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A Vision for the Music
Industry
By
Finbar O’Hanlon
Jan 2014

What is this document
As a musician, technologist I have spent my life either surrounded by music
or working in some capacity in the development of technologies that
Empower the music industry.

I have had over 15 years experience in the Digital Music and Media
marketplace globally and worked at all ends of the Digital content Eco
system from being an Artist, Publisher, Producer to Editor, Technician, and
Product Specialist
This document is a smaller less detailed version of a bigger deck that
provides a vision of how I see the Music Industry in the Future. A thriving
industry for those involved that create and add value to the core product
(Music). I don’t pretend to understand every facet of the music business
and am not armed with all the metrics to understand the details around all
of the complexities that exist in this industry, however my experience has
helped me see a solution to fundamentally solving many of the key
challenges facing the music business. Challenges I believe when solved
provide a strong foundation for a healthy and profitable industry once
again.

What’s the problem
The Internet and Digital Communication has enhanced our lives in so many ways.
It has made it easier for us to access information and services and has proven to be the
cornerstone of value for industries and business that adapt to utilize this advancement
for the value of their customers.
We can now book travel in a millisecond from our Lounge chair, connect with people
from anywhere in the world, electronically mail people where the mail is delivered in
seconds, take tests online, find the love of your life, shop with the ability of purchasing
and viewing anything from a song to a commercial aircraft anywhere in the world.
In terms of the Music and Content Industries Content consumption is the highest it has
ever been, but the acceleration of the digital communication in our world has produced
massive downward impact on the revenues of the artists that create this content and
the industry as a whole.
Today’s digitally connected world should be providing the opposite, greater
opportunities and revenues for artists and the industry.

What’s the problem

So with the consumption of music being the highest it has ever been, why is the industry
in a state where the creators of the product, and the industry that supports this product
In a state of decline?
Is it
Piracy?
Shifting Consumer Behaviors?
Technology Platforms that sell content by the song?
Content that lacks individuality?
To much competition?
All the above?
Or something else?

What’s the Answer?
Ask the Questions, that are so simple they are hard to answer.
For these questions often house the secrets that enable a
solution to the problem.
Solutions that complexity and expertise cannot solve alone.

What is Music
Music is a universal language that provides many emotions to the Listener.
By listening to music, people often develop expectations about what will
happen next in the music they are listening to - even if you have never
heard it before. The idea is that emotion is produced when the music
violates your expectations. This can cause
surprise, frustration, amusement, wonder, excitement, sadness - a wide
range of emotions.
Memories are recorded and retrieved with music and music is core to our
makeup as humans.
Since the birth of music man has attempted to engineer ways in which
musical works and performances could be enjoyed by others.
Lets take a brief look at some of the attempts man has made to help others
enjoy musical works.

Sheet Music 1457 AD approx.
Sheet music was conceived as a way to reproduce a musical work. It is a
handwritten or printed form of music notation that uses musical symbols to
represent the work of an Artist / Composer.
Sheet music only represents the authored work and not the performance
work and requires musical knowledge and skill to reproduce.
The first known authored work in printed music was the Mainz Psalter in
1457.
Prior to more modern methods Sheet Music was the main format used to
share musical works.
Requirements: The reproduction of the Musical Works is only
possible, providing the listener either had Musical Knowledge or access to
people with Musical Knowledge who could decipher the symbols to
reproduce the music.
The Promise: Access to an artists musical written works without having to
have the artist present.

Radio Broadcast 1910
In 1907 Lee De Forest company advertisement said,
“It will soon be possible to distribute grand opera music from transmitters placed on
the stage of the Metropolitan Opera House by a Radio Telephone station on the roof
to almost any dwelling in Greater New York and vicinity... The same applies to large
cities. Church music, lectures, etc., can be spread abroad by the Radio Telephone”
3 years later on January 13, 1910, the first public radio broadcast occurred.
Radio broadcast made it possible to share the works of artists with others in a way
that sheet music could not. With Radio Broadcast the performance of the Artist could
now be shared as well as the authored works.
Radio was a true innovation for music, the listener and the artist.
Requirements: To enjoy the musical works and performances a listener had to have a
radio set with a tuned receiving antenna. Without this tuned antenna access to the
music via radio was not possible
The Promise: Hear and access the Artists performance without having the artist
available

LP Record 1948
The Vinyl record was invented around 1902 however the LP (Long Play), or
33⅓ rpm microgroove vinyl record, was a format for phonograph
(gramophone) records born around 1948. The LP was an analog sound
storage medium that provided the capability for the listener to have access
to the musical works or performances of an artist at any time they choose.
Introduced by Columbia Records in 1948, it was soon adopted as a new
standard by the entire record industry. Apart from relatively minor
refinements and the important later addition of stereophonic sound
capability, it has remained the standard format for vinyl albums.
Requirements: The reproduction of the Musical Works or Performances was
only possible, providing the user had a player which would decode the
grooves into vinyl to produce the artist work and performance.
The Promise: Access to the musical works at any time you desire.

CD Compact Disc 1979
The Compact Disc was a format designed to provide a more portable and
higher quality Digital representation of the Artists works and performances
in a more durable optical structure.
Requirements: The reproduction of the Musical Works or Performances was
only possible, providing the user had a player which would decode the
digital data written to the disc. Data that once decoded would reproduce
the artist work and performance in a digital manner
The Promise: Access to the musical works at any time you desire in a
superior quality.

iTunes Store 2003
The iTunes Store, originally the iTunes Music Store, was originally conceived
to provide access to music content in a format that suited Apple’s iPod
Device. The iTunes Store and subsequent iterations is a software-based
online digital media store operated by Apple Inc. It opened on April
28, 2003, and has become the biggest distributor of musical works and
performances in the world.
Requirements: The reproduction of the Musical Works or Performances is
only possible, providing the user has an apple device that can decode the
content delivered by the store. Non apple specific playback devices cannot
play the artist works or performances without Apple iTunes software.
Library access available through an Apple iCloud account
The Promise: Access to the musical works at any time you desire in a
portable manner and superior quality. In recent years the promise has been
to have your entire musical Library protected against loss or damage.

Summary
Since the birth of music, the desire for the ability to hear Musical Works
and performances has resulted in man developing technologies and
systems to meet this demand.
As listeners demand this music anywhere at anytime different mediums
and Devices have been developed to meet this demand.

CD’s, LP’s Cassettes and Music Files like MP3’s, M4A files are mediums that
are used to hold the Artists works and Intellectual Property. These mediums
have no value without having the device, player or keys to decode the
information on them to playback these works or performances as sound.
The value is the purely in the ability to access the Artists Works and
Performances. Which in the case of a LP is etched on a piece of Vinyl.
Listeners Purchase the ability to access these works on these mediums not
the medium itself. Without the works the medium is worthless.

Mediums that hold the Artists works and Intellectual Property within the medium.
(The intellectual property of the works travels with the medium)

The Medium
In summary the Medium is a technology or material that the Artist works is
attached to via a process or a Performance process whereby the Artists
works are accessible ( e.g. Radio ). Once the Artist works are attached to
medium the combination of artist works and medium is often described as
a Physical or Digital Unit.
A Physical or Digital unit contains the Artists Intellectual Property, property
which is transferred to a user at purchase time.
Medium
CD
LP
MP3
M4A

Property
Plastic Optical Disc
Black Vinyl Plastic
Data Structure
Data Structure

Artist Works ( IP)
Included / Embedded
Included / Embedded
Included / Embedded
Included / Embedded

Radio (Digital)

Data Stream

Included / Embedded

The Medium
In the Early days of Radio, the Broadcast was a distribution of an Artists
Works or Performance through a transmission of signals. Listeners had
access to these Artists Works and performances as long as they had a tuner
that could intercept and transform these signals to become sound.
In this model of Radio the Intellectual Property of the Artist was controlled
from a single source ( Broadcaster) and the listener did not have access to
the IP contained within the Signals.
Once the listener demanded the ability to to access the performances
anytime they desired the medium changed from Broadcast to a unit with
physical properties that contained the embedded Artist works and
performances (i.e. LP, CD MP3,) Once the Artists works were embedded in
the medium control of the Artists Works and IP started to be compromised
as the copyrighted material was outside a method of control
and in the hands of the consumer.

The Medium
As the world moved to a digital world, The Medium changed.
One piece of plastic was exchanged for another (LP to CD)
As the world continued to evolve new mediums were born Mediums not
made of plastic but made of Data. These new mediums like their older
counterparts carried the artists works and performances inside them, but
being Digital the works and performances were represented by numbers.
Numbers that with the right player could be decoded to represent the
works and performances in sound digitally.
These new mediums are typically called Digital assets. MPEG Audio files,
MP3 files, and any other music file on your computer is one of these files.
Most people are unaware these digital music files are a medium that
contains the artist works and performances as data inside the digital file.
Think of these files as little databases, where the file is the database ( the
structure) and the data within the database is the artists works and
performances.

This digital medium made it possible for the valuable data to be easily
extracted and copied without loss of quality meaning loss of control of a
Artists Works, and IP and fueled piracy

The Medium Problem
Including an Artists work/s, performances and IP on a medium has made
sense for a long time.
Digital Music Files provide the world with the ability to replicate an Artists
works in a manner that suffers little on no degradation from the original
recording on the purchased Digital medium with little or no cost or
consequence to the user of the content.
In todays digitally connected world Networking technology ( the internet )
provides consumers with the ability to distribute anything easily with little
cost. Consumers can access content for free on a multitude of
platforms, legally anytime they want.
The Digital method of distribution has had a profound impact of the entire
music business as the copyrighted music via the medium was placed
directly in the hands of the user of that content and the ability to access
music anywhere anytime has meant the value of the ability to access has
been greatly reduced.

The Transaction
Ok now we understand the medium lets look at a typical music transaction.
The typical transaction on a piece of music content revolves around a
license.
The typical license provides the ability to playback the works and
performance (access the content) on the medium ( MP3, CD) or device/s
the license is attached to (i.e. An iPhone, Platform service).
The typical purchase of a Musical Work or performance does not include
the transfer of ownership of the artist works and does not allow for the
works to be duplicated, or played back on a device or medium other than
the medium it was delivered on.

So if the transaction of music is a License that allows the access of an artists
works. The value of the License and therefore content is determined by the
ability to provide the access.
It makes sense. The value is not the medium (file, CD, LP etc.) its being able
to access the artists works within the medium RIGHT?

The Industry
The combination of Artist Works and Mediums are described as either
Physical or Digital Units. Units that the Music industry has used to
distribute the artists works and to Measure the value attributed to a
particular artist and industry as a whole.
The Financial Workflow of Artist Works and the subsequent value of the
Music Business as a whole is underpinned by the measurement of number
of transactional metrics. Most notably the transactional Volume of Physical
Electronic and interactive Units / Streams.
The Music Business recognizes the popularity of Artists based on these
transactional metrics. For a long time awards such as Gold and Platinum
records have been based on these transactional metrics.
These units either Physical or Electronic all include the artist works / IP.

We’re nearly there
I Promise

The Value (Artist )
Artists who create works rely on the income generated from Royalties
Royalties are generated from the usage of these works and cover different
revenue streams. As consumers acquire content in multiple revenue
streams it is increasingly difficult for artists and performers to be always
aware of what they are owed and what use of their music they should be
earning royalties from.
New consumption and business models and an evolution in music
distribution has meant more so than ever the importance of reporting all of
the facts correctly.
If misleading and incorrect numbers are presented as facts or without
validation of their accuracy, content creators lose faith in the systems put in
place to guarantee an accurate place in the digital earnings loop.

The Value (Artist )

Hang on
Maybe I’m missing something.
How can any Body, Organisation, or person provide accurate measurement
on the value ( Access ) of Music when the artists works and IP reside within
the medium that resides with the consumer.
If access is where the value lies every play of content should be measured.
How can every play ( access ) be measured when there is no method to
REPORT EVERY PLAY
IF A CUSTOMER PURCHASES A LICENSE TO ACCESS AND ROYALTY
MEASUREMENT WAS CALCULATED ON THIS ACCESS, THE INDUSTRY AND
ESPECIALLY THE ARTISTS IN THE INDUSTRY WOULD BE MUCH HEALTHIER

OK
So let me get this right

When I purchase content I purchase a license to access that content
on specific devices or mediums.
And
The Medium ( Music File) houses an artists works, and IP inside itself
Works that can easily be extracted, shared or used outside the terms
of the license.
And
Unauthorized sharing of content greatly impacts the value of the whole music
industry and the product the artists create.
And
Measuring the value of an artist, works and industry means measuring access.
And
More content is being consumed than ever before but the industry is in decline

WHY NOT
Remove the Data that represents the Artist Works from the Medium
( Music File)i.e. extract the data from the database
IF THAT HAPPENNED
The Medium ( Music File ) would become an Access Token much like a ticket
the medium would allow the connection to the Artist Data
And
Would be able to be measured at every Play
Reporting bodies would now be accurate and value would start flowing
And
Consumers could have a medium that played on virtually any playback device
without taking any storage space on the device
And
Valuable Artists works and IP could be sent in a format that could only be
decrypted by the Medium sent to the consumer every time play is requested

With one fundamental
Change
Access is Universal
Access is Controlled
Access is Measurable
Access is Valuable once again

Build It
How do you build it?
Here’s a hint
Replace the word Music with the Word Data Below. Try it on any document
you have relating to the music business especially relating to the
distribution, monetization and security of Digital Music and see how you
look at the problem then especially if you understand data.
“Since music was first created man has looked for ways to provide access access to this music so
people around the world could benefit from the work of the artists that created it.
But Music files are large in size and wont work on most devices without changing the music files
into a format that the device can understand.
Music files contain the valuable artist works and IP inside them. These music files allow the music
hidden inside the file to be extracted and copied without loss of quality which has greatly
diminished the value of being able to access the music within the file. It has also meant that
being able to record the access of the music for royalties has been all but impossible on all
services except subscription services.
When an artist creates music it is copied every time there is a purchase because of this millions
of copies can exist making it impossible to control

The Answer
1)Understand the Product and Value
2) Recognize the Problem
3) Learn from success in other industries selling the same value ( Access) in
this digital age

Ticketmaster
Ticketmaster provides a business that commercializes access via tickets.
A Ticket is by definition a key or a license.
Millions can be distributed without the IP or Works, Show etc. being
compromised
A key that allows the access to something else ( win a prize, travel, entry to
events.
A ticket is typically a one time key that is attached and recorded to a
consumer
A ticket is Lightweight, easy to handle and can be measured.
If lost, access can be provided by validating the purchase record

The Answer
Credit Card Companies
Credit Card Companies provide access to Financial products via a plastic
card.
A credit card is a piece of plastic that is a key that unlocks access to
financial capability a credit card does not have the money embedded on
the card.
If we look at a CD, a CD is in fact a piece of plastic i.e. key. The CD cannot be
played or inspected unless there is a reader that will read the plastic disk,
the difference is the CD contains the embedded value the key unlocks.
A digital music file is also a key, the digital music file requires a player that
understands the file to play it back but like the CD, the digital music file
contains the embedded value the key unlocks.

The Learning's
Lets look at other models around keys.
A car is a block of metal and technology that performs tasks only when
paired with the correct keys and driver.
Without the Keys and Driver the Car is a block of metal and technology.
A block of metal and technology without the keys that has little value.
Yet with the keys its value is assessed on the way it performs its tasks to the
person operating it.
If we used this value on a Music file it would go something like this
A digital Music File is a block of data. A block of data like a database that
contains bits. The bits represent the artists Recorded works.
The Digital Music file performs its task of delivering the bits to a player to
make sound.
Without the Bits the Digital music file is a data shell

What would happen if ?
The copyrighted music was not included in the medium (music file)?

The medium provided Universal Access to everyone instantly?
The Artists works were delivered from one Authority?
The License was validated every single time a work is played?
Content could be controlled from a single source
Any possible model of monetization was possible from own for life to price per play
Every single play is recorded for transparent performance reports
Customers did not have to have huge libraries filling their device up
Everything became very simple in the management , protection, control and reporting of content.

The Answer
If the results on the previous page look good I have better news such a
system is a reality. It’s called Linius. What’s better news a system like this
provides the underpinnings of a workflow for content that will not only
simplify the entire content ecosystem, provide the greatest level of
accessibility, control and protection of Music Intellectual Property it
provides the foundations in which to provide the world’s first ecosystem
which provides.

“Officially Licensed Content”

To Learn more about the System
Contact me
finbar@linius.com

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Finbar m usic industry vision 2014

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Finbar m usic industry vision 2014