December 3, 2012
- Music industry experts are skeptical of startups in light of the “prohibitively expensive” costs of licensing music from record labels, writes GigaOM contributor Matthew Hawn. But “they’ve forgotten that the music industry isn’t — and never has been — just about recorded music,” Hawn writes, noting that many companies have promising opportunities in other parts of the music world.
- Rather that “whining about the high cost of licensing music,” some companies have switched their focus to live music, offering fans intimate access to artists.
- “And fans are willing to pay for these experiences, in stark contrast to the smaller segment who are willing to [pay] for downloads or subscription music services,” Hawn writes, noting that these offerings are also hard to pirate.
- Another open door is music discovery, promoting musicians that are otherwise lost in obscurity. “The old channels of videos and radio are still there, but the Internet exploded everything and diffused attention. In many ways it’s harder than ever for artists and fans to connect,” the post states.
- Some startups aim to connect listeners and musicians financially, allowing fans to pay their favorite bands directly. Others are looking to create a simpler music ecosystem or leverage mobile’s capabilities.
- “The opportunities to expand [mobile technology] to other music-centric features like with ticketing, new music discovery, fan/artist interactions are all fantastic,” suggests Hawn. “Location and hyper-local services around music are also untapped.”
- “Startups create the most value when they carve out new business models and transform the way we used to do things. They are less valuable (and thus less viable) when [they’re] just wringing the last drop of money out of old models. The truly great ones transform industries and build new opportunities, growing the market for everyone.”