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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Filed Under: business models, economics, music industry

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  1. identicon
    Anonymous Coward, 8 Oct 2007 @ 11:35pm


    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.

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