Have you bought a video game recently? Have you ever made an in-game purchase? Do you consider pre-roll, banner or in-game advertising acceptable? Do you think buying video games online or on a mobile device is normal? Has the video game industry turned social networking into a revenue generator through multiplayer gaming?
Every day, I’m meeting people who could answer “yes” to all these questions - which raised a very important question in my own mind: if we replace the word “game” with “music,” why aren’t these answers still “yes?”
The music industry has a lot to learn from the video game industry. We’ve finally gotten past the “save the CD” era, but the music industry is still lagging when it comes to proactively developing new business models. Just as the video game industry has continually adapted and reinvented itself in the last few decades – arcades to consoles to mobile to online to apps to ad-supported and so on – the music industry must learn to quickly spot new consumer trends and behaviors, and then adapt the technology and business models to turn those trends into new revenue streams.
When discussing business models today, there are several critical consumer trends that should not be overlooked by the music industry:
- Consumers like to be social while they are entertained. This was always true to a degree, but now even the solo-music device (the portable player) has been flipped to become the most social device (thank you, iPhone apps).
- Consumers expect to personalize everything. We always saw it in mix tapes and remixes, but that was the domain of hardcore music lovers. Now, personalization is just an expected standard feature.
- Consumers don’t simply want to socialize, they want to compete. Socializing isn’t simply about talking to each other and sharing, it’s about showing who is king of the hill.
Our challenge as an industry to turn these trends into revenue streams, not by simply marketing music downloads but by creating new categories of products that fit how people listen, use, create, socialize, share and, yes, listen to music.
Read more about our views on the future of the music industry at http://blog.mxp4.com/
Albin Serviant is an established digital media entrepreneur and CEO of innovative interactive music technology developer MXP4.