What’s Ahead For 2011? George Howard: I Hope We’ll See Greater Clarity In Licensing Fees For Streaming

Gh state road As we end the year, Hypebot asked some our favorite thinkers, writers, and friends to answer two questions – one looking forward and the other back. Here George Howard, a music industry educator and leading blogger, answers.

Hypebot: What do you see as the most important business and consumer trends that will shape the music industry in 2011?

George Howard: What's happened over the past decade(s) or so is this:

We went from a society where the few had a voice, and the many had none. We were essentially "talked at" by advertisers, marketers, and "gatekeepers" of many stripes. The Internet, of course, not being about commerce, but rather about telling stories/reclamation of the voice (please see "The Cluetrain Manifesto") allowed for a redistribution of the voice from the few to the many.

Social media amplified these voices. The problem is that once everyone has a voice, particularly after not having one for some period of time, everyone yells.

Where we are/where we're going is this:

We're currently in the last stages of yelling. What's coming is the organization of disparate voices into more meaningful "conversations" (again, please read "The Cluetrain"). It makes little sense that my FB feed is full updates from family members/business associates/people I don't really know/friends/restaurants, etc. We'll see, therefore, splintering of networks into more specific verticals of interest.

This will bleed over into music. What people in the music startup world keep missing is that the VAST majority of people don't want every piece of recorded music. Rather, they want what they like, and then they want to be led to other things that they might like by people they trust. This is why Pandora has succeeded (possibly false factoid: the number three most-listened-to genre on Pandora is Jazz – this tells you everything you need to know about how people "use" music). So, we'll see curation take center stage (maybe in 2011, or later, but it's the grail).

Of course, it'll be cloud-based, of course streams will surpass downloads. Vinyl will still matter, but less because it's a better listening experience (it is), and more because it's the ultimate "social object" for music (please read Hugh MacLeod's blog: Gaping Void).

What I *hope* we'll see is greater degrees of transparency and clarity with respect to licensing fees for streaming (interactive/non-interactive/mobile, etc.). Only when this occurs will we get true innovation. There are a tremendous amount of SMART possible participants eager to enter the music space, but reluctant to do so because they can't gain clarity with respect to costs associated with streaming. Thus, the risks and transaction costs are too high for anyone with sense to enter; so, we get who we get.

Hypebot: Since this is ultimately all about music, what were your top musical moment(s) of 2010?

George Howard:

1. Playing "Radio Free Europe" on my guitar while my 5-year-old daughter accompanied me on her violin

2. Seeings Dave Rawlings and Gillian Welch and (separately) mgmt do mind-blowing Daytrotter sessions

3. Watching Mark Isham reinvent jazz at a small club in LA4. Reading Kristin Hersh's "Rat Girl" while listening to her new record, "Crooked."

George Howard is an Executive in Residence and Assistant Professor of Management in the College of Business at Loyola, New Orleans. He advises a number of music and non-music companies and individuals. He blogs at: www.9giantsteps.com and can be followed on Twitter at: www.twitter.com/gah650

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  1. Has George checked out songza? A more social, customizable free streaming service ( no audio ads, bigger catalogue than pandora, and no audio ads).

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