How Digitization is Transforming the Music Industry
Haris Krijestorac
October 4, 2010
Twitter: @hariskr
The Early Music Industry:A ‘Perfect’ Business
Limited Storage Space Market of Hits
Music goes Digital:Everything that made it the perfect business changes
• Supply
• Creation
• Discovery
From Niches to Riches…
70% of revenue comes from the long tail
Success Strategies for the Music Industry
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
Strategy #2: Add Value
Add value to Physical Package
Strategy #2:Add Value
Add value through Website and Social Media
Strategy #2:Add Value
Add value through Concert Experience
Spreading the music used to be the SALE
… now it’s the MARKETING
The Challenge: Creating Sustainable Strategies
Sustaining ‘Add Value’
• Record companies: – design tailored digital marketing strategies
• Artists:– Just create art
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
Music industry is still ‘The Perfect Business’
…. And record companies can survive if they adopt new roles
4 Tips
for record companies of the future
Tip #1:Find Artists for Niches, not Masses
Tip #2:Help digitally spread music,
don’t physically sell it
Tip #3:Deepen artists’ fan base,don’t broaden it
Tip #4:Tailor physical
product to niche,not masses
Thank you
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