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Experimenting with
Business Models in the
 Music Industry (part I)
         Alexander Osterwalder, Phd
               Alex...
the following slides are a very brief
excerpt of a 60 minute keynote Iʼm giving
at Eurosonic Noorderslag, Europeʼs most
im...
business
models
The Business
Model Canvas
to describe, challenge,
design, and invent business
models more systematically
9   building
    blocks
The Business Model Canvas
   KEY             KEY        OFFER     CUSTOMER          CUSTOMER
PARTNERS         ACTIVITIES  ...
the
“old”

record
label

model
The “Old” Record Label Model
   KEY             KEY            OFFER           CUSTOMER            CUSTOMER
PARTNERS      ...
The “Old” Record Label Model
   KEY             KEY            OFFER               CUSTOMER                 CUSTOMER
PARTN...
The “Old” Record Label Model
   KEY             KEY            OFFER                 CUSTOMER               CUSTOMER
PARTN...
The “Old” Record Label Model
   KEY             KEY                   OFFER                 CUSTOMER               CUSTOME...
The “Old” Record Label Model
   KEY              KEY                   OFFER                 CUSTOMER               CUSTOM...
The “Old” Record Label Model
      KEY                 KEY                   OFFER                 CUSTOMER               ...
The “Old” Record Label Model
      KEY                 KEY                            OFFER                CUSTOMER       ...
buzz
group
?
    assess the business model
building blocks of the “old” model /
   where are the weaknesses?
The Old Record Label Model
      KEY                 KEY                            OFFER                CUSTOMER         ...
The Old Record Label Model
      KEY                 KEY                            OFFER                CUSTOMER         ...
but piracy is the
wrong battle to fight!
The Old Record Label Model
      KEY                 KEY                            OFFER                CUSTOMER         ...
The Old Record Label Model
      KEY                  KEY                            OFFER                CUSTOMER        ...
The Old Record Label Model
      KEY                 KEY                            OFFER                CUSTOMER         ...
The Old Record Label Model
      KEY                 KEY                           OFFER                CUSTOMER          ...
The Old Record Label Model
      KEY                    KEY                            OFFER                CUSTOMER      ...
The Old Record Label Model
      KEY                 KEY                            OFFER                CUSTOMER         ...
The Old Record Label Model
      KEY                   KEY                            OFFER                CUSTOMER       ...
www.businessmodelgeneration.com
        www.alexosterwalder.com
 www.businessmodelalchemist.com
         Twitter: business...
BusinessModelGeneration.com
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The Music Industry - what's broken (excerpt of a keynote)

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The following slides are a very brief excerpt of a 60 minute keynote I’m giving at Eurosonic Noorderslag, Europe’s most important live music industry conference

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  1. 1. Experimenting with Business Models in the Music Industry (part I) Alexander Osterwalder, Phd AlexOsterwalder.com Twitter: business_design 1
  2. 2. the following slides are a very brief excerpt of a 60 minute keynote Iʼm giving at Eurosonic Noorderslag, Europeʼs most important live music industry conference
  3. 3. business models
  4. 4. The Business Model Canvas
  5. 5. to describe, challenge, design, and invent business models more systematically
  6. 6. 9 building blocks
  7. 7. The Business Model Canvas KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS KEY CHANNELS RESOURCES COST STRUCTURE REVENUE STREAMS
  8. 8. the
“old”
 record
label
 model
  9. 9. The “Old” Record Label Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS nnabe mass hits & wa hits market KEY CHANNELS RESOURCES COST STRUCTURE REVENUE STREAMS huge sales from few artists’ albums
  10. 10. The “Old” Record Label Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS nnabe mass hits & wa hits market KEY CHANNELS RESOURCES Retailers TV “new” digital Radio channels COST STRUCTURE REVENUE STREAMS huge sales from few artists’ albums
  11. 11. The “Old” Record Label Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS nnabe mass hits & wa hits market KEY CHANNELS RESOURCES Retailers TV “new” digital Radio channels COST STRUCTURE REVENUE STREAMS huge sales tours & from few merch andisin g concerts artists’ albums
  12. 12. The “Old” Record Label Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS marketing & promotion detecting & nnabe mass building tale hits & wa nt market hits KEY CHANNELS RESOURCES Retailers TV “new” digital Radio channels COST STRUCTURE REVENUE STREAMS huge sales tours & from few merch andisin g concerts artists’ albums
  13. 13. The “Old” Record Label Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS marketing & promotion detecting & nnabe mass building tale hits & wa nt market hits KEY CHANNELS RESOURCES portfolio of Retailers TV star artists copyrighted “new” digital content Radio channels COST STRUCTURE REVENUE STREAMS huge sales tours & from few merch andisin g concerts artists’ albums
  14. 14. 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 huge sales tours & from few merch andisin g concerts artists’ albums
  15. 15. 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
  16. 16. buzz group
  17. 17. ? assess the business model building blocks of the “old” model / where are the weaknesses?
  18. 18. 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 piracy 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
  19. 19. 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 unbundling of COST STRUCTURE price of songs REVENUE STREAMS into single albums tending towards songs (iTunes) royalt y huge sales ing & payme ZERO tours & market subsidizing nts from few merch andisin ion g promot unsuccessful concerts artists’ albums artists
  20. 20. but piracy is the wrong battle to fight!
  21. 21. 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 distribution is a RESOURCES commodity, attention is manufacturers the new scarcity 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
  22. 22. The Old Record Label Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS talent will be marketing & discovered by promo on other mechanismsti 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
  23. 23. The Old Record Label Model KEY KEY OFFER CUSTOMER CUSTOMER social PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS networks are what drive music sales 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
  24. 24. 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 bloated cost content Radio channels structure (talent discovery/marketing) 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
  25. 25. 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 shift of the hits balance of power towards artists 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
  26. 26. The Old Record Label Model KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS customer marketing & needs are not promotion being satisfied detecting & distribution nnabe mass building tale hits & wa nt market channels hits KEY CHANNELS RESOURCES itʼs all about manufacturers hits AND the Long portfolio of Retailers Tail of music 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
  27. 27. 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
  28. 28. www.businessmodelgeneration.com www.alexosterwalder.com www.businessmodelalchemist.com Twitter: business_design
  29. 29. BusinessModelGeneration.com
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