Villa+S+Final+Report+Proposal

Villa S TO: Proximity Music Team FROM: Scott Villa SUBJECT: Proposal for Revenue Sharing Between P2P Networks and the Music Industry DATE: April 25, 2010

Due to the rapid decline of digital music sales over the past few years the artists as well as the record labels have shown massive declines in revenues. Almost all of Gen-Y has shown a reluctance to buy legal downloads from places such as iTunes and other pay sites. We need to develop a new business strategy that will bring in more revenues to the music industry. I propose to write a report on revenue sharing through advertisements between illegal music download sites and the music industry as a whole.

** Here in the U.S. members of Gen-Y don’t feel threatened to download music illegally because we have such liberal laws on internet piracy. So if you can’t beat them you may as well join them in terms of creating a way for everyone to make a profit while still allowing this type of downloading. It is important to look at the following circumstances in which illegal downloading have changed the way the music industry goes about making money:
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· The music industry is starting to look into product placement to generate needed revenues · Advertising has shown to increase revenues for the sites that allow it but this money is usually given directly to the site and not shared with the music industry. ·Limewire’s 80 million users generate an estimated five billion search requests each month, putting the P2P client in the same league as search engine giants like Google and Yahoo · Limewire CEO George Searle announced a plan to payback rights holders at the P2P Media Summit in Los Angeles. His plan is to split the revenues of its upcoming contextual advertising platform with record companies where they would receive as much as 40% of what Limewire will make off of advertisements.

If Gen-Y in America sticks to its way, which I’m sure they will, then changing to a pay only system won’t be effective. Mostly because then you will have one person buying the music and then recording it by CD for all of their friends who can then rip it to their hard drive. With the socialistic President Obama in office who knows if we will go to a European model that has a three strike system for illegal downloaders (I wouldn’t count on it). Using George Searle’s model the music industry can generate revenues by not doing a single thing other than make the music that will promote the advertising on P2P networks. We must also explore the possibilities of product placement in the music industry to generate these lost revenues.

** The proposed report: “If You Can’t Beat Them, Join Them: Revenue Sharing in the Industry” will deal with the following topics:
 * Topics

· The rapid decline in music sales and its effect on the overall industry · Policies used overseas that regulate illegal downloading more effectively than here in the United States. <span style="font-family: Symbol; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; msobidifontfamily: Symbol; msofareastfontfamily: Symbol; msolist: Ignore;">· <span style="font-family: 'Times New Roman','serif'; font-size: 12pt; line-height: 115%;">Ways for advertisers to use the music industry as a media to reach Gen-Y <span style="font-family: Symbol; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; msobidifontfamily: Symbol; msofareastfontfamily: Symbol; msolist: Ignore;">· <span style="font-family: 'Times New Roman','serif'; font-size: 12pt; line-height: 115%;">Product placement in the music industry (music videos) Sources ** <span style="font-family: 'Times New Roman','serif'; font-size: 12pt; line-height: 115%;">The following are the resources used to complete this report:
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<span style="color: black; font-family: 'Times New Roman','serif'; font-size: 12pt; line-height: 115%;">Pfanner, Eric. (2010, March 14) "British Put Teeth in Anti-Piracy Proposal." //The New York Times//. Retrieved April 23, 2010, from <[]>.

This article talks about how the UK, France, and South Korea are trying to pass laws that will stop internet piracy. These laws are similar to the three strike theory where your internet service will be shut down upon your third violation of piracy.

Hampp, Andrew and York, Emily Bryson. (2010, March 13) “// How Miracle Whip, Plenty of Fish Tapped Lady Gaga's Telephone.” // Advertising Age. Retrieved April 23, 2010, from []

The authors describe the various product placements in Lady Gaga’s “Telephone” music video and how they have affected the companies who placed the ads. Many of the advertisers have said they are very happy with the outcome of the plug-ins since they have reported increases in sales following the music video’s popularity. <span style="color: #494949; font-family: 'Times New Roman','serif'; font-size: 12pt; line-height: 115%; mso-ansi-language: EN;"> Roettgers <span style="color: black; font-family: 'Times New Roman','serif'; font-size: 12pt; line-height: 115%;">, Janko. (2008, May 13) “ <span style="font-family: 'Times New Roman','serif'; font-size: 12pt; line-height: 115%; mso-ansi-language: EN;">Limewire wants to give record labels a cut of its ad revenue.” P2P Blog. Retrieved April 23, 2010, from []

Limewire CEO George Searle plans to share profits from Limewire’s Google-type ads with record companies. Limewire plans on giving up to 40% of what they will make from these new ads.