8/14/2019 The Future of Music Publshing - Music Publishers Canada Interview June 2006 (Gerd Leonhard)

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8/14/2019 The Future of Music Publshing - Music Publishers Canada Interview June 2006 (Gerd Leonhard)

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12 Music Publisher Canada  / Summer 2006

In The Future of Music you’re highly criti- 

cal of the old thinking on which the record busi- ness is built and contrastingly positive about 

the future of music publishing. In fact, you 

write: “Ultimately, publishing will, by default,

become inseparable from distribution. The tasks 

 performed by what used to be ‘record labels’ will 

be morphed into the publishing business . . .” 

Can you elaborate? 

The basic thing going on in digital

networks is that something is being pub-

lished; people publish themselves, they 

publish other people. What music pub-

lishers realize is that it’s no longer about 

delivery because delivery is essentially 

free, or at least the cost is moving towards

free because storage is so cheap now. So

the challenge lies not in the distribution

but in gaining the consumer’s attention.

 A publisher makes money by having his material paid attention to,

basically by exposure. The music publisher used to go to Nashville

and tell an artist, “Record this song and we’ll all make a million.”

Now he goes to the web and posts his stuff, essentially previewing it 

as widely as possible through, for example, syndication and blogs,

podcasts, videogames, thereby 

creating demand. So as a pub-

lisher, all you have to do is set up the toll booth a little bit 

later—you don’t want to ask

for money too early because

it turns off the exposure.

MySpace.com is a good exam-

ple, it provides unpaid musical performances and downloads and

nobody’s saying much about it because it’s essentially the next MTV.

Getting all that exposure is worth a lot more than getting $37 for a

performance. So publishers understand that the internet is a great 

 vehicle for exposure, while a distributor, which is really a record

label (at least it used to be), is no longer much of a game because

distribution is not a big deal anymore.

Neither is production—another point you make in your book. These days 

everybody’s got ProTools and GarageBand on their computers and can record 

a song in their bedroom.

Right, but although it’s getting cheaper, it’s not getting easier.

To make a good song or a good production is probably even more

difficult now because you have more options. To me, creating good

content and having professional level production really is profes-

sional work. You may be able to write a song on the spur of the mo-

ment but to whip it into shape and make it sound great is a whole

other cup of tea. So that means the publisher is in particularly good

shape because the song or the idea can be created rather quickly 

but somebody will have to pay for the production, which may or

may not be the publisher these days. All the publisher has to do isget his or her hands into the revenue streams that are basically com-

ing up out of the blue, for example, podcasting and webcasting.

But people aren’t paying for podcasts at this 

 point.

No, but you don’t necessarily want people

to pay for the content in a one-to-one rela-

tionship. For example with a book, you buy 

the book, you pay for the book, there’s no

advertising in the book. But on the internet 

it’s possible to sell all kinds of coupled me-

dia so that people buy one thing but they get 

several others with it. In the bundling pro-

cess you can create value for the user but it 

doesn’t cost very much for the producer. In

the future we won’t sell media like we used

to sell CDs. We’ll bundle it, wrap it in other

offerings, do quite a bit of up-selling, we’ll

move the toll booth.

 As I said, you no longer look to sell a song for $1, that’s not going

to work in any large way. What’s going to work is selling a wireless

subscription to Sprint, for example, where you pay $3 for any and

all streams of music on the network, you just dial in. And with that 

 you have a mechanism to capture interest. But that’s where the legal

challenge comes in; you can no longer say it’s a per-unit or per-copy 

fee. We see a revenue share and this is also why publishers are in a

great position because they’ve always worked with revenue shares,

 while the record guys are so locked into a per-unit mentality.

In the book you suggest that the ownership models of iTunes and other 

digital retailers are doomed, that the model of the future will position music 

as a service rather than as a product. And yet subscription services have so  far been very slow to catch on. What do you think will be the chief catalyst in 

shifting the public’s consumption behaviour? 

Music subscriptions as offered by Napster and Yahoo and Rhap-

sody are fantastic services but they’re not quite working yet as tech-

nologies because you can't port the music to a mobile device (at 

least you couldn't the last time I tried). So there are significant 

problems because of digital rights management software. Subscrib-

ers have to be painstakingly geeky to make it work. iTunes is so suc-

cessful because it’s fashionable and it’s a great device, but music-

 wise, eventually you stop buying at $1 per song, I mean you’re not 

going to spend $20,000 to fill your iPod.

The only way to solve the problems in the music business is to go

from buying to subscribing because the value proposition for theuser is much more powerful. As a subscriber I have seemingly limit-

less choices and it feels like free in a way, just like

“The only way to solve the problems in the music business is to go frombuying to subscribing because the value proposition for the user is muchmore powerful. Imagine the kinds of exploration that will take place whenpeople can surf for music the way they surf on cable TV.”

Q UESTIONS for Gerd LeonhardCo-author of The Future of Music talks about how and why musicpublishers are poised to make themost of the digital revolution.

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