Friday, April 20, 2007

Reshaping the music market

The music industry is being suffering enormous changes in the last decade. Internet posed an interesting threat to a very well established and profitable market. Their traditional business model basically selling CDs was partially replaced by digital downloads via internet and more specifically through peer to peer file sharing applications. And then Intellectual Property Rights came into scene, until different protection systems appeared such as DRM. Steve Jobs, considered one of the best tech gurus, questioned the utility of such methods, and soon an agreement between EMI and Apple announced the appearance of music sold without DRM protection in exchange of an additional charge per song.

Undoubtedly, the power of users sharing music (not piracy of people selling it…) is difficult to control. So business models have to be redefined. And the ones that will adapt best to this scenario will be (are) the most successful. As normally artists get more revenue from concerts and merchandising that the sale of records itself, they should take profit of he huge power of internet to broad the reach of their music. However the record companies don’t want to lose their piece of cake. Talking about the possibilities of internet to promote new music talents, let’s take the example of ‘Sellaband’, a website that allows users to buy a kind of ‘virtual shares’ of new groups, and then if they get enough ‘investment’ the group will record a CD. The users that invested on them will get a discount to buy it and they’ll share a 50% of the revenue coming from this CD. Don’t you think that’s innovation and really taking this industry to the future rather than anchoring it in the past?

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