Experimenting with

Business Models in the

Music Industry (part I)
Alexander Osterwalder, Phd
AlexOsterwalder.com
Twitter: business_design

1
 the following slides are a very brief
excerpt of a 60 minute keynote Iʼm giving
at Eurosonic Noorderslag, Europeʼs most
important live music industry conference
business
models
The Business
Model Canvas
to describe, challenge,
design, and invent business
models more systematically
9 building
blocks
 The Business Model Canvas
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS

KEY CHANNELS
RESOURCES

COST STRUCTURE REVENUE STREAMS

the
“old”

record
label

model
 The “Old” Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS

nnabe mass
hits & wa
hits market

KEY CHANNELS
RESOURCES

COST STRUCTURE REVENUE STREAMS

huge sales
from few
artists’ albums
 The “Old” Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS

nnabe mass
hits & wa
hits market

KEY CHANNELS
RESOURCES

Retailers TV

“new” digital
Radio
channels

COST STRUCTURE REVENUE STREAMS

huge sales
from few
artists’ albums
 The “Old” Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS

nnabe mass
hits & wa
hits market

KEY CHANNELS
RESOURCES

Retailers TV

“new” digital
Radio
channels

COST STRUCTURE REVENUE STREAMS

huge sales
tours & from few
merch
andisin
g
concerts artists’ albums
 The “Old” Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS

marketing &
promotion

detecting &
nnabe mass
building tale hits & wa
nt market
hits

KEY CHANNELS
RESOURCES

Retailers TV

“new” digital
Radio
channels

COST STRUCTURE REVENUE STREAMS

huge sales
tours & from few
merch
andisin
g
concerts artists’ albums
 The “Old” Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS

marketing &
promotion

detecting &
nnabe mass
building tale hits & wa
nt market
hits

KEY CHANNELS
RESOURCES
portfolio of Retailers TV
star artists

copyrighted “new” digital

content Radio
channels

COST STRUCTURE REVENUE STREAMS

huge sales
tours & from few
merch
andisin
g
concerts artists’ albums
 The “Old” Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS

marketing &
promotion

detecting &
distribution nnabe mass
building tale hits & wa
nt market
channels hits

KEY CHANNELS
RESOURCES
manufacturers
portfolio of Retailers TV
star artists

copyrighted “new” digital

content Radio
channels

COST STRUCTURE REVENUE STREAMS

huge sales
tours & from few
merch
andisin
g
concerts artists’ albums
 The “Old” Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS

marketing &
promotion

detecting &
distribution nnabe mass
building tale hits & wa
nt market
channels hits

KEY CHANNELS
RESOURCES
manufacturers
portfolio of Retailers TV
star artists

copyrighted “new” digital

content Radio
channels

COST STRUCTURE REVENUE STREAMS

royalt
y huge sales
ing & payme tours &
market subsidizing nts from few
merch
andisin
ion g
promot unsuccessful concerts artists’ albums
artists
buzz
group
 ?
assess the business model
building blocks of the “old” model /
where are the weaknesses?
 The Old Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS

marketing &
promotion

detecting &
distribution nnabe mass
building tale hits & wa
nt market
channels hits

KEY CHANNELS
RESOURCES
manufacturers
portfolio of Retailers TV
star artists

copyrighted “new” digital

content Radio
channels
piracy

COST STRUCTURE REVENUE STREAMS

royalt
y huge sales
ing & payme tours &
market subsidizing nts from few
merch
andisin
ion g
promot unsuccessful concerts artists’ albums
artists
 The Old Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS

marketing &
promotion

detecting &
distribution nnabe mass
building tale hits & wa
nt market
channels hits

KEY CHANNELS
RESOURCES
manufacturers
portfolio of Retailers TV
star artists

copyrighted “new” digital

content Radio
channels
unbundling of
albums into single
price of songs REVENUE STREAMS
COST STRUCTURE songs (iTunes)
royalt tending towards
y huge sales
ing & payme ZERO
tours &
market subsidizing nts from few
merch
andisin
ion g
promot unsuccessful concerts artists’ albums
artists
 but piracy is the
wrong battle to fight!
 The Old Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS

marketing &
promotion

detecting &
distribution nnabe mass
building tale hits & wa
nt market
channels hits

KEY CHANNELS distribution is a

RESOURCES commodity, attention is
manufacturers the new scarcity
portfolio of Retailers TV
star artists

copyrighted “new” digital

content Radio
channels

COST STRUCTURE REVENUE STREAMS

royalt
y huge sales
ing & payme tours &
market subsidizing nts from few
merch
andisin
ion g
promot unsuccessful concerts artists’ albums
artists
 The Old Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
talent will be
keting &
marby
discovered
promotion
other mechanisms

detecting &
distribution nnabe mass
building tale hits & wa
nt market
channels hits

KEY CHANNELS
RESOURCES
manufacturers
portfolio of Retailers TV
star artists

copyrighted “new” digital

content Radio
channels

COST STRUCTURE REVENUE STREAMS

royalt
y huge sales
ing & payme tours &
market subsidizing nts from few
merch
andisin
ion g
promot unsuccessful concerts artists’ albums
artists
 The Old Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
social
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
networks are what
drive music sales
marketing &
promotion

detecting &
distribution nnabe mass
building tale hits & wa
nt market
channels hits

KEY CHANNELS
RESOURCES
manufacturers
portfolio of Retailers TV
star artists

copyrighted “new” digital

content Radio
channels

COST STRUCTURE REVENUE STREAMS

royalt
y huge sales
ing & payme tours &
market subsidizing nts from few
merch
andisin
ion g
promot unsuccessful concerts artists’ albums
artists
 The Old Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS

marketing &
promotion

detecting &
distribution nnabe mass
building tale hits & wa
nt market
channels hits

KEY CHANNELS
RESOURCES
manufacturers
portfolio of Retailers TV
star artists

copyrighted “new” digital

bloated cost content Radio
channels
structure (talent
discovery/marketing)
COST STRUCTURE REVENUE STREAMS
royalt
y huge sales
ing & payme tours &
market subsidizing nts from few
merch
andisin
ion g
promot unsuccessful concerts artists’ albums
artists
 The Old Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS

marketing &
promotion

detecting &
distribution nnabe mass
building tale hits & wa
oflsthe nt market
hanne
cshift hits
balance of power
towards artists KEY CHANNELS
RESOURCES
manufacturers
portfolio of Retailers TV
star artists

copyrighted “new” digital

content Radio
channels

COST STRUCTURE REVENUE STREAMS

royalt
y huge sales
ing & payme tours &
market subsidizing nts from few
merch
andisin
ion g
promot unsuccessful concerts artists’ albums
artists
 The Old Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
customer
marketing & needs are not
promotion being satisfied

detecting &
distribution nnabe mass
building tale hits & wa
nt market
channels hits

KEY CHANNELS
RESOURCES itʼs all about
manufacturers hits AND the Long
portfolio of Retailers
Tail of music TV
star artists

copyrighted “new” digital

content Radio
channels

COST STRUCTURE REVENUE STREAMS

royalt
y huge sales
ing & payme tours &
market subsidizing nts from few
merch
andisin
ion g
promot unsuccessful concerts artists’ albums
artists
 The Old Record Label Model
KEY KEY OFFER CUSTOMER CUSTOMER
social
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
networks are what
talent will be customer drive music sales
keting &
marby
discovered needs are not
promotion
other mechanisms being satisfied

detecting &
distribution nnabe mass
building tale hits & wa
oflsthe nt market
hanne
cshift hits
balance of power
towards artists KEY CHANNELS distribution is a
RESOURCES itʼs all about commodity, attention is
manufacturers hits AND the Long the new scarcity
portfolio of Retailers
Tail of music TV
star artists

copyrighted “new” digital

bloated cost content Radio
channels
structure (talent piracy unbundling of
discovery/marketing) albums into single
price of songs REVENUE STREAMS
COST STRUCTURE songs (iTunes)
royalt tending towards
y huge sales
ing & payme ZERO
tours &
market subsidizing nts from few
merch
andisin
ion g
promot unsuccessful concerts artists’ albums
artists
www.businessmodelgeneration.com
www.alexosterwalder.com
www.businessmodelalchemist.com
Twitter: business_design
BusinessModelGeneration.com