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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.
Date of Conference: 7-9 Sept. 2011