Even though recorded music industry revenues have dropped dramatically in the last fifteen years, the number of people listening to music around the world is not declining. They listen to more recorded music today than ever before. The influence of recorded music is everywhere in our lives.
Combining legal online music services with illegal online file-sharing means that almost every song is accessible anywhere, at any time.
Is The Idea Of Listening To Music Just Becoming Obsolete?
Legal music services that are access-base, such as Spotify, Grooveshark and Radio, are legal. They are still in their infancy and actively seeking the best pricing and service structure to allow them to compete and thrive.
These services all share a common structure: they offer unlimited access to a music catalog for a monthly subscription fee. These services compete largely on the size and availability of their music catalogs on different platforms.
It is possible to imagine that all these services will eventually converge toward a common music offering. They will be available across all platforms and include almost every song recorded.
Basic economic theory predicts that price will determine the level of competition among similar products or services. Profit margins will eventually shrink and only a few big players will survive to compete in an oligopolistic marketplace. In other words, access-based music services will become a commodity market, and behave in the same way as petrol and sugar markets.
Online music service providers will have to find other ways to differentiate and maintain their profitability once the market is in this dark place. This can done by creating services and features that give context to the songs in the catalog.
Music Listeners Industry
For example, music listeners may be able to quickly find the song they want by using context. It could allow users to share music with their friends and organize their favorite music in convenient ways.
These context-based services are less predictable and offer more innovation opportunities than services that are based solely on an access model. The context-based music services have a higher chance of creating a competitive advantage through unique and innovative features that are not possible in the access model framework.
Along with access-based music services, the number of context-based services is increasing. Most music services now offer access to music and a variety of features that let users do stuff with the music.
Primary Concern For Customers Industry
Access to music is not the primary concern for customers. Customers primary problem is not accessing music. They need to learn how to use the music that they have. In essence, customer value can be create when the audience has tools that enable them to ‘do stuff’ with music instead of just having access to basic music.
Many online music services, such as those mentioned above, offer context-based features. Even more fascinating is the fact that context-base logic can be use by many musical artists and composers who experiment with context-based ideas that go beyond traditional song structure and album structure. They create online and mobile apps that allow fans to interact with music in a playful and creative way.
These new tendencies raise fundamental questions about how the music industry is defined. And what music organizations are meant to do. Software and tools for creating music will be recognized as an integral part of the music business. It will it become a core sector in the music industry alongside recorded music, licensing music and live music? What does this mean for musicians, composers, and established music companies?