Some time ago, sales were still suffering greatly from ongoing digitalization, but the music industry can now proudly look back on a successful leap into the digital age. 45 percent of sales in the music sector come from digital distribution and the overall market grew by 3.2 percent worldwide. Forms of use such as music streaming even increased by 106 percent in Germany. Read here the 4 steps the music industry took to make this change:
The Business of Music: 4 steps to Digitization
1. Make your content available
At the dawn of digitization, the music industry believed it made the most sense to sell content directly to consumers. However, it quickly turned out that users prefer platforms that offer a full range. A circumstance that, for example, was fatal to Universal’s Popfile, a platform that only contained artists from Universal itself. Only iTunes managed to convince users with content from all major labels.
2. Pay attention to service and usability
In addition to the availability of content, users also value service and user-friendliness. At the beginning of digital music distribution, for example, Windows Media DRM was used, which among other things meant that hardly any players were compatible and no CDs could be burned. Many potential buyers were put off by this rather than introduced to the new format. And the MP3 format, which was clearly superior in all areas and was still illegal at the time, didn’t make it any easier for legal music distribution. In a market in which illegal but free offers are available on every corner, the customer must be convinced and retained through high service and usability.
3. New business models?
With global growth of 45.2 percent, streaming has become an integral part of the music industry. However, the new sales model was initially only able to establish itself in Sweden. There, the industry collapsed almost completely due to illegal downloads. That’s the only reason the record companies there were willing to test the new model. As it turned out, a good idea. Thanks to the early opening up to the new sales model, sales in Sweden were almost able to rise to the old level.
While planning for a new sales model for music, it is nice to integrate the new trends in digital marketing. For example, the use of Search Engine Optimization and Link building is something worth considering in the marketing endeavors of the music industry. Solicitation of third-party services keen on digital marketing like the link building services from Outreachmonks can boost sales in the long run.
4. Look for sales partnerships
Even if new sales models can be very beneficial for the industry, it is not always possible to implement them successfully. In the case of music streaming, the partnership with network operators, in particular, ensures that new, potentially paying customers are won. Deezer’s enormous growth can therefore also be attributed to the more than 60 worldwide network operator partnerships.
A small fly in the ointment of digitization is the sluggish start to profitability. With Spotify, the largest streaming service is in the red. However, the enormous growth allows an optimistic view of the future.
The great potential in the digital market must also be used consistently in the future. Because the following applies: If companies are unwilling to engage in unknown sales models, to enter into new partnerships, and to prioritize customer satisfaction over copy protection and security of the content, they too could fall victim to digitization.