Subscribe
RSS news feed
Add to Technorati FavoritesRecent Posts
- Something to think about while watching the British GP this weekend...
- The You Experience demands more of online Business
- Cloud Computing; the Invisible Infostructure
- Innovation Brief
- Intel CEO Summit sets some technology directions
- Breed a better dinosaur?
- W3C proposes new working group for the mobile internet
- Why Google may not win the Social war - Guest piece by Vinesh Kurup, Managing Consultant, Capgemini
- Innovation Brief
- Enterprise Widgets join Enterprise MashUps
Navigate
Search the blog
« Enterprise Architects versus Business Architects | Main | Who am I? – A credit card is one possible answer »
Radiohead leading, or destroying, the music industry
I have blogged already on the term ‘Innovation’ meaning innovation of your business model, as opposed to trying out a wide range of minor activities around technology that you have not tried before. Well this is a quick topical piece on the innovation of Radiohead this week who broke the accepted mould on how to sell music in form of either CDs or downloads by offering ‘free’ downloads. Rather than describe ‘what’ they have done I suggest a visit to their web site.
My interest is in the impact of their business model innovation and how that is based on increasing the use of multiple technologies to increase what is becoming known as ‘intimacy’, in this case the vastly improved ‘interaction’ between fans and the pop group. There was a massive amount of coverage throughout the industry on the Radiohead innovation, and it really boiled down to two messages:
- 1) its highly destructive of the music industry or,
- 2) its highly innovative in an industry where the value proposition has shifted.
The first point is pretty obvious a cry to maintain the status quo in an industry where falling sales in CDs have not been off set by rising revenues from paid for online downloads. Though there was a great quote from another group that asked if they gave away their music would the plumber give away his time if their house boiler broke down.
It’s the second point that is interesting; because it might be the music industry today, but I am pretty sure it will be a lot of other industries tomorrow. I believe it to be a combination of the ‘long tail’ effect of making more and more specialised markets that appeal to different sections of the potential market, and, the change in what represent value in a world driven more by interactions based around Services, than by distribution of products. However one last comment on the music industry around Prince and his sell out event in London at the O2 centre where he played to bigger grounds for a longer period than would be normal. In the lead up to this a leading British national newspaper gave away free a CD of Prince’s new album. So once again what was considered the product that raised revenue through distribution, became a free item with the goal of encouraging more people to get ‘involved’ with Prince and his music leading to increased sales for a live event. The event was just that, a high value/cost ‘event’ or perhaps we should consider it as a service for one evening only.
If we return to the Radiohead offer of ‘free’ downloads, what is truly innovative and worthy of some real deep thought, is the fact that you are offered the opportunity to pay, in fact to choose how much to pay. This break through that they describe as an ‘honesty box’ is more properly the opportunity for a fan to decide on the value of the offering to them individually. (I suspect that underlying this is the thought that a real fan would not cheat his/her favourite group on the basis that will destroy their future). This is a very advanced version of the low cost airline industry proposition of deciding on the value of a seat on a given flight with a potential customer on line. However its even smarter than that because the music industry is losing the ability to sell copies of the music as user see sharing as a social principle of the new world. Why fight this when you can change your model and your value proposition?
Let’s go back to what is really being sold, or more crucially what people are choosing to buy, and that’s the ultimate example of a ‘long tail’ approach. That’s what I believe should make us all think very very carefully about the Radiohead innovation, and make us keep a very careful eye on what happens next in one of the first industry sectors to really be moved into the new market models.
The link to technology? Actually everything about this is driven by the new technologies and I don’t just mean the distribution of music cheaply on line, I mean the social networking, video, blogging interactive world that creates and unifies entire communities in a shared value model that leads to different behaviours and values. Is your business really thinking about how new technology is changing the market enough? Does it even know enough about this kind of change and the technology that makes it possible to be able to think through what they could do? That’s something to really consider!
Posted by Andy Mulholland on October 16, 2007 in
Innovation
| 
Digg this | 
Seed Newsvine
TrackBacks
TrackBack URL for this entry: http://www.capgemini.com/cgi-bin/blog/mt-tb.cgi/228
Comments
# on October 17, 2007 12:36 PM, gareth farry said:
The web is saturated with articles and blogs about the death of the music industry & what Madonna, Radiohead and the like in collusion with web 2.0 digital models and P2P sites are doing to the industry ... "killing it"?
But this IS the new industry ... a place where the majority of content is created and consumed for free, where the creativity embodied on your musical content IS the value attributed to it.
True creativity will become a form of money; so you may download my music for free, but that creativity still has value – value enough for me to extract a service from you or your peers in exchange. A system where money becomes less important than trade.
A place where the merit in music conquers all. Or at least in the years to come it will.
It is my absolute belief that "where music leads all else will follow" .. that is the breakdown of the commercial music industry to elements of trade, file sharing, swapping & purchase will one day encompass our whole online commercial structure.
Merit and creative truth will rule, meaningless content (read “pop”) will simply become ignored meaninglessness, and it will struggle for any traction.
The sharing and spread across digital platforms of all online services and products will occur, with value being judged by merit. This will occur whether we are talking about a music track, a new product or a simple day to day service.
Advertisers will no longer be able to saturate our TV screens with useless products and thinly veiled lies about necessity - purchase value & immediacy will be decided by the purchaser.
ok, …. deeper : the human mind is a spark of the almighty consciousness of the creator, imagination and creativity are the doors from which this consciousness emerges.
As human minds develop further and become more fully tuned to the nature of spirit, by stopping thought, abandoning knowledge & trusting intuition, creativity also becomes more fully tuned to this truth. That is, music / knowledge / content / product is freed from the shackles of blind commercialism, prejudice or banality will simply cut through and gain traction by the simple fact of its creative merit.
The deeper the self realization of a person and his/her creativity, the more he/she influences the whole universe by subtle creative vibrations.
Silence is the potent carrier of the present tense. Every sound or action comes from silence & dies back into the ocean of silence.
You choose by your actions how you may disrupt this silence – choose wisely.
Death to the music industry, long live the industry of creativity.
# on October 17, 2007 4:55 PM, andy mulholland said:
The first thing i did after reading your post was to visit www.sugarlicks.com, and it certainly showed how you are living the points you are making. (worth visiting for a new taste in music as well as seeing what Sugarlicks is doing).
I guess i would summerise the change that Web 2.0 is providing is the ability for people to de construct existing commercial practises if they feel they are not ADDING value, but creating cost.
# on October 29, 2007 3:22 PM, Raj said:
Gareth makes an excellent point. Music (and art) are very close to the soul of a person.
Is this the route to breaking barriers and opening up opportunities to engage with others? Across a multitude of arenas including politics, commerce and social engineering.
Kudos to the vision:-)
# on October 29, 2007 5:29 PM, andy mulholland said:
as an optimist i am hoping that technology is opening up capabilities to be more invovled in the arts!
# on December 20, 2007 6:28 PM, andy mulholland said:
just an update to this blog piece.
very interesting analysis on the music industry as a rapidly breaking business model by means of technology change at http://www.youngfoundation.org.uk/tips/is-web-2-a-revolution