I could hardly wait to see Tim O’Reilly, the man who is credited with coining the term Web 2.0, give his keynote on Wednesday. I expected to hear about cutting edge innovations in business models, groundbreaking developments in software, and the effect that Web 2.0 is having on the world offline; there was just so much to talk about! I’m sad to say it was a disappointing speech. He talked about a narrow version of Enterprise 2.0, data mash-ups. He mentioned Wesabe a company of which he happens to be a Board Member.

I walked out half way through, bored and wanting more. So I headed down to the Expo floor with my partner in crime, David Preciado, where I was met with more disappointment. It was a typical expo set-up. Rows of booths with huge displays staffed with personnel in branded t-shirts reciting memorized pitches. And, of course, TONS of brochures, hand-out, pens, foam balls, stuffed animals and other useless crap with company logos splattered all over them. Much of this stuff would end up in the collection cans outside the Schwaggin’ Wagon.

It was very disheartening, while O’Reilly was calling for Silicon Valley to take on bigger challenges (a part of the keynote I admittedly missed); the companies represented at his conference were anything but innovative. Now, I’m not a tech expert by any means, my specialty is marketing and from that perspective – there was no innovation or revolution or new standards setting happening, except in the white van parked in the loading zone outside the Mascone Center.

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Hello guys and gals. I’ve been on hiatus from my blog in August, feverishly working on my new book about blogs and blogging. Once it’s ready I’ll give you more details.

In the meantime…here is a video presentation of Gerd Leonhard on the Future of Music. Gerd is the head of Sonific, a streaming music application. He calls himself a Music Futurist and has written several books on the subject. Rick Rubin recently quoted some of his ideas on subscriptions services in an article for the New York Times. I have not read any of his books but based on this informational video, he knows his stuff.

Pay close attention to his new paradigm of purchasing. “It is no longer a pay first paradigm.” How true.

Cruxy is a new service that provides tools for the musician and filmmaker to market, distribute and monetize their assets. It was sent to me by a friend in the tech world, where there is apparently a buzz about Cruxy. However, from a music world perspective, they are lacking a credible music community. It is worth keeping an eye on their progress. If they have a solid platform that delivers what it promises, it may catch on.

Here is a description of the company from their ABOUT page:

“Cruxy provides powerful marketing, monetization and performance tools for digital creators, whether filmmakers, musicians or artists of any kind. Cruxy’s tools give artists the power to share their work on Cruxy or across the web using the Cruxy Social Player. Cruxy also gives creators the ability to sell their work as digital downloads. The artist chooses the retail price and the file format. Cruxy registers the work with search engines, generates thumbnails and previews and handles all aspects of the financial transaction. Cruxy also provides a robust set of analytical tools so that creators can track and improve their progress.”

They also help you sell your wares in virtual worlds like Second Life. Included in their services are a real time analysis of your sales and Internet buzz. Valuable information for any band self-managing. And…you can monetize any asset that can be made into a digital file; drum beats, video clips, ringtones, and photos. The Long Tail model for bands is emerging.

How will music be profitable in the future? In the recent Rolling Stone article, “The Fall of the Record Business: What Next?” five music industry pros theorize on possible scenarios.

Theory 1: Ad-Supported Music
Yahoo! Music General Manager Ian Rogers says all music will be free - paid for by ads - and any song by any artist will be accessible from anywhere in the world.

“I can imagine a future where you just consume a hell of a lot of music - just hit ‘play’ on any player, and hear music. There’s an ad experience there, and we’ll pay the labels a percentage of that ad revenue. All devices will be connected to a network and we can find anything we want and hit ‘play’ without connecting our device to our computer and dragging a physical file over. People are going to have the expectation that they can get to anything whenever they want to.”

There is already evidence to support this idea in companies like We7 and the number of media sites integrating the model of ad revenue sharing. Another theory in the article speculates labels will change their stripes and take on more management and publishing roles. A solution that makes sense, but not likely to see this in the near future. Terry McBride, who I am usually a big fan of, presents the idea that consumers might become retailers. I see that as a logistical nightmare. Read the other four theories here.

LAMbCase enables artists to sell their entire CD in a digital file using a technology similar to Win Zip. They were featured in the CMJ newsletter today. Here is what the company has to say about their product:

“LAMbCase is the name of our patented container format which allows easy distribution and payments of digital products. Using our system, content owners can sell retail equivalent CD and DVD titles along with web based formats such as MP3 and iPod compatible video.

Our services are intended for content owners serious about delivering digital goods with the quality and standards consumers expect from retail products.

Our system works in 3 easy steps:

Your content is stored under a dual layer AES 256 shell! This is double the security used by governments using password protected Zip files.

We provide sellers with extra features such as:

A HTML badge which can be placed on your website or MySpace page:

And advanced features such as real-time payments and “point of sale” split payments for up to 3 partners!

“

We7 is a company that is taking on the world of FREE music with a new slant. By placing an ad in the digital file, they can make DRM free MP3s available for FREE download AND the artist gets paid. Once the file has been played a few times, the ad disappears. Sounds good, right? Check our their site here - We7.com

Let me know if you like it.

The first time I heard about Freemium was on my new favorite blog A VC.
Who knew a Venture Capitalist could be so cool!

I highly recommend reading his article on Freemium and the music business.

“I’ve riffed on the notion of free as a business model frequently on this blog. We’ve even come up with a name for a business model that uses free as its foundational element - ie freemium.

The fact is that the Internet demands a free business model. It’s a network where content flows freely in abundance. Scarcity works great for physical goods, but crumbles in a digital world.” Read more…

Some of us in the music biz have been waiting for something like this to materialize for the last few years. Although this may not be the brass ring - it is an option worth exploring.