Hip Hop Stars Understand The Real Business Models For The Music Industry
from the making-all-the-scarce-goods-valuable dept
It's exactly the model we described (though, many could probably do even better if they further embraced freeing their music). The music itself is an infinite good and can be used to the musician's advantage to make scarce goods much more valuable. As Lea Goldman, the associate editor at Forbes who put together the story notes: "they are smart enough to know that it's not just about selling albums. That'll keep you going for maybe two, three years tops. It's about building an empire and plowing those earnings into lasting businesses that will generate income long after the music stops selling." For some artists, that means branching out into totally different businesses. When people attack the business model we've described, they snicker at "selling t-shirts." However, the article notes that hip hop artists are creating full lines of clothing that sell well and sell for a premium because of their association with the artist. Also, the successful hiphop stars all seem to recognize one of the key "scarce" resources they can sell: an association with themselves. Many of these musicians took in millions by doing sponsorships, by producing other musicians albums or simply by appearing on other musicians' recordings. So, can we now set aside the myth that the music industry is in trouble? It's only in trouble if you're solely in the business of selling plastic discs -- and that's because those discs are increasingly obsolete.