Reinventing the Music Industry: Creation and Distribution

The music industry’s current model is based upon obsolete practices and standards that leave it weak and outdated. The industry has scrambled to keep up with lightning-fast technology over the past twenty years. Long gone are the days of vinyl records or magnetic tape being the main way record companies sell an artist’s product to the masses. The rise of digital recording and online dissemination of music created a scenario in which music could be produced and shared quickly – before the industry had an effective method of profitable distribution. While the industry has adapted in recent years with efficient download sites like iTunes, major problems still confront the music industry and its artists.

1.  The Music Product

One fundamental problem is that the music product being sold is still the same, whether you buy, lease, or steal it. Music can conveniently be purchased from sites like iTunes or Amazon. It can also be leased via Spotify or Pandora. Many people, unfortunately, still download music illegally, ensuring that neither artists nor record companies receive any compensation. In all of these cases, the quality of the product is nearly identical, but each version is sold (or not sold) through different distribution channels. This reduces the incentive to buy for those tempted to illegally download. Morals aside, why would you purchase a song when you can just as easily find a same-quality mp3 for free? The convenience and number of options are fantastic. The business model is not.

2.  Customer Incentive

The industry, right now, serves people’s desire for accessing music. It’s essentially a one-way street wherein a song is created by one group, then marketed and sold to a separate group. What if the barriers were broken down and the customer became the artist – or the record company? By establishing affiliate programs within music sites, users would have the ability to make money by promoting the music they enjoy. In addition, music could be created by a site’s users and promoted within that audience or social network. By promoting that music, the user could receive a commission for their efforts.

The goal is to take an entire generation that believes free music is its right and turn those users into capitalists who believe getting paid to share music is their right. By building a decentralized army of music affiliates, the commercialization of music would grow from the bottom up. Since users would be the ones actively creating and marketing, they would have a real incentive to share and monetize their creations. Music companies, artists, and music lovers would all benefit from this model.

3.  Too Many Sites, Not Enough Service

Which site do you use on a regular basis? Amazon? iTunes? Spotify? You might be one who believes music is “free,” and have become a hub who shares it with others. At this moment, these are all either/or choices you have as a music fan. No distribution point offers all of these choices in a single site.

The rise of digital recording and distribution has changed the face of music forever. While progress has been made in the attempt to preserve royalties for artists and producers, the industry is still in “catch up” mode. We need to set the standard higher to allow music fans to share in the creation and monetization of music. An avid audience is the greatest means of spreading the word about fantastic music. The future is wide open. A dynamic change in the perception of music will help destroy the barriers between creator and audience – and solve many of the problems in the music industry.

Ken Oboh is the co-founder of the and, two revolutionary music sites that give users the power be their own DJ. Ken is a serial entrepreneur in the entertainment industry.


Posted by on July 21, 2012. Filed under Business,Music. You can follow any responses to this entry through the RSS 2.0. Responses are currently closed, but you can trackback from your own site.

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