FISTFULAYENTalking To The Music Industry Again, The Aspen Live Conference
[this was written in the middle of December, and I've been piecing it together in my copious spare time ever since]
For the past 12 years, CAA has been hosting an infamous music industry conference in Aspen, Colorado. Mark Kates always used to tell me I should go, that tons of real business gets done there, but I was never really invited and as a general rule I don’t invite myself to parties. A couple months ago I was asked by CAA to speak on a panel to UCLA students alongside good peeps like Rob Light, Don Passman, Michael McDonald, and Diarmuid Quinn. I accepted and was honored to be “the interweb guy” on a panel of music industry veterans. It turns out the person who organized this panel, Jim Lewi, was the same former Aspen resident who started the Aspen Live Conference. He was kind enough to extend my first proper invite.
Still, the conference is the definition of boondoggle (in Aspen and starts at 4pm each day after the lifts close) and I wasn’t sure if I could justify the time away from work and family . But then the invite turned out to not just be an invite to attend, but to take one of the two speaking slots at the conference. This pushed the needle into the “justifiable” end of the spectrum, and sufficiently away from the “total boondoggle” side. I accepted.
Now it’s Saturday night and I’m on the plane on the way home from the conference. I’m thankful to have been invited: great conference, people, snowboarding, and opportunity. Really the best conference I’ve ever been to. Unfortunate because a) this is the conference’s last year and (not unrelated) b) it was overshadowed by the ghost of a more prosperous music business. Record label attendance was thin. Sony/BMG had a round of layoffs on Wednesday, the day I arrived, which I discussed on the bus from the airport with a woman who works at Interscope. The same woman didn’t make it to my presentation on Thursday because she was laid off via phone earlier in the day. Ouch.
Which is where I came in. I have a pretty optimistic view of the future of media. I (like David Byrne) think what’s happening in media today makes sense, is good for people who make music and people who love music (if not for people who built oligopolies on selling music on plastic discs for $18) and is good for culture in general. I wanted to give a presentation which explained where this optimism came from, the forces behind it, where I saw the opportunity is/isn’t, and encouraged the music industry to do the right thing with respect to building platforms for monetization and leveraging standards. It was pretty lofty goal in its own right, but worth a shot.
I think it turned out ok. People said they enjoyed it (to my face, at least). Even Bob Lefsetz paid me a compliment. I’ll let you decide for yourself by paraphrasing the presentation here:
Hello there. My name is Ian Rogers. My current title is VP Video and Media Applications, and I was most recently the General Manager of Yahoo! Music. I came to Yahoo! through the acquisition of my startup Mediacode (with my friend/business partner Rob Lord, who is currently working on Songbird) four years ago. Prior to that I was part of record label Grand Royal, and worked at Nullsoft which sold to AOL in 1999. I started in “the (music) business” in 1995 when I left grad school to go on tour with Beastie Boys, which I did again in 1998 and just this past august my 17 year-old daughter opened for Beastie Boys at The Greek. I also have a one year-old daughter,
and ride a skateboard,
some times with this guy, John Silva, who couldn’t be here today but sends his love.
I’d like to convince you of three things today:
- There is more opportunity in leveraging the scale of the Web than trying to create scarcity. We’ve all been engaged in many attempts at creating scarcity in digital music and none of them have worked. Meanwhile, others have been leveraging the scale of the Web with great success. We should learn from this pattern and apply our energy appropriately.
- We will do this together by creating a loosely-coupled value chain including users as value creators. The value chain is not owned by a single entity (LimeWire, Apple, or Universal). There are many participants in a healthy ecosystem. Furthermore, users are no longer just consumers, they’re active participants adding value and any successful solution will leverage this user-contributed value.
- We need to work together to create the Media Web. Here I’ll step off into nerd-ness for a minute, but I’ll try to tie it to a concrete example so you see what it is I’m getting at clearly.
But first, lets take a look at the physics that are shaping today’s media space. I think we can agree the environmental forces in the digital media space are much different than the physical space. However, we’ve been trying to apply our physical world models to the digital space and then wondering why they don’t work. It’s like trying to live a normal life on the moon without adjusting to the changes in oxygen and gravity. Our collective success relies on our understanding and adapting to the new physics in the space, not denying them.
We’re moving from a world of limited distribution channels and therefore abundant attention (CBS was not scared of losing any of us as customers 20 years ago, I came home from school every day and watched Brady Bunch and Gilligan’s Island because it was THE ONLY THING ON), to a world of unlimited distribution and therefore attention scarcity (when Zoe watches TV it’s TiVo and she doesn’t even watch TV after school, she gets on the computer, uses Facebook, does her homework with the help of Wikipedia, IMs with friends, etc).
Umair Haque of BubbleGeneration.com wrote a great piece outlining the new media landscape some time ago entitled “The Blockbuster vs. The Snowball”. He contends (and I agree) that Media 1.0 is Blockbusters and Media 2.0 is Snowballs. In the Blockbuster world there’s a certain point where investing more in quality delivers diminishing returns and marketing serves the need. If you are making Pirates of the Carribean 12, do you spend $2M extra dollars on that actress or on getting Johnny Depp’s face on the cups at Burger King? Burger King, of course, you’re not trying to make the best movie in the world, you’re just trying to get people to go to theatre A instead of theatre B this week. But in the Snowball world the opposite is true. At a certain point you get diminishing returns spending more money on marketing, how do you even get to the audience when their attention is spread across an unlimited distribution channel but quality is hyper-efficient—if something is good, everyone sees it.
Every time I say “quality is hyper-efficient” someone asks me if I am saying that our kids aren’t going to watch and listen to crap anymore. Of course they are, but they are going to watch and listen to exactly the crap they want to watch and listen to. It’s not really quality we’re talking about here, it’s relevance. With unlimited choice people will consume what is most relevant to them (“Tier 1 to me”, as Jonathan Strauss puts it).
Never was this more clear to me than when I spoke to a room full of teenagers at the National Youth Leadership Forum on Technology. I asked the kids how many of them had seen the “Lazy Sunday” clip from Saturday Night Live. Nearly 100% raised their hands. I asked how many of them saw it on television as opposed to YouTube. None had. I pointed out that in essence negative marketing dollars were spent trying to get them to watch the clip—NBC actively tried to KEEP them from watching it and yet they still all saw it. Then I asked how many of them had seen the new Superman movie (which was out 2-3 weeks at the time). About 10-15% had seen it. I then asked them why they’d all seen something that had less than zero marketing dollars spent and on a relative basis none of them had seen something which had millions in marketing spent trying to get them to see it. After a short bit of silence one kid finally raised his hand and offered, “Because it’s funny?” YES! Because it’s good, and your friend said you had to watch it, and when you watched it you said the same thing to ten friends.
Our kids are going to watch exactly what they want to watch, not necessarily what’s marketed to them. I understand this is threatening to large media businesses which are accustomed to owning the means of distribution, but I am certain it’s very good for our kids and for culture writ large. We’re all in the same business now, the business of making things people really love. It’s the same for Yahoo! as for media companies. If we don’t make the best products there is always a startup who is ready to step up and serve people’s needs. Record labels are operating in an environment with the same physics.
[for more on this, see my original Media 2.0 Physics presentation from the first BarCamp LA early 2006 and my “Media 2.0 for High Schoolers” presentation from later the same year]
Hopefully we all agree it’s good news that DRM is finally dead. Five years ago I started saying we were in the age of PURE CONSUMER CONFUSION (a phrase I lifted from Rob Lord) and it wouldn’t be gone until DRM was gone and digital media was interoperable. With proprietary DRM there are only two possible outcomes: PURE CONSUMER CONFUSION or Monopoly. We’ve been saddled with both in varying degrees. But now that MP3s are finally for sale we’re headed toward much less consumer confusion and a much better value proposition for sales. Please don’t look at this as the labels “giving up”. It’s much better seen as an acknowledgment of the physics of the space and an appreciation that attempting to create scarcity only wastes precious time and money.
As I alluded to in my presentation from October, I’ve been complicit, but I’m done. I’m not spending my energy attempting to create scarcity any longer. Life’s too short. Instead we need to leverage the tremendous scale of the Web to create value in new ways.
Today users are creating tremendous value and for the most part we’re ignoring it. They’re writing blogs about your artists, putting bios on Wikipedia, documenting last night’s concert on Flickr and video sharing sites, showing what songs are most popular by their behavior on Last.fm, building “box sets” on community sites, etc. How has the music industry leveraged this? What tools have you created to enable or encourage it?
Nothing and none, and what we’ve done is forced a disconnect between content and context. As I mentioned in my October presentation, iTunes is a (mostly) context-free content experience and the Web is a (mostly) content-free context experience. Whoever puts the two together wins.
The alternative is a shadow ecosystem which serves the same purpose for the user but offers zero involvement for the music business. Today I can get a great music discovery and consumption experience from Hype Machine, download the MP3s to my iPod, and the industry gets nothing. The opportunity is in giving Hype Machine the tools to make the (many, already existing) buy from Amazon/iTunes/eMusic buttons work well and letting the bloggers blog any music legally forever instead of a few tracks here and there which they take down after seven or fourteen days.
So the opportunity lies in a functioning Media Web, but the irony is that the Media Web doesn’t exist. While there’s an image tag in HTML, there isn’t an audio or a video tag. This may seem nerdy or trivial but it’s really important. Let me explain what I mean:
If any of you were “online” in 1992, unless you were at a university you likely had an AOL or Compuserv account. If Jerry Yang and David Filo had wanted to create a directory of “being online” they’d have had to go knock on Steve Case’s door only to have him tell them, “no thanks, I’ll build it myself.” HTML and HTTP were very simple standards which came along and knocked this whole thing on its side.
Digital media today is still in the AOL and Compuserv era. While text and images are easy to add to Web pages, every time you add media you are dealing with a proprietary technology. This is something you’ve all experienced but probably never thought too much about. Think back two years ago, the Web worked fine on your PC, your Mac, even your cell phone to some degree, but as soon as you wanted to watch a video you were faced with the “which proprietary technology owns your ass?” question. Quicktime? Real? Windows Media Player? What happened was “The Web” stopped and proprietary technologies took over. Flash has made this feel a little less painful but now the entire online video industry is in the hands of one technology company (Adobe), being delivered the features they see fit on their timeline? That’s never a good thing. And who is challenging their monopoly with a technology called Silverlight? Microsoft? Doh. This is not exactly a recipe for openness.
We need the same force that created The Web to create The Media Web. What was that force? Open standards solving universal user needs and enabling a level publishing platform. While this may seem outside of your job description, let me first give you a sense of the kind of standards I’m talking about, and then a specific example that will likely hit pretty close to home.
Practically speaking, the standards we need are relatively straight-forward:
- We need media to be a first-class object in HTML. I vote for media microformats, starting with hAudio.
- We need ways to describe collections of media objects (playlists). We have this. It’s called XSPF. It was created by a loose consortium of like-minded folks in the same way I’m suggesting the rest of these standards are created. A simple, effective, informal process that generates well-documented standards and working software.
- We need a way for creative people to build contexts for media. The replacement for the album cover or DVD case. I’ll talk more in-depth about this in a moment. David Gratton and Project Opus are doing some interesting MPEG-21-derived work here which I’m holding out hope for.
- We need standards for sharing user data. How can I easily import my iTunes collection into Yahoo! or Rhapsody? How can I take my Last.fm data and build an experience on Pandora? We need simple ways of describing and giving these preferences portability.
- We need to define services such as search, resolution of media between services (how can a third-party recommendation system allow for your choice of retailer?), and purchase or provisioning (how can you decide if you want to plug in Yahoo!, Rhapsody, Napster or Lala on the fly to an application created by a third party?).
This list is up for debate but I feel someone needs to throw an opening salvo at some specifics around what we need to build to create The Media Web, this is mine.
Now I know, this is a music industry conference, not a technology conference, and this standards nonsense is all a little heady, something for the computer scientist set, right? I don’t think so. Closing the gap between the Media Web geeks and those of you that make, distribute, and market media is key to our success as an industry as far as I’m concerned. My goal is to give you some insight within which to evaluate new opportunities. To give a concrete example, I’d like to talk about the digital packaging opportunity.
As music fans I’m sure we can all agree that the loss of the album cover is sad. I’ve sat with artists as they’ve labored over their album art, it’s a part of the creative process that’s unfortunately been reduced to a 200 pixel square. Gone is the Billion Dollar Babies
The creative package will return. I promise you. It will look more like a Web site than a gatefold, but it will return. Many people are working on their solutions to this problem. But there is a big question about what shape this will take. The lessons above will all come in to play. We as an industry have a choice if we’re going to flounder around with proprietary solutions or if we’re going to get together to support an HTML-like solution and create massive opportunity for the industry.
In the case the packaging effort is proprietary, labels create packages, labels control how and when you get them. Big companies like Apple, Microsoft, and Yahoo! adopt the package formats (at potentially considerable expense). It works. They’re neat. Users think they’re ok. They help sales but not by an order of magnitude. They do little to change how people discover or recommend music. Key selling point to labels is the “control” they get over the ecosystem. They’re suckers for the control pitch. They even believe it.
In a standards-based approach, labels and artists create packages, but users can create packages, too. Big companies like Apple, Microsoft, and Yahoo! adopt the packages, but at less cost because the community chips in on the development tools and open source efforts can be leveraged by the entire industry to get more for less cost. A vastly different discovery and recommendation ecosystem emerges where consumers can find products on Yahoo!, buy on Amazon, consume on Yahoo! (or elsewhere) and see user-created packages right next to packages created by labels and artists. Users can re-package for new sales opportunities. More creators means more value with less investment. And the artist/label hasn’t necessarily lost any control over how they present their package, they have only lost a fictitious opportunity to create scarcity (while it sounded good, it never really existed).
Here’s an example David Gratton from Project Opus quickly put together of his forthcoming standards-based Jamm techonology:
Discover music on Yahoo!:
Purchase music on Amazon (or elsewhere):
Manage your music on Yahoo! (or elsewhere):
Discover user-created packages right next to the ones created by your favorite artists:
Clearly I’m biased, and you know which approach I hope we choose as an industry. In reality we’ll probably end up with both. The industry will hedge its bets and choose neither, and the whole thing will take a lot longer than it should have, again.
Now I know what you’re thinking, OK, Ian, I kinda get it. I think you might even be right. You should go fix that shit! Heh. I’m here to tell you it’s your problem, too. It’s your industry. Many of these choices are yours. You are in these meetings when these technology companies come by preying on your vulnerability and longing for the good ol’ days when you had control, and wouldn’t you rather trust the venture-backed guys who are your age and have $10M in the bank instead of some intangible “standard”? No. Tell your boss he’s wrong, that you’ve seen this movie before. Understand the physics, trust your instincts, and swim with the current instead of against it. We have fifteen years of example behind us. Do you want to be in on the ground floor of the next Liquid Audio or the next MP3? Rob and I had the same choice 8 years ago and we chose MP3 using the same sorts of evaluations.
So where does Yahoo! fit into all of this? What do you think of when you think of Yahoo! and Music? Yahoo! Music is the #1 Music site on the Internet. Comscore tells us that it’s one of the few sites on the Internet which has had more than 22M monthly visitors for the past two and a half years (an incredible feat). But what is it exactly? What’s the strategy?
We’re in the process of redefining what Yahoo! Music is, and making it the Music destination in Yahoo!’s successful image. Yahoo! is the best starting point on the Internet. The Internet is a massive place, more complex with every passing day. At the same time, consumer expectations for finding what they’re looking for in a small number of clicks (relevance as referred to above) are increasing. From a simplistic perspective Yahoo! today is what Yahoo! was the day Jerry and David started it, a set of tools which makes navigating the Internet easier. Yahoo! Music and Yahoo! Media in general will continue to do exactly this, be the best starting point and help you experience an increasingly complex Media Web.
Just like Yahoo!, Yahoo! Music is not a retailer or a content creator. We’re the best Music starting point on the Web, helping you discover, consume, manage, and share your music. There are people who make music and people who love music, and we’re looking to make an efficient connection between the two, creating an ecosystem which includes both artists and users as value-creators. We’ll be not only giving you content, but also great contexts for that content. We’ll be supporting standards and fostering a true Media Web. In other words, following exactly the three things I’m trying to convince you of today. Join us.
Thanks for listening.
And thank you, dear reader, for reading. If you’ve something in response, please leave a comment. Nothing you say could possibly be any more incredible to me than having Townes Van Zandt’s widow argue with legendary photographer Glen E. Friedman in the comments last time around.
I have a couple of post-scripts to this…
Rob Lord has engaged Chris Messina’s Citizen Agency to help forward The Media Web. Organized leadership is exactly what this movement needs. I plan to put my (and Yahoo!’s) support behind them as well.
They have started a site, OpenMediaWeb.org, to chronicle the emergence of the Open Media Web, and have kicked it off with an interview with the inimitable, genius, and all around amazing Lucas Gonze.
If you are at a media company, I suggest you get involved with the Open Media Web projects. We will be working to pull together a number of companies to align around *real products* which utilize these emerging standards. Through instantiating these standards they will become real and create opportunities. The rising tide can and will lift all boats.
Finally, I thought I’d post the video I shot from my Sanyo Xacti of our day on the snow cat. Jim Lewi and Jason Flom hooked it up, and the posse included Chris and Barbara Jones, Barbie Baylis, Don Strasburg, Matt Drouin, Francoise DeGrandpre, and Michael McDonald. I’d never been on the cat before, and it was an amazing day. I was a little anxious because at 9am PST Zoe would be back at home finding out if she was accepted to MIT or not. It was a very big deal to her and therefore to me. I managed to get everyone on the trip invested in the outcome, and though we fought all day with the cell service we finally managed to get in touch with her and sho’ nuff, she got in. Thanks to y’all for sharing that moment with me, and for not making fun of me for gettin’ all teary.
Enjoy the video, and buy the music in the video:
CRS – Us Placers
Hockey Night – Greet The Dawn
Deerhoof – Believe E.S.P.
Click here if the video doesn’t play for some reason.
Happy New Year,
ian
Not sure I agree that Yahoo is the messiah but can understand you plugging the “home” team. Lots of stuff there for me to think about. been subscribed for a couple of months and this post really made it most worthwhile. Keep up the effort my man.
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[...] Rogers of Yahoo! Music has posted his presentation to the music industry, highlighting the shifting physics of the information world. “The Phyics of Media have [...]
Hey! We made up awards too!! Introducing: The Quiet Revolutionaries at a quiet revolution on 30 Jan 2008 at 10:45 pm
[...] International – Ian Rogers Before the holidays I stumbled upon Ian Rogers blog. I had heard and read numerous mentions of a talk he had given earlier in the year which you can find on his blog at Convenience Wins, Hubris Loses and Content vs. Context, a Presentation for Some Music Industry Friends. Most recently he posted anther talk he gave, Talking To The Music Industry Again, The Aspen Live Conference. [...]
Out of context « Swindleeeee!!!!! on 03 Feb 2008 at 11:14 pm
[...] subject. The first (to which this post is dedicated) is from Ian Rogers of Yahoo!, recapping his presentation at the Aspen Live conference in December: Today users are creating tremendous value and for the [...]
StraussBlog » The Inevitable Rise and Liberation of Music 2.0 on 11 Feb 2008 at 7:20 am
[...] a presentation titled “Losers Wish for Scarcity, Winners Leverage Scale,” Ian says “[w]e’re moving from a world of limited distribution channels and [...]
Bench Marks » Blog Archive » Why Web 2.0 is failing in Biology on 14 Feb 2008 at 12:43 pm
[...] quote comes from a talk given by Ian Rogers of Yahoo! Music at a Music Industry meeting, but it’s very relevant for our business as [...]
Is EMI actually going to do something interesting? « Media - what is it good for! on 02 Apr 2008 at 9:52 am
[...] Merrill, the CIO of Google. Hopefully this will lead to something interesting! As I (and others) said before new business models are required to revive the music industry and to date the [...]
Mark, my words » Yahoo! Music / Rhapsody Integration - baby steps on 02 Jul 2008 at 10:28 am
[...] made our users jump through over the years. We don’t even shove a toolbar down your throat! We’ve been talking about friction free web music for a while now, and it’s finally starting to [...]
The Bytesize Music Blog » Blog Archive » Topspin on 07 Jul 2008 at 9:39 am
[...] I haven’t seen their service in action yet but Topspin is described over at Billboard as a “turnkey suite of technologies and services that provides all the content management and customer relationship tools artists need to distribute and market music directly to fans.” At this point I would usually reach for the snooze button, I’ve seen too many uninspiring offerings billed exactly as this. But this particular venture is well funded and has Ian Rogers as its CEO (if you’re not familar, Ian Rogers is the ex-Yahoo Music GM and was a bit of a hero for me because of this blog post.) [...]
Get Ready for DRM-FREE 2008: Amazon, Napster, Sony, Yahoo Music | Bob Caswell on 17 Jul 2008 at 12:10 am
[...] Music’s VP of Product Development Ian Rogers has been hinting at big news revolving around dramatic changes in Yahoo’s music model. He said, “We’re in [...]
Links - 25th September 2008 « Curiously Persistent on 25 Sep 2008 at 7:03 am
[...] Fantastic presentation on the music industry embracing the Web (Fistfulayen) [...]
Finance 101: Defending Corporate Harakiri | youarekillingme.net on 23 Feb 2009 at 4:43 pm
[...] indexed and freely available. I would tweak the graph slightly (see below) to account for Ian Rogers’ attention scarcity theory so the gap becomes defined by both piracy and people moving to the next piece of content on the [...]
Outdustry — So You Want To Sell Music In China? [Guest Post] on 26 Feb 2009 at 12:47 am
[...] combined with recommendation engines to guide the user along in unfamiliar territory. Ian Rogers recently lamented the death of the album cover but in China a more profound barrier exists that stunts the [...]
Apple Does Digital Packaging at FISTFULAYEN on 30 Jul 2009 at 11:05 pm
[...] Two Octobers ago I pleaded with the industry to embrace standards before some company interested in platform lock-in …. [...]
Music industry change | AlastairC on 13 Sep 2009 at 8:00 am
[...] I wonder who will be the first to create this type of site? It could be the current labels, there are moves in that direction. It seems unlikely though, they are too entrenched in scarcity thinking. [...]