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Music 2.0 the Telco 2.0 way

The week that the real Music 2.0 book launches, we were having a backchannel conversation on future business models for the content industry. We think there’s a strong parallel between music and telecoms — high fixed cost businesses trying to recover that value through products with zero marginal cost of production, and therefore a tendency towards zero as the marginal price.

The thought process therefore needs to be similar: What’s the fundamental value in music… or telephony?

I’m listening to Pink Floyd’s Meddle right now (for the 712th time). Why? Well, a Wikipedia article on Radiohead’s lead guitarist cited it as an influence. And I was reading that after watching the stunning (ahem, pirate) Radiohead performances on YouTube from Later with Jools Holland back in February, which as I told my brother at the weekend…

OK, let’s stop there. Among other things it’s about (i) fandom — discovery, belonging, experience and emotion; and (ii) shared experience — recommendation, weekend house party soundtracks, concert-going, toked and smoked out festivals, etc. These overlap.

So how could you build a business model around that? Well, we’re all potential microsponsors and millipatrons of the arts. And just as billionaire sponsors of the arts like to have their name on the concert hall, us thousandaire plebs won’t want to look like cheapskates in public. If people want to share music, let’s turn that from a bug in the business model into a feature.

What if every album or track sale was also effectively a lottery ticket to the concert; or at least buying the recording would make you eligible for the concert, but that those receipts could only be redeemed for concert ticket applications in date order. You get rewarded for buying, and being in early. Imagine Radiohead’s 1993 Pablo Honey receipts on sale at eBay for $1000… but thanks for discovering us. Oh, and your odds are proportional to the dollars spent, so a mega thanks for getting the deluxe box set.

And then what if you get a digital receipt for every download, and you can show your support on your MySpace page. “Genuine verified supporter of Radiohead”. Roll over to see Verisign announce which albums you really paid for. Freeloaders need not apply.

And then what if the purchase was also a bundle, which included the ability to gift the content. Potentially to an unlimited number of recipients. Just the recipients don’t get sponsor and supporter status, or a place in the concert ticket queue.

And then what if you could be upsold to the “mobile plus” version, where all the distribution costs of gifting were included. “John, I’m sending you this amazing album. You’ve got to listen to it now. All the mobile data charges are included. Ciao, M.”

Or why not be able to listen to whatever Thom Yorke has on his iPod right now… for a fee?

There’s a pattern here. You make money because of the music, not from it. Concert tickets and t-shirts, not albums. There’s still money in the base product, but that is priced and packaged in ways that accellerate the other lines of business.

Could telecoms go the same way? Perhaps the most important economic thing in a phone call in 2018 won’t be the access or minute charges. It’ll be getting a receipt for each call. You can then feed it into LinkedIn (or whatever’s popular in 2018), saying: I gave you my most valuable thing — my time — for 12 minutes 47 seconds on 30 March 2018. Because without that, my call won’t be routed though to you or your friends in future. The value will be in protecting the time and attention of users, not metering out network access by the dime. I’ll be in the “straight to voicemail” or “access denied” categories unless I’m verifiably a buddy of yours, or we’ve made an agreement to talk.

For a practical look at the closer future of the voice and messaging business, we’ll be publishing our Consumer Voice & Messaging 2.0 Report at our next Telco 2.0 event.

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