the music industry - new models (excerpt of a keynote)
Post on 17-Oct-2014
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The following slides are a second brief excerpt of a 60 minute keynote I’m giving at Eurosonic Noorderslag, Europe’s most important live music industry conference. This set outlines two innovative models: Spotify and SellabandTRANSCRIPT
Alexander OsterwalderAlexOsterwalder.com
Twitter: business_design
Experimenting with Business Models in the Music Industry (part II)
the following slides are a very brief excerpt of a 60 minute keynote I gave at Eurosonic Noorderslag, Europeʼs most
important live music industry conference
todayʼs music industry is ...
a business model playground ..
a business model playground ..
limitations of the old record company ...
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
The Old Record Label Model
hits & wannabe
hitsmass
market
Retailers TV
Radio
tours &
concertsmerchandising
huge sales from few
artists’ albums
portfolio of
star artists
detecting & building talent
distribution
channels
marketing &
promotion
marketing &
promotion
royalty paymentssubsidizing
unsuccessful artists
copyrighted content
manufacturers
“new” digital channels
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
The Old Record Label Model
hits & wannabe
hitsmass
market
Retailers TV
Radio
tours &
concertsmerchandising
huge sales from few
artists’ albums
portfolio of
star artists
detecting & building talent
distribution
channels
marketing &
promotion
marketing &
promotion
royalty paymentssubsidizing
unsuccessful artists
copyrighted content
manufacturers
“new” digital channels
distribution is a commodity, attention is
the new scarcity
social networks are what drive music sales
unbundling of albums into single
songs (iTunes)price of songs
tending towards ZERO
customer needs are not being satisfied
itʼs all about hits AND the Long
Tail of music
piracy
shift of the balance of power
towards artists
bloated cost structure (talent
discovery/marketing)
talent will be discovered by
other mechanisms
twonewmodels
example
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
Business Model
free streaming
music
Spotify.com
free
young connected music fans
software application
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
Business Model
free streaming
music
Spotify.com
free
young connected music fans
software application
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
Business Model
free streaming
music
Spotify.com
recordlabels
licensing
agreements
free
young connected music fans
software application
licensing fees (for each song
played)$$$$$$
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
Business Model
free streaming
music
Spotify.com
platform development & maintenance
recordlabels
licensing
agreements
free
young connected music fans
software & network engineers
platform,
software &
brand
software application
licensing fees (for each song
played)
plus even more work
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
Business Model
free streaming
music
Spotify.com
platform development & maintenance
recordlabels
licensing
agreements
free
young connected music fans
software & network engineers
platform,
software &
brand
software application
licensing fees (for each song
played)
bandwidth
costs salaries engineers
plus even more costs
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
Business Model
free streaming
music
Spotify.com
platform development & maintenance
recordlabels
licensing
agreements
free
young connected music fans
software & network engineers
automated online
relationship
platform,
software &
brand
software application
advertisers
licensing fees (for each song
played)
bandwidth
costs salaries engineers
mood-based advertising
ad fees
revenues for free services
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
Business Model
Spotify.com
platform development & maintenance
recordlabels
licensing
agreements
young connected music fans
software & network engineers
automated online
relationship
platform,
software &
brand
software application
mobile
application
licensing fees (for each song
played)
bandwidth
costs salaries engineers
premium subscription
subscription fee
revenues from premium
subscriptions
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
Business Model
Spotify.com
platform development & maintenance
recordlabels
licensing
agreements
young connected music fans
software & network engineers
automated online
relationship
platform,
software &
brand
software application
mobile
application
licensing fees (for each song
played)
bandwidth
costs salaries engineers
premium subscription
subscription fee
pay-per-usefee
day pass
revenues from occasional
uses
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
Business Model
free streaming
music
Spotify.com
platform development & maintenance
recordlabels
licensing
agreements
free
young connected music fans
software & network engineers
automated online
relationship
platform,
software &
brand
software application
mobile
application
advertisers
licensing fees (for each song
played)
bandwidth
costs salaries engineers
mood-based advertising
premium subscription
subscription fee
pay-per-usefee
day pass
ad fees
we need to constantly rethink ourmodels - systematically ...
BusinessModelGeneration.com
THANK YOU!www.businessmodelgeneration.com
www.alexosterwalder.com www.businessmodelalchemist.com
Twitter: business_design