A Few More Music Business Model Suggestions

from the keep-'em-coming dept

Every time we talk about the economics of the entertainment industry, someone accuses us of not suggesting any alternative business models. However, we actually have suggested other business models all the time, while showing how other musicians have succeeded in embracing new models to make money while giving fans reasons to pay. Of course, part of the confusion is that many musicians are using slightly different business models to make this work — which is exactly how it should be. No one is saying that all musicians are going to find that any particular business model works, but there are a number of different business models that all involve using the music to make other (scarce) things more valuable and worth paying for. Reader alex points us to a column from Pitchfork Media that has a bunch of other business model suggestions, mostly focused on giving people a reason to pay, rather than just complaining that they won’t pay. Once again, it’s important to remember that “free” isn’t the business model — but it’s an important part of any business model involving infinite goods.

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Comments on “A Few More Music Business Model Suggestions”

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Anonymous Coward says:

Re: Re:

The thing you are missing is that in the US anyway, the bands do not work for record sales, they work for merch. Bands make all thier money for the most part off the merchandise they sell at thier gigs, and little to none of that money (except music sales) normally goes to the label. For example, when you see that second and third band on a tour; they normally are not getting anything more than food, lodging and gas money. They only make money for things like toothpaste off merch.

Record companies tend to only make thier money off of record sales. They do a valuable service to the bands and to the music listening public, which is they front the money for the cd to be recorded and then use established distrubution channels to get the product to the consumer. They may also make some money on the tours for what the vanue pays the performers but normally that is only repaying an advance and not profit.

So the UK model wouldn’t work for most record companies. It would work for unsigned bands and smaller indie labels but not the big boys.

And no, I am not an RIAA supporter. I think it is stupid to sue people on internet based solutions unless you can prove who the guilty INDIVIDUAL is. The lawsuits seem to be more like saying that someone driving your stolen car ran a red light, and since you didn’t know the car was stolen and taken for a joy ride and returned, you are liable for the red light ticket. It seems to me that when there are how many zombies on the internet, that this would be my defense if I ever did share music and was sued. Then I would sue my ISP who’s security software came free for the damages incured from the RIAA suit.

Mike (user link) says:

Re: Re: Re:

As I agree with you on all of your points except for one. Record labels do not do good for the bands, if they are not making money off of the CD’s why do bands go to them? Why not just go to street vendors and make their own CD’s to just give away for free, CD printing devices and making mass copies of disks is not that hard. A CD printer is a few 100 dollars and you can go to a company to make X amount of copies for you for dirt cheep.

MadJo (profile) says:

Re: Re: Re: Re:

The artists do still rely on marketing (is expensive); how else does anyone know that you have brought out a new CD?

But I’m not apologizing for the music industry. They should’ve seen very early on that all they should be are marketing bureaus for said artist.

Too bad, these marketing bureau managers are too greedy to see that, and refuse to believe that they are nothing more than that, and want all the money they can squeeze out of their licensed artists.
I wouldn’t be surprised if they started demanding money off of the merch sales too.

Willton says:

Re: Re: And the songwriters?

Er. They get paid to write the songs? Don’t see what’s so complicated about that.

Wrong. Songwriters get paid for the songs they write that sell. Songwriters are not rank-and-file employees of a record company. They get paid solely through the royalties they receive based upon the sales and performance of their music. It has to be this way because there is no objective way to value a song prior to its performance to the public.

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