The Music Industry

I recently watched a show called Insight where they were discussing about the issue that record companies were losing sales due to illegal music downloading. Here are my thoughts, ideas and response to the issue:

The industry is definitely in a transitional period. They should essentially give the consumers the choice to whether or not to pay for songs consumers want to download. There will always be consumers who will want to pay in order to support their favourite artists and songwriters, as well as feeling morally obligated. So for paying consumers the industry could offer:

For consumers who want free music:

In my opinion I think that the record companies should move towards a role of being an advertiser instead of a distributor. If they can get the artist and the songs out there, making them more popular then that would mean more demand for concerts. The artists and the record labels could then share in the revenues from tours. Also the record labels should do some test market on the songs they put on an album, much like what they do with film. If they can help artists create a solid album that its more likely people will buy it.

Here are two ways to provide some incentive for fans to go out there and purchase an album. You just got to think creatively.

First off, people who purchase an album are the only ones who are allowed to go to the artist’s concert tour. So basically each album would have a code in it that permits the fan to purchase a ticket to a concert. This could possibly help prevent scalpers, unless of course they buy truckloads of an album. It is possible you could also offer non-album holders a premium price for a ticket but with limited seatings. And album holders get a better price and have more seating available for them.

Secondly, give the fans a piece of the artist’s work literally. For example a book where an artist has been compiling and writing their lyrics and songs in. Show the world that the artist would like to give their fans a piece of that book by splicing it into a million pieces. Of course you would want to make a copy of the book first. So in one million albums there is a piece of that original book in it. Fans can have something that once belong to their favourite artist.

Victor Tsen, June 2008.

--- Update July 17 2008 ---

Popcuts is a music website with an interesting revenue model, when a user buys a song he or she is eligible to earn money everytime that song sells. Therefore people who are good a spotting hits will earn more credit.

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