Broadcasting, TV, Radio & Film , Future Scenarios , GeneralPosts , Music Business , Telecom and Wireless , Trends

Hold on, I’m coming: the digital music flat rate is imminent

Gerd Leonhard, Music Futurist, at the Musiik &...

Image by gleonhard via Flickr

*Cross-posted from the MidemNet blog

I will be presenting my thoughts on the digital music flat-rate in a session at Midemnet 2009, and so I thought it may be a good idea to give you a heads-up on what’s coming. Many of you may of course know my work from the past 10 years and that the flat rate for digital music aka Music Like Water has always been a crucial cornerstone of my concepts for the Future of the Music Industry.

First, it is really great to see that indeed, music flat rates are being considered, planned and tried literally everywhere – here are some examples, and the models that go with it.

  • Google is offering free music in China, via their partnership with This offering covers mostly Chinese music  at this time, I think, but if you’re logged-in you will get free on-demand streams (and  MP3 downloads, I think – can’t access it from here). Google pays license fees for the music and in return gets to sell more and better ads – plus, if this can be expanded to all music and other media, as well, Google may eventually be able to actually compete with Baidu (which is crucial for them). The model: your attention pays for the Content; i.e. Google pays the license fees (it’s a split of revenues I would guess). The traffic & attention pays for the music -sounds familiar?
  • Orange’s Musique Max, in France (*a client of mine) now offers a flat rate for digital music to their French mobile customers, as well. Unlimited downloads to mobile and PC, for 12 Euro per month (see this press release by France Telecom). The catch is, of course, both the DRM (yes… still…ouch), and the price, and the data costs – but all 3 of those will certainly be addressed in the near future I would hope.
  • TDC in Denmark: buy Internet access from them, and get the music ‘for free’. Same issue with the DRM but the bundle certainly is a good concept. The model: Music is a substantial added value – the cross subsidy model  that LongTail-Chris Anderson talks about a lot. Playlouder in the UK has a similar model of bundled, all-you-can-eat access.
  • Nokia comes with Music (*disclosure: Nokia is a think-tank client of mine) : the latest offering by mobile device & soon-to-be Internet giant Nokia, bundling music from all 4 majors and an increasing number of independents into the purchase of the handset. Buy the Nokia music phone, and all the music is yours (yes, their are some catches but …it’s a great start).  The model: a 3 party pays to promote another offering (i.e. the music is free for the user!)  Sony-Ericsson pulled a similar rabbit out of their Swedish hats, just a few weeks ago, with their Play-Now-Plus service that was launched in Sweden. What about Samsung? Stay tuned…
  • The German magazine Focus reports that mobile operator T-Mobile wants to offer a Music Flat Rate, as well. Clearly, operators and telecoms are going to be entering the content distribution and service business much more seriously than ever before – they have no choice. A rather funny google-auto-translated English version of the Focus article here, original German version here.
  • recently reported on Norway’s Netcom launching an unlimited music offering, as well (albeit only with 50k tracks provided by UMG – hardly a convincing argument for the digital natives I would guess but … baby steps are better than none)
  • Swedish performing rights society STIM (also presenting at MidemNet) has been busy pushing things forward in the same direction – read their statement "how downloading could be made legal" here
  • Over in the newly re-inspired lands of Obama and, my dear friend Jim Griffin has been trying to steer the Warner Music Group ship into the music-flat rate direction – and I would guess we will hear more from him at MIDEM, hopefully!

There are many more examples but hey – this is blog post, after all, not a Music 3.0 book (yet). But the bottom line is this:

  • The flat rate for music is a certainty and we will see it become a reality in the next 2 years, so… get ready
  • New business models that are based on attention-revenues not copy-revenues must be developed asap – and this is not an easy mission during these times of transition
  • The artists and their managers, the traditional master recording rights holders and composers and publishers, as well as the many organizations that represent them must collaborate much more in-depth than ever before –  and most likely the master and composition rights societies will need to actually merge to make this work

But I don’t want to jump the gun here – all of this will be part of my presentation at MidemNet. Look forward to seeing you there!

Digital music flat rate gerd leonhard

This post has been read 815 times!

Learn about the future

original feedView Feed XML

Learn about me