Music GroupsWharton On The Music Industry
Knowledge@Wharton, an online journal of the Wharton School of Business at the University of Pennsylvania, just released an article titled "From Confrontation to Experimentation: The Music Industry Is Playing a New Tune."
Wharton business and public policy professor Joel Waldfogel says the industry's challenge is to "change values about music." Jeffrey Babin of Wharton Global Consulting Practicum says the industry "is doing what it should" and gives three examples: EMI's collaboration with The Firm, Universal Music Group's tiered CD pricing scheme and Sony BMG's Jessica Simpson MP3.
Multiple business channels are seen as a strength. The article gives a short list of favored models, including music subscriptions, new labels, hybrid models (i.e. ad-supported, free music services) and DRM-free digital music ("it would eliminate a lot of interoperability issues").
Good article. My major complaint: The industry has been embraced experimental business models for years and has done so concurrently with its lawsuits against P2P users. There were a lot of new ideas being tried out before the Grokster decision. Labels (Warp, Def Jux) opened their own download stores. They've experimented with bundling extra items with digital albums and with staggering the street dates of digital and CD releases. They've been very aggressive in using the Internet to market artists.
