by: Rick van der Wal via Business and Games Blog

Isn’t it ironic the industry which consistently struggles to monetize its digital content is the business with the highest potential to do so.

Everyone producing content is starting to make money from it it seems, with the exception of the music industry who clamps desperately its retail model. They watch their income only drop on a daily basis and complain about theft through filesharing. The reality of today is: The business model of just sending your music per unit vs money per unit is not such an interesting proposition anymore to many consumers.

A Social Beacon

So what to do? The obvious way to ’sweeten the deal’ and boost sales is to drop the retail model, and adopt and adjust the model the music industry uses for television. Because of the powerful social beacon music is, it could attract very specific ‘focus groups’ within complicated markets. The melting pot of various demographics on the internet can be sorted trough music. Music carries a strong image, and tells a lot about the person dedicating time to one specific artist or genre. So music can function as a filter for attracting specific audiences online. This has a lot of marketing potential and thus can be monetized. Focussed advertising and ‘brand affiliation’ (connecting brand or product X to the image of a band) could be an easy way to create value generated by advertisers.

This model isn’t the most innovative way however. And the music industry faces another threat besides dropping income from reduced sales. The threat is the labels are becoming obsolete themselves. There have already been a number of hits created by amateurs. Recording material for ‘industry’ standards is getting more and more available to the the everyday consumer. Also the need for the Music Industry labels as distribution is threatened. With websites as you tube and fast word-of-mouth in various networks they keep losing ground as gatekeepers to success in the industry.

Adoption by ‘The Industry’

Music is content, and on the internet content is king. There is a raw power in music, largely because it is a ’social beacon’. Meaning my personal interest in music could link me to someone I know nothing about except their interest in the same kind of music. We love to share music, experience it together. However, music downloads and CD’s facilitate the social experience very poorly - and concerts are expensive and rare events to most. This is where virtual worlds could come into play.

I think it would be interesting to see the music industry change their roles. Instead of selling music and being the gatekeepers to success, they should start facilitating and selling a social experience online, and benefit from the growing production on the consumer side. They could start to use the digital means to promote the growing number of prosumers on micro-scale, organizing live events in virtual environments for example. The social experience of music takes us one step back from mass distribution and can make it feel more intimate again.

Music is the most social, most powerful content you will find on the www. The traditional retail model for digital, copyable content isn’t going to get better, it’s going to get worse. New, social and thus commercial opportunities await in the Metaverse and it’s about time the Music Industry showed some innovation, instead of being two steps behind (again). Fortunately we can see some of this happening already. SellAband offers this platform on the 2D web, supporting upcoming artists by micro investments. vSide is a virtual world dedicated to promoting live performances in a virtual setting. From within Second Life we see initiatives like Cruxy and life performances innovating music monetization models.

P.S.: In case you missed it on the official blogs, Hibernia on the Skids has a great post on how to get your music streaming into Second Life without using voice or pay services through MediaMaster.

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