For The Music Industry, Buffeted by Declining sales of Albums and Slowing Digital Downloads, The Writing on the wall is clear. Embrace Innovative Business models or go under.
At a fundamental level, the music industry’s woes can be ascribed to its inability to come up with new alternative music products tailored to keep pace with the changing face of music. Another is the failure of traditional music companies to alter their existing business model, largely based on physical distribution of music (selling CDs), which still accounts for almost 73% of their total revenue pie. Crispin Reed, Managing Director, BrandHouse, a UK based brand consultancy, fully agrees. “Although, sticking to conventional business models might have been a conscious decision, it’s equally likely that this was due to inertia, which is typical in well-established sectors. It’s often easier to create a new paradigm than change a long established one” says Reed. Thankfully, a few big players seem to have accepted the harsh realities of file-sharing, music downloads and independent do-it-yourself market taking over. According to an industry report, both Universal and Sony are using digital music downloads to build buzz around a particular album, which will follow the single months after.
iTunes stores have also shown the industry a way to monetise the digital platform. Introduced by Apple in 2004, users are charged a nominal downloading fee per song. Today, iTunes accounts for 70% online digital music sales and is the largest legal online music retailer in the world. Johnny Ryan, Senior Researcher at The Institute of International and European Affairs (IIEA) offers some ideas on how the industry can buoy up sales of music. He tells B&E that “the lesson for the music industry lies in the gaming industry. Computer game sales have risen as the music industry’s have fallen, and a part of the former’s success is a result of its approach to piracy and community”. The most successful computer games offer players online communal experiences that allow them to compete against each other, and to leverage the community and social strengths of the internet. At the same time, they also require players to connect via online subscription services that make software piracy impossible. Transferring this concept to the music industry might actually be a good approach.
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Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
iTunes stores have also shown the industry a way to monetise the digital platform. Introduced by Apple in 2004, users are charged a nominal downloading fee per song. Today, iTunes accounts for 70% online digital music sales and is the largest legal online music retailer in the world. Johnny Ryan, Senior Researcher at The Institute of International and European Affairs (IIEA) offers some ideas on how the industry can buoy up sales of music. He tells B&E that “the lesson for the music industry lies in the gaming industry. Computer game sales have risen as the music industry’s have fallen, and a part of the former’s success is a result of its approach to piracy and community”. The most successful computer games offer players online communal experiences that allow them to compete against each other, and to leverage the community and social strengths of the internet. At the same time, they also require players to connect via online subscription services that make software piracy impossible. Transferring this concept to the music industry might actually be a good approach.
Read more.....
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
