Cross-Industry Innovation: The Transfer of a Service-Based Business Model from the Video Game Industry to the Music Industry

How does one capture value from delivering digital music files which users expect to download for free? This is the fundamental challenge the music industry currently faces. Therefore, new service-based business models are required that incorporate the increased consumption of music on mobile devices, pervasive social networks, peer-to-peer technology, and the internet as the main distribution channel. Compared to the music industry, the video game industry was more successful in adapting its business models and therefore is a vital source from which to draw analogies for the music industry. In this article we propose a cross-industry innovation on the basis of a business model taken from the video game industry adapted to the needs of the market for digital music. This is illustrated with a case-study of the UK music-technology startup RjDj.