Technology of the Week Project – Information Goods (Music Industry)

8

October

2016

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The music industry has evolved severely. This mainly is due to the speedy progress of IT.

Nowadays, music is being provided for free and this causes many artists to be discontent

with the online music platforms. We will zoom in on Spotify and Bandcamp which are well-

known music platforms.

Spotify uses the so called freemium model.

This is a pricing strategy where basic services and functions are free and users have to pay

for additional features and services through paid subscriptions.

Besides this revenue source Spotify also generates revenue by third party advertisements.

Artists who use Bandcamp are provided with a customizable microsite where the music they

create can be uploaded and shared. All tracks can be played for free on the website and

users are most often provided with the option to purchase the album or a specific track at

customizable prices, and sometimes are given the option to pay more than required for the

album/track. Bandcamp offers consumers free streamable content, while providing artists the

ability to set variable pricing, ranging from free to paid options, allowing for more choice for

potential customers, and allowing controlled access to the music without need for payment.

Due to the free pricing of music, music platforms are under serious pressure. Many music

platforms have been taken to court for their unfair and unjust strategies and many music

platforms did not survive these legislation conflicts. The digital Media Copyright Act protects

music artists and their work and due to the rapid development of technology in the music

industry, more Acts will be developed to protect artist and to attack music platforms.

The challenge for music platforms will be to create a business model with an agreeable price

for artists while on the other hand providing music for almost nothing to customers. We won’t

only be seeing freemium, advertisement or name your own price strategies but we might

witness more bundling of services between social media and music platforms.

Music platforms have to find the most sustainable business model.

Source:
https://www.youtube.com/watch?v=1hsDktXn5-Y&list=PL_EGRp-gM6XUmrCD2i4Jmuwilvq1LNIm8

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