Recently, in another forum, I got involved in a discussion about where people believe the music industry is going. As a very passionate music fan and entrepreneur, it's a topic that I have been thinking about on a daily basis. Now that I've joined Bandzoogle as CEO, where we work closely with thousands of independent musicians that are serious about their art and career, it has become an almost-obsession. In that forum, I summarized my thoughts on "how-to-make-money-from-music" as follows:
I think there are 3 ways that a creator can earn from the music he or she creates:
1) Monetize ownership of the music
2) Monetize access to the music
3) Monetize enjoyment of the music
I wasn't there, but I believe the bulk of the wealth in the music industry was built on #1, in the last 20 years, through the CD-Release complex and whatever was going on before (Thanks Kyle: http://www.hypebot.com/hypebot/2009/03/the-death-of-the-cdrelease-complex.htm).
Now everyone realizes that, technology helping, #1 is slowly fading away and they try their best to get into the #2 game, pulling on their fractions of cents and .0001 percentage points before others do it faster and better (note: I meant through Youtube, Mog, Spotify, Rdio, Pandora, Rhaposody, Jango, Thumbplay, etc.).
What only a few people have realized is that where the money is, now and tomorrow, is #3. Sure, you can still earn from #1 and #2, but it won't happen if #3 doesn't happen first. Problem is that #3 is hard to define (my clumsy stab at it: http://bit.ly/d2G4cy), and it's still not clear how you build strong business models around it. Biggest problem is that there are many, many people that are motivated to keep #3 from happening if #1 and/or #2 do not happen first. That's the bottleneck.
Now, I would be happy to hear what our members think about this. Are you getting revenue from the music you create and perform ? The counter here is getting dangerously close to $3,000,000. That's amazing. But is it important for you ? Do you think your "revenue mix" will change in the future ? Are you selling your music ? Or are you selling experiences, where people enjoy your music? Or both ?
As for the "industry", earlier tonight I read the first part of a series of blog posts that Jeff Price, CEO at (digital distribution company) Tunecore, is writing. I strongly urge you to go read the whole thing. Here's an excerpt:
"The reality is:
- More musicians are making money off their music now then at any point in history.
- The cost of buying music has gotten lower but the amount of money going into the artist's pocket has increased.
- There are more people listening, sharing, buying, monetizing, stealing and engaging with music than at any other point in history.
- There are more ways for an artist to get heard, become famous and make a living off their music now than at any point in the history of this planet.
- Technology has made it possible for any artist to get distribution, to get discovered, to pursue his/her dreams with no company or person out there making the editorial decision that they are not allowed “in”.
- The majority of music now being created and distributed is happening outside of the “traditional” system.
And to reiterate, sales are up… "
Hopefully it will enable a bright future for those that deserve it. And hopefully we at Bandzoogle can do our part and help !