The music industry has clearly changed. The music industry has turned digital. That’s a fact. Traditional models do not apply anymore. Distribution rules shifted towards online channels. The main distribution of music comes in digital formats through digital environments. The industry is in need of new business models. A few years ago, Trent Reznor, the mind behind the band Nine Inch Nails, decided to change the rules. He left the big record companies, and decided to distribute the band’s albums through their website, for free! However, he managed to create strong bonds with the fans and offered exclusive offers to make the traditional formats of the album more attractive.
Another example discussed in class relates to the pricing methods followed. Radiohead, an English rock band from UK, decided to work interdependently and self-released their seventh album, In Rainbows (2007), as a digital download for which customers could set their own price. The Radiohead experiment set new standards for the industry.
Successful or not in terms of profits, these approaches showed that the future of music business is based on different dynamics between b(r)ands and consumers. All aspects of the value system have changed and new models need to be implemented.