The last few decades have seen a revolution in the way that we buy and listen to music. From vinyl to cassettes and CDs, and most recently streaming services. The way artists choose to market and distribute themselves is also changing. The traditional record label business model is fast becoming outdated and bands are increasingly using companies like Nationwide to print their own albums and independently release music direct to fans. By doing this, they get to keep more royalties and cut out the middleman.
New Industry Landscape
Initially, digital downloads caused a stir in the record industry. Record labels fought to reduce piracy and protect profits. The ability for records labels to create a profitable business out of a changing business landscape makes it the ultimate case study on adaptability.
The transition between formats wasn’t as straightforward as it may seem. Vinyl didn’t give way to the CD right away. In fact, prior to CD’s, there were 8-tracks (think old vintage Nintendo game size cartridges being inserted into your car’s dashboard). After the 8-track was the cassette tape – which led the way for copying and sharing music. And after the cassette tape came streaming service.
Adapting & Creating a Profitable Model
Streaming was initially introduced through satellite radio. It emerged in recent years as a fully personalized way to listen to music. This new technology marked a complete upheaval in the way that people listened to music. Before streaming, no matter the format (vinyl, cassette, CD… etc) people paid for music the same way – one album copy for a one time fee. Since streaming services have become widespread, people aren’t so worried about personally owning the music that they listen to. Instead, you pay a monthly subscription for access to an extensive collection but the key difference is, you don’t necessarily own the music.
This new way of paying for music has caused a rift with some consumers. Some are happy with the new format and the ability to listen to an endless collection of music. While others still see ownership as important. The music industry has been able to capitalize on these disenfranchised customers by creating a vinyl record revolution. What was once an outdated way to enjoy music, has seen a massive (widely-accepted) comeback in recent years. And a very profitable one for the record companies – who are now selling vinyl albums a steep premium. By doing so, they’ve turned vinyl sales into an opportunity for increased revenues.
Expand Your Offering
Recording artists have also adapted by putting greater focus on touring, strong branding and merchandise licensing. They’ve done so to make up for the loss in revenue caused by illegal downloading and streaming services. It’s now not uncommon to see recording artists launch product and apparel lines, write books and become spokespersons for other established brands. An industry, once thought to be in peril has adapted to changing technology and created ways to continue to please the customer and simultaneously stay profitable.
*this is a contributor written post