Seminar: Build a band then a business

Topic Number:2

Principles of Business

2

Overview

This case looks at the changing nature of the music industry and how artists need to adapt from the traditional business model to “make it”.

It looks specifically at one bands journey and critically evaluates their strategy and approach as well evaluating what they could have done differently.

This seminar will get you thinking of the many different types of business models one can consider within the music industry and evaluate how best to navigate through its complexities.

We will also look at the changing ways consumers consume music and the new providers that currently cater to this.

3

• Determine and articulate the changing nature of the music industry

• Describe the traditional and new business model of the music industry and how technology has impacted it

• Be able to determine and discuss the role of ‘free’ music to help a band success more widely

• Be able to anticipate and articulate the future state of the industry

Learning outcomes of this seminar

Agenda for this seminar

How many ways you can listen to the band’s music for free. Why is it in the group’s long term interest to make its music available for free?

If the band had begun its professional existence 10 years earlier, how might its business strategy be different from the path it took?

Consider if you were ETH what would you have done differently?

Would it still make sense to stick with an indie label, or should the band pursue a major label contract and all the potential marketing exposure that comes with it? Explain your answer.

Structure for the session

You will have 15 minutes to

discuss each question

We will have a de-brief at the end of each 15 minutes to hear your thoughts on each area

Feel free to ask questions but please do not have separate conversations ‘we are all in

this together’!

Advice from the top?

How has the music industry evolved?

But formats are just the start

What does all this mean for the business model?

Pursue an indie label or mainstream

contract?

Who are Enter the Haggis?

Enter the Haggis is a Canadian Indie/Folk Rock world-fusion band based in Toronto, Canada. Commonly called ETH, the band has been playing and recording since 1996. Their latest studio album, "The Modest Revolution" is the band's tenth album.

Since its birth in 1996, ETH has kept a rigorous concert schedule, playing in wide ranging venues in Canada, Europe, and the United States.

A growing disconnect in the music industry

Millions of music listeners were fed up

with the business model that had been

in place for decades…forced

customers to purchase albums for

$15 to $20

Thousands of musicians were fed up with the model…industry dominated

by a small number of large record companies

Who are the real winners here?

What do the two routes have to offer?

• Potentially more lucrative but fewer opportunities

• Less control over decisions making

• More exposure and greater distribution

• Potentially less lucrative but more opportunity

• More control over decisions making

• Less exposure and limited distribution

“Success is making any kind of a living doing the thing you love” ETH

Self publicity is key for ETH

How many ways you can listen to the band’s music for

free? Why is it in the

group’s long-term interest to make its music available for

free?

ETH Offers Free Music

Listen for free or buy tracks/albums: A hybrid

But why?

Raise initial awareness with their target

audience

Get listeners hooked and become fans with no

need to purchase

Draw them in to concerts to drive revenue

Make revenue through ancillaries

How sustainable is this approach?

If the band had begun its

professional existence 10 years

earlier, how might its business strategy be

different from the path it took?

Would they be where they are today?

Do you think a big label would have

signed them?

How would they have made a name

for themselves using a non-free

model?

Do you think they would be

successful?

Going down the traditional route

If they got signed

they would have to fit the mold

Traditional paid for music route

Traditional advertising

media

Traditional concert route

Label gets most; ETH gets little

Limited ability to

self promote

Competing with many brands for

few contracts

Competing with many brands for

few contracts

Consider if you were ETH what would you have

done differently?

Would you have gone down this road?

Would you have signed up to a music sharing?

Sales

Revenue

CostsSales-Costs

Appendix – Sources for illustrations

Slide 6:www.dailymail.com

Slide 7:www.wikipedia.org

Slide 8:Virgin, Napster, Spotify, Tinie Tempah and Soundcloud Websites

Slide 11www.jasonderulo.com & www.emi.com

Slide 12www.emi.com & www.ufo.com

Slide 22:X Factor, American Idol and Britain’s Got Talent websites

End of Seminar

Note: This recording is for your personal use only and not for further distribution or wider review.

© Pearson College 2013