Skip to main content

Alternative Business Models in the Music Industry

Read an interesting blog post titled "The Future of Music Business Models (and Those Who Are Already There)" by Mike Masnick. I don't know much about the music industry, so thought it was interesting.

The main take-away of the new way to approach music business models is:
Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model
The business models he used as examples ranged from giving away music for free online (but charging for "packages"), to getting your fan-base to fund your next record, to

Here were the examples:
  • Trent Reznor of Nine Inch Nails - They give away their music for free online, but ask that you sign-up for their email list. You then get emails about their upcoming tour dates, can find ways to connect with other fans (like forums, mobile apps, and user submitted videos), to purchasing higher-end packages. He's made a lot of money this way ... despite giving the music away for free.
  • Drummer Josh Freese - He priced his album similarly (near free), but then sold off personal services like a personal 5-min phone call, dinner at PF Changs, private drum lesson, and even a day at Disneyland.
  • Jill Sobule ("I Kissed a Girl") - Many of her labels either went out of business or dropped her, so when she was creating her new album she funded it via her fanbase. Fans could get rights to visit any show for the next season, could have a private concert at their home, or could even appear on the album itself.
  • Others -
I think my personal favorite out of all of those was Jill Sobule and how she had her fanbase fund her new album. Can you imagine a crowd-sourced label where fans themselves fund the production of new music directly? Heck, they could even share in the proceeds. I can just imagine someone like ReverbNation adding that to their services pretty easily.

Here's an excerpt from the blog post that touches on making the connection between fans and artists closer:
Adding in new licensing schemes only serves to distort this kind of market. Fans and artists are connecting directly and doing so in a way that works and makes money. Putting in place middlemen only takes a cut away from the musicians and serves to make the markets less efficient. They need to deal with overhead and bureaucracy. They need to deal with collections and allocation. They make it less likely for fans to support bands directly, because the money is going elsewhere. Even when licensing fees are officially paid further up the line, those costs are passed on to the end users, and the money might not actually go to supporting the music they really like.
Doubtful the music industry will entirely head in this direction, but interesting to see how folks are working with alternative business models.
Labels:

Comments

Post a Comment

Popular posts from this blog

Dancing on the Edge of a Volcano

I found this opinion piece ( Democrats aren't innocent bystanders ) interesting on how both Democrats and Republicans share responsibility for polarizing the electorate and undermining some of its faith in democracy. It references two other posts that were pretty good as well: The Disease of Delegitimization The Weimarization of the American Republic The second article is really long and heavy on history.  But given all of the comparisons people make between the current times and those of post-WWI Germany, I found it interesting to dive in to understand where the comparisons are coming from and how close we really are.  The short answer is that we aren't that close (phew). Seems like post-WWI Germany was incredibly fragile.  This was a good excerpt that summarized it: So, unlike the 60s, you have a dynamic in which both sides are behaving like radicals, in which the establishment isn’t yelling “stop,” and in which oikophobia is more evenly distributed, relative to its Boo...
Post a Comment
Read more

The Fortunate 400

So there's rich, and then there's super rich. I recently read an article in the WSJ about the top 400 taxpayers based on income. Pretty incredible statistics. Those top 400, or what they call the "Fortunate 400", pulled in $85.6 billion in income in 2005. That's over $200 million each ... in one year! Here's a quick graphic to drive that home: Very impressive. There's all the obvious jaw-dropping statistics to go with that. For instance, to make the cut to be in the 400 you had to pull in at least $100 million. With an average of $200 million, that means there's people pulling in well over that number. Obviously, quite crazy numbers, and generally speaking not necessarily anything to be concerned about. I'm all for capitalism. But one of the more disheartening statistics was that adjusting for inflation, the minimum income to make the cutoff into the Fortunate 400 has nearly tripled since 1992. That's probably not a good sign as I imagine that...
Post a Comment
Read more

Nine Prescriptions for Building the Duke Entrepreneurial Community

I think Duke can have one of the strongest entrepreneurial communities in the world. Are we there yet? Well, not yet. But there's a tremendous amount of momentum that I saw build in just the past two years while I was getting my MBA at Duke. While leading Duke's 10th annual business plan competition, the Duke Start-Up Challenge (DSC) , last year, I witnessed a near doubling of participation on campus in just a single year. The interest on the ground was clearly there and building rapidly. But now that I'm an alum, I'm looking back and wondering ... how do we rev-up the Duke entrepreneurial community even more? I read a great article by Daniel Isenberg, a professor of management at Babson, called " How to Start an Entrepreneurial Revolution " in the June edition of the Harvard Business Review. Isenberg outlines nine prescriptions for governments that want to create entrepreneurship ecosystems in their countries. Although he was focused on governments an...
3 comments
Read more