New Business Models For The Music Industry?
from the maybe-possibly dept
NPR is running a three-part series looking at potential new business models for the music industry in the face of the ongoing changes brought about by digital technologies for the creation and distribution of music. The three business models are all interesting, and some are already being tried, but it seems unlikely that any will get all that far. The first goes back to times past and looks at the idea of "patronage." The idea is to get a wealthy individual (or, more likely, company) to pay for musical output. The NPR piece suggests that this could be modified as a way for hardcore fans to repay a band, but another interesting concept could be corporate sponsorship. The second idea is bringing back the always popular, but often discredited, idea of micropayments. Without rehashing all the old arguments, micropayments only work in some very specific circumstances, and do more to shrink a musicians potential market than to grow it. The final idea is some sort of general tax on ISPs, which has strong proponents but raises all sorts of problems concerning why some users are subsidizing others and who gets how much money. Of course, there are other business models that could work today, don't require a huge change in the way things are done, and gives people real value for their money: recognize that the music is a promotional tool for other stuff (professional liner notes, fan clubs, concert tickets, clothing, access to the band, backstage passes, you name it) and suddenly the state of the recording industry doesn't seem so dire.
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Or how about the obvious
Still not buying new.
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What about try before you buy?
Then I discovered magnatunes.com !
I purchased 2 CD's from them, after listening to them over and over and really falling in love with the music. I try all sorts of music that I never would dream of buying.
I just wish they would really catch on.
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Tax
The problem with any other idea is there will always be a technology to get around, hide, or make to tough to track music downloads.
I'd think a fair per-year-price would really be a great benefit to consumers, and could increase the music industries profit.
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Re: Tax
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How would you classify iTunes?
TechDirt starts a discussion on business models for IP (specifically, music), based on an NPR story.
Part of TechDirt's perspective is on micropayments:
"The second idea is bringing back the always popular, but often discredited, idea of micropayments. Without rehashing all the old arguments, micropayments only work in some very specific circumstances, and do more to shrink a musicians potential market than to grow it."
It may just be me, but if iTunes isn't "micropayments" ($0.99, $0.49 via Buy.com), I'm not sure what is. Perhaps we need to coin a new term, "nanopayments", for sub $0.10 content buys? Or does aggregation/total purchase size determine micropayments?
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Re: How would you classify iTunes?
The truth is that Apple realizes what I'm saying. They're losing money on the songs to sell more iPods... Which goes right back to what I spoke about in the post: music is a promotion for something else. For Apple, it's a promotion for iPods.
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iTunes and micropayments
Micropayments is a terrible moniker to begin with. More terms just confuse the issue. Today we have people debating how much it takes to make a micropayment a minipayment and other such silliness. Properly, micropayments ought to refer to sub-1 cent transactions, while anything about that is simply a payment.
They're losing money on the songs to sell more iPods...
Actually, no, they're not. In the June 2004 conference call, Apple announced that the iTunes Music Store had earned a "small profit" but didn't quantify how much. It's worth remembering that Amazon.com took 8 years before its first profitable quarter. I think you're kidding yourself if you don't think most music will be sold online in coming years.
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Re: How would you classify iTunes?
The giving music away will work for apple, Sony, Microsoft, etc because they use it as a hook for their other products. What are the Flock of Seagulls, Adam Ants, Devo's, of the world suppose to survive on ? Live performances and other forms of income generally aren't viable for lesser none entities.
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Re: How would you classify iTunes?
So, actually, I think my idea works *BETTER* for lesser known acts. Giving away their music, if they're good, gets them more attention, and lets them get more people to come out and see them.
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Re: Tax
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Re: How would you classify iTunes?
How popular (assuming they'd actually still be in the business) would Madonna or Britney Spears or New Kids on the block be/been if it hadn't been for the for the musical companies pushing the 'image' with all of the money behind it ? MUSIC ALONE WOULD NOT HAVE GOT THESE 'artists' NOTICED.
I honestly like the idea of bands giving away their music assuming it's good enough to listen to and make me want to see them live or for some strange reason buy other act related material (I don't see myself buying used drum sticks). I'm just not sure there are that many bands/acts out their that can make it this way. The ones that can are nuts not to ... why give their money to a company when you can stand on your own. It's the other 90% that can't work under this model.
It's kinda like the union. The 10% who have no use for it are forced to join and the other 90% are the ones who really reap the benefits.
One other consideration/question. Wouldn't this model limit the consumer in it's choice of supporting groups (assuming live shows are the primary money maker) ? Live shows are very costly these days. Going to 10 to 20 shows a year could easily run between 400 and 2000. Seems to me, and maybe I'm just not keeping up with inflation and what people are willing to spend on music, that your going to severely limit the money available to live acts.
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Re: How would you classify iTunes?
The model I'm talking about wouldn't necessarily make the biggest stars as big, but would make it possible so many more musicians could make a decent living.
I still think there would be plenty of room for big stars, though, much more of their money would end up coming from endorsements.
Also, I'm not talking about $70/ticket stadium shows, but smaller club shows, for the most part.
Again, the world starts to change when this is how people make money. You're also forgeting that it's not *just* live shows I'm talking about, but other things, like access to the band. Some bands have talked about ideas like playing a special concert for fans in their fan clubs, or letting them backstage or giving them better tickets. One artist is giving away music lessons to some fans who join his club.
The possibilities grow...
Besides, if you're not spending so much money on CDs, doesn't that mean you'd have more money to spend on other aspects of the band?
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