Heer+A.+blog+post+analysis

Heer A. TO: Proximity music team members FROM: Andrew Heer SUBJECT: blog post analysis memo DATE: Feb. 3, 2009

** Introduction: ** To prepare for the focus groups later this spring we have begun research on the music industry by reading some blogs and familiarizing ourselves with emerging treads in the business. Technology has always changed the way people, including members of the music industry, make a living. There is no way to stop peer to peer music sharing and that is why I believe we should explore the other opportunities members of the music industry can make a living in the internet age. I found an interesting blog written by Dave Kusek who is the Vice President at Berklee College, where he is critical of a recent report on Digital Music by Redwood Capital which lists, what they believe to be, the 9 over all treads in the new music industry.

** What: ** Dave Kusek starts before even addressing what the 9 tends that Redwood Capital are by saying that the real problem is that as far as investors in the music industry are concerned "Not one of them would bet on a new label or artist driven business model", there is not enough artist support according to Kusek. this is what Kusek had to say about the trends.

1. Rampant Piracy Continues and people's feeling on paying for music have been forever changed since napster's. Redwood Capital believes that packaging music with other commodities people expect to pay for could help but Kusek think that is a bad idea in favor of developing new experiences to sell to the public.

2. The Strategy of Major Labels which has been to cling to the old business model. spending millions on suing their customers and each other over the rights to the music has all been terrible for the industry and need to change especially when the all music is quickly becoming public domain and unprotectable.

3. Legal complexities that hold back new companies and artists from getting  licenses and contracts written.

4. The end of digital rights management which begun when people begun to share mp3's and now allows for greater flexibility in sharing across different platforms.

5. Is a Mobile Strategy is Critical, people are more likely to pay for the convince of mobile technology and is important to pursue but application of this may be difficult.

6. Is the Dominance and Importance of the iPhone, Itunes has some 70% in legal internet music downloads and must be involved in anyone business plan in the music industry.

7. Importance of Wireless Broadband as technology increases information will be more freely exchanged and new advancements will change the industry in the future.

8. Consumers Remain Willing to Pay for Exciting New Technologies and Products this is one that Kusek fully agrees with, supplying consumers with new great sounding and fun ways to experience music and media is the key to making money.

9. Convergence of Models, here Kusek says we need to not converge but find and emerge and new business model for the music industry that will make money.

A top priority for the focus groups should be to determine new methods and ways of making a living in the music industry in the internet age. Our questions need to be geared at finding out which services they would be most likely to spend money on or attend and why, in order to isolate the best options for artist and record labels to pursue.
 * Questions: **

∙ Which services are you most likely to pay for? ∙ Subscription radio ∙ Shows and merchandise ∙ Downloadable Applications for smart phones ∙ Itunes Vs. torrents ∙ What would you change about the music industry to insure artists can make a living? ∙Do you prefer major labels or indie labels and why? Reference: Kusek, D. (2010, January 15). “ Are these really the key trends and challenges for Digital Music?” http://www.futureofmusicbook.com/2010/01/are-these-really-the-key-trends-and-challenges-for-digital-music/