Tuesday, November 9, 2010

Market Study on Live Streaming services in the Music Industry

The HEC MBA is soon coming to an end :( Before that, I still have to finish one of the major assignments for my class "Business Plan Workshop" in the Entrepreneurship track.

As a subject, I have chosen to study the potential of Live Streaming service applied to Music.

The reason why, I have chosen that topic is that I am passionated about music and technology and after the MBA, I really would like to work in a startup (or create one :D) dealing with that subjects.

Working on that study has been a great way to learn more on the Music industry where I have no past experience. Thanks to the HEC's network, I have been able to meet Universal Music and EMI executives and great discussions have followed. It's really cool being able to meet anyone in an industry for an academic project :D

Right now, there are several services offering live music streaming such as Grandcrew.com, Justin.tv, BigLive.com... What is still not clear is how these companies make money out of it if they make any. Indeed, even though many companies have launched such service, music fans do not really seem ready to pay for watching a live concert on the internet.

Therefore, many studies and bloggers argue that it can be an indirect sales channel to help music bands develop their marketing strategies (Direct-to-Fan and give Reason-to-Buy). By the way, I have come across a great study by Virginie Berger (a french blogger specialized in the music industry) called "What is a good digital music strategy?" and it provides great tips on our bands should build their marketing offer to reach and maintain their fan base.

Coming back to my market study, the general trend seems now to be to have a better knowledge on your fan base and propose them customized offers depending on their willingness-to-pay. Several music startups are working on that: Topspin in the US, Noomiz in France.

But this is for recorded music as it has been a decreasing market for the last few years. On the live music market, the picture is a bit brighter in the sense that this is a growing one and that the industry is restructuring around that. Indeed, music labels are now buying music venues and tour management companies in order to find new revenues. And vice-versa when LiveNation (tour management company) offers 360-deal with artists managing their whole career from the recordings, tours, merchandising,...

So what is to be done in the live music market? Are there still market imperfections where a startup could work on and make a profit out of it?

These questions are still open for me and I will work on that for the remaining months of my MBA. If you have opinion on the subject, please do not hesitate to contact me.

No comments: