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Music industry's business models in the digital era focused on indie artists : a study case

Dias Dos Santos, Iara (2016)

 
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Dias Dos Santos, Iara
Tampereen ammattikorkeakoulu
2016
All rights reserved
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2016111616355
Tiivistelmä
The music industry faced a severe reorganisation due to the digital revolution that affected directly the way we consume music. This new dynamic opened new markets, created new opportunities for new entrants, vanished some companies, merged others and change the way players are monetizing music nowadays.

This study intends to give some examples of business models created during this era. For the purpose of this study, some of the chosen business models focus on music consumers and others focus on independent (indie) artists. Nowadays an indie artist’s workload goes beyond her/his music, owing to the fact, that they have to manage their careers at least until (or if) they get a deal with some record label. This new reality of the music industry seemed like an opportunity for several companies, which are offering DIY (do it yourself) tools for musicians help them to take care of their careers. By doing jobs that were once, done by some departments on record labels, those business models are mainly subscription plans, which does not affect the artist’s finance, and on the other hand, guarantees the sustainability of the business since they have a monthly income. Some new models that recently did not exist like ‘crowdfunding’ and influencer marketing also emerged as a source of revenue for artists.

The study case is a Dutch start-up that operates two different business models aiming for indie artists to thrive in their careers. One is a DIY tool for musicians build their website and the other is an influencer marketing online platform to help connect artists with brands interested in support them in exchange for the exposure to their fans. They are a SaaS (Software as a Service) and CMS (Content Management System). For three months, this study was performed in loco, and it was possible to get a glimpse of their main business model and a secondary business model that emerged right after this study started at the company. Thus this study will also showcase the development of a new business idea that emerged after the study started. It will be more detailed in the study case section. This start-up offered an opportunity to introduce and test project management methods like scrum, agile and lean start-up concepts like the Business Model Canvas as well as to introduce KPIs (Key performance indicators) to help them improve their results by measuring them. This research aims to explain ‘How is the development of an MVP (Minimum Viable Product) as a second business model for Music Industry’s (SaaS) start-up? For answering that, a participative research is the research method adopted.

In the end, this study presents a new framework based on the Business Model Canvas by Osterwalder and Pigneur to have a visual tool to get a better understanding of the surrounding of the company to monitor what could influence the company’s future.
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