by Mike Masnick

Filed Under:
business models, music

Bands Big And Small Finding New Business Models That Work

from the and-it-all-comes-together dept

There's been renewed interest in music industry business models now that we're seeing a number of top musicians experimenting with changing business models. The backlash to those early reports was somewhat amusing and seemed to fall into one of two camps. First, there were those who said that these business models would only work for big, well-known bands, despite plenty of evidence to the contrary. Then, there were those who would pick apart each business model to point out why that particular business model wouldn't work for other bands. One of the things that we've tried to do around here is make it clear that there no longer is just one business model that works -- but that there are many different business models that all are based around the idea of the music being free and then charging only for scarce goods. However, if we gave an example of bands making money off of concerts, people would say that some bands don't like to tour. If we gave an example of a band making money through merchandise, we'd hear that some bands don't want to sell merchandise. That's fine. The point is that there are lots of different business models, and bands can find the ones that work for them. Two articles that came out over the weekend help to highlight this.

The first is in the NY Times, and it talks about how big bands are embracing all kinds of new business models from having their music used in TV commercials to selling other related goods (beyond the typical t-shirts and CDs), such as branded drinks. The second article focuses on less well known bands, and how they're adopting all kinds of new business models that focus on getting fans to pay up. In fact, it mentions one band that appears to be using a close variation on the subscription fan club model we suggested years ago. What these two articles show, however, is that both big and small bands are learning there are all sorts of ways to make money in making music even if the music itself isn't where the money comes from. You provide the music to build up a fan base, which helps build up the value of lots of other things as well. It's nice to see more musicians recognizing this trend -- even if the RIAA continues to deny it.

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  1. identicon
    scott parsons, 29 Oct 2007 @ 5:10pm

    From small to big

    What I think will be the real test is when we see a small band using one of these new business models graduate to "stardom." While I don't think we need music megastars, I do think that it is important that there still be a track to big success for our rockstars, for no other reason that it would be nice to have our cultural ties stay strong.

    It could be just me but I love being able to talk about music with someone else and still be able to recognise at least some of the bands, and I could see a future where everyone has their own favourites and outside that fanclub the music is unknown. Not necessarily a bad thing, but I think it could be problematic.

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