digital transformation in the music industry
DESCRIPTION
This is a presentation I made for my Digital Transformation course. The class was taught at Carnegie Mellon University by professor Michael D. Smith. In the presentation, I discuss how technology has transformed the role of record companies. I also discuss what record companies must do if they want to continue to add value.TRANSCRIPT
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How Digitization is Transforming the Music Industry
Haris Krijestorac
October 4, 2010
Twitter: @hariskr
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The Early Music Industry:A ‘Perfect’ Business
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Limited Storage Space Market of Hits
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Music goes Digital:Everything that made it the perfect business changes
• Supply
• Creation
• Discovery
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From Niches to Riches…
70% of revenue comes from the long tail
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Success Strategies for the Music Industry
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Strategy #1: ‘Pay What You Want’
• ‘You can’t stop piracy, you have to learn to compete with it’ - Steve Jobs
• Create an Efficient Market– 100% of demand is captured– Consumers pay their WTP
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Strategy #2: Add Value
Add value to Physical Package
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Strategy #2:Add Value
Add value through Website and Social Media
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Strategy #2:Add Value
Add value through Concert Experience
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Spreading the music used to be the SALE
… now it’s the MARKETING
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The Challenge: Creating Sustainable Strategies
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Sustaining ‘Add Value’
• Record companies: – design tailored digital marketing strategies
• Artists:– Just create art
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Sustaining ‘Pay What You Want’
• Record companies must build cult followings around artists
• Even more important for new artists, since the main goal is to spread their music
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Music industry is still ‘The Perfect Business’
…. And record companies can survive if they adopt new roles
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4 Tips
for record companies of the future
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Tip #1:Find Artists for Niches, not Masses
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Tip #2:Help digitally spread music,
don’t physically sell it
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Tip #3:Deepen artists’ fan base,don’t broaden it
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Tip #4:Tailor physical
product to niche,not masses
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Thank you
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