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Service vs. product

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In the twentieth-century music economy, the content (music) and the medium (disc) were inseparable, and the music industry clearly was an industry made up of physical goods. In the new music economy, characterized by high connectivity and little control, it becomes increasingly difficult to charge a premium for discrete chunks of information. As soon as some kind of information is uploaded to the Cloud, it is instantly universally accessible to everyone connected to the Cloud. In such a ‘friction-free network’,3 the economic value of providing basic access to an individual track is infinitesimally close to zero.

But there are other things that remain chargeable. In a world where information is abundant, people may not be willing to pay a premium for basic access to that information, but they are most probably willing to pay for services which help them navigate through the vast amounts of information. If music is thought of as a service, it is possible to fathom consumer propositions that are both valuable to the audience and respectful to the work of the creative artists.

The Music Industry

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