Beyonce is not only an artist & entertainer, she is also a strategist. Through analyzing business models in the music industry like iTunes, record company, piracy, spotify, artists we show how Beyonce re-introduced the business model of the classic album. A classic. Beyonce rocks.

1. How Beyoncé
disrupts the Music
Industry
Insights in how Beyoncé disrupts the Music
Industry by introducing a traditional business
model in a new fashion.
Amsterdam, January 2014

2. TH
13
ON DECEMBER
2013 BEYONCÉ
LAUNCHES HER NEW
ALBUM ON ITUNES

3. AN ALBUM ON ITUNES?

4. AN ALBUM ON
ITUNES!

5. HER FULL ALBUM

6. WHY WOULD SHE DO
THAT?

7. WHAT CAN WE
LEARN FROM
BEYONCÉ?

8. FIRST TAKE A LOOK
AT THE MUSIC
INDUSTRY

9. A DETAILED ANALYSIS

10. SEVERAL
QUESTIONS…

11. WHAT
DOES THE
MARKET LOOK
LIKE?

12. A DYNAMIC MARKET
A GLOBAL INDUSTRY
CHARACTERIZED BY
MANY PLAYERS AND
FIERCE COMPETITION

13. A PRODUCT OR SERVICE
WITH A MASS MARKET
POTENTIAL

14. THE ROLE OF MUSIC IN PEOPLE’S LIVES
“Music is something most people
love, that no one dislikes and that
touches everyone throughout their
lives”
BrandAmp)study,)Millward)Brown,)2007)

15. A GLOBAL INDUSTRY

17. SOMETHING FOR
EVERYONE…

18. REMEMBER THEM?

19. THE CREATIVE
GENIUS

22. LOT’S OF GOOD
ADVISORS

24. ENOUGH PLAYERS

26. TECHNOLOGY
ADVANCEMENTS

29. MORE MUSIC THAN A SINGLE STORE

30. UNDERSTAND THE
CONTEXT…

31. DECLINING SALES IN
2009

32. GLOBAL MUSIC SALES
Global&music&sales&&
(physical)and)digital))
excluding)VAT)
1997:)38)billion)USD)
2009:)17)billion)USD)

33. WHO
ARE THE
PLAYERS?

34. WHO CREATES
VALUE IN THE
MUSIC INDUSTRY?

35. WE NEED TO
UNDERSTAND THE
VALUE CHAIN

36. RECORD
COMPANIES?
WHO RECORD, PRODUCE, PUBLISH,
DISTRIBUTE AND MARKET MUSIC?

38. SHOPS?
WHO AGGREGATE AND SELL MUSIC?

39. DESIGNING BETTER BUSINESSES

40. PLAYERS?
WHO AGGREGATE AND STREAM
MUSIC?

42. ARTISTS?
WHO WRITE AND SING?

44. OR FANS?
WHO LISTEN AND EXPERIENCE
MUSIC?

46. SO LET’S SEE…

47. HOW
THEY EACH
ADD VALUE?

48. WHAT DIFFERENT
BUSINESS MODELS
EXIST IN THE
INDUSTRY?

49. LET’S LOOK AT 5
PLAYERS AND THEIR
MODELS…

50. A RECORD COMPANY

51. THE BIG FOUR

52. 1 MAIN ACTIVITY

54. THE RECORD
COMPANY BUSINESS
MODEL

55. THE RECORD COMPANY
DISTRIBUTION
CHANNELS
MARKETING AND
PROMOTION
MANUFACTURERS
DETECTING AND
BUILDING TALENT
HITS AND
WANNABE HITS
PORTFOLIO OF STAR
ARTISTS
MASS
MARKET
RETAILERS
TV
COPYRIGHT
CONTENT
RADIO
DIGITAL
MARKETING
AND
PROMOTION
SUBSIDIZING
UNSUCCESFUL
ARTISTS
ROYALTIES
HUGE SALE
FROM FEW
ARTISTS
TOURS AND
CONCERTS
MERCHAND
ISING

56. IN COSTS YOU MISSED:
‘OVERPAID EXECUTIVES’…’
MICHAEL SMELLIE, FORMER COO SONY MUSIC

57. MICHAEL SMELLIE

58. RECORD COMPANIES
DID NOT KNOW
THEIR CUSTOMERS

59. COMMERCIAL BREAK

60. We help companies innovate like start-ups
Consulting and Training
DESIGNING BETTER BUSINESSES

61. <advertising>
WE HELP COMPANIES INNOVATE LIKE
START-ups
through consulting and training

62. PIRACY

63. THE DOMINATING PHENOMENON

64. SORRY, NOT THESE GUYS

65. THIS IS WHAT WE BELIEVED…

66. THE BIG DISCUSSION

69. THE PIRACY
BUSINESS MODEL

70. THE PIRACY MODEL
ILLEGAL
DEVELOPERS
UPLOAD
NETWORK OF
COMMITTED USERS
DOWNLOAD
PEER TO PEER
MASS
MARKET
ALL THE
WORLDS MUSIC
USERSKILLS
DIGITAL
COMMITMENT
HOSTING
ADVERTISING
TRAFFIC

71. IS PIRACY A
SUSTAINABLE
MODEL?

72. ITUNES

73. ONE BIG BELIEVER

75. “Rock)and)Roll)will)
never)die.)It)is,)
however,)being)
reborn.”)

76. A NEW SUCCESFUL
BUSINESS MODEL

78. Very)successful)

79. STEVE JOBS ANNOUNCED IN HIS
"IT'S SHOWTIME" KEYNOTE
THAT APPLE HAD
88% OF THE LEGAL
U.S. MUSIC DOWNLOAD MARKET
ON SEPTEMBER 12, 2006

80. THE ITUNES
BUSINESS MODEL

81. THE ITUNES MODEL
RECORD LABELS
HARDWARE/
SOFTWARE DESIGN
OEM
MARKETING & SALES
SUPPLY CHAIN
MANAGEMENT
ITUNES SOFTWARE
SEAMLESS
MUSIC
EXPERIENCE
AND COOL
DESIGN
(MUSIC AND SOFTWARE)
IPOD HARDWARE
APPLE STORE
APPLE BRAND
APPLE.COM
DESIGNERS
SUBSIDIZING
UNSUCCESFUL
ARTISTS
ITUNES STORE
RETAIL STORE
CONTENT &
AGREEMENTS
MARKETING
AND
PROMOTION
MASS
MARKET
ROYALTIES
HUGE SALE
FROM FEW
ARTISTS
TOURS AND
CONCERTS
MERCHAND
ISING

82. UNBUNDLING THE
ALBUM OR CD

83. COMBINING
SOFTWARE AND
HARDWARE

84. SPOTIFY

86. THEIR VISION WAS
PUT ON PAPER

87. DESIGNING BETTER BUSINESSES

88. “We)are)going)to))
provide)music)to)everyone))
(any)time,)any)place))
for)free)
in)a)legal)way”)

89. THE SPOTIFY
BUSINESS MODEL

90. THE SPOTIFY MODEL
DISTRIBUTION
CHANNELS
MARKETING AND
PROMOTION
MANUFACTURERS
DETECTING AND
BUILDING TALENT
AUTOMATED ONLINE
ADVERTISING
3RD PARTIES API
ADVERTISERS
COMMUNITIES
PORTFOLIO OF STAR
ARTISTS
COPYRIGHT
CONTENT
MARKETING
AND
PROMOTION
SUBSIDIZING
UNSUCCESFUL
ARTISTS
ACCESS TO MUSIC VIA
DOWNLOADING AND
STREAMING
ROYALTIES
ADVERTISING
INTERNET + MOBILE
GLOBAL
MUSIC FANS
INTERNET + PC
FREE
SUBSCRIPTION

91. THE MODEL VISUALIZED

92. WILL THEY SURVIVE
BY CHARGING TOO
FEW MONEY FOR
MUSIC?

93. THE ARTIST

94. THIS IS THE DUTCH SINGER HIND

95. “I just want to sing and
perform.”

98. Crowd-funding paves the
way for the independent
artist

99. € 40.000
11 days

101. THE ARTIST
BUSINESS MODEL
(INDEPENDENT)

102. THE ARTIST MODEL
MUSICIANS
SONGWRITING
SONGWRITERS
SINGING &
PERFORMING
PRODUCERS
PROMOTION
CD PRODUCTION
MUSIC, VIDEOS,
CONCERTS
MUSIC
FANS
ARTWORK & STUDIO
MANAGEMENT
TECH & TOUR TEAM
RADIO & TV
BRAND HIND
ONLINE PLATFORMS
MUSIC ARCHIVE
BAND
HIND.COM
BRAND EXPERIENCE
EVENTS
INVESTMENTS
SALARIES
IT, WEBSITE,
TRAVEL ETC.
CONCERTS
MUSIC SALES
MERCHAND
ISING

104. A TOUGH MODEL
WHEN ‘EVERYBODY’
CAN BE A SINGER
NOWADAYS…

105. A FEW MAJOR
SHIFTS IN THE
MUSIC INDUSTRY

106. COPYRIGHT

107. A FRAGMENTED
COPYRIGHT INDUSTRY
MADE IT IMPOSSIBLE
TO SET UP LEGAL,
SUSTAINABLE
BUSINESS MODELS.

108. RISE OF
PIRACY

109. THE GAP OF
LEGITIMATE
BUSINESS MODELS
FOR CUSTOMERS
PAVED THE WAY FOR
THE RISE OF PIRACY.

110. UNBUNDLING
OF THE
ALBUM

111. THE UNBUNDLING OF
THE ALBUM KILLED
SIGNIFICANT REVENUE
STREAMS IMPACTING
THE WHOLE MUSIC
INDUSTRY.

112. MUSIC
DISTRIBUTION

113. FROM YOUR LOCAL SHOP

114. TO ‘FREE’ PLAYERS

115. RESULTING IN A
BUSINESS MODEL
PATTERN…

116. FROM
OWNERSHIP
TO ACCESS

117. FROM OWNERSHIP

118. TO ACCESS

119. TECHNOLOGY
DEVELOP
MENT

120. FROM HERE

121. TO HERE

122. SO WHAT DID
BEYONCÉ LEARN?

123. VERY SIMPLE

124. UNDER
STAND

125. SHE UNDERSTANDS
THE CURRENT
FRAGMENTED
INDUSTRY

126. HOW ARTISTS
STRUGGLE TO MAKE
MONEY

127. LEARNING

128. SHE LEARNED ALL
ABOUT OTHER
BUSINESS MODELS

130. AND
RE-INTRODUCED
THE ALBUM!

132. SO…

133. WILLING
NESS
TO PAY

134. BEYONCÉ
KNOW(LE)S…

135. WHAT HER FANS
ARE WILLING TO PAY
FOR…

136. 15,99
USD

137. I AM A BIG FAN OF
BEYONCÉ NOW ALSO
FOR HER BUSINESS
MODEL SKILLS!

138. BEYONCÉ THANKS
HERE FANS…

140. WARNING!
WE WORK ON GLOBAL BUSINESS MODEL CASE STUDIES FOR OUR TRAINING COURSES AND STRATEGY
WORK. IN THE COMING YEAR WE WILL CONTINUE TO PUBLISH ON THE MUSIC INDUSTRY ESPECIALLY IN THE
ELECTRONIC DANCE MUSIC PROJECT ‘OPEN HOUSE’ IN COOPERATION WITH ID&T AND VARIOUS DJ’S.

141. <advertising>
WE HELP COMPANIES INNOVATE LIKE
START-ups
through consulting and training

142. By patrick@businessmodelsinc.com
CEO Business Models Inc.
DESIGNING BETTER BUSINESSES