Not Free: Revenue Innovation For The Music Industry

Not-for-free Saul J. Berman's "Not For Free: Revenue Strategies for a New World" offers a solid approach to understanding revenue innovation in a constantly shifting digital landscape. Berman discusses revenue innovation with numerous examples from media companies which he considers canaries in coalmines.

Though his examples focus on larger enterprises, the message which should resonate with anyone promoting and selling music or almost anything else, is to examine one's assets and abilities and act flexibly to develop new revenue streams, often from assets already at one's disposal. 

Berman does take an academic approach but he grounds his perspective with real world examples.

Not for Free: Revenue Strategies for a New World by Saul J. Berman shares the insights of research mostly conducted at IBM with a focus on revenue innovation and the following key concepts:

  • Segmentation – by behavior rather than traditional demographic groups
  • Pricing Innovation – finding new ways to charge for a product
  • Payer Innovation – changing who pays including cost deferred approaches such as advertising
  • Package Innovation – finding different ways to offer the product to the customer

Berman shares an IBM segmentation model that is based on media consumption and use of technology. This approach offers a different view of one's market, switching the perspective from segmentation via such divisions as age group to a regrouping around activity in the world.

Berman maintains that such segmentation should be the basis for targeting new revenue models. He also points out that the music industry's resistance to customer interest in digital music sales meant that other companies, such as Apple, innovated and reaped the rewards.

Streaming music audio services are an example of Pricing Innovation with the switch to a subscription rather than ownership model and a seemingly limitless all-you-can-eat bundle of selections.

Streaming music video has taken a different path with a more successful focus on Payer Innovation via ongoing exploration of approaches to advertising.

Ringtones represent a now fading example of Package Innovation by repackaging tiny clips of music and then sometimes charging more for the ringtone than for the single.

Though Berman's emphasis in "Not for Free" is on large corporations, I think these insights can be applied to musicians as well. For example, now individual acts can be involved in industry innovations, such as crowdfunding an album's recording and production, or in personal innovations, such as repackaging a club act for the sidewalk during busker season.

Hypebot contributor Clyde Smith is a freelance writer and blogger. Flux Research is his business writing hub and All World Dance: World Dance News is his primary web project.

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  1. It’s fine to try and take something away from just about anything and apply it to your own situation, but unless this book has specific examples and practices that work for maintaining and managing finances for independent artists, I don’t see this being very helpful. Most of the time there are very few practical things that help indie musicians in this area, probably because so few actually exist or work. You either have a source of revenue to invest in your project (making and marketing your music) or you don’t. Being a successful musician is like being a successful actor… there are very few good parts and too many people vying for those parts. Except that it’s STILL easier than being a musician! 🙁
    Free album download at http://www.facebook.com/chancius

  2. True, but it’s always good to take a look at the big picture to come up with your own practical efforts. There is no formula for success in business or music despite how many “10 Ways to Succeed” blog posts there are in the world. Those are tactics, not strategies. Tactics are most certainly important, and there’s a whole Internet full of them, but you should have a strategy first and foremost and that can’t be cut and paste. You have to know the world you live in to the T and apply what you do and who you are to come up with your own path to success.
    This book looks pretty interesting… I think I may cop it… right now in fact! Thanks for posting.

  3. I point out two very specific examples at the end of my post related to using the framework in Not For Free to reexamining an individual artist’s revenue.

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