Emerging Music Markets

As the dinosaur music corporations crumble at the foot of the internet monilith, musicians who love playing and entertaining have an exciting and prosperous future.

The product life-cycle is a standard business text book concept. The idea is basically that the product is developed and sales grow along with profit. Then as the the product matures competition increases and profits stabilise. New ideas, technology, manufacturing methods can lead to a product declining, eroding profits.

Product Cycle

Development ——-Growth ————–Maturity ———–Decline

The product life cycle is a simple description of a reality which is happening every day around us as competition drives innovation. It explains the current state of the music industry perfectly, where technological innovation (the internet) has eroded the capacity of music manufacturers to control property rights with the consequence of plummeting profits. With technology you can download anything for free and because the internet is a free market in the true sense, and theres nothing anyone can do about it.

What is really interesting is not how the industry dinosaurs try and grasp the remnants of their crumbling empires, but how generation Y musicians are innovating and redefining new products and distribution strategies.

The new world is in its infancy, but its evolving fast. Its a world where email is for old timers, framed by networks supported by Myspace and YouTube and text messaging where generation Y consumers structure their media on their own terms. Nothing could fly further in the face of the old authoritarian corporates who controlled the media in their time frames, to their budgets and for their taste.

Consider the radical example of English band Radiohead who distributed their latest album through their own website at a price determined by the purchaser, by-passing the traditional industry distribution institutions. One can only surmise that they believed that voluntary contributions would deliver as much revenue as the their cut from traditional distributors and manufacturers, plus the value of the publicity.

In fact, web platforms such as My Space are abundant with musicians and bands advertising and promoting their skills and products, although to date, it relies on networking and word of mouth. Alternatively, you can put your band on to a ‘find a band‘ business to business site structured to enable classified searches in local areas. These sites are a similar business model to the business to business and business to consumer cyber marketplaces which operate to link suppliers and consumers with Asian producers (eg. Alibaba, VA4U, etc.).

Another emerging strategy involves independant internet radio stations which provide airplay opportunities for bands and musicians, often according to specialist genres. For example, Inside Jazz broadcasts live recordings of some of the finest jazz and fusion players with links to their personal websites where you can download tracks and cd’s.

One of the most interesting, strategies is the US band Umphrey McGee who upload podcasts to their web page, containing their live shows as they tour around the year. Presumably, this reinforces their key marketing strategy as a live performance band.

While the new music industry is young, an emerging common thread seems to be that the emerging new music market place is largely being developed by musicians who have talent and can entertain (as has always been the case). A key issue to be resolved is how to effectively mass market in the new world. No doubt clever solutions will develop as new generation Y entrepreneurs put their minds to creating new ideas.

Perhaps it will integrate with traditional free to air radio marketing, although I suspect they are also entering the declining part of their product market cycle as well.