The New Business Model Of Music
The music industry has an uphill battle to fight. On one hand they want to continue to enjoy the insane amount of revenue that music sales bring them and on the other hand you have the Digital Age sweeping in and casting that idea to the wind. Once a product goes digital, its value in and of itself is nothing.
The Old Days
See, when people bought phonographs, they weren't buying music, they were purchasing a piece of vinyl that happened to have music on it. They owned something. It was physical, tangible, cuddleable. It was yours. You could lend it to a friend, swap it for another, but in all you owned a piece of property, one very difficult to reproduce yourself. Cassettes were the start of trouble for the recording industry because now people could create copies, pass them around, make mix tapes etc. Using cassettes still meant that you had to buy new media if you wanted to make copies, but in all it was fairly convenient. Same with CDs. For longer than a decade now, you have a collection of 1s and 0s. You can share it instantaneously with thousands of other people or duplicate it a million fold at the click of a button.
At that moment a song meant nothing, it is expected to be attainable for free. This of course runs contrary to what the music industry wants you to do, but the opportunity is there and you are not likely to get caught. So how can you compete for free? There have been attempts at giving away advertisement laced tracks. But why would someone savor what is perceived as an inferior product when one without advertisements can be obtained as easily? The RIAA has tried scaring people into submission with threat of lawsuit, but that doesn't seem to have worked. If not that, what?
Enter The New Business Model
Music means the most to people when it is associated with an experience. Listening to a song on an iPod is not necessarily an experience. A song on a radio while sitting in traffic is not exactly a highlight experience of music listening. So how do you create an experience, and more importantly, how do you monetize it?
Since music is now considered a commodity, you have to now start bundling it with value add items. For the cynics who think that's marketing-speak for 'giving away doohickeys', they're on the right track. Apple is trying out a new LP Format to lure fans back into purchasing whole albums, but even that format has limited appeal. Why? Because once again, you're not creating an experience. Music needs to get back to brand. To image. To something tangible.
I think one of the more innovative approaches to word-of-mouth product advertising is HouseParty.com. Companies can setup an avenue for people to invite friends over and try out products. In the case of the music industry, why not get your fans to sell crap for you? I'm talking about T-Shirts, buttons, stickers, posters, and other music group paraphernalia. Imagine teenagers across America having a place to facilitate getting friends together at their home to listen to a new album FOR FREE and have them sell orders for T-Shirts and other junk. Fans eat that crap up! In those moments you are now creating an experience that people can relate to and remember. They remember the posters that the host had up, the music blaring, parents shaking their heads but glad that they know where their kids are and what they are doing.
That's just one idea.
How about another: Why not create kits with a CD, SD card, or other digital format of the latest Celine Dion album in a box set of chocolate, lotions, and aphrodisiacs? It's kinky and silly and you're laughing right now, but at the same time you are making an experience out of the music these artists are creating. You can make money off of that!
The point is this: the music itself has no value. It's too easy to duplicate and get for free. That can of worms is open and can never be closed. The music industry needs to come to grips with that and invent other ways to add value to something that now has no worth. It may end up that the margins are not as lucrative as they once were, but as mentioned before, they weren't really selling music anyway, only the media upon which it was inscribed.
Good luck artists, you're going to need it.