Gales Network • Brand building from the inside out

24 April 2008

…To Skin A Cat*
Music Monetization Alternatives

THE BIG IDEAS TOPIC: Making Money From Music

The Big Idea behind a new breed of website like imeem and others, is that there is money to be made from the use of music as an audience aggregator, along with its value as a front line product.

AT ISSUE: How can content owners get paid for giving away their content?

THE BIG IDEAS VIEW: Think outside the litter box. imeem is a social network that uses entertainment as a community builder. Users are drawn to the site by video, photo, blog content, but its most appealing offering is music streaming. They can upload songs. They can share play lists. They can get music recommendations from other members or the site’s recommendation engine. And they can listen to the music as often and as long as they like. All with the blessings of the indie labels, the unsigned artists and, wait for it…the major music labels that own the content. Imeem developed a revenue model attractive enough to these catalog holders to provide their content for its service. That’s no small feat.

So what’s the catch? imeem inserts advertising in the content it streams and throughout the website itself. The site shares that ad revenue with the content owners as compensation. The labels and artists also benefit from the exposure generated by users sharing playlists with friends. Artists Happy, Labels Happy, Users Happy, Imeem Happy. New Model Happy.

For the conventional among us, those who like to “own�? music, featured tracks are available for purchase through imeem from iTunes and Amazon. That’s important, because consumers have been saying consistently that they want options and flexibility with their music consumption.

Advertising around music programming is not new. Radio has monetized music through advertising for decades as a “promotional�? medium. With direct music sales in decline and the definitions of promotion and consumption blurring, the imeem model is an exciting innovation that should be encouraged. This approach is one of the new ways to monetize music outside of direct sale and only the beginning of how we will look at music as a “product�? going forward. While brands like imeem, iLike, Pandora and Last.fm, among others, are not widely known or used by consumers yet, it’s these kinds of experiments that will lead to a healthier music industry. With more players in social network/music discovery entering the space regularly, the right model(s) may be on the horizon. Here, kitty kitty…*.

*No animals were harmed during the writing of this essay.

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The Big Ideas Report separates the real issues (Big Ideas) from the noise, so that it’s possible to move forward with confidence or simply converse intelligently with others. We identify issues that have a material impact on your business, define them succinctly and suggest a position, so you can get going. Part fact, part opinion, part alchemy, that’s The Big Ideas Report.