future of sound hmn v4
TRANSCRIPT
2012Monetizing Music
Hany Nada
- Disrupting The Music Eco-System
“You've lost control of the means of distribution, promotion, and manufacturing. You've lost [inventory] control… what you sell has become as free as oxygen”
-Michael Wolff, NYT
We’re doing it wrong
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• Music is not a product it’s a Service• You don’t have customers, you have
Fans and Patrons• Business model is antiquated, its not a
one size fits all business, analyze and segment
• Lawyers don’t innovate, entrepreneursinnovate
Fan Engagement = $200B industry
Product vs. ServiceCustomer vs. Fan
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• It all started with sheet music• Creation, distribution, promotion and
monetization were controlled under a licensing and access model facilities by strongly defined structure and a Self-reinforcing system
• “One size fits all” packaging of music• $$$ to lure broke artists/bands ensures
sustainability of old model• Do you know your fans ?
Customer
Patron Fan
Stuck in old mind-set
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Stone Roses Heaton Park performance, 70K fans Video
• Problem with entire ecosystem• Needs dramatic disruption• New ways to engage with fans• Segmented offers/services• Give away the product, sell the
service• “Crossing the chasm” moment
A Monetization Eco-System
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Minnows
Segmentation + Tools = Data you can act on to maximize your revenue potential
DolphinsWhales
Give Whales special Access Reward Dolphins to keep them engaged and loyal
Monetize Minnows by allowing them to extend fan base
NFL’s Fan–based $40B franchise
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Suites$125k-$500k
Club Section 20k-80k License
+ $400/game
Reserved Section$2-$12k License
+$100-$200/game
“Bleacher seats”$2k License + $85/game
TV Rights
TV rights for “Minnows” worth $6B/year
Packers – ARPF:$390 / NFL ARPF:$50
* CBA states that players get ~50% of revenue
49ers Stadium:$675mm and counting…
Free to play games
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• Heavily data driven
• $50mm-$1B gaming franchises
• 2-10% of gamers actually pay
• 50% of revenue are 5% of payers
• ARPPU of $0.10-$40.00
• Whales spend $10k/month
• Value fan base, game longevity matters
Virtual Monetization
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• Poison made $50k last month
• Creative monetization strategies based on human behavior• “Front of the line”• Bragging rights• Super fan status• Channel control
• ARPF = $0.16• ARPPF= $2.38
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Kickstarter breakdownWhales- 48% of raise
949 Fans/4% of baseRange of contribution $300-$10,000Signed album+ book+ surprise gift“Veblen” Goods
Dolphins- 49% of raise13k Fans/ % of baseOffers: $25-$125Prerelease CDs+ booklets“positional goods”
Minnows- 3% of raise11k Fans/45% of baseOffers: $1-$5single track + album downloadsFacilitates Dolphins and Whales
$540k
$550k
$37k
949 Fans4%
13k Fans51%
11k Fans45%
Free To Play Music
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• Become very active in social marketing• Give your [product] to sources that are
willing to share the data!• Segment and target fans with specific
offers – Fan Relationship Management• Create specific and scalable offers for
your Whales, Dolphins and Minnows• Learn economics- there is a science to
this
What’s Your ARPF ?
Thank YouHany Nada / [email protected]