Companies often have great successes by tweaking business models. Tweaking a business model is sometimes about redistributing a bit of the work, that changes your cost structure, and changes how you compete. Ikea tweaked the furniture business model by employing their customers as logistics and delivery people. South West tweaked it’s business model by not serving meals or checking bags so their customers were employed as baggage handlers. Netflix tweaked the video rental business by employing their customers as reviewers that powered their recommendation system, customers got more value, netflix gained loyalty. The important thing about these business model tweaks is that when customers take on more work/responsibility they either receive more value or save money, that’s why they do the work.
What has happened with the music industry and p2p is nothing more than another tweaked business model, customers have taken on the role of promoter and distributer, but instead of compensating them for that valuable service they are getting sued. The obvious problem was that p2p systems didn’t compensate anyone, and the later ones that did compensate people compensated everyone except the people that make p2p work, that is the users, they are the engines behind p2p.
So along comes Grooveshark, a company that is going to allow people to share all their music and make recommendations, sell DRM free music, for 99 cents and compensate the artist, publisher, and the user who makes the sale. Grooveshark might not make it, but this is the model IMHO that will work in the end, it’s just going to require the right dealmaker/rainmaker behind it (Steve Jobs anyone?). Read a full report on Grooveshark and the exclent Read/WriteWeb blog.
See also
0 Responses to “Tweaking The Music Business Model So People Get Paid”
Leave a Reply