YourMusic.com is a platform of creativity, which gives a chance to talented and passionate with music people to become famous and supports the co-creation of songs in a way that they meet the preferences of customers. The company will play the role of the intermediate and link the customers-artists with big record labels.
This table depicts the key benefits of the existing systems in the music industry:
|Meet Preferences||Price||Effort for consumers||Effort for new artists||Opportunities for new artists||Sharing/Sense of community|
|Traditional Record Labels||+/-||–||+||–||–||—|
|Record Labels using YouTube||++||–||–||–||+||+|
|Record Labels using Blogs/Forums||+/-||–||–||–||+||++|
|Record Labels using Talent Shows||+||–||–||—||+||+|
New Market Value Chain
The basic tool of our company is the website, “YourMusic.com”, where there can upload their lyrics, music or a song that they have created. First of all, every customer should subscribe at “YourMusic.com”, create a personal profile and become member. In that way the sense of community will be enhanced. There will be two kinds of members: the simple members, who can, just, vote for the uploaded material and the premium members (artists) who can, also, upload their work but should pay a small fee the time of their subscription.
We want the selection process to be as easy as possible: Once someone uploads his work, all members have the opportunity to “like” or “dislike” it and comment on it. After the final ratings have been formed, company selects the best of the material and chooses which of them are more appropriate to send to the record labels. The record labels, finally, can select, combine the given material and deliver it to its singers or bands. It has to be mentioned, that during the selection process there will be a forum in which members can share their ideas.
The main source of our revenues will be from the record labels, from which we will receive a percentage of profits and also, we will earn money from owing a portion of the artist’s legal rights. The ads of other music sites and magazines on our website are important for our revenues.
From the perspective of record labels, there are many reasons why they will prefer the new value system. First of all, they enjoy a large pool of talent that is developed in the online community of Yourmusic.com. Furthermore, companies save high amounts from hiring well known artists and work with talented musicians and lyricists that are paid significantly lower. This enables them to increase their price margins and subsequently profit highly from this system.
As far as customers are concerned, they will be benefited from the new marketing system because the music product will more aligned to their preferences. Moreover, they will purchase the records at lower prices due to the expected decrease of production costs from producers.
Investments and efforts
One of the key services offered, is legal assistance to secure the rights to the members who upload the material. This requires significant investments in hiring legal staff and maintaining a legal department. The most important investment however is the development of the website which requires tools for uploading artistic materials and some recording tools that could be offered to the members. Yourmusic.com must also make efforts to promote artists to record labels and as result will built relations with the labels and hold negotiations.
Contracts will exist between the website and the artists that will offer the highest percentage to the artists and will secure a portion around 10-20% to Yourmusic.com. Furthermore, the fact that members are a part of the community requires a suitable behavior from them and active participation in all processes. Finally the company may have switching costs when trying to establish a new system of hiring artists and break existing bonds with past collaborations.