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Business - Written by on Thursday, July 5, 2007 22:30 - 2 Comments

Paul Artiuch
A different model for the music industry?

An innovative business model for the music industry has emerged in China. The leading search engine Baidu has teamed up with the record label Rock Music Group to deliver a free streaming music service to users. The companies, in turn, gain by splitting the advertising revenue.

If the United States is a difficult place to do business for record companies, China should be nearly impossible. The International Federation of the Phonographic Industry (IFPI) estimates that as much as 85% of all music consumed in China is pirated. An extreme environment such as this drives business model innovation. While an ad-supported music business model is nothing new – think radio – streaming puts the user in control.  It seems that Western record companies will have to learn that you can make money by giving customers what they want.



2 Comments

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Rozlynn Crew
Jul 9, 2007 11:40

I’m fascinated and trying to make the connection to my trade association and our public website and our members. We have 26,000 members and a billion hits per month on our site.

Has anyone applied this concept to trade associtions, specifically real estate agents. While association membership nationwide is still strong, traditional bricks and mortar events have suffered attendance losses?

Perhaps our community building efforts need to focus online and not on the traditional days of mixers, expos, and installations.

Thoughts?

Max
Dec 2, 2007 13:55

Interesting… Labels in the US are starting to offer large advance sums to artists willing to give a portion of their publishing and touring monies to labels. Labels have never had their hands on these revenue streams and are trying to compensate for the drop in CD revenue. As one label put it “We’ve went years without asking for touring and publishing monies. I think we have deserve a cut”. Whatever. I’d like to hear their explanation as to why artists make $1-2 per unit sold when they make $8-10.

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