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Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
Business Models in the Music Industry
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Business Models in the Music Industry

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Business models in the music industry. A dynamic market, a global industry, characterized by many players and fierce competition. How does the music industry create, deliver and capture value? What …

Business models in the music industry. A dynamic market, a global industry, characterized by many players and fierce competition. How does the music industry create, deliver and capture value? What different business models exist in the music industry?

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  • 1. Business  Models  in  the  Music  Industry   Eurosonic  Noorderslag   January  14th,  2011  
  • 2. Business  models  in  the  music  industry?  
  • 3. Value  creation?  
  • 4. Firms  that  record,  produce,  publish,  distribute,  and  market  music.  
  • 5. Fans  that  listen  to  (or  experience)  music.  
  • 6. How does the musicindustry create,deliver and capturevalue?  
  • 7. What differentbusiness models doexist in the musicindustry?  
  • 8. Business    Model?  
  • 9. Business    Models?  
  • 10. Definition_Business  Model  A  business  model  describes    the  rationale  of  how  an  organization  creates,  delivers    and  captures  value  
  • 11. Self  Published  www.businessmodelgeneration.com 14  translations   70.000  sold  copies  
  • 12. THE  BUSINESS  MODEL    CANVAS  
  • 13. 1.  CUSTOMER  SEGMENTS  
  • 14. 2.  VALUE  PROPOSITION  
  • 15. 3.  CHANNELS  
  • 16. 4.  CUSTOMER  RELATIONSHIPS  
  • 17. 5.  REVENUE  STREAMS  
  • 18. 6.  KEY  RESOURCES  
  • 19. 7.  KEY  ACTIVITIES  
  • 20. 8.  KEY  PARTNERS  
  • 21. 9.  COST  STRUCTURE  
  • 22. Key Value Client Activities! Proposition! Relationship! Key ClientPartners! segments! Cost RevenueStructure! Key Streams! Resources! Channels!
  • 23. PARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS KEY DISTRIBUTION RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMS
  • 24. The  The  Music  Industry    Industry
  • 25. A  dynamic  market  a  global  industry    characterized  by  many  players  and  fierce  competition  
  • 26. A  product  or  service  with  a  mass-­‐market  potential  
  • 27. The  role  of  music  in  peoples’  lives  “Music is something most people love,that no one dislikes and that toucheseveryone throughout their lives” BrandAmp  study,  Millward  Brown,  2007  
  • 28. A  global  industry  
  • 29. Something  for  everyone  
  • 30. The  creative  genius  
  • 31. Lots  of  good  advisors  
  • 32. Enough  players  
  • 33. Technology  advancements  
  • 34. Declining  sales  
  • 35. Global  music  sales  Global  music  sales    (physical  and  digital)  excluding  VAT  1997:  38  billion  USD  2009:  17  billion  USD  
  • 36. Business  models  in  the  music  industry  
  • 37. A  record  company  
  • 38. The  big  4  
  • 39. Independent  labels  
  • 40. 1  main  activity  
  • 41. The  business  model  of  a  record  company  
  • 42. PARTNER KEY OFFER CUSTOMER CUSTOMER NETWORK ACTIVITIES RELATIONSHIPS SEGMENTS Marke:ng  &   promo:on   Distribu:on   channels   Detec:ng  &   Mass  market   building  talent   Hits  and   wannabee  hits   KEY DISTRIBUTION RESOURCES CHANNELSManufacturers   Por@olio  of  star   TV   Retailers   ar:sts   Copyrighted   Radio   Digital   content   COST STRUCTURE REVENUE STREAMSMarke:ng  &   Royalty   Tours  and   Merchandising  promo:on   Subsidizing   payments   concerts   Huge  sales   unsuccessful   from  a  few   ar:sts   ar:sts’  albums  
  • 43. Piracy  
  • 44. The  dominating  phenomenon  
  • 45. The  big  discussion  
  • 46. The  business  model  of  piracy  
  • 47. PARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS Upload   Peer-­‐to-­‐peer  Developers  of   illegal   Download   All  the  worlds   applica:ons  and  soGware   music   Mass  market   KEY DISTRIBUTION RESOURCES CHANNELSA  network  of   commiLed   users   User  skills,   interest  and   Digital   commitment   COST STRUCTURE REVENUE STREAMS
  • 48. iTunes  
  • 49. “Rock  and  Roll  will  never  die.  It  is,  however,  being  reborn.”  
  • 50. A  new,  successful  business  model  
  • 51. Very  successful  
  • 52. 1  billion  songs  sold:  February  23,  2006  1.5  billion  songs  sold:  September  12,  2006  2  billion  songs  sold:  January  10,  2007  2.5  billion  songs  sold:  April  9,  2007  3  billion  songs  sold:  July  31,  2007  
  • 53. Steve  Jobs  announced  in  his     "Its  Showtime"  keynote     that  Apple  had     88%  of  the  legal    U.S.  music  download  market     on  September  12,  2006  
  • 54. The  business  model  of  iTunes  
  • 55. PARTNER KEY OFFER CUSTOMER CUSTOMER NETWORK ACTIVITIES RELATIONSHIPS SEGMENTS Hardware/ soGware   Lovemark   Record  labels   design   Seamless  music   Marke:ng  &   Supply  chain   experience  and   Mass  market   Sales   management   Switching  costs   great  design   (music  and   hardware)   KEY DISTRIBUTION OEMs   RESOURCES CHANNELS iTunes   iPod   iTunes   Apple   soGware   hardware   store   stores   Content  &   agreements   Talented   Retail   stores   apple.com   Apple  brand   people   (designers)   COST STRUCTURE REVENUE STREAMSPeople,  design   Marke:ng  &  &  development   Sales   High-­‐volume   High-­‐margin   content   hardware   Hardware   Music  royal:es   revenue   revenue   manufacturing  
  • 56. Spotify  
  • 57. “We  are  going  to    provide  music  to  everyone    (any  time,  any  place)  for  free  in  a  legal  way”  
  • 58. “Our  dream  is  to  collect  all  the  world’s  music  and  make  it  accessible  to  everyone.”  
  • 59. Spotify  aggregates  content  from  right  holders,  distributes  it  to  consumers  through  the  technical  platform  and  monetizes  both  through  a  free,  ad  funded  service,  and  a  subscription  service.  
  • 60. The  business  model  of  Spotify  
  • 61. The  Business  Model  of  Spotify  PARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS Pla@orm   Automated   development   online   and   rela:onship   Adver:sing   Adver:sers   maintenance   Rightholders   3rd  party  APIs   Communi:es   (labels  and   publishers)   KEY Access  to   DISTRIBUTION RESOURCES music  via   CHANNELS streaming  and   Global  music   Licensing   download   Internet  +     fans   agreements   services   PC   SoGware  and   Internet  +   Pla@orm  and   network   mobile   brand   engineers   COST STRUCTURE REVENUE STREAMS Subscrip:on  Royal:es  to   Bandwith  costs   Ad  fees   fees  PC  +  rightholders   Subscrip:on   mobile   Salaries   fees  PC  
  • 62. The  artist  
  • 63. “I  just  want  to  sing  and  perform.”  
  • 64. Crowd-­‐funding  paves  the  way  for  the  independent  artist    
  • 65. €  40.000   11  days  
  • 66. €  24.000  promotion  
  • 67. The  business  model  of  Hind  
  • 68. PARTNER KEY OFFER CUSTOMER CUSTOMER NETWORK ACTIVITIES RELATIONSHIPS SEGMENTS Musicians  &   Singing  &   Songwriters   Songwri:ng   performing   (Social)  media   Producers   Music  CD  produc:on   Promo:on  &  distribu:on   Music  fans   Videos   Artwork  &   KEY (performance)   DISTRIBUTION Studios   RESOURCES CHANNELSManagement   Concerts   Online   The  Brand  Hind   Radio/TV   pla@orms   Tech  &  tour   team   Brand   Hind.com   Music  archive   Events   Band   experience   COST STRUCTURE REVENUE STREAMS Investment   IT,  website  and   concerts,   Concerts   Merchandising   marke:ng   transporta:on   Salaries   Music  sales  
  • 69. Looking  back  at  some  major  shifts  in  the  music  industry  
  • 70. A  fragmented  copyright  industry  made  it  impossible  to  set  up  legal,  sustainable  business  models.  
  • 71. The  gap  of  legitimate  business  models  for  customers  paved  the  way  for  the  rise  of  piracy.    
  • 72. The  unbundling  of  the  album  killed  significant  revenue  streams  impacting  the  whole  music  industry.  
  • 73. Looking  at  some  current  shifts  in  the  music  industry  
  • 74. Legislation  around  piracy  
  • 75. Music  distribution  
  • 76. Shift  from  ownership  to  access  
  • 77. Technology  capacity  
  • 78. Customer  in  charge  
  • 79. What  do  customers  want  (tomorrow)?  
  • 80. The  Big  Challenge  in  Business  Modeling  
  • 81. Who  is  my  customer?  
  • 82. What  does  he  or  she  wants?  
  • 83. What  is  he  or  she  willing  to  pay  for?  
  • 84. Different  needs  
  • 85. Market  split-­‐up  
  • 86. Multi-­‐party  scene  serving  customers  needs  
  • 87. More  questions?  
  • 88. www.businessmodelsinc.com  
  • 89. www.businessmodelgeneration.com  

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