Tag Archives: businessmodel

Business model of the music industry

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The world’s music market occupies 75% of the total market in five countries: America, Japan, Germany, Britain, and France.

The music industry has taken the business model of “mass production and mass consumption,” in which the performance produced by the artist is contained in a package called a CD and sold to profit.

This model produced a profit by discovering and nurturing artists, recording the artist’s music, producing a master of a CD package, copying it from there, and delivering it to the hands of consumers.

Anyone can play music, but it requires a large capital to be distributed in CD packages and distributed nationwide for mass sales.

You can not expect the benefits of living with the indie model of writing songs yourself and playing yourself, making your CDs, and selling them at your concerts or on the streets.

However, if it is a business model of mass production and mass consumption, it is also possible to aim at American Dream and one thousand dollars.

On the other hand, the spread of the Internet has presented artists with new revenue sources. In particular, the impact of innovations such as the spread of SNS and streaming has greatly affected the structure of the U.S. market itself.

For example, there was only 9% streaming in the U.S. market in 2011, but it has increased to 51% in 2016. That is half of the revenue from the U.S. music business, excluding live activities, and it comes from streaming.

In the 20th century, the artist was a star and a special being. However, the explosive spread of the Internet has created a new media and communication tool called SNS.

As a result, to get up to the status of a star until now, “power, energy, and luck” were required, but the elements of “luck” decreased, if you have the energy, it becomes possible to promote your music by yourself. So you can see that anyone could be a star.

Business model makes profit

 Let’s look at the business model of the music industry.

 First, 「①create a music work」, 「②artists perform it」,「③recording and make a master (original data)」, and「④duplicate it and distribute it in the form of CD and Internet distribution」.  As a result, it will reach the consumer’s hand and produce satisfaction, and it will only make money if it is paid. In this series of flows (flows), it does not mean that only one company is engaged, but it is established that various people are involved little by little. In particular, many creators are involved in distributing good music.

 Creative work is a formless thing, so if someone admits some value and pays money, they can not make a doller. It is after the wisdom and sensibility of many people, and the impersonal effort that we can enjoy, be moved, and healed listening to music works.

Although the value of music is invisible, copyright is guaranteed to create a mechanism for paying money for the work of those involved.