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The New Record Business Models: Yes, More Than 1

April 9, 2008

There is constant debate and questions on the future of recorded music.

Will Record Labels become all-in-one music service shops (recording, touring, artist management, publishing, merchandising) and take a piece of every piece of revenue an artist generates? In other words, will the 360 deal triumph?

Sadly, I think these deals will continue at least for a short while longer. Nothing is set in stone, things are still in flux. However, the models below will definitely have an impact.

Will music be “purchased” like a utility where you pay a monthly fee for access to all the world’s music and artists/labels’ will be paid on the popularity of their downloads (there will be a very big pie of money)? Will everyone agree to this?

I first read about this in Dave Kusek’s and Gerd Leonhard’s fantastic 2005 book, “The Future of Music”. I think it has merit, however I have my doubts on everyone agreeing to this.

Will the Telecommunications/Internet companies bundle a music fee into their packages to give users (who want music) access to “seems-like-free” downloads?

This I could see happening anytime now (if it isn’t already happening). I can see music fans who are sick of getting crap downloads on torrents and peer-to-peer networks pay a nominal fee (2-3$/month) to have ready access to quality downloads. If it’s bundled in a package, it also feels like free. It could be a great marketing tool for the first company to really push it.

Will the Artist and Manager work together to build their own music company where they go direct to consumer and license their masters to Music Marketing Companies (the new record label) to generate revenue directly from physical products (cd’s) or Digital sales for a set period of time in various territories (countries)? Man, that was a long sentence!

There are more and more artists doing this. They have their own record label, own the masters, own the copyrights, manage their own merchandise, and license their work to be marketed and distributed by record labels. This will continue to gain popularity and the record label will evolve into a music marketing company (which it was, but without the recording costs)

Will their be more and more competition to Itunes like MySpace Music, Musicane.com, and AmieStreet.com who will force price competition and change the $.99 standard?

It’s happening and more will come. If music fans want to buy a song or album, but don’t want or need access to everything, these sites are ideal.

Will Ad Supported models where you can download as many tunes as are available on a site as long as you can spare a few seconds to see an advertising message?

I think this will be the domain of the niche music sites where content and music will be given “free” but will be paid by advertisers. The site will cover a niche, and offer music from the niche. The artists offering their music on these sites will get paid from a percentage of advertising including the promotion. Advertisers looking to market to that niche, will find these sites highly focused and appropriate for their products/services.

Long story short, there will be a popular model, but all the others will be able to exist and flourish. I personally like the inclusion of a fee into a telecommunications/ISP package. People don’t have to be force fed anything. They can find what they want when they want, it seems like free, no quality or virus worries, and the artists can get paid for it!

I love the internet.

I leave you with the video from Guy Leonhard, co-author of the Future of Music Book. You can visit his blog at mediafuturist.com

Make Great Music

Cheers,

Hoover


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