Transmission #2

Jim Rondinelli talks about the need to change certain paradigms in the music industry at the Transmission 2009 conference

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We are home!  Just in time for the 8 day holiday.  What are you guys doing?  Modern Sky Festival, 60th birthday celebrations, JZ Music Festival (OK, so that’s not during the holidays)?  We will be heading to Beijing for day 1 of Modern Sky, so expect some more localized (and China centric) reporting coming up.

However, in tune with our commitment to posting the more amazing bits and pieces that we’ve been exposed to over the last 2 weeks, we give you Jim Rondinelli (bio HERE) who was talking about the rather pretentiously named “Carthago delenda est” (literally, Carthage must be destroyed”).  Despite the title, Jim was an extremely bullish speaker, confident about the future of the music industry if certain paradigms can be reversed (particularly the issue of actual ownership).  Here it is in full:

JIM RONDINELLI – Cathago delenda est

SVP Strategic development Slacker Inc. (Slacker is a personalized radio service, available as an app for streaming radio on Blackberry)

Jim started off by insisting that we need a multilateral approach to distribution. The music industry is currently an adversarial world: Labels are adversarial to publishers, publishers are adversarial to the labels and artists are adversarial to both. Tech companies see them all as adversaries. This hugely unhelpful atmosphere creates a large log-jam – it shrinks and delays new opportunities.

The future is on mobile devices. IPods are finished (sales are 15% down this year, predicted to be down 30-40% next). Let’s try not to make the next transition to mobile the same fracas as the others.

He feels well placed to comment: he has been a producer, did mp3.com biz dev., had a US$1.2bn venture fund, some of which was for entertainment/ tech portfolio. He was then head of digital for Warner Chappell.

The pricing level for music was set way too high and it still is. Need to address this dissonance. THE CARDINAL RULE IS: IF THINGS GO WRONG, DON’T SUE YOUR CUSTOMERS.

The music industry has been reticent to embrace new business models: It should be taking advantage of the new business models out there – Last.fm is NOT substitutional to the purchase of music (rights holders would prefer not to license, as they feel it might cannibalize sales).

For VCs, they should be investing money in a human factors engineer when analyzing potential investments. These will help to predict your revenue threshold. A lot of money chases after businesses that are set to fail because the human factors are misaligned.

Need open and clear ownership information for these new businesses to thrive. This lack of transparency is blocking development.

  • PREDICTIONS:
    The absence of transparency of ownership will result in massive class actions from owners – copyright holders not doing their fiduciary duties will lose the copyright
    In music we have been our own worst enemy and it is now happening in film etc.
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