THE FUTURE OF MUSIC Manifesto for the Digital Music Revolution by David Kusek and Gerd Leonhard Publisher: Berklee Press Price: $16.95/trade paper Publication: February 2005 ISBN: 0-87639-059-9 THE RECORD INDUSTRY IS TERMINALLY ILL. BUT THE MUSIC INDUSTRY IS ALIVE AND WELL AND ON THE BRINK OF PHENOMENAL CHANGE AND GROWTH Future Business Model Will Revolve Around the Flow of Music Directly From the Artist to the Consumer, Say Two Industry Experts in New Book The record industry as we know it is dying. But the music industry is healthier and more vibrant than ever. The Internet and the digitization of music have introduced limitless possibilities for change and growth. In THE FUTURE OF MUSIC, David Kusek, a music industry entrepreneur and Vice President of Berklee Media at the Berklee College of Music, and Gerd Leonhard, music futurist and founder of ThinkAndLink, analyze the music industry and explore how it needs to adapt for the future. Acknowledging that many industries are resistant to change, the authors discuss the music industry's reluctance to embrace new technology. Kusek and Leonhard also look at the new music economy, show how technology will rewire the music business, and present trends that will impact the future of music. Along the way, they debunk industry myths, outline the ways music will be marketed, promoted, and distributed, and present their top ten truths for where the industry is headed. Kusek and Leonhard reveal their top ten truths of the music business and argue that their predictions "will guide the future of music, define the nature of the relationship between artist and fan, and likely prove to be of great significance to those in this business who wish to remain relevant." Their top ten truths are: Music matters more than ever: the music market is alive and vibrant. Many music fans are surrounded by music all day long and can stream, download, watch, edit, swap, burn CDs, accessing as much music as they want, whenever they want. Online music has become "radio" for the new generation. As Kusek and Leonhard point out, "Music and the music industry are getting a lot of interest and attention, even though the record industry is on its way to the meat grinder." The record business is not the same as the music business. The music business encompasses concerts and touring, music and event merchandising, licensing of tracks for film, television, and advertising. In THE FUTURE OF MUSIC, the authors show that ninety percent of an artist's income will no longer come from selling CDs. The artists are the brands, and entertainment is the main attraction. Records are not sold because they're released by Sony or BMG - it's the artist's work that music fans want. The functions of the record label are diminishing. Artists and their managers are shaping the future. The role of the manager has changed, and many artists, though known for their creativity and not their business acumen, are taking a bigger role in their careers. Managers and artists are making the decisions, not the label. Publishing income is a crucial income stream. Kusek and Leonhard discuss traditional streams of income such as CD sales and public performance, but they stress that the Internet and other digital networks are essentially a giant publishing outlet. The importance of embracing technological advances is key to success in the future. Radio is no longer the primary way that people discover new music. The authors report that "radio as we know it will be replaced by digital music services that tie seamlessly into music distribution systems." They also offer advice to the radio industry in order to keep that industry from following the path of the record industry. Digital niche marketing outperforms mass marketing. The myth is that an artist has to sell 500,000 records to succeed. THE FUTURE OF MUSIC discusses ways that artists can exploit the artist/fan relationship without the record label as the middleman. Technology can be developed to enhance this marketing of a direct relationship. Customers demand - and get - increasing convenience and value. The CD is no longer a good monetary value. Kusek and Leonhard remind the reader that the Internet is only the first step, and that the explosion of wireless service and broadband present endless possibilities. The current pricing model goes out the window. The authors say that selling individual tracks won't generate the revenue that outlets such as iTunes and Buy Music are hoping for. They also report that traditional recording contracts are obsolete and that many music fans are complaining about the way music is priced. Music is mobile, and new business models will embrace a more liquid view of music. They describe such futuristic scenes as music fans pulling in to their local gas stations, filling up their gas tanks and their music devices. Ultimately, Kusek and Leonhard explain, music will flow like water - fluid and (almost) free. Consumers will be billed much the way they are for electricity or oil or telephone - on a monthly basis - whether directly, or as an addition to the fee they pay to their Internet service provider. Much like telecommunications companies that embraced technology and gave birth to the cell phone industry, the music industry must do the same. Based on their time and experience creating the future of music, these two industry experts reveal a unique bird's eye view, and they present revolutionary ideas that can change the way people think about music. THE FUTURE OF MUSIC is a roadmap for the music industry to grow and prosper. # # # About the Authors David Kusek is a musician who has been inventing the future of music for the past twenty-five years. He co-invented the electronic drums, which helped ignite the disco era, and founded the first music software company, Passport Designs, which made it possible for musicians to record and produce music at home. He co-developed the Musical Instrument Digital Interface (MIDI) standard and in 1993, with A&M Records, designed and developed the first commercially available enhanced CD that connected audio CDs to a personal computer. He is currently Vice President of Berklee Media, the continuing education division of the Berklee College of Music in Boston, Massachusetts. An Associate Professor of Music Business at Berklee, he also provides strategic consulting and advisory services to companies and individuals involved in the music and entertainment industries. Gerd Leonhard is a respected music futurist and well-known music industry executive and music business entrepreneur. He founded LicenseMusic.com, a company that revolutionized music licensing, and is the founder and CEO of ThinkAndLink. As CEO of ThinkAndLink, he serves as senior advisor to Media Rights Technologies, BlueBeat, and ShareTheMusic Networks. A renowned musician, including opening engagements for such acts as Miles Davis, he currently resides in Basel, Switzerland. The book, Berklee College of Music, and the authors, have no affiliation with the Future of Music Coalition.
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