10 concepts you should understand to survive the digital revolution

Are you aware that some people are not reading or writing blog posts? Are you using Twitter, Facebook and other social media? In other words: are you 'connected' or 'disconnected'? Some people only read newspapers, watch television and read some books. They only use internet in a web 1.0 way; reading and writing e-mails, check some websites and do some Google searches. They haven't got a clue what is going on in the digital environment.

It becomes more and more obvious: in future there will be a separation between 'connected' and 'disconnected' persons. If you understand the digital age and act upon it you will be able to survive the digital revolution that is currently taking place.

Everybody needs to be connected. It will take a while. If you are a decision maker within a company, you need to be connected to survive this digital revolution! If you don't understand social media or just not interested, no problem! Surround yourself with 'connected' people and listen to their advice!

Web 2.0 have changed some economic laws. Several management guru's have written about the changed principles. I would like to call these concepts 'internet concepts'.

The upcoming weeks I would like to share with you the following internet concepts on this blog. I will also give some examples on the way these internet concepts are influencing your (music) business:

1. The Long tail (Chris Anderson)
2. Paradox of choice (Barry Schwartz)
3. New age of innovation (C.K. Prahalad & M.S. Krishnan)
4. The tipping point (Malcolm Gladwell)
5. Open Innovation (Henry Chesbrough)
6. Blue ocean strategy (Kim & Mauborge)
7. Purple Cow (Seth Godin)
8. The starfish and the spider (Ori Brafman & Rod Backstrom)
9. Tribes (Seth Godin)
10. The future of competition (C.K. Prahalad & Venkat Ramaswamy)
    

In my opinion every manager at traditional (music) companies should at least be aware of these internet concepts. Do you agree with me? Or did I forget an important internet concept? Please let me know!

Ups and Downs: business model innovation

A consortium of Dutch researchers published a report on 'filesharing and the economic impact on the Dutch creative industry'. One of the suggestions of the researchers is innovating business models. Earlier, I shared with you the presentation of Alex Osterwalder about business model innovation. Alex and the researchers are suggesting the same types of innovations. Innovation of value chains into value networks, innovation of distribution and markets. Page 136 of the report 'Ups and downs':

"The only way to cope with the impact of file sharing is to develop new connections and networks to support new products and services'. It seems like a strategy of lawsuits and DRM is not the right way to act. Next to this the market size of legal music downloads isn't generation the same amount of revenues as the decline of the music market." 'The industry is in a forced phase of transition"

Part of this transition is the entrance of new companies into the value network. Companies like Nokia and Apple are taking the lead in constructing new products, services and connections. It is really 'innovation time' for the traditional music companies. Otherwise the new entrants will take over their business.

Music, Beer & innovation

Last Saturday, 17 January 2009 a meeting of Beer and innovation was held in Groningen, The Netherlands. The idea of beer and innovation meetings is to connect professionals and start-ups with each other. The start-ups will pay the drinks, the professionals will share their knowledge. The meeting in Groningen was initiated by Lopend Vuur and was all about music start-ups. Not really a coincidence because during the weekend the European music conference Noorderslag / Eurosonic was held. The following start-ups were presenting themselves at the meeting: Twones, Cloudspeakers, Tipspot, Tribe of Noise, Next best band, New music labs (tools for tribes). Conclusion after some beer and an inspiring conversations: we have a lot of innovative upcoming / promising Dutch start-ups which are using music as one of their core activities. The Netherlands is ready to create and facilitate more music tribes!

The rise of the all-you-can-eat mobile music model

This week Nokia has unveiled the Comes with Music service for the United Kingdom. It launches on the 16th of October 2008. This all-you-can-eat service provides unlimited access to music via your Nokia phone. Sony-Ericsson is offering a similar service: Play now plus. Are this innovative services? Who are profiting from these services? Time to discuss this music model. 

Is this service an innovative music model?

According to Wikipedia 'innovation' means a new way of doing something. But, is this kind of service new? Five months ago the Danish Telco TDC launched a similar music service called 'play'. So, not completely new, but almost. The subscription part of this model isn't new either. eMusic offers a subscription model as well. This model is ad supported and 'feels like free' for consumers. Another subscription model is 'Planet music' a music service of KPN within the Netherlands. Consumers are charged to use this service. So the subscription and ' feels like free' part are not innovative any more. Maybe the 'DRM free' part is a new element? This service is still a walled garden according to blogger David Gerard. Although, this music model is not an innovation, I think you can call it innovative from a rights holder’s perspective. Siliconrepublic.com reports that all the major music labels and major publishers are supporting this service.

Who is profiting from this music model?

This brings me to the next question: Who is profiting from this music model?

• The consumer?
  
• The Telco’s and mobile phone manufacturers? 
  
• The rights holders?
  

They all are profiting! 

• The consumer is finally offered a new music model to consume and discover music, 
  
• The Telco’s and manufacturers are hoping to increase sales of the devices and data transmission
  
• The rights holders are generating new income streams from giant multinationals which are using the content of the rights holders to increase sales by increasing customer (music) experience  
  

But, are consumers really shifting away from P2P networks with this service? Or is this service cannibalizing the sales of other legal music services like iTunes or Beatport? At least it is a nice try and a positive next step for the music industry when it comes to music innovation.

Changing Music Industry

The music industry is changing. Technological innovations within the music industry are mainly initiated by hardware suppliers not by record companies. It seems like that the global music market is evolving into three markets; the traditional music industry of soundcarriers, the mobile music industry and the online music industry.

Innovaties in de Nederlandse muziekindustrie

Om tot een lijst van innovaties op het gebied van muziekexploitatie in de Nederlandse muziekindustrie te komen is nog niet eenvoudig. Ik ga hieronder toch een poging doen:

• www.aim4music.nl/
• BEO (Bousie Exploitatie Overeenkomst, http://www.bousie.nl/)
• www.boep.nl
• www.dutchsound.nl
• www.fuelfortravel.nl
• www.hyves.nl/muziek/
• www.radiodigitaal.nl/
• www.sellaband.com
• www.slamtv.nl/

De lijst is nog lang niet volledig. Niet alleen omdat (nog) onduidelijk is wat nu volgens de literatuur een innovatief initiatief is. Ik zal de lijst aanvullen. Heb je suggesties?

Plaats in het reactieveld suggesties zodat ik de lijst verder aan kan vullen!