Abstract
- Ten System-V Services
- Distribution: Supply Chain
- Retail Strategy
- Revenue Leverage
- Developer Community
- Security and Privacy
This report is a blueprint for a completely new music industry, which we have
called System-V.
Unlike the current music industry, System-V would be perfectly aligned with
consumer behaviour and with the powerful forces of technological change.
Today, these trends are slowing destroying the music industry but, with
System-V, we show how they could be harnessed and used to generate a new
category of revenue that could be enjoyed by record labels and music
publishers.
The music industry' s problems are so profound that a major rethink is
required. Concepts that the industry has held dear for decades now seem
increasingly redundant. The industry' s value chain, its approach to pricing,
the underlying infrastructure, the role of copyright and even the industry' s
core commercial model and its value proposition all need a radical rethink.
In a System-V world, music would be provided for free. Uncontrolled copying
and sharing would be encouraged and DRM would be removed. System-V is not a
rental model and users do not buy music. Existing copyright laws as they apply
to sound recordings would be redundant.
A thriving developer program would be a critical component of System-V.
Developers, entrepreneurs and established companies would be encouraged to
create new, value-added applications, products and services that incorporated
music, but they would not have to pay the music industry anything.
The System-V API would provide access to a wealth of information about the
world' s consumption of music and allow third parties to develop broad range of
new products, applications and services that would draw users and others into
the System-V ecosystem.
This report describes System-V in detail by covering aspects such as the
underlying strategic rationale, business considerations, infrastructure
requirements, operational aspects and enabled user services.
Table of Contents
INTRODUCTION
- BACKGROUND
- RELATED REPORTS
A NEW MODEL: SYSTEM-V
- RETHINK 1: FREE MUSIC IS GOOD
- RETHINK 2: UNCONTROLLED COPYING AND SHARING IS GOOD
- RETHINK 3: HARNESS THE POWER OF TECHNOLOGICAL INNOVATION
- Unstoppable Force
- Implications
- RETHINK 4: FORGET MUSIC OWNERSHIP AND FORGET MUSIC RENTAL
- RETHINK 5: DRM IS BAD
- With the benefit of hindsight…
- Role of DRM
- Observations
- RETHINK 6: DON' T SELL VIRTUAL RECORDS, SELL ' PLAYTIME'
- RETHINK 7: CREATE AND HARNESS A DEVELOPER PROGRAMME
- RETHINK 8: MP3S & FULL BACKWARDS COMPATIBILITY
- RETHINK 9: P2P IS GOOD
TEN SYSTEM-V SERVICES
- 1. MUSIC BROADCAST
- 2. MUSIC SEARCH
- 3. AD-SUPPORTED MUSIC SERVICES
- 4. MUSIC BACK-UP
- 5. REMOTE ACCESS
- 6. @ HOME SERVICE
- 7. WIDGETS
- 8. LIVE MUSIC
- 9. B2B - EXAMPLE 1: USAGE REPORTING
- 10. B2B - EXAMPLE 2: CHARTS
THEORY AND PRACTICE
- DISTRIBUTION
- Current Approach: Linear Distribution
- System-V Approach: Non-linear distribution
- Developer Community Encourages Adoption of System-V
- RETAIL
- Selling Digital Downloads - Retailer Objections
- Selling System-V ' Playtime' - Retailer Concerns
- A New Retail Market
- Enabled Retail Scenarios
- Cashflow-friendly
- PRICING
- Option A: Differential Pricing
- Option B: Collective Licensing
- REVENUE LEVERAGE
- Example User Scenario
- Publishing Upside
- SERVICE REGISTRATION PROCESS
- Pre-pay Accounts
- Subscription Accounts
- SECURITY CONSIDERATIONS
- New form of Piracy
- Role of Hackers
CORE INFRASTRUCTURE
- KEY COMPONENTS
- TAGGED MP3S
- Reasons for Tagging
- Privacy Considerations
- Civil Libertarians
- CENTRAL ADMINISTRATION FUNCTION: ADMINCO
- REPORTING FUNCTION: REPORTCO
- DISTRIBUTION FUNCTION: DISTRIBUTECO
- Content Upload
- Security Considerations
- Onwards Distribution
- DEVICE SOFTWARE
- Component 1: Playback Enabler
- Component 2: Service Enabler
- Service Provider Software
- DEVELOPER COMMUNITY
