The Music Industry - new models (excerpt of a keynote)

Experimenting with Business Models in the Music Industry (part II) Alexander Osterwalder AlexOsterwalder.com Twitter: business_design

the following slides are a very brief excerpt of a 60 minute keynote I gave at Eurosonic Noorderslag, Europeʼs most important live music industry conference

todayʼs music industry is ...

a business model playground ..

limitations of the old record company ...

The Old Record Label Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS marketing & promotion detecting & distribution nnabe mass building tale hits & wa nt market channels hits KEY CHANNELS RESOURCES manufacturers portfolio of Retailers TV star artists copyrighted “new” digital content Radio channels COST STRUCTURE REVENUE STREAMS royalt y huge sales ing & payme tours & market subsidizing nts from few merch andisin ion g promot unsuccessful concerts artists’ albums artists

The Old Record Label Model KEY KEY OFFER CUSTOMER CUSTOMER social PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS networks are what talent will be customer drive music sales marketing & discovered by needs are not promo on other mechanismsti being satisﬁed detecting & distribution nnabe mass building tale hits & wa nt market channels shift of the hits balance of power towards artists KEY CHANNELS distribution is a RESOURCES itʼs all about commodity, attention is manufacturers hits AND the Long the new scarcity portfolio of Retailers Tail of music TV star artists copyrighted “new” digital bloated cost content Radio channels structure (talent piracy unbundling of discovery/marketing) price of songs REVENUE STREAMS into single albums COST STRUCTURE songs (iTunes) royalt tending towards y huge sales ing & payme ZERO tours & market subsidizing nts from few merch andisin ion g promot unsuccessful concerts artists’ albums artists

two new  models

example

Business Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS ming free strea music young connected KEY CHANNELS music fans RESOURCES Spotify.com software application COST STRUCTURE REVENUE STREAMS free

Business Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS record ming labels free strea music young connected KEY CHANNELS music fans RESOURCES Spotify.com licensing agreements software application COST STRUCTURE REVENUE STREAMS licensing fees free (for each song played) $$$$$$

Business Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS platform development & maintenance record ming labels free strea music young connected KEY CHANNELS music fans RESOURCES Spotify.com licensing plus even agreements more work software m, platfor softwar application re & e & softwa network brand engineer s COST STRUCTURE REVENUE STREAMS licensing fees free (for each song played)

Business Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS platform development & maintenance record ming labels free strea music young connected KEY CHANNELS music fans RESOURCES Spotify.com licensing plus even agreements more platfor m, softwar costs software application re & e & softwa network brand engineer s COST STRUCTURE REVENUE STREAMS licensing fees bandwidth free (for each song salaries costs played) engineers

Business Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS mood-based automated platform advertising online development & advertisers relationship maintenance record ming labels free strea music young connected KEY CHANNELS music fans RESOURCES Spotify.com licensing revenues agreements for free m, services software platfor softwar application re & e & softwa network brand engineer s COST STRUCTURE REVENUE STREAMS licensing fees bandwidth free (for each song salaries costs ad fees played) engineers

Business Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS automated platform online development & maintenance revenues from relationship record premium labels subscriptions young connected KEY premium CHANNELS music fans RESOURCES subscription Spotify.com licensing agreements software m, platfor softwar mobile application re & e & softwa network application brand engineer s COST STRUCTURE REVENUE STREAMS subscription licensing fees bandwidth fee (for each song salaries costs played) engineers

Business Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS automated platform online development & maintenance revenues from relationship record occasional labels uses young connected KEY premium CHANNELS music fans RESOURCES subscription Spotify.com licensing agreements day pass software m, platfor softwar mobile application re & e & softwa network application brand engineer s COST STRUCTURE REVENUE STREAMS subscription licensing fees bandwidth fee (for each song salaries pay-per-use costs played) engineers fee

Business Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS mood-based automated platform advertising online development & advertisers relationship maintenance record ming labels free strea music young connected KEY premium CHANNELS music fans RESOURCES subscription Spotify.com licensing agreements day pass software m, platfor softwar mobile application re & e & softwa network application brand engineer s COST STRUCTURE REVENUE STREAMS subscription licensing fees bandwidth free fee (for each song salaries pay-per-use costs ad fees played) engineers fee

we need to constantly rethink our models - systematically ...

BusinessModelGeneration.com

THANK YOU! www.businessmodelgeneration.com www.alexosterwalder.com www.businessmodelalchemist.com Twitter: business_design

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The Music Industry - new models (excerpt of a keynote)

by Alexander Osterwalder on Jan 18, 2010

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