#digHBS Summit 2015: Digital Music

summiteventpage-v3 Screen Shot 2015-03-29 at 11.46.59 PM

The main theme around this year’s digital music discussion included exploring ways artists could make alternative sources of revenue beyond recorded music. We had Mark Kates, J Sider, Prof Felix Oberholzer-Gee and Jim Lucchese come and speak!!

Some notes, taken by Jingping Zhang (formerly at Sony), include:

– Spotify/Pandora: network effect (instead of scale)

– 360 deals were created because labels were losing their sources of revenues

– old model: 15% were successful. control the retail; now: direct to fans

– http://www.rollingstone.com/music/news/jay-z-kanye-rihanna-throw-support-behind-streaming-service-tidal-20150330 Jay Z’s Tidal has been around for a while. Echonest. Music-service $45M acquired by Jay Z; 12-15 stars own a piece of Tidal

– content is windowed

– streaming platforms: how do you drive value out of the customer –> focus and get them what they want

– e.g. gaming business 2007 (online gaming business. massive change) —>changed game in real time based on how much you play—>unlock the customer information for the first time, in music business as well

Tidal: has the potential as they grow. will lean on the fact that they have all the musicians that own the platform

Bandpage—>take the product. work with the streaming partners. 5x higher click-through-rate on streaming than artist’s own website, plus 10x more traffic. 

– D2C: TLC’s recent promotion on kickstar campaign


– customers pay for special things: e.g. $6000 a bag of air from Kanye West concert (this is real); a photo with your favorite artist

– they want something special – hence why vinyl increasing  -> merchandise. 

– exclusivity has high value to consumer

– artist must deliver the experience in an ‘over the top’ way

– festival apps-> one of the most popular categories. majority not downloaded at the festivals, but used by consumers to find new music

– most valuable asset to the industry: customer segmentation. use massive data to create wonderful experience, but it’s all about customer segmentation

– Demand is VERY social—> there’s no economy of demand —> Jay Frank book (http://en.wikipedia.org/wiki/Jay_Frank)

– there’s no data that’s creating the next big artist->music is a cultural currency. That’s why the creative industry strikes out against tech trying to predict the answers

– one benefit of digital: easier to reach a global market

– Spotify: facilitate the creative choices/processes artists make (e.g. single selection) in real time, to the extent that they are interested in getting feedback

– even the most major forces don’t know how to interpret a lot of their info

– Career advice: believe in the product->monetize the market->know the structure->come in and make a difference 

Disruption and opportunities: 

– VIP/ticketing: lots of disruptions

– take streaming to mainstream

– venture in music has always been hairy

– Focus on artists directly->big opportunities 

– Spotify’s goal : taste profile for every listener, listening context. right music in the right context.