Freemium economy

The Most Important Things In Life are Free

Chris Anderson "the long tail" guy asserts that with more and more industry leaders turning their traditional markets on their heads by giving away their core product (from semiconductor manufacturers giving away GPS chips, to 1-800-GOOG-411, yahoo infinite email) in the hope of creating new "user generated markets", Chris points to a path that is now well trodden and being followed - whether it is the only successful path is less important. Here's his Wired article as well.

Music business model

How will a dollar of music revenue be distributed in the future? The chart above shows the progression of how a single dollar in music revenue has been distributed in the past as technologies have evolved.

Pre-1990, major labels were responsible for the entire lifecycle of music production and consumption.

During the 1990s, computers dramatically reduced the cost of producing music recordings and CD duplications, increasing the number of independent labels (Indies). The increased competition drove the costs A&R (Artist Development and Recording) and production down. However, to get music played on the radio and get CDs distributed to stores let alone acquiring shelf-space required the Indies to close a distribution deal with the major labels. The result: major music labels enjoyed oligopoly profits from their stranglehold on distribution.

Post 1999, the Internet downloads of MP3s became the number one method of consuming music worldwide. The vast majority of this music consumption and sharing is illegal and conducted over Peer-to-peer networks: under the radar.

2005 onwards, the opportunity in the new music economy is in marketing and distribution.

Michael Masnick (of Floor64) presents some astute observations on a potentially new business model for the music industry used by Nine Inch Nail's Trent Rezner. The core of the presentation is the "formula" that is the basis for making money in the music business in the digital era:

Music $$ = Connect with Fans (CwF) + Reason to Buy (RtB)

There are many artists -- famous and not so famous -- who've been making use of this formula to create successful strategies for building up a stronger fan base, creating wonderful new works of art, distributing them out to the community and getting paid for it at the same time.

What made Reznor so interesting as a case study was the fact that he's done it so many times in so many different ways that he, by himself, represents a great example of how you can approach this simple formula in an infinite variety of creative ways.

CES - the next big thing

CES is the worlds biggest consumer technology conference. This year, they were host to parading some new cute gadgets ranging from Internet delivered TV (over the top, OTT) such as Boxee, In-Car Connectivity, Electronic Book Readers, 3D TV, Tablet computers, Mobile TV, and Google Nexus one. The biggest discussion at the conference appeared to off the limelight where vendors were discussing how the business models would need to be changed to accommodate the many ways that the media is being served to the end consumer.

USA Financial Statement

Morgan Stanley's Mary Meeker presented a stark picture of the US entitlement crisis at the Web 2.0 Summit in San Francisco.

Innovation

IV's approach to inventing is to propose things that appear crazy in the beginning. If you look at the really BIG problems they're trying to solve from taming hurricanes to counter the effects of global warming, you just have to, maybe, pay attention - at least they are in the company of the world's greatest optimists.

"It is always delightful when a great and beautiful idea proves to be consonant with reality."
Albert Einstein

And the Oscar goes to . . .

The Oscars got it right. . . for best original song: "Once"

3 weeks, 2 handycams to make this indie movie from Ireland for less than $100,000. Now, that's movie making at its best and what an uplifting song for once.

Bravo!

Next generation search

I wrote about the next thing in search a while ago citing the inherent weaknesses in Google's search methodology. I was caught today by a blog citing the launch of SkyGrid which appears to be trying to bet the farm on predictive searches for very specialized and high paying consumers - hedge fund managers. Monitor110 versus SkyGrid versus Old School (Bloomberg, Google) -- this could get very interesting very quickly.