I have done extensive research in the music industry in 2014 when I was writing my business plan. It took me nights and days in order to completed the whole document and financials. However, even those I have exhausted myself over the business plan, I still had the marketing plan to complete. I share this with you to allow you to get a feel of how much work and taught goes into getting persons music in stores, on radios, on Tv stations, streaming sites and gigs. Not to mention interviews. But the key issues that are facing artistes in today world is the problem of learning how to adapt to changes in the music industry. Our artistes have to don't learn quickly how to adapt with the new changes.
Adapting and Modifying presentation of Music
If you are a musician and your music your music are not circulating on the internet on sites such Itune, Amazon, Spotify and other sites then your are not fully optimizing your song(s) highest earning potential. Artistes it don't matter where in the world you live, you can earn maximum from earning from your songs, but you need to be aware of what you need to do.
Here is the Old Model, Intermediate model and the New Business Model in music
The Traditional Business Model
The traditional business model in the music industry includes
the mass production and distribution of physical
goods (Hughes & Lang, 2003). This model includes the record
labels that manufacture the product (e.g., mainly
CDs) and distribute it via bricks-and-mortar stores, direct
mail clubs, and online e-tailers, as well as artists selling
their CDs at concerts. The traditional model includes the
history of the industry from the early 20th century
through the present (Hull, 1997; Rivkin & Meier, 2002).
The Renegade Business Model.
This is based on illegal, unauthorized
P2P music file trading (of digital MP3 files) via the
Internet; this activity is enabled by organizations
providing software that empowers millions of consumers
to become unauthorized mass distributors of music for
free. Between 1999 and 2000, the pioneer Napster was the
first renegade organization to garner brand recognition
and loyalty, with more than 60 million users worldwide,
before it was shut down by the U.S. court system
(Greenfeld, 2000). Because the record industry was bypassed
and there was “no tollgate for collecting payments
and royalties … (it became) a runaway worldwide bazaar”
(Maney, 2000, p. B2). Soon after, other unauthorized services
entered the market (Richtel, 2001; Strauss, 2001). By
2003, Kazaa was the new renegade leader and like the pioneer
Napster, it became a lawsuit target. In May 2003,
more than 230 million users had downloaded Kazaa Media
Desktop software, making it the most downloaded
program on the Web (“Most Downloaded,” 2003). The
popularity of renegade P2P file trading continues to
grow as part of the emerging trend on the Internet of
self-organizing, emergent digital community networks
(Hughes & Lang, 2003).
The renegade model can be considered a combination
of two types of “native Internet” business models: freeware
(i.e., free software) and information barter (i.e., exchange
of information; Bambury, 1998). Organizations offering
renegade services and content can be considered
business models due to their contribution to economic
value in the form of knowledge and content provided by
the participants (Lechner & Hummel, 2002; Timmers,
1998). There are also legitimate free services such as
tinyurl.com turning a profit by including Google’s
AdSense (i.e., contextual advertising) on their site. Like
tinyurl.com, many companies offer free services and content
with the hope of upselling consumers to premium
paid services and content (Dean, 2004). At present, music
industry “P2P services often support themselves by serving
up unwanted ads—annoying pop-ups, spam and the
like—to users” (Taylor, 2003, p. 34).
Currently, the renegade business model is in the early
stages of development. Although the renegade approach
offers content and services to consumers free of charge,
the intention for these organizations is usually to find a
way to generate income. For example, in October 2003, 2
years after it was shut down by the court system, Napster
was reintroduced as a for-profit, legitimate business in the
United States with plans to enter the European market.
The present renegade leader, Kazaa, has its headquarters
in Australia, with offices in Denmark, Estonia, the
Netherlands, Sweden, the West Indies, and Vanuatu
(Levack, 2003). The Recording Industry Association of
America (RIAA) has been trying to get Kazaa shut down by
the U.S. court system. The senior vice president of
Sharman Networks, the parent company of Kazaa, appeared
at U.S. Senate hearings to answer questions about
P2P software (“Top 50,” 2003). In April 2003, Kazaa
countersued the entertainment industry
for copyright misuse, monopolizing content, and deceptive
acts and practices … [which] is one of the largest
Marketing Strategies in the Music Industry 47
cases of online copyright infringement. … Kazaa’s future
will depend on whether it can prove both the issue of
monopolizing content and whether Kazaa can be used legally.
… If Kazaa wins … it will set precedents the world
over for online film and music distribution. (Levack,
2003, p. 16)
Another strategy Kazaa is pursuing to become a legitimate
online music firm is to try to negotiate a deal with
the major record labels, or get compulsory licensing
approved. In November 2003, to promote its mission to
turn legitimate, Kazaa spent $1 million on a marketing
communications campaign (“Kazaa Launches,” 2003).
Kazaa’s strategies are discussed in more detail later.
Meanwhile, Kazaa has numerous sources of revenue.
The first source of revenue is from advertising software
(e.g., adware) that is included with users’ agreement in
all free Kazaa downloads. Adware refers to software applications
that display ads (e.g., banner and pop-up ads)
while the programs are in operation. In addition,
adware also may track consumers’ Web browsing history
to send targeted promotional messages to consumers
who have installed the program on their personal computers.
Adware has generated legal and industry controversy
when it tracks users’ personal information and
passes it to third parties without the users’ permission
(in which case it is known as spyware). Some of Kazaa’s
advertising clients include Microsoft, NetFlix, and
DirecTV (“Kazaa,” 2004). In addition, promotional firms
such as Claria and Cydoor (which claim high
click-through rates) provide messages from their networks
of advertisers to Kazaa users (Fadner, 2004). As a
backlash to the adware, an unrelated organization introduced
Kazaa Lite, a copy of the Kazaa software without
the adware. In response, Kazaa offered for sale (at a price
of U.S. $29.95) Kazaa Plus, a greatly enhanced version of
the free program without adware (Lyman, 2003).
A third source of revenue is related to Kazaa’s innovative
attempt to establish a new model of advertising-supported
television. Kazaa distributed to its 60 million registered
users a free weekly hip-hop culture TV show hosted
by rap star Ice T and produced by digital broadcaster
Pseudo.com; soft-drink maker Red Bull was a paying sponsor
of this show (Olsen, 2003). A fourth source of revenue
is from paid content related to Kazaa’s partnership with a
firm called Altnet that promotes legally licensed content
(e.g., music files, video games, videos, and other material;
“Kazaa,” 2004). In conjunction with Altnet, Kazaa has sold
paid content associated with more than 15 million
copy-protected files per month (Borland, 2003). Finally, a
fifth source of revenue for Kazaa is from Altnet, which receives
fees from selling more than 500,000 licenses per
day to independent artists who pay $99 and up to post
their content (Jesdanun, 2003; Hachman, 2003).
The New Business Model
The new business model
This includes legitimate online digital
music services. By 2008, Forrester expects that approximately
33% of music sales will be from legitimate online
downloads, and that CD sales will drop 30% from their
peak in 1999 (Needham, 2003). Forrester currently estimates
that by the end of 2004, online music sales may
amount to $270 million, up from $89 million in 2003
(Legon, 2004).
Legitimate online music services are part of the native
Internet business model category of digital products
and digital delivery (e.g., including music) that often
have strategic alliances with access providers (Bambury,
1998). The first legitimate online music services began to
appear on the Internet in 1995, but none of the early services
were very successful (e.g., Rivkin & Meier, 2002).
When Apple Computers introduced its iTunes service in
April 2003, it marked the first major success for this new
business model; within its first 6 months of operation, a
record number of 14 million songs were purchased for
download. In July 2004, iTunes reached its 100 millionth
download (“iTunes Tops,” 2004).
In the European market, there are more than 30 legitimate
online services that offer music either by
pay-per-download or by subscription (IFPI, 2004). In May
2004, Napster 2.0 started its European market entry with
its UK edition, and the following month Apple iTunes began
service to Europe in the United Kingdom, Germany,
and France (“iTunes Tops,” 2004; Twist, 2004). In 2004,
competition will intensify, as more than 10 Windows-
based online music services will be introduced in
the market (Legon, 2004). However, right now, the legitimate
downloading of music is still just a drop in the
bucket compared to the massive adoption and usage of
file trading via unauthorized, illegal music services.
Services Marketing Strategies and the
Three Music Industry Business Models
The American Marketing Association defines marketing as
“the process of planning and executing the conception,
pricing, promotion, and distribution of ideas, goods, and
services to create exchanges that satisfy individual and organizational
objectives” (American Marketing Association Dictionary
of Marketing Terms, 2004). Thus, the marketing process
is a means to implement a business model. Marketing
strategists have asserted that for an organization to succeed,
a marketing orientation using a customer focus
must be a company-wide mandate, not just the responsibility
of a functional department (e.g., Webster, 1992,
2002).
48 V. L. Vaccaro and D. Y. Cohn
There are three main modern marketing management
orientations that an organization may have: a production,
sales, or marketing.
There are three main modern marketing management
orientations that an organization may have: a production,
sales, or marketing orientation (Keith, 1960; Kotler &
Armstrong, 2004). These orientations are organizational
philosophies that are part of corporate culture that become
drivers of a firm’s business model and strategies. A
production orientation philosophy is implied when management
decisions are made without taking into consideration
consumer needs. A sales orientation philosophy is in
place when an organization attributes its success to
large-scale promotional efforts in the mass media. In contrast,
a true marketing orientation is a business philosophy
where the organization fully explores consumers’
needs first, and then implements strategies to generate
maximum customer satisfaction and profitability.
The traditional music industry is being forced to shift
from the paradigm of a physical product manufacturer
and distributor of music to a service provider. Therefore,
an understanding of services marketing becomes essential
to the development of successful strategies for all business
models in the music industry. The following analysis
uses the framework of the services marketing mix to compare
strategies of the three business models (traditional,
renegade, and new) and to make recommendations. The
services marketing mix consists of eight Ps: the four Ps in
the traditional marketing mix of product, price, place,
and promotion, and four additional Ps of process, people,
physical evidence, and productivity (Lovelock & Wright,
2002).
This services marketing mix framework analysis refers
to the three modern marketing management orientations
(Keith, 1960) and ties the eight Ps to six major reasons consumers
desire to be online for product acquisition: convenience,
choice, customization, communication, control,
and cost (Kerin, Hartley, & Rudelius, 2003). The analysis
also connects the six Cs of online motivations with five
convergent marketing strategies. “Convergence … means
more than the fusion of different technologies (television,
computers, wireless, PDAs) or the combination of channels
(such as … (a) bricks-and-clicks model) … There is a
more basic convergence within the consumer … created
by the technology and the enduring behaviors of human
beings” (Wind & Mahajan, 2002, p. 68). Convergent consumers
are those with both online and offline attitudes
and behaviors. The five Cs of convergence marketing are
community, customerization, choice tools, channel, and
competitive value (Wind & Mahajan, 2002).
Comments
Post a Comment