Digital Music Business Models

Top PDF Digital Music Business Models:

DIGITAL MUSIC REPORT New Business Models for a Changing Environment.

DIGITAL MUSIC REPORT New Business Models for a Changing Environment.

Music companies are working to cut through the “noise” from myriad digital channels to generate commercial value for the works of their artists. EMI Music’s chief executive Elio Leoni Sceti says the work of a music company today is “managing multiplicity and complexity” and that its role is to help artists reach consumers wherever they are with great music in a marketplace that is increasingly complex, with partners ranging from games companies to mobile phone operators. In order to better understand consumers, EMI plans to rollout its emi.com site. Its main purpose is to be a “learning laboratory” where the company can develop a deeper knowledge of how consumers experience, interact with and purchase music. Simon Wheeler, director of strategy at Beggar’s Group, which includes brands like XL Recordings, Rough Trade and Beggars Banquet, says music companies’ skills are essential in connecting artists to consumers in the complex digital world: “For the artist to connect with the consumer through all of these new channels needs a big team of people – without that it’s just not realistic, even for the biggest management company.” Helping build an artist’s career does not mean just telling them what they want to hear. Ged Doherty, chairman and chief executive of Sony Music UK, says that he twice had to tell one well-known act that their new album was not up to the standard that they could achieve. Because of their good relationship, that act reworked the album which has now proved very successful. “Sometimes you have to be brave enough to say the baby is ugly,” says Doherty. Labels open other doors for artists too. Nick Gatfield, president of A&R Labels, North America and UK, EMI, recalls signing Amy Winehouse when he worked at Island Records: “She had real, raw talent, but she was just 17 and it took time to develop her vocal skills and her song writing. We experimented with different styles and rehearsed and improved her live performances. The pay off came when she released Back to Black as we harnessed her natural talent to produce a coherent album.”
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Future Business Models of Music,
An Intellectual Property Perspective :
A New Perspective on Copyright Protection, Methods of Utilizing Revenues and Business Models in the Electronic Music Industry

Future Business Models of Music, An Intellectual Property Perspective : A New Perspective on Copyright Protection, Methods of Utilizing Revenues and Business Models in the Electronic Music Industry

Another factor driving illegal downloading online is that the generation of digital natives is used to receiving all kinds of information really fast. As Sano-Franchini (2012) said about digital natives: “They like to parallel process and multi-task. They prefer their graphics before their text rather than the opposite. They prefer random access (like hypertext). They function best when networked. They thrive on instant gratification and frequent rewards. They prefer games to “serious” work.” Combined with the aftermath of the era of Napster, representing a profound cultural shift., signaling “a new “digital ethic” of text use and file distribution that runs counter to the usual expectations that have governed sharing and use of print texts.” (Sano-Franchini, 2012) This cause of a subconscious shift in peoples’ understanding of copyright, usage and ownership, made it rather unclear what is considered “appropriate” use of intellectual property and copyright- protected works. This way it is often easier to download music online, for example by directly starting a Youtube download while simultaneously watching the video to receive instant gratification, rather than visiting an external website and going through the purchasing process. These circumstances limit the functionality of existing business models in the music industry.
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Business Models, Business Strategy and Innovation

Business Models, Business Strategy and Innovation

Additional impetus has come from the growth of the Internet, which has raised anew, and in a transparent way, fundamental questions about how businesses deliver value to the customer, and how they can capture value from delivering new information services that users often expect to receive without charge. It has allowed individuals and businesses easy access to vast amounts of data and information, and customer power has increased as comparison shopping has been made easier. In some industries, such as the recording industry, Internet enabled digital downloads compete with established channels (such as physical product sales) and, partly because of the ubiq- uity of illegal digital downloading, the music recording industry is being challenged to completely re-think its business models. The Internet is not just a source of easy access to digital data; it is also a new channel of distribution and for piracy which clearly makes capturing value from Internet transactions and flows difficult for recording companies, performers and songwriters alike. More generally, the Internet is causing many ‘bricks and mortar’ companies to rethink their distribution strategies e if not their whole business models.
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IFPI Digital Music Report 2008

IFPI Digital Music Report 2008

The DRM-free model is one way to avoid the interoperability problem. It allows consumers to buy music from any store, take their tracks wherever they want and play them on any device. The use of a non-DRM model led to new services such as Amazon entering the already-established digital music market. Amazon’s new service sells music in a format that is compatible with a vast number of portable players, including the iPod. It offers a catalogue of over two million songs for US$ 0.89-0.99 and albums for US$ 5.99-9.99. DRM today is still a key element of the digital business, with DRM-free and DRM-protected download offerings co-existing in the market. Many business models, particularly based on subscriptions (where users pay a monthly fee for unlimited access to music), super-distribution (allowing fans to share music with their friends) and time-limited downloads (such as those offered by ad-supported services), cannot exist without DRM and record companies remain committed to these alternatives. Services specialising in indie music first offered DRM-free downloads. eMusic, which operates in the US and Europe, offers a subscription service that allows consumers to own the tracks they are authorised to download, even when their subscription ends. MP3 tracks can be played on multiple devices, including the iPod. The service targets heavy music buyers over the age of 25 and specialises in a non-mainstream catalogue comprising over two million songs. To date, eMusic has attracted more than 400,000 subscribers worldwide.
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How Has the Changing Demand for Downloadable Music Influenced the Strategic Business Models of Firms?

How Has the Changing Demand for Downloadable Music Influenced the Strategic Business Models of Firms?

What happens when individuals try to override the DRM system and gain free access to the copyrighted digital content? The United States made an amendment to the US Code of Copyright Law to address this potential problem, known as the Digital Millennium Copyright Act (DMCA) (The Library of Congress, 2009). Voted into law in 1998, the DMCA makes it a crime for people to circumvent anti-piracy measures built into most commercial software. Additionally, the Act outlaws the manufacture, sale or distribution of code-cracking devices that would illegally copy computer software. More importantly, the Act limits Internet Service Providers’ copyright infringement liability for illegal information which is transmitted over their Internet service. Nevertheless, ISPs are obliged to remove any material from users’ websites which appear to be copyright infringement (“Highlights”, 2001).
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Digital Business Models for Peer-to-Peer Networks: Analysis and Economic Issue

Digital Business Models for Peer-to-Peer Networks: Analysis and Economic Issue

While the P2P architecture was present in the early Internet, it was not until June 1999, with the release of the Napster client that P2P networks began to gain a place in the public consciousness. Initially, Napster was intended for a small group of friends to share MP3 files, because standard search engines were unreliable to locate these files and available music indexes were out of date. Within just a few days after its release, the client was downloaded by 10,000 to 15,000 people (Spencer, 2000), and by the end of the year 1999, the number of Napster users reached 1 million (Merriden, 2001). At its peak, Napster had 13 million registered users, with about 1.6 million of these users logged into the service at any one time (Romer, 2002). College students were among the first to embrace Napster. By late 1999, Napster was consuming up to 30% of the Internet bandwidth at a number of universities such as Oregon State and Florida State. In February 2000, New York University became one of the first schools to ban Napster. As the Napster community kept growing, it also drew attention from the Recording Industry Association of America (RIAA), who sued Napster for copyright violation. In July 2001, a U.S. District Court judge ordered Napster to close, which forced the company to shut down the service (Moon, 2003).
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Digital Music Distribution

Digital Music Distribution

Control points are evaluated primarily in terms of their “scarcity,” where scarcity refers to the non-interchangeability of a service transaction with that of another provider. Scarcity is a measure of the number of possible players in the market. Scarcity can be high or low, where 100% non-interchangeability represents monopoly conditions (and therefore one or few players), and low scarcity (high interchangeability) represents commoditization (and therefore as many players as the market can support). Business models vary in terms of where scarcity exists in the value chain, why it exists, and the degree to which it exists. Scarcity is an important strategic property because it determines where value can be captured (or not) in the value chain, and who has control over that value (and who doesn’t). Scarcity is a function of business design, regulation, and/or technological features. It is therefore also a dynamic property, which shifts according to changes in these factors, changing the nature of a given business model.
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New business and economic models in the connected digital economy

New business and economic models in the connected digital economy

the time, the watch could detect that it is lunch time and energy levels are low and then suggest places to have a bite based on the person’s location. This dynamic participation for the firm may stimulate demand for the offering, or create additional economic benefits for the firm outside of its usual revenue streams. The digital visibility of customer experience of a product, available as personal data, is therefore potentially the firm's biggest opportunity to create market advantage through configurable products or service. To leverage on it, firms have to move beyond the current traditional mindset that consumption data is only useful as intelligence to feed back for demand management, similar to buying data. Consumption data is potentially much more than that, especially when the data is real time, and can allow for demand stimulation as well as dynamic and personalised response to serve customers in context and on demand. Music has evolved in such a manner. Where previously music resided in CDs to be purchased out of contexts of use (at shops), the digitisation of music has created a market in context of use and on demand. Wherever it is technologically possible, markets for products of the future will come to exist within consumption spaces for the simple logic that consumption spaces are where needs are fulfilled. The current 'distance' (in terms of time and space) between purchase and consumption is a market inefficiency that technology can quickly resolve, i.e. from an economics perspective, markets at consumption spaces, if technologically possible, is Pareto efficient. Customers are often more willing to buy closer to when they need an offering, and firms will derive greater revenues.
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Business Model Dynamics In The Music Industry: Video Killed The Radio Star   Or How The Internet Altered Business Models In The Music Industry

Business Model Dynamics In The Music Industry: Video Killed The Radio Star Or How The Internet Altered Business Models In The Music Industry

It is already well-known and also indicated in this paper that traditional business models in the music industry were unable to stop a decrease in revenues and profits during the last years (Chesbrough, 2010). One reason for this is that digital music distributed via alternative formats like iTunes and Spotify leads to decreased CD unit sales (Chesbrough, 2010; Fox, 2004). However, not only record companies but also artists are affected by changes in the market. Still 40 years ago an artist could live quite well from revenues through sold music records (Teece, 2010), while in the 80s and 90s music videos were a significant source of revenues (Teece, 2010). The emergence of digital distribution and online music piracy has most certainly disrupted this structure and forces record labels to rethink their cost structure, cost savings and thus their approach of artist development (Fox, 2004). This is a decisive turning point since record labels act basically like venture capitalists – they invest in as many artist as possible hoping that some of them will bring significant financial returns (Fox, 2004). On the other hand, the decreasing costs concerning physical inventory, manufacturing, distribution and retailer inventory-holding boost competition in the music sector between major and online labels (Fox, 2004). Additionally, the online distribution of songs allows labels to better evaluate the expected success of their artist, it enables a more precise forecast of the music enthusiasts’ preferences and hence provides the label with information regarding the choice which artist to support (Fox, 2004).
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Music business models and piracy

Music business models and piracy

The percentage of buying physical is 30.1 per cent and digital at 31.2 per cent in the total sample. However, the distribution is quite different. As shown in Table 5, only 3 per cent of the group that don’t respond to the file sharing question buy digital music, but 30.1 per cent buy music in physical format. This percentage is close to that for Non- File Sharers, 33.3 per cent and larger than the File Sharers, 25.1 per cent. Therefore it cannot be concluded that the Don’t Respond group are non buyers, they simply have different preferences when buying and they listen to fewer hours of music per week; 2.5 hrs in comparison with 2.9 hrs of Non-File Sharers and 3.8 hrs for File Sharers. The Don’t Respond group is less passionate about music than the other groups, which correlates with their average age ~45 years; older than File Sharers at 31.1 and Non-File Sharers at 38.5 years old. To explore the view that the Don’t Respond group may be not be illegal file sharers two control variables were included; their willingness to buy music legitimately and download music without paying. On average the group place greatest value on buy music legitimately, a value of 3.8 compared to 2.6 for File Sharers. The group also has the lowest value for acquiring music without paying: 2.2 compared to 3.7 for File Sharers.
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Live performance, touring and music in the digital age

Live performance, touring and music in the digital age

multimedia industry, the illegal distribution of illegally acquired materials is detrimental to the profits of the people that own the material as quite frankly piracy is stealing. 5 Piracy of music came to a heated peak with the case of Metallica versus Napster. Metallica (and other companies and parties) famously sued Napster for copyright infringement in 2000 with Napster settling later in 2001. Napster was a free peer to peer file sharing service which allowed users to share their mp3’s and other files with other users of the service with artists receiving no royalties for their work. This is taking money directly away from the musicians and their representatives pockets as each download was a potential sale of a record or CD. It is not surprising, with everything considered, that the artists and labels were going to act; it was more a question of when. Metallica drummer Lars Ulrich said the following regarding the lawsuit with Napster, "Our beef hasn't been with the concept of sharing music[…]The problem we had with Napster was that they never asked us or other artists if we wanted to participate in their business". 6 Hip-Hop Artist Dr. Dre also took action against Napster and made the following comment on the matter, "I work hard making music - that's how I earn a living[…]Now that Napster's agreed to respect that, I don't have any beef with them". 7 It’s difficult to believe that the whole issue was due to Napster not asking for permission, it is doubtful that Metallica and other artists will have allowed their music to have been
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Ethics in the Music Business and its Impact on Popular Music, Society and Culture

Ethics in the Music Business and its Impact on Popular Music, Society and Culture

One issue that is addressed in the epistemology of the music industry is the relationship between the knower and the object known. The relationship between the music industry and the artist is a precarious one. It is a relationship of mutual exploitation to accomplish what each feels is important. The artist desires to express their inward images of reality externally. That expression is accomplished by songwriting, playing an instrument, writing lyrics, or singing. Performance is the vehicle through which the images are shared. The business side of the industry desires to make as much money from the sale of pre-recorded product as possible. It is not concerned with the images of reality. The more products it can sell, the more successful it becomes. What stimulates the business side is the commercial quality of the expression, not the expression itself. Artists know that in order to continue to create their art they need financial resources, therefore, they exploit the record labels for the financial resources to produce, manufacture and distribute their recorded products as well as for living expenses. Record labels exploit artists by giving them a small percentage royalty of the sale of the pre-recorded product – usually less than 10% - and keeping the rest. In addition, the record labels expect artists to pay for all the costs in producing the pre-recorded music. Both parties enter these agreements aware of the mutual exploitation and hope that the product of the artist will generate enough resources to pay for all the expenses.
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Business Models. Successful Online Business Models. Case Study

Business Models. Successful Online Business Models. Case Study

The most matching factor of success is to find an unmanaged market. Website visitors are generally very loyal to their first choice; despite the fact that there are new and maybe even better alternatives they keep visiting their first option. The second factor of success is configuration of the value configuration process. Almost every researched business model has designed their value configuration process in a way that it’s fully automated. In other words, once the website is online and visitors are using it, the service doesn’t require manual intervention The third factor of success is to offer the products or services for free. Unfortunately internet users are not prepared to pay for products or services unless they have experienced the benefits. Seven of the eight researched business models offered their services for free. The eighth model is Bol.com, an online web shop. The fourth factor of success is the revenue model that’s used by the internet business model. A revenue model can work like a charm on paper, but when it’s not appropriate it will fail in practice.
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The epistemological foundations of music piracy in the digital marketplace

The epistemological foundations of music piracy in the digital marketplace

This paper examines the fundamental epistemological gap between the consumers and producers of digitally based products. Using the music industry and the significance of digital products in this arena as a case study of evolving relationships between buyers and sellers, we evaluate the nature of ‘piracy’ from multiple perspectives: creators, intermediaries, distributors, and end consumers. Our study centres on the epistemological boundaries of these agents and actors, using existing evidence and qualitative research to examine the nature and limits of the epistemological reach of agents and actors in this digital marketplace. Our theoretical model is an adapted and applied version of Domain-Generality and Domain- Specificity in Personal Epistemology. We find a series of epistemological dissonances, driven by differing levels of understanding about (and access to) the underlying technological, legal, and social structures of an evolving marketplace. As a result of instability, these structures inevitably create various epistemological boundaries. Using the analytical framework developed, the case study of music piracy illustrates how identifying epistemological dissonance helps sellers develop strategies that could minimize the impact of piracy on their revenue streams.
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Digital transformation, business models and the postal industry

Digital transformation, business models and the postal industry

For many decades, the postal industry offered postal services and in parallel, had a monopoly over the national postal markets. Recently, the postal industry endured a phase where their national postal markets were subjected to liberalisation by the respective nations. This was due to various reasons such as inefficiencies of the postal services, ambiguous monopoly legislations, mounting pressure from competitors, and changing nature of customer demands. The liberalisation of the European Union postal markets is an example of a liberalisation that was based on the unique requirement of harmonising the postal services across the whole European Union. Other nations outside the European Union liberalised their postal markets either completely or partially based on their own unique requirements. After the liberalisation phase, the postal industry faced a significant challenge from digital services. Digital services were responsible for the constant declines in profitable letter service volumes. In response, the postal industry started developing digital postal services. However, therein lies the problem. The postal industry is unaware of the steps needed to develop digital postal services and has not had a great deal of financial success in this area. I address this problem by referring to “business models”. Business models have been a recent area of interest in management literature and, as such, offer an innovative perspective on the postal industry’s development activities in digital postal services.
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Music Publishing Company Business Plan

Music Publishing Company Business Plan

The U.S. record business, which grossed four billion dollars in 1990, exploded to eight billion dollars in sales by the end of 1995, with a unit volume of 726 million records sold. Sales fell sharply over the course of the next six years, mainly due to the popularity of file sharing on the internet. File sharing has been curbed, but the internet has taken a key role in the music landscape. Recent figures show industry sales of more than 10 billion dollars, most of which has been generated online.

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IFPI Digital Music Report Music how, when, where you want it

IFPI Digital Music Report Music how, when, where you want it

Sweden’s IPRED law came into effect on the 1st April 2009. Based on the EU Enforcement Directive, it gave copyright holders the right to obtain the name and address of copyright infringers from ISPs. Evidence indicates the law had a strong impact on music users in the short-term. Research by GfK in June 2009 found that 60 per cent of infringing file-sharers had stopped or reduced their activity as a result of the introduction of the IPRED law. However, piracy levels in Sweden are believed to have risen again since then, underlining the need for sustained enforcement and ISP cooperation. Spotify’s founder and chief executive Daniel Ek believes “carrot and stick” are crucial to Sweden’s success. “In Sweden, the most important lesson is the public recognition of the problem. Most people now acknowledge that file-sharing unlicensed music is illegal – it’s not OK and it’s not something that you should do, especially not when there are legal services that you can use instead.” n
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New Storage Solution is Music to the Ears of Fast-Growing Digital Music Company

New Storage Solution is Music to the Ears of Fast-Growing Digital Music Company

As the company signed more distribution contracts, it became concerned that expanding its existing storage solution was proving extremely costly. In addition, the system could only handle block-level storage, and INgrooves wanted to be able to take advantage of the performance benefits of a solution that could handle both block-level and file-level storage. Nicolas Ratineau, director of systems engineering for INgrooves, explains the company’s storage conundrum. “As a music company, we are constantly storing more and more content. Nothing is ever deleted—no matter how old the music. We know we have to add storage as we grow, but the cost of adding a full rack to our existing system was prohibitive to our business. We needed to find a much more cost-effective, scalable option.”
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Stochastic text models for music categorization

Stochastic text models for music categorization

Abstract. Music genre meta-data is of paramount importance for the organization of music repositories. People use genre in a natural way when entering a music store or looking into music collections. Automatic genre classification has become a popular topic in music information re- trieval research. This work brings to symbolic music recognition some technologies, like the stochastic language models, already successfully applied to text categorization. In this work we model chord progressions and melodies as n -grams and strings and then apply perplexity and na¨ıve Bayes classifiers, respectively, in order to assess how often those struc- tures are found in the target genres. Also a combination of the different techniques as an ensemble of classifiers is proposed. Some genres and sub-genres among popular, jazz, and academic music have been consid- ered. The results show that the ensemble is a good trade-off approach able to perform well without the risk of choosing the wrong classifier.
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Business model innovation and strategic transformation when confronting digital disruption: The case of data-driven business models for professional services

Business model innovation and strategic transformation when confronting digital disruption: The case of data-driven business models for professional services

We are especially interested in the strategic transformation of incumbent professional services firms. While some general advice is available in relation to disruptive innovation (Christensen 1997; Christensen and Raynor 2003) and strategic innovation (Govindarajan and Trimble 2005), these approaches do not cover the knowledge-intensive nature of professional services nor the dynamics of technology innovation. As such, we intend to look deeper into how these two factors play a role in the strategic transformation as professional services firms come in a wide assortment of forms (Figure 2). As such, we may expect that their transformation approaches and barriers may depend on this. A critical dimension to classify these firms (or their business units) is in respect to their dependence on existing knowledge assets. A firm with high dependence on existing knowledge assets will have established high barriers to entry for their competitors. As an example, firms offering consulting services in the defence and security arena would meet these criteria. These firms depend on decades on knowledge assets that include social capital, prior project experiences, and specialized know-how that is not easy to acquire on the market instantly. A firm with low dependence on existing knowledge assets will need to continuously innovate to stay ahead of its competitors by keeping its knowledge assets fresh and relevant. Let us be clear, we are not arguing that a firm’s existing knowledge assets are of no value. What we are saying that is that in order for the firm to compete, they cannot use their dependence on their existing knowledge assets as a measure of how insulated they are from competitor’s actions (due to the history, costs, or resources required to acquire or replicate the knowledge).
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