A brief introduction to Pine and Gilmore's Experience Economy as viewed through Music. This presentation is for a first year lecture module on entrepreneurship. Pine and Gilmore's theory is presented alnogside Zhang and Negus's Platform Musician.

1. Experience Economy
Four Value Creating Opportunities
Hussein Boon

2. More offerings should be mass customized
 First, concerning goods, more offerings should be mass customized: what is needed is not
more production of physical goods but more innovative methods for making those goods.
 Most manufacturers have ignored the pleas by us (and others) to shift from Mass Production
to Mass Customization methods, to replace supply chains with demand chains, to convert raw
materials into goods not as speculative inventory but only in response to actual demand.
 the most powerful— concept in the entire book, namely the notion of reducing or
eliminating customer sacrifice.
 Customer sacrifice is the gap between what individual customers settle for (in buying mass
produced goods and services) and what each wants exactly.
(Pine et al. 2011: xiii)

3. More companies should direct their
employees to act
 Second, concerning services, more companies should direct their employees
to act.
 Organizations that have a service mindset focus solely on what tasks
employees do; those with an experience mindset also consider how those
tasks are performed and thereby embrace theatre as a model for
performance.
 By and large, despite decades of management literature proffering
customer service advice, consumers still endure many miserable encounters.
(Pine et al. 2011: xiv)

4. More offerings should find ways to
explicitly charge for time
 Third, concerning experiences, more offerings should find ways to explicitly charge for time.
 Time is the currency of experiences.
 Today, some experiential marketing events require an admission fee; some experiential operations
contribute to charging a premium for the supported goods and services; and some experiences are
accessible only on a subscription basis. Some.
 It is vital that more experiences in the future be available only by admission, for such holds the key to a
full-fledged Experience Economy.
(Pine et al. 2011: xv)

5. More experiences should yield
transformations
 Finally, more experiences should yield transformations. Moreover, these
transformations— the fifth and final economic offering in the Progression of
Economic Value that begins with commodities— should themselves command
a fee in the form of explicitly charging for the demonstrated outcomes that
result from the underlying experiences.
 In other words, companies enabling transformations should charge not merely
for time but for the change resulting from that time. They should charge for
the ends and not only the means of life-changing (or company-altering)
experiences.
(Pine et al. 2011: xvii)

6. Discussion
 What is this sacrifice in music in general and in live or recorded mediums?
 What effect (scarifice) does it have if experienced by the customer/gig or concert
goer?
 How can customer sacrifice be reduced or eliminated?
 Generally?
 Specifically to Live
 Examples from your experience?
 What is meant by mass customisation?
 What is meant by transformations?
 What does all of this mean for Music in general?

7. Progression of Economic Value

8. Economic Progress Requirements
 But true economic progress requires experiences in the form of new
economic output
 and not only new experiential promotions, customer-experience processes,
or the experience-rich potential of new media.
 The Progression of Economic Value requires new for-fee offerings in which
operations are an experience and the experience is the marketing— in
either the physical or the virtual realm.
(Pine et al. 2011: xiii)

9. Economic Distinctions
Source: Pine, B.J. and Gilmore, J.H. (1998)

10. Economic Distinctions: Headline Points
 Experiences have always been at the heart of the entertainment business, possibly not foregrounded nor identified as such.
 the concept of selling an entertainment experience is taking root in businesses far removed from theaters and amusement
parks.
 New technologies, encourage whole new genres of experience, such as interactive games, multi-player games, and virtual
reality
 The growing processing power required to render ever-more immersive experiences now drives demand for the goods and
services of the computer industry.
 stores such as Niketown, Cabella’s, and Recreational Equipment Incorporated draw consumers in by offering fun activities,
fascinating displays, and promotional events
 Companies consist of people, and business-to-business settings also present stages for experiences.
(Pine et al. 1998)

11. Experience Economy in Music 1
 This schema could be adapted to suggest that
 recording is a product,
 radio and streaming provide a service,
 and a live event stages an experience–although this is not, as far as we are aware, how the phrase
“experience economy” has been adopted in discussions of the popular music industries.
 Rather, the terms have been applied loosely in discussions of a wide range of existing practices
such as copyright, branding, licensing, identity, and chart analysis. (Zhang et al. 2021: 5)

12. Experience Economy in Music 2
 Given the malleable and inclusive nature of the term (what is not an experience?), other authors subsequently stretched the idea
to accommodate a plethora of practices (many already quite adequately theorized with concepts of the “creative industries” and
”cultural economy”).
 These included the economies of tourism, food and drink, sport, numerous leisure activities and hobbies, healthcare, beauty
products, computing, and personal services (Sundbo and Sørensen; Freire-Gibb).
 The modest insight provided by Pine and Gilmore became overtheorized as marking a new stage in business and commerce,
rather than referring to an aspect of life that was receiving more emphasis as digital reproduction, storage, and communication
and social media allowed imagery and representations to appear more abundant.
 The evidence from research on the music industries and live event sector that we have cited so far, suggests that there is not so
much a new type of “experience economy” but changing relationships between different experiences, and shifts in how these are
calibrated according to market price and cultural value. Some of this may be explicable in crude supply-and-demand terms.
Source: Zhang et al. 2021: 5

13. Experience Economy in Music 3
 When it was relatively scarce the recorded album enjoyed a cultural significance in people’s lives
 subsequently declined with digital proliferation and abundance–a fall precipitated by the ever- shrinking size of the iconic album
artifact and its disappearance into a smartphone.
 As popular music events became fewer and larger, and more spectacularly staged, their scarcity increased the economic and
social value of live shows.
 Musicians and their managers recognized the increased revenues that could be generated from concerts and touring as the
market value of recordings declined.
 Live music is now experienced on social media platforms and mobile devices (in addition to that special event in the club, field, or
arena). The social value, the economic importance, and the performative possibilities of live music are not only transformed
through the integration of digital technologies into events, but through the embedding of live music in the social media that we
use to engage with the world and people around us. This process has provoked related debates about abundance and the
attention economy.
Source: Zhang et al. 2021: 5-6

14. Bibliography
Pine, B.J. and Gilmore, J.H. (1998). Welcome to the Experience Economy. Harvard Business Review.
Available from https://hbr.org/1998/07/welcome-to-the-experience-economy.
Pine, B.J. and Gilmore, J.H. (2011). The experience economy, Updated edition. Boston, Massachusetts:
Harvard Business School Press.
Stassen, M. (2022). Warner Strikes Deal To Create ‘First Music-Themed World’ In The Sandbox
Gaming Metaverse, Music Business Worldwide, 27 January. Available from
https://www.musicbusinessworldwide.com/warner-strikes-deal-to-create-first-music-themed-world-
in-the-sandbox-gaming-metaverse1234/.
Zhang, Q. and Negus, K. (2021). Stages, Platforms, Streams: The Economies and Industries of Live
Music after Digitalization. Popular Music and Society, 1–19. Available from
https://doi.org/10.1080/03007766.2021.1921909.