<< Chapter < Page Chapter >> Page >

Artist-centered website hub

This business model uses one large website as a database for music. Content creators contact the website directly and set the price of their music. The website sets a minimum downloading fee to cover costs; the fee is set on a monthly basis (or on a per-download basis). Customers access the website and purchase all the music they want, knowing that the artist receives most of the profit.

Some websites are already implementing this model. For instance, CD Baby sells independent music that comes directly from the artist. Since this model cuts out several middlemen, CD Baby claims that artists receive USD 6-12 per album versus the USD 1-2 that artists typically receive through their record labels. There are currently 248,891 artists on CD Baby and over USD 87,052,087 dollars have gone directly to the artist since the company opened for business in 1998 (Hefflinger 2008).

Artist’s personal website

Another potential model encourages users to access the artist’s personal websites to purchase music. This approach allows the artists to have the most control over their music. The band Radiohead tested this model during the debut of their seventh album “Only in Rainbows.” The band alienated themselves from their record label, EMI, and offered the album solely from their website Radiohead.com. Customers who visited the site where allowed to decide what they were willing to pay for the album (Tyangiel 2007).

Although this model is attractive for popular artists, it is potentially troublesome for artists who are not well known. Lesser known artists have great difficulty standing out in a crowded market. This model also eliminates the record label.

Non-traditional “record labels”

Currently, independent record labels are sprouting up in unexpected places. In 2003, the Cracker Barrel Old Country Store created an American Roots record label called CB music, Ltd (Romero 2003). Starbucks, the eternally popular coffee house launched their own record label in March of 2007. Their plan involves signing artists (e.g. Paul McCartney) and selling records through Starbucks stores (http://www.starbucks.com/).

Tax-the-device model

This model follows the open content model, in that music is provided free of charge for music downloads. However, such downloads are tracked, and a sales tax is placed on all devices that are sold to play back downloaded files. The money generated from taxes is then used to pay back artists. Of course, this model is speculative in nature. At present, there is not a reliable method for tracking all downloads. In addition, devices sold outside of the US would be difficult to tax.

Summary of new business models

A major purpose in describing these music business models is to illustrate how innovations do not have to be tied to the success of a new good or service. Rather, an organization can innovate by introducing a new method of doing business, and such innovation has the potential to “turn the world upside down” (a la Google or Facebook).

Music Business Models
Model Currently implemented? Feasible? Currently legal or illegal? Consumer satisfaction Record label satisfaction
Traditional No Not anymore Legal No Yes
Digital music stores Yes Yes Legal Yes Yes
Peer-to-peer Stores Yes Yes Legal Yes Yes
Open Source Yes Yes Illegal Yes No
Artist centered website hub No Yes Legal Yes No
Artist’s personal website Yes Yes Legal Yes No
Non-traditional “record lables” Yes Yes Legal Yes if used with other models No to traditional record labels
Tax-the-device No Not really Legal ? No

Questions & Answers

if three forces F1.f2 .f3 act at a point on a Cartesian plane in the daigram .....so if the question says write down the x and y components ..... I really don't understand
Syamthanda Reply
hey , can you please explain oxidation reaction & redox ?
Boitumelo Reply
hey , can you please explain oxidation reaction and redox ?
Boitumelo
for grade 12 or grade 11?
Sibulele
the value of V1 and V2
Tumelo Reply
advantages of electrons in a circuit
Rethabile Reply
we're do you find electromagnetism past papers
Ntombifuthi
what a normal force
Tholulwazi Reply
it is the force or component of the force that the surface exert on an object incontact with it and which acts perpendicular to the surface
Sihle
what is physics?
Petrus Reply
what is the half reaction of Potassium and chlorine
Anna Reply
how to calculate coefficient of static friction
Lisa Reply
how to calculate static friction
Lisa
How to calculate a current
Tumelo
how to calculate the magnitude of horizontal component of the applied force
Mogano
How to calculate force
Monambi
a structure of a thermocouple used to measure inner temperature
Anna Reply
a fixed gas of a mass is held at standard pressure temperature of 15 degrees Celsius .Calculate the temperature of the gas in Celsius if the pressure is changed to 2×10 to the power 4
Amahle Reply
How is energy being used in bonding?
Raymond Reply
what is acceleration
Syamthanda Reply
a rate of change in velocity of an object whith respect to time
Khuthadzo
how can we find the moment of torque of a circular object
Kidist
Acceleration is a rate of change in velocity.
Justice
t =r×f
Khuthadzo
how to calculate tension by substitution
Precious Reply
hi
Shongi
hi
Leago
use fnet method. how many obects are being calculated ?
Khuthadzo
khuthadzo hii
Hulisani
how to calculate acceleration and tension force
Lungile Reply
you use Fnet equals ma , newtoms second law formula
Masego
please help me with vectors in two dimensions
Mulaudzi Reply
how to calculate normal force
Mulaudzi
Got questions? Join the online conversation and get instant answers!
Jobilize.com Reply

Get Jobilize Job Search Mobile App in your pocket Now!

Get it on Google Play Download on the App Store Now




Source:  OpenStax, Business fundamentals. OpenStax CNX. Oct 08, 2010 Download for free at http://cnx.org/content/col11227/1.4
Google Play and the Google Play logo are trademarks of Google Inc.

Notification Switch

Would you like to follow the 'Business fundamentals' conversation and receive update notifications?

Ask