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FMC: Monetizing Sharing Through Recommendation Systems

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[by Derek Slater] Today we returned to the topic of recommendation systems, jump-started by Sandy Pearlman‘s “5 cent solution” for monetizing the billions of uncompensated P2P downloads. Pearlman suggests that combining robust search and recommendations with a close to zero price point would provide a way to make P2P pay. What would be lost per song would be made up in volume, as recommendations would make it incredibly attractive to download. Robert Kaye and Dan Levitin highlighted how recommendation systems can allow fans to automatically generate playlists that suit their general tastes and present mood.

The 5 cent price point isn’t the meat of the proposal, and recommendations aren’t only important in this particular context. This specific proposal does highlight the bigger picture, though — instead of getting stuck in legal quagmires and demonizing sharing, future business models and innovators must focus on leveraging it and giving music fans a richer experience. As I pointed out at the panel, P2P as it stands is a primordial form of media search and sharing, but we’ve continually chilled innovation in that field. If sharing – whether in the form of podcasting or P2P streaming like Mercora – is seen as an opportunity, everyone will benefit. Let’s not make the same mistake with novel sharing tools that we did with P2P.

Gartner’s Mike McGuire highlighted how tools for managing and discovering music collections are increasingly being used. Gartner’s surveys show that use of playlists to listen to music is quite common. In turn, playlist sharing may be an attractive, accessible tool.