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Tuesday, June 28, 2022

Business Models For Music That Make Artists Happier

Editor’s Note: The guest blog is by Oscar Santolalla Obenhausen. Oscar holds M.Sc in Computer Science at the Helsinki University of Technology, with the specialization in Mobile Computing and Security and currently works for Tuxera.

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Music CDs are becoming obsolete in digital music’s favor (especially MP3 files). Today it is very easy to find free streaming, to buy lots of music for a comparatively small price (Spotify, Nokia comes with Music), or to pay only ten Euros per album (iTunes store, Amazon.com). Music seems to inevitably become free, or nearly free. What’s more, online music sites are full of integration capabilities with social media. This creates a delightful environment millions of listeners.

But, what about the artists? Are they as happy as listeners with this new way of how things work? What about independent artists? From a new artist’s perspective, there are indeed plenty of ways to reach a wider audience worldwide. However, this is not necessarily reflected in getting meaningful profits.

As a matter of fact, the music industry drastically changed compared to few years ago. Recording companies are resigned themselves to have less and less profits per sold record, and as consequence of this the artists will receive smaller incomes from royalties. A key point is that the main source of revenue for musicians is not selling music anymore. Nowadays concerts and merchandising are becoming their main source of revenue, so these must be somehow involved in the online music business models.

Here are five identifiable online music services that address this new artists’ dilemma. The list covers only companies with origin in our “arctic” area of the globe.

If I am a new or independent artist, what can these services do for me?

In Spotify you can…

  • Stream your music to a wide audience in a great application. However: (1) listeners must pay for the service (or obtain it with some restrictions); and (2) you as artist firstly need to publish the music through an “aggregator”.
  • Sell your music, but the royalties for both sold and streamed song are known to be low.

In Gogoyoko you can…

  • Publish your music directly.
  • Stream your music for free (registration required). “Fair play” lets you receive 40% of the advertisement income, based on streaming of the music.
  • Sell your music. 90% of the profit goes to the artist, and 10% goes to charity.

In Hitlantis you can…

  • Publish your music directly.
  • Stream your music with a very creative web interface that helps users to easily discover new artists by genre. “Hotness” is a users’ rate that helps the most popular artists to stand out from the crowd.
  • Sell your music. After transaction expenses and taxes, 90% of the money goes directly to you. The listener chooses how much to pay for a song (minimum between 0 and 0.50€).
  • Be invited to play in a gig organized by Hitlantis (once per month). To be eligible for this, you just pay 5€ per month (Premium membership).

In Gigswiz you can…

  • Ask your fans: “where do you want us to play live?”. Via myspace and Facebook, you can collect gigs’ petitions from fans. The only thing you need is to do is installing the Gigwiz widget in your myspace and Facebook profiles.
  • Reduce the risk of playing in a city that is not going to bring a considerable audience.

In Mobilebackstage you can…

  • Push exclusive content to fans via a mobile pone application. Your fans must own a smartphone (or a Java feature phone), and install application Mobilebackstage (free of charge). However, you as artist must invest 999€ subscription plus 49€ per month to host the service.
  • Promote and sell your music, currently via iTunes.

These services one way or another are really great for artists! I am looking forward to knowing about successful business models like these. And, the most important thing, let’s hope the artists can profits from it.

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