Music Business Models

101 | Design

By Tommy Darker | Downloadable on Patreon

Intro


“It’s the 18th of November 2014. The day of my birthday. I wake at 8am and go upstairs to prepare breakfast. Compared to my flat in London, which is compact and minimal, my parents’ house is pretty comfortable and cosy. I’m glad I decided to spend my birthday with them, after 5 years or so.
When visiting my parents, my time is usually quite relaxed. Mum cooking and attacking me with hugs, endless conversations with dad, jogging with my teen brother and talking about his girl issues, playing video games with the youngest one (will I ever beat this brat?), and letting our huge golden retriever load me up with love and saliva. Who wouldn’t enjoy such joyful anarchy?
Not this time.
Today, like all the previous and following days, I got work to do. Specifically, I have to follow my typical 8-hour schedule:
Grab my breakfast, go to a local coffeeshop and start analysing yesterday’s data. I have my first audit in the afternoon and finish off with the last two in the evening. Next day will be exactly the same, until the project is over.
Today is the 7th day of the 10-day music business model audit project I have initiated. I’m getting a bit tired, but work has to be done, so no time for excuses. I open the folder with last night’s work — session #19. Got to reach #30 by the 21st of the month, for when the project concludes.
Achilles, let’s do it.”

This could have been a page of my imaginary diary (actually, I never started one — Achilles would definitely be its name, if I had). This would be a page describing one of the days that cumulatively built up to the essay you’re reading right now.

What was this project about?

Briefly, it was a 10-day project of audits with 30 artists from 13 different countries, regarding their music business model:

  • During the audit, they answered my questions regarding how they run their already existing music business
  • I also gave them feedback for improvement and ideas on business model innovation
  • Next day, I prepared a personalised business model for each one of them and sent them resources and information on how to implement it
  • After the completion of the project, I started looking for patterns and interesting ideas in the data that could be compiled in series of essays about new music business models — an area that has not been thoroughly explored yet.

The music business model audit (analysing existing activities and providing feedback/ideas) lasted one hour. Each personalised business model/implementation tips/resource package took me one more hour to create.

These two vital hours helped many musicians gain clarity on how their business works and see the big picture, so they can improve upon their weaknesses, add more value to their community and more revenue streams in their pocket.

Time for another flashback.

Date: October 2014.
Location: University of Westminster, London.
Occasion: Tommy Darker’s visiting lecture about identifying trends and patterns in the music industry.

- “Tell me the first mainstream artist that comes in mind”, I ask.

- “Miley Cyrus!”, one student shouts.

- “Great, let’s break down her business model. I’ll start by asking you a few questions, and you’ll tell me what you think. There’s no right or wrong here, every answer is correct; just speak your mind. Ready? Let’s do it.

Within an hour, the large whiteboard is filled with keywords, ideas and concepts around how Miley Cyrus makes a living in the music industry. This includes her income streams, who her customers and fans are, what value she brings to the world, who she potentially partners with to make things happen, what daily activities she needs undertake, how much everything costs and so on. Some ideas could only match the profile of a superstar, others could be replicated by beginner artists as well.

The point is — these students had no prior experience on how business models work and, with some external help, they managed to break down the complicated (?) business model of a mainstream artist.

Flash-forward to today’s essay. I will mention two things and then will pose the one million-dollar question:

  1. If the whole process takes 2 hours from scratch to end, and…
  2. It’s so easy that even inexperienced university students managed to do it…
Then why don’t more musicians create their own business models?
Gain clarity over their music business, eliminate unnecessary activities, generate a more sustainable income and come up with more creative concepts that bring value to both their audience and the world?

The obvious answer is: they don’t know what a business model is. Right?

Well, I wish. The answer is more complicated and nuanced.

But fear not. In this series of essays about new music business models, we’ll explore different aspects of entrepreneurial structures, why they are more relevant and essential for musicians than ever, how to design and implement one from scratch, typical examples and case studies, and interesting ideas from all over the world.

We’ll also look at practical lessons and areas to focus on, productivity lessons learnt from eliminating the unnecessary, why traditional business models don’t work and need to be reinvented, and the broader concept of sustainable business as a musician in the contemporary music ecosystem.

At no point do I claim to know everything about what is being discussed. On the contrary, I’m just an explorer and practitioner that likes sharing his findings. There is a lot of unexplored territory in the area of music business models. That’s why, as you read the following words and digest the content, I’m waiting for your feedback and interesting ideas on how to make it all better. Simply get in touch via my website, Facebook, Twitter and in the comments of the online essay.

Ready to set sail on this journey?

Chapter #1

“I will just focus on making music and everything is fine”, and other fables.

Being a musician and having a business model in place is a concept. Not a good or bad concept, just a concept.

Hopefully, at the end of each chapter, we’ll all get closer to realising why it is valid, relevant and maybe essential in the contemporary music ecosystem.

However, as with almost every new and unfamiliar concept, there are many barriers to its adoption. My favourite barriers, and this is what I will refer to below, are the mental barriers, widely known as misconceptions or mind-traps.

Let’s have a closer look.

A business model involves many parties, such as the artists/creators, the mediators, the customers/audience, the team and so on. Some of the most popular misconceptions have been around for a good amount of time — and have become rooted in each party’s mentality — becoming cliché quotes and ambassadors of the status quo. I’ve highlighted some below:

1. “Make good music and everything will follow.”

Well… not exactly. Although this is a potential scenario, it is not a realistic scenario. For two reasons:

  1. It might happen (somebody might discover and sign you, your fans might buy all of your CDs etc.) but, ‘til that moment, you don’t control your destiny. Instead you build something that is heavily dependent on the agenda of others and unlikely probabilities.
  2. Labels don’t work like they used to and are more likely to sign a band that has built a following and/or some already existing business structure.

Approaches like this often turn into ranting about ‘the system’ and why nobody discovered your talent. This is definitely not a healthy and well-informed path to choose.

2. “You can’t make money making music today.”

Correct. Literally, you never made money from music — you always made money from things around music.

A CD is not music; it’s a container for music that used to give you the convenience of listening to music in a car or home device. Spotify doesn’t make money with music; it makes money by providing access to a vast catalogue of music from any device. Music always helped attract attention, then money was made with a successful and smart business model.

3. “My customers are my fans.”

Your fans are your customers, but your fans are not your only customers.

What about the venue you perform in? They are also your customers. What about the movie that uses your song? They are also your customers. What about the students you teach how to play the guitar? They are customers of yours as well. There are a vast amount of customer groups that musicians could create value for (and make money from). We only explore a fraction of the possibilities. This is a common mistake most musicians make.

4. “You need to find tangible stuff to sell to make money. I’m no t-shirt seller! I would have opened a shop, if I wanted to.”

CDs, vinyl, merch and memorabilia are all items that musicians can potentially sell. They provide value to certain customer groups (potentially your fans). What about live shows? This is an experience, not a product. What about connectivity that a community offers? This is also intangible, but of value. What about that guitar course? That’s a transferred skillset. That song you got placed? A legal use of copyright. The insider experience of coming backstage? (whether offline or online). The exclusivity of getting a track first? This is all intangible value that your customers potentially want. Thinking only in terms of tangible products can be quite restricting in many cases.

5. “If I spend time marketing, when will I make music?”

This is a common excuse, but it can be countered very easily. Let me try to make a point with a story. I once went to Nepal and had the following dialogue with one of my Nepali friends:

- ‘Would you like to come and live in Europe?’
- ‘Nope.’
- ‘Why?’
- ‘Because it’s better here and we are happy.’
- ‘Have you been to Europe, then?’
- ‘Not really.’
- ‘So how do you know that it’s better here? You have no point of comparison.’
- ‘Well…’

In my experience, and please correct me if I’m wrong, most musicians think this way. They haven’t experienced true entrepreneurship, however they already have an opinion about it: the default notion around the globe that doing business is bad and can take you away from what you mostly love — music.

With the mindset, all musicians do is blind themselves and follow the default plan, just like my Nepali friend did. Which can be great sometimes! But you cannot deny that you don’t have the option.

It’s not a dichotomy ‘business or music’. As a practitioner who has stepped into both worlds, I can say for sure that musicians who pose the aforementioned argument (about lack of time), probably aren’t so well-organised or productive themselves. Kill procrastination and you got plenty of time for everything.

6. “The artist needs to leave business to those who know how to do business.”

This is a remnant from the traditional label model, but there is no reason for it to continue existing. Any concept that uses the phrase ‘needs to’ can (and maybe should?) be challenged. Having a team of professionals doing the business work for you is an option, but not the mandatory path. Either way, whether you choose to do business yourself or delegate it to your team, you are the boss and they are employed by you, not vice versa (like the old record label system). And as a prerequisite for this you need to know about your business already, so you can trust your delegated tasks to a skilful professional or intern.

7. “I just want to make music. I’m a musician, not a businessman.”

This means you’re a hobbyist. Which is great, but this essay is probably not relevant to you.


The list could go on. I subscribe to the philosophy that knowing why you take action is equally important as taking action — both are required for success. These mental barriers block and blur your ‘why’, turning you into a very productive robot, but with no initiative or potential for adaptation.

In the changing modern world, adapt or die.

Chapter #2

Reality — old business model, new ecosystem

You’re a music artist or label. Imagine a big sheet of paper, where you can write down every single element of your music business. What would that include?

  • What you offer of value (your music?), that you can exchange for money or other benefits? Yes. Value is the primary reason for two people to transact and the pillar for each business.
  • Probably your fans; they’re an inextricable part of what you do — you provide them with value and they give something back.
  • Your sales revenue? Yeah, that too. This is how you survive, after all.
  • The intellectual property you own? Sure, copyrights and royalties are a major element of the music industry.
  • The costs you endure? Sure, you can’t avoid them. Don’t forget, you need to calculate profits by subtracting costs from revenue.
  • The main channels of communication? Yes, of course. Radio, magazines, online outlets… all play an important role in how you reach out to your fans and customers.
  • Shall we throw in our daily activities? Whether an artist or label, we have certain activities we cannot do without.
  • Probably the mediators too, such as manufacturers, promoters and distributors. Their job is to get stuff done for you; you couldn’t do without them.

Cool, that should be enough information.

Now listen carefully. We just created the business model for the traditional music industry. It was that easy and we can place all these elements on a sheet of paper.

The beautiful thing about this is:

When you see the big picture, you can feel confident that you’re making more well-informed decisions.

Why is that? Because you can see how each action affects everything else. Your actions are not isolated, but interconnected, part of a system whose success is contingent upon the seamless connectivity of its elements.

A clear vision of what you are undertaking and how its elements interconnect with each other is the biggest weapon in your armoury.

Back to our sheet of paper.

As I mentioned, we just created the traditional music industry’s business model. How great is that?! Shall we visualise it, so we can see it clearly?

Great. Let’s do it together. Feel free to take an empty sheet of paper and follow along.

In order for it to be better organised, let’s divide it in two parts: what the music fan sees and what they don’t see.

From the aforementioned parts, what would a fan see? Let’s arrange these elements.

Themselves and all the other fans…

The music they know (the hits, in other words) and superstar artists…

What they pay for…

And the channels they’re being marketed through…

Now let’s move to the left side. What would we include there? Remember, this is the side that (traditionally) fans don’t see and they (probably?) don’t care much about.

We would include our expenses…

The mediators and partners…

Our daily activities…

The intellectual property we own and our fame…

Great, looks tight.

Now, we can come to some interesting conclusions from this visualisation. Let’s assume the current system we’re exploring refers to the music industry as a whole (and not for a specific artist or label).

Every business and industry ideally wants to increase its profits, right? How do you do that?

Since profit = revenue — expenses, you can increase profit by minimising expenses and maximising revenue.

You also want LOTS of sales. As many as possible. This assumes as many consumers as possible (whether true fans or just casual listeners) actually buy what is being offered.

What does that mean for artists? If you don’t have a hit, you’re probably not in the bill, as you don’t fit in the current model. These economics lead us to a perfectly hit-driven system. Small artists don’t have a chance.

How do you maximise sales? By massively marketing the product (the big music hit or wannabe hit) to make it a ‘sales hit’. Radio, TV and big retailers are the way to do it, as they’re the biggest channels.

So far so good? Does it all make sense?

Now, if we look at the backstage, we’ll also find interesting information hidden behind our visualisation.

First and foremost, copyrights and intellectual property were traditionally a pillar and the biggest asset for the industry. That would allow us to add royalties as another major revenue stream.

Secondly, superstar fame is another asset. That creates the ‘you can’t touch the star’ style of indirect communication with the fans and affiliation with companies as a revenue stream.

Finally, the major labels have human resources, who get all the ‘dirty’ work done. Another major element, so to speak.

What would an essential daily activity be? To find new talent, filter and nurture it (so it can fit into the model), and market it (so it can bring big sales).

Also to maintain the existing connections and network, as well as bring new exclusive connections in.

Finally, to maintain the artist’s fame.

The daily activities are heavily assisted by a network of hard-working mediators and partners, who manufacture, distribute and maintain the system.

Thus, as a final element, the expenses will include mediator expenses (or ‘cut’), system maintenance, human resources, marketing the artist to the public and the risk of wannabe-hits-turned-into-flops (emerging artists traditionally were subsidised by the profits from established artists).

Do we all see the connections in such a system? Sure, there are many other smaller elements we could add, but I hope you’ll agree that the major ones are highlighted below.

This is more-or-less how ‘business-as-usual’ used to be in the traditional music industry. A well-oiled machine, driven by profits and high margins.

Since everything is well-connected and rigid, everything functions predictably within the careful design.

The Lake Analogy

Picture a quiet lake for a moment. It’s a well-balanced, quiet ecosystem. What if a kid threw a rock at the water? That would create waves and leave a rock at the bottom. The lake wants to return to its initial state, its stillness, the status quo. The lake doesn’t like change. The rock, however, will remain at the bottom forever.

What’s more, the kid starts to like throwing rocks and creating waves. “There’s something fun in throwing rocks and disturbing the quiet lake. I’ll throw some more”, the kid says. Others see how fun it is, so they start throwing rocks and other stuff, just to see how it feels and what results it might bring…

What if nobody can stop these ‘naive’ kids from throwing stuff? The lake’s status quo is now constant movement. Not only for the surface of the lake, where you’ll see ripples, splashes and all sorts of disturbances, but also for the bottom of the lake, which is quickly becoming full of detritus. The lake will never be like it was before.

In one sentence, we would say that the lake’s ecosystem was first static and predictable, but is now interactive and open to disruptions and challenges.


The ecosystem of the lake is the music industry. It used to function like a perfect profit-making machine. The mischievous kids symbolise disruption. What the fans see is the surface of the lake, while the backstage activities are everything below the surface.

Keep this analogy in mind, it will be helpful as we describe and visualise new business models along the way.

The question is, “is such a model perfect?” Or, even more accurately, “is it even relevant today?”

Let’s figure out below, with the help of more diagrams.

Chapter #3

The old model’s weaknesses and its main problem

Let’s analyse where the weaknesses of the traditional music industry lie, what the main problem is and why things cannot be the same again.

A side-note; my point here is not to criticise any system or practice, but to identify templates and discover opportunities towards the improvement for the music industry.

[Weakness 1]

Napster was the first kid to throw rocks into the lake. It challenged the idea of copyright, enabling a generation of Internet-savvy digital natives to ‘pirate’ songs for free, without paying the status quo price that was integral to the traditional model.

[Note: it’s not in the scope of this essay to debate the issue of piracy, we’ll just accept the fact that it does happen.]

What were its implications?

The concept of copyright, one of the industry’s ‘below the surface’ pillars, was challenged. The music industry quickly responded by taking legal action against all the individuals and companies that disrespected the notion of copyright. Their response was predictable:

Just like the lake, they wanted to return to the initial status quo.

Long story short and flash-forward to today, the major labels’ legal actions could not stop people from getting lots of copyrighted material for free. And the shift was made: at some point, artists started giving their digital music voluntarily away for free, in exchange for the downloader’s information.

That was the turning point: the societal perception towards digital music’s market value changed. Now the audience thinks it’s pretty normal to receive the digital file of a musical composition for free.

[Note: again, it’s not in the scope of this essay to go in depth about how and why this happened. It was a long process. Could it have been avoided? In my humble opinion, it was inevitable.]

How do these permutations manifest in the business model? One of the core pillars of the music industry has been undermined. Copyright was considered to be a reliable mechanism for profit. I’m not that sure everyone shares the same view today.

[Weakness 2]

In the traditional music business model, the main value proposition was the artist’s hit songs and the heroic figure of the artist. How could this turn into revenue? Mainly by selling copies of the recorded music contained in a medium (vinyl, CD etc.), and usually in the format of an album (10–12 songs). Touring and merch supported the album’s sales (and often worked as a promotional tool to drive more CD purchases).

The reliability of this premise gradually deteriorated, partly due to three reasons:

- iTunes unbundling

The album format was the only way to get the recorded music you desired. Even if you only wanted 3 tracks from an album, you had to buy the whole thing to get them. Even if the rest of the album was just filler. But iTunes changed that.

Now you can buy a single song, without paying for the whole album.

- Copyright infringements

As we discussed before, piracy rearranged the landscape, raising the question “what does the audience value in a music market?” We knew (correctly?) that fans loved recorded music in a plastic disc, forgetting that this was the only option they had at the time. But, gradually the market value of a digital file plummeted to zero (nothing, nada). And this will happen to every other form of digital information in the near future (movies, books etc.).

Free is now a price point.

- Experience over product / direct relationship

Traditionally, there was no direct-to-fan relationship; superstars did not allow their fans to come closer and their communication with them was through representatives (the labels or retailers). The two aforementioned reasons, in conjunction with the rise of social media platforms and the need for transparency created the need for artists to connect directly with their fans and be authentic. Crowdfunding platforms showed us that artists can now offer a living-room concerts, backstage passes or an exclusive dinner with a few special fans as a purchase option.

Today, communities and experiences beat products — a phenomenon that will only escalate in the future.
All the above contributed to the discovery of various holes in the traditional music business model. First, it’s not only about hits (as there is also a Long-Tail portfolio of songs waiting to be discovered and enjoyed). Second, the ‘superstar effect’ is not that powerful anymore (you cannot fake what you’re not) and third, the main economic driver is not album sales (there is a product/experience diversity you can offer to your fans, at different pricing points, including free).

[Weakness 3]

Mass media distribution. TV and radio used to be the only way to market any form of content. Want your product to become well-known? You had to pay for a 30-second ad on a TV show break. Want to promote a new single and make some album sales? Radio was the one-stop-shop to go to. Want to manufacture stardom for an up-and-coming artist or maintain the fame of an existing musical behemoth? Magazines and TV served this purpose. What about distributing music? Huge retailers were there for you. Money and connections were absolutely essential for something like this to happen.

Again, things have changed. Digital distribution via online stores has become open and cheap, platforms such as Spotify, Soundcloud and YouTube host music and make it available for anyone with Internet access, social media helps us share what matters (to the point that viral hits are an everyday phenomenon), whilst blogs and review sites are hungry for new quality music submissions.

What does this all mean? Distribution is not scarce anymore. Anyone can access it. The audience’s attention is scarce, though. Curation and filters have become essential for the audience to de-clutter all that information and discover new music.

[Weakness 4]

Market hits and superstars for the masses? When the goal was to sell as many albums as possible, it made sense. Not anymore.

It’s a fact that the audience’s attention span has decreased; as well as what they consider ‘novel’. Artists get forgotten easily and releasing singles more regularly makes more sense than releasing albums once every two years.

Where does this lead? Now it makes more sense to retain fans and identify who they are, instead of marketing to everyone from scratch once a new record is out. Starting from zero is considered to be nonsense nowadays.

Yes, massive marketing to everyone still exists (how would one see who’s the fittest in the advertising game?), but a marketing campaign doesn’t start there. Mass marketing serves more the purpose of staying at top of people’s minds, gaining new fans or influencing the younger generation. It also serves as a great way to scale up, once a tested experiment works.

Artists make sure their fans and community are first to know about their latest news. They also try to satisfy the existing fans and offer them special experiences, rather than treating everyone the same way. A new segment of passionate fans, the superfans, are now in the map.

To sum up: retaining fans and making recurring sales seems to be a better solution than thinking about the fans only when something to purchase is out. Treating fans differently in terms of their relationship with the artist makes more sense than ever, making the mass market a bit vague as a target audience.

[Weakness 5]

Inextricably connected with the previous issue is the concept of communities and authenticity.

A shorter attention span necessitates the creation of communities of like-minded music fans that identify themselves as ‘Something Somethingers’. Think Lady Gaga and her Little Monsters.

A fan club is not a new idea, or course, but has become very relevant today. Even to the point that a lot of artists call their fans with a specific name. This is not an accidental phenomenon.

Communities might seem like an unimportant thing that doesn’t/shouldn’t affect how an artist behaves. But this is wrong. They encapsulate an even bigger concept that guarantees their existence: authenticity.

As Seth Godin says in his book ‘Tribes’, every community or movement assumes a leader, followers, a theme and relationships between the followers themselves.

What is a community without an inspiring and authentic leader? In our case, it’s the artist.

An aspiring community leader, amongst all, is the glue that keeps the community together. He/she reminds them that he/she is there for them and gives them signs that they are humans like everyone else (so that the members can feel more familiar with their world).

This does not mean full disclosure. As a great analogy, a successful artist-leader sees the relationship with their fans like one they might have with a fireplace. Draw too close and you get burned, but stray too far and maybe you freeze to death.

A great example of such communities can be found at Patreon.com, where artists get patronised by their fans, who choose to pay a specific amount of money per creation or per month, in exchange for exclusive perks (and a slice of the artist-leader’s trust).

As a direct consequence, each artist now has to take the community’s preferences into regard when collaborating with brands. Despite the possible revenue stream, the wrong kind of collaboration with a brand could lead to distrust amongst community members and the feeling of an inauthentic relationship with the community.

Needless to say, there are always mega-famous artists that do not have communities and keep on with the traditional ‘do-not-touch-me’ relationship. There will always be such artists, since engaging with the fans is an option, not an obligation. Even major stars, however, will probably not get their fans’ support if they don’t have a direct relationship with them. Think of Bjork and the failure of her Kickstarter campaign.

With brevity: the need for communities to exist brings the need for authentic relationship and engagement with the fans. This means changing one’s agenda to cater the superfans’ needs first, even if this means turning down a financially appealing offer from a brand with lots of cash but no obvious affiliation with what the artist does.

[Weakness 6]

In a world where major labels curated the perception of the music’s value to the public (and, in a sense, controlled and determined it), being part of a label was the ‘seal of approval’ that brought you more audience and likability.

Thus, the A&R team had to do their best to create the most powerful portfolio of artists for their label. This ensured more sales, maintained the reputation of the label and the power of their ‘seal of approval’. In other words, the status quo.

Gradually, due to all the disruptive influences we’ve highlighted in this chapter, this role began losing power — or, at least, changed forms. Showcases, where the A&R people used to hang out, got a competitor: social media. Recruiters for labels now hang out where the fans do, so they can see what they’re talking about. Quite a few music professionals admit that they check Twitter for the next ‘hot act’ or track. They also check out artists’ social media channels to see their following and engagement with the audience.

Something rather interesting: traditionally, if you had a few great songs and presented yourself in a series of showcases, a label would be likely to offer you a contract. That is, they would look for artists with potential. Why? Because they could now develop these artists according to their agenda and use them as another gear in the label’s powerful machine.

Today, recruiters are more likely to look for already developed artists, with fans and all the basic business mechanisms in place, so that they can help them scale up and increase their reach. That’s why figures like ‘engagement’, ‘likes & followers’, ‘influence’, as well as ‘paid customers’ guarantee more likelihood of being signed with a major. These figures are indicators that the artist has the audience’s attention, as well as lessening the risk that the label is taking by investing in this artist (remember the mega-stars recouping the costs of the emerging artists?).

In a few words, the audience now has more influence when it comes to who will get signed or not. If there is no proof that there is an audience behind an artist, it is less likely for this artist to get signed. Labels tend to sign already developed artists and use their network and capital to help them scale up.

Now, please don’t conclude that I’m a genius. I’m far from that. I ‘stole’ this Business Model Canvas concept from Alexander Osterwalder, the co-creator of the Business Model Generation system. His presentation about the music industry is available for everyone to download here. I just remixed it — by polishing it, making it more relevant to today (it was created in 2010) and by helping us visualise it with the lake analogy.

A little memo here. Three years ago, I read Steve Knopper’s book ‘Appetite For Self-Destruction’. It highlighted how the music industry works and what we should expect in the future. The book stopped in 2008.

Since then, the music ecosystem has changed, new audience habits have become the norm, and new technology has emerged, which has extended (or limited) the creative and marketing process of music (and… everything). Nevertheless, the music industry has stayed more or less the same (same concepts, but now with digital means).

If adaptation equals survival, then what makes people think that the current music business model doesn’t need change? If I may add a personal commentary here:

This is where the main problem lies: the music business has not fully adapted to the changes in the digital world.

As placing a camera in a theatrical play doesn’t turn it into a TV show (thanks to Andrew Dubber for the analogy), the same is true about the music business. Just doing everything as before (but through digital means) won’t create a digitally optimised industry that can harness all the opportunities generated.

You need to approach each medium according to its rules.

As you can see, I’m not suggesting that all the traditional model’s elements will eventually disappear. Hits, superstars, copyright and so on will continue to exist. The weaknesses I mention are rather opportunities for innovation, experimentation and novelty.

In conclusion

The music ecosystem is changing, new behavioural norms continue to be adopted by the audience and the existence of new technology contributes to the evolving music landscape as we know it today.

The music industry’s main value propositions are still hits and superstars. However, it’s less and less convincing for the audience, who have more options than ever before. They are not the slaves of a hit-driven music world.

As more artists embrace the concept of ‘experience over product’ and offer a nuanced range of ‘alternative’ offers (which are defined this way until they become the norm, of course). This new mindset can potentially create a ‘mature novelty’ — a fresh idea, now gaining mainstream acceptance, and that will need to scale up through capital investments.

Since capital follows where innovation and the opportunity for novelty is, and the mainstream follows where this capital has invested, I’ll be bold enough to predict:

In the near future, every major artist will adopt the mindset of the current grassroots rebels, which include Amanda Palmer, Trent Reznor and Radiohead.

However, since there is no ‘one-size-fits-all’ formulaic solution, this raises another question: “how can an artist build a sustainable business around their art?”

Which brings us to the next chapter.

Chapter #4

Musicpreneur and personalised business models

A French economist coined a term that opened my eyes. To me, this short statement seems to answer the question posed at the end of the previous chapter.

He said:

“Each musical expression deserves its own mediatisation.”

Let’s decode this.

Musical expression is the musical composition, minus the extras. Say it’s the sound of a song, without any video, stories, information, connotations or artwork attached to it. It’s what we record in a studio: pure sound.

Mediatisation is storytelling added to musical expression, bringing meaningful value to it. It shapes the experience and perception of music — and the economic value of the music industry is based on its potential. It’s all the metadata, videos, branding and stories attached to music, which create a narrative that people can follow.

The mediatisation of a musical expression can potentially have unlimited form, but in practice is depends on the limitations caused by the technology and dominating media/formats of each era.

In the analog world, there was one major way of approaching mediatisation; the CD or vinyl. Artwork, release anticipation, myths around the artist, they all created this desirable storytelling layer that artists and labels wanted. It worked in a pretty straightforward way, was totally controlled by its creators, and few external forces could disrupt it.

Thus, considering that “each musical expression deserves its own mediatisation”, the analog world had one major way to do so: music attached to its physical container, which was the medium of mediatisation available.

They had to do it this way. As an extension, this created one major business model for everyone participating in the commercial music world (which includes everyone who creates or receives value from music-related activities and who participates in a commercial exchange).

In the digital world, however, some things changed.

An mp3 is a ‘demediatised’ file, containing the musical expression and nothing more. No story attached to it. (Which is why selling an mp3 album is not the same as selling a physical copy of an album — contextually and commercially). The good news is (at least for the creators and labels), in digital, the musical expression is free from the slavery of its physical container and can be mediatised in diverse ways (though always limited by the capabilities of its medium). In our case, the main mediatisation medium is the Internet, which offers a plethora of options.

Again returning to the French economist’s words, “each musical expression deserves its own mediatisation”. This means that the bad news (for the economists) is that this diverse choice of mediatisation cannot be translated into one universal business model to be replicated by everyone (which used to be the status quo in the analog era).

This is where the opportunity lies today.

Every music artist can create their own personalised business model that fits their vision, values, audience and story.

(By the way, that French economist is named Olivier Bomsel.)

Which is great news for all creators out there!

But… wait. What is a Business Model exactly? Wikipedia uses the definition:

“A Business Model describes the rationale of how an organisation creates, delivers and captures value, in economic, social, cultural and other contexts”

…as proposed by A. Osterwalder (mentioned in the previous chapter). I love this definition.

I’ve been trying to come up with my own definition for a Music Business Model. I would sum it up as follows:

“A Music Business Model is a system that describes how a music enterprise creates, distributes and captures cultural and commercial value.”

Pretty easy to digest and derived directly from Osterwalder’s definition.

When we identified the weaknesses in the music industry’s business model, you got a glimpse of how it works. In the next chapter we’ll analyse each element individually. Before we do so, it would be wise to mention a few notable characteristics of business models and what makes them the most relevant solution for musicians today (plus every other creative, digital and commercial entity, such as labels).

Here it goes.

1. Living document

Each business model is created to reflect the current situation of your musical endeavours. It is not supposed to remain static and anachronistic. That is why a business model is a living document that needs to be revised frequently. It is based on validated facts, not on hypotheses. Being relevant offers more chances for survival in an ocean of creative projects that want a piece of your attention, time and money. A creator’s job is to ask questions and get answers, validating the relevance of the business model.

2. Big picture

It’s a great advantage to be able to see a snapshot of your business in a single sheet of paper. The big picture gives you a good impression of how each business element connects to each other one (or not), allowing you to make better-informed decisions on what to proceed with, what to omit and what additions to make (both from a creative and commercial standpoint). Ultimately, seeing the big picture gives you more control over your project.

3. Rooted in creativity

A business model is revised or designed by listing all the potential scenarios and then choosing the most relevant ones for your situation. In other words, it’s a game where you synthesise in a similar way to composing a song: connecting the dots of different, mature ideas whose time has come to merge.

4. Systematisation

All musicians already apply entrepreneurial practices. Whether they busk, initiate crowdfunding campaigns, sell CDs after a show or book a local tour, they’re providing value and receive money in exchange (the most straightforward form of conducting commerce). Musicians need to follow entrepreneurial practices, but not in a form of mimicry. Instead, with a business model they can be systematic about their entrepreneurial practices, and maximise the value they offer to their audience.’

Enter the Business Model Canvas. Let’s dive in and explore it.

Chapter #5

The Business Model Canvas

I would like to start with a short introduction of the Canvas. This tool has been co-created by 470 practitioners from 45 countries, curated and written by Alexander Osterwalder and Yves Pigneur. It helps business practitioners (from Fortune 500 companies to small startups) get clarity on their business and design/innovate/revise/validate their business model.

This chapter is not meant to replace the original book, which I encourage you to purchase and read at www.businessmodelgeneration.com. Below you’ll find a summary of the most important information about the Canvas, as well as personal commentary designed specifically for modern musicians and labels.

(I mean, I wish somebody had done this for me when I started devouring the Canvas!)

Specifically for Musicpreneurs, the Business Model Canvas methodology will help you:

  • Find (and make) the connection between commerce and creativity,
  • Synthesise in a creative way (just like when songwriting),
  • Create holistic, artistic projects that practically balance your values/mission/resources/commercial potential, and…
  • See the big picture of your music business (which is the root of the desirable control we talked about).

It can help musical people realise that it’s not about creating new music constantly, but about re-arranging the way business is done, managing resources that already exist differently and reframing the value you offer.

A Business Model can help artists discover untapped value and innovate.

The Canvas is broken down to 9 building blocks, each one of which is inextricably connected with the other. Referring back to the Lake Analogy, blocks 1–5 are the area ‘above the surface’, while 6–9 are the area ‘below the surface’.

Let’s briefly analyse each one of them.

[Note (1): in this essay, I do not use the original terminology. I have adapted the names to more music-friendly ones.]

[Note (2): if you can’t conceptualise the information while reading, don’t worry — there will be practical examples in the next chapters. Re-reading this chapter after finishing the essay is advised.]

1. Music Value Proposition (MuVaP)

Music Value Propositions describe what a musician offers of value to a specific Customer/Audience Group. This value may take the form of a problem solved or a need satisfied. In other words:

A Music Value Proposition is benefit-driven and has the customer in mind.

Matching which value is offered to which customer/audience is the key here.

Whether we think about it this way or not, musicians solve numerous problems for millions of people around the globe daily. This is hugely valuable.

The value that musicians create may take the form of art, information, connectivity, problem-solving, brand, experience, product, service, a transferrable skillset or a bundle of the aforementioned, benefit-driven traits.

A Music Value Proposition is benefit-driven. That means that the question ‘isn’t my music value enough?’ is the wrong way to put it. ‘Music’ is too generic to describe a customer-specific value. A single word, ‘music’, can take many forms, provide different value and satisfy different needs.

For example, music can have:

  • the form of a live performance in a venue (which is problem-solving, and benefit-driven for a few specific customer/audience groups: e.g drawing a crowd for the venue owners, entertainment and live experience for the live audience, memorabilia for the merch buyers etc.)
  • the form of recorded music in a CD (tangible memorabilia, portability)
  • the form of digital streamable recorded music (easy and direct access globally)
  • the form of a video (visual stimulation, easy access via video platforms)

…and so on.

Each music business can offer one or more Music Value Propositions to their Customer/Audience Group. However, the value offered will not stand out unless it is unique from the other offers, practical/relevant for the audience group and articulated clearly.

From my experience and research, value that musicians/labels can offer includes: support/trust, entertainment, memorabilia, access, convenience, belonging, backstage/how-I-did-it videos, personalisation, reliability, exclusivity, higher quality, inclusivity, coolness, content, social good, awareness and lessons learned.

As you probably noticed from the examples above, the more we specify the value, the better we can refine who it applies to and why. And then build a sustainable business around it.

2. Customer/Audience Groups (CAG)

Customer/Audience Groups is the block that defines who is served by your Music Value Propositions. Without customers and audience to create profit, it is clear that there is no (sustainable) business structure.

Each music business can serve multiple customer/audience groups, according to the number of Music Value Propositions they offer. That’s why the artist/label needs to make a conscious decision on what customer groups to engage with (otherwise the business can get cluttered and dysfunctional).

When an artist starts making music, they think they can reach the whole world through the Internet (mass audience). Although this is true (in terms of capability — yes, you can do that), it is not always smart or practical to focus on everyone, like the old business model. The more targeted the Customer/Audience Group is, the more efficiently the Music Value Proposition can be served. Let’s also clarify that your fans are not your only customers, just a segment of all your potential customers.

For instance, following the previous example, with a musical composition you can have multiple customers, depending on its format:

  • a live audience — local, international or digital (when performing the songs in a venue, depending if it is a local gig, an international tour or a live streamed performance from a room)
  • a sync agency that will license your music in games/movies/commercials/trailers
  • an audience that loves your genre of music and streams it online
  • an audience that buys the digital downloads
  • a group of physical artefact collectors that love vinyl and handmade items from their favorite band
  • a group of superfans that will buy everything related to that piece of music
  • a group of fans that want to have access to that song first
  • a video platform that wants content and gives ad revenue in return
  • curators/influencers that seek new music for their compilations/podcasts

…and so on.

More often than not, it is important to interact with various Customer/Audience Groups and find out what needs they want met and how these could be best served by your specific Music Value Proposition (or, if you don’t have one, how to create one for them). Each customer wants to alleviate a pain, gain a benefit or get a specific job done. In that sense, it is also wise to treat them differently, with different offers (something that most artists/labels do not really do).

As Clayton Christensen (Harvard Professor) said:

“We hire products to do things for us.”

Finally, the customer/audience group that every emerging band needs to focus on is not their ‘friends’, but the ‘friends of their friends’ (their weaker, extended social circle). By breaking the barrier of a close social circle, a business proves that there is viability and a bright future for further expansion.

3. Revenue $treams (R$)

This block will determine the commercial viability of your music business. Profit (costs subtracted from revenue) helps an organisation/company (thus an artist or label too) prosper and aim for longevity. Even non-profit organisations have revenues, in order to maintain their operations and cover their expenses. Revenue makes the difference between professional and amateur musicians.

A Revenue $tream is the outcome of when a specific Customer/Audience Group receives a Music Value Proposition successfully — which translates into a monetary transaction.

A successful Revenue Stream design takes into regard what customers are willing to pay for, what you will offer of value, how they will pay (method), which pricing mechanism you’ll use, and whether the transactions are one-off (single sales, one-off usage fees, ticket sales etc.) or recurring (subscriptions, patronising, royalties etc.).

In the past, fixed pricing for everyone was the norm. (Remember: CD price was fixed around $15, for every music fan.) Even today, the mass market still uses the same prices on many occasions (for instance, iTunes’ fixed pricing on song and album downloads). However, the new business paradigm has shown us that every Customer/Audience Group is willing to pay different prices for what they value (even for the same product).

Variable pricing is now an emerging way of doing business. Usually this is enough to double or even triple your revenues, compared with offering a fixed price for everyone. Kickstarter (and crowdfunding, in general) is a mainstream example of such a strategy in practice. For instance, most fans will pay for a $5 digital download, but a few of them will happily pay $1,000 to receive a customised piece of artwork by the creator or $10,000 to have dinner with them (like Amanda Palmer did).

Even free is a price point now, as long as there is something in return (i.e. a free download exchanged for the contact details of the customer). An option like this can lead to a deeper, long-term relationship with the customer/fan, and thus a projected recurring income in the future.

This block, combined with Music Value Propositions and Customer/Audience Groups form a triangle essential for each and every business.

4. Communication/Relationships (CR)

The Communication/Relationships block describes the type of engagement the artist/label develops with specific Customer/Audience Groups. Communications can vary between automated, personal or platform and from direct to mediated, while (commercial) Relationships can range from acquisition to retention and from one-off to recurring.

We live in an era where people care about how a product/experience makes them feel, not necessarily about how much it costs (free alternatives are everywhere) or whether it is available (almost everything is on demand today).

In that sense, the more personal relationship with the audience takes you a long way, both in terms of value and profit. On the other hand, a more personal relationship can be time-consuming (and sometimes even impossible). No-one says that you should be the most social and responsive of all (most major artists have labels that mediate, certain artists have profiles built around mystery etc.), but we all have to accept that engaging with the customers/audience directly is now a feasible option and (some) customers may actually expect you to.

A few examples of Communication:

  • Direct-to-fan (owned stores, websites), through a representative (label, manager, PR, agency), through a 3rd party (retailers, partnering networks, other artists, featured media — magazines, shows, interviews)
  • Personal (self-managed social media, backstage experiences), automated (ticket service software that handles transactions, social media scheduling software, autoresponders), canned (semi-personalised messages tweaked by mailing list software or an individual, to match certain characteristics of the receiver, and in order to look personalised), platform (a premise — digital or physical — that hosts a community, where you are the leader, but most interactions occur between members)

A few examples of Relationships:

  • Acquisition (gaining as many new customers/fans as possible through advertising — giving away/heavily discounting music — creating an entry offer that hooks people), retention (keeping the existing fans and network, offering special value to the devoted insiders, giving incentives for the community to engage and keep you top of mind)
  • One-off (selling a set of limited and personalised series of merch, casual ticketed shows, a crowdfunding campaign, a timebound project), recurring (subscriptions, bulk pre-purchase for a series of products, fan patronage, software-as-service, building an ecosystem around community)

It is important to highlight the necessity of knowing who the devoted superfans are and rewarding them accordingly. Knowing your various Customer/Audience Groups can help move you in this direction. A different, more exclusive treatment will encourage this specific group to stay closer, advocate for and purchase the artist’s work/services.

Since we’re talking about customer/audience retention, the interesting concept here is the one of ‘switching costs’. Apple and Google are great examples of companies that hook you into their ecosystem and make it hard (if not impossible) for you to leave: their products are intertwined and cannot exist without one another.

Apple and Google might be tapping ‘gray’ areas of human psychology that ‘force’ you to stay with them, since the switching costs are bigger than the benefits of leaving. This concept might not be considered ethical to use as music artist and label. How can the music world benefit from this concept, in a more ethical way?

By creating a community of which members feel they want to be a part of. There might be numerous Balkan-rock bands out there (with equally great music), but the band with the strongest community is the one that makes people want to voluntarily stay and consume everything produced (plus, spread the word about it). The trust, loyalty and consistency of a relationship is much stronger than any other mechanism that tries to enforce certain behaviour.

The same goes for the creative and business network, which is where a Contact Relationship Management System can be handy, allowing you to track your interactions with specific individuals, treat them accordingly and follow up.

Let’s talk about scalability: being 100% personal is not scalable, but being 100% automated cannot generate engagement and trust. The truth lies somewhere in between.

5. Channels of Communication (CC)

The Channels of Communication block refers to the way the music enterprise delivers the Music Value Proposition to the specific Customer/Audience Group. This block plays an important role in creating a quality overall experience, since these channels are often the face of your values and vision.

Channels could include your own website (the primary touch point for each professional artist and label), own store, own community platforms, own social media channels, partnering stores (retailers, websites), partnering media sites (blogs, social media pages), partnering influencers (leaders of networks, curators), and so on.

An interesting concept to highlight is the steps of engagement for a customer and how channels can help this experience become more seamless. The Circle of Engagement (for commercial or casual interactions) can be divided in 5 phases:

  • Awareness

Your potential fan/customer becomes aware about your Music Value Proposition, through one of your many Channels of Communication (could be a blog post, a TV mention, another friend etc.). But how is their first experience worth their time? How is it special enough, incentivising them to engage further?

  • Evaluation

They evaluate whether what you offer is worth their time (Do they like your music? Can they trust you? Are you interesting enough? Do they dig your brand? Do they like your style? Can you teach them something? Can you help them get their job done? Questions, questions…). Do you provide them with the right shortcuts/clues to overcome these questions/barriers and engage with you further?

  • Purchase

Next, they find a way to engage with the transaction you propose (a purchase, a sign-up, a specific Call-To-Action). Is it clear where they need to go? Can everyone understand what you want them to do next? Can they understand the risks (or absence thereof) involved if they go through? Are the payment methods easy to use? Your job is to make this experience seamless.

  • Delivery

Great, they’ve chosen to transact with you. Now, how do you deliver what you promise (one of your Music Value Propositions)? Is it through the software you’re using? Will you do it manually after a specific amount of time? What will trigger the delivery and when should they expect the value they long for? The instructions need to be clear (and, of course, the delivery fulfilled in time).

  • After sales

The experience doesn’t end with the delivery. Is there any extra value you can offer? Can you follow up after some time and ask if everything went smoothly? Can you ask for a review or referral? Can you ask for an upsale or recurring commercial relationship? Can you excite them with something unexpected? From my experience, this is the most crucial part of building a business with longevity.


If you’d like to visualise this procedure, it would look like a circle, with the successful after sales step leading to more awareness. Interestingly, once a customer/fan interacts with you for the first time and completes the circle, next time the experience will be even more frictionless. Since they have engaged once, the awareness step has been already completed and the evaluation step becomes easier (you’ve provided them with the right shortcuts, they have personal experience and, hopefully, great after-sales treatment).

A well-designed Circle of Engagement through your Channels of Communication can lead to great results, healthy communities and plenty of word of mouth.

Let’s talk about scalability: creating a seamless experience can make customers/fans want more and drive word of mouth. Test the Circle of Engagement hard and make sure it works perfectly before you ask for the public’s attention.

6. Career Assets (CA)

Looking below the surface of the lake, we can see the first major block, Career Assets. It describes the major elements of an artistic business that function as the foundation for the sustainability and longevity of the rest of the Business Model.

Usually, we can see one or more Assets corresponding to each block, assisting in its seamless operation. Although it’s a common phenomenon for each business to own these assets, some of them can be rented, leased or shared through partners.

Since the Career Assets create value in the long term and let other activities flourish, their development is a strategic investment. Identify your goals/vision, outline the necessary resources required and then figure out a way to obtain them. (‘Should I develop them? Acquire them? Rent them?’)

The most common music-specific resources are as follows (talent not included):

  • Brand

An authentic brand can positively affect the value and perception of every musical activity, as it is part of your music’s story (your mediatisation). A strategically deployed brand can lead to more revenue streams, partnerships and unique Music Value Propositions. A brand can also evolve as time passes, reflecting the healthy evolution of each artistic soul.

  • IP

In the long term, copyrights create strong revenue streams through royalties — once a track is licensed, performed or played on visual media and radio. This makes the IP portfolio a valuable asset for an artist or label to own.

  • Skillsets

Skillsets are powerful assets for two reasons:

  1. they can contribute to the artistic quality and uniqueness of your art, and
  2. they can be transferred to others through courses and consulting.

Both can turn into inextricable parts of a music business and career.

  • Human resources

As I’ve highlighted in many essays in the past, a project can never fully succeed without a great team. Human resources resemble this team — one that collaborates, bringing know-how, passion, vision and hard work to the project.

  • Website/platform

A strong online presence with a central hub (a website you own) can turn into another great Career Asset, where web visitors can find what they want and/or connect with other like-minded individuals. As I say, a successful web platform is like a playground that kids want to play in and can’t do without.

  • Reputation

A long-term career cannot do without some kind of reputation, whether this is a niche (within the confines of a specific industry or geographical area) or within the mainstream itself. Reputation makes sure you are top of people’s minds and a good reputation helps people skip the awareness and evaluation process when they enter your Circle of Engagement.

  • Qualities

They say that ‘a drop of will is more effective than a ton of intelligence and vision’. Well, I’m not sure that this is entirely true, but a combination of qualities and values as guides can give birth to remarkable art/projects that endure.

  • Network

Both a creative and a business network can make the difference in many industries. Trust and referrals are what a strong network can bring to the table, as well as opportunities hidden from public view.

  • Knowledge

Extensive experience and in depth knowledge on areas outside the scope of music can become a valuable addition to one’s career. Knowledge in economics, computer science, education, you name it, all can bring creative craziness and innovation to a business model, allowing one to identify connections that ‘normal’ artists cannot see.

  • Community

A community that patronises your work can be a blessing for most artists, since they can become partners, resources, channels of communication, revenue, customers and a value proposition at the same time! Investing time in building a community of passionate supporters that talk with each other is one of the keys for a long-term career.

  • Financial

Unless you already have a huge financial buffer or a network of investors ready to pour capital into your project, this is a great asset for your music business to consider. At some point, most projects need capital to scale up, so it is wise to consider having such a mechanism in place in advance.

As you can see, I did not mention talent in the resources, as talent can be an accelerator, not an asset to build a career upon.

Let’s talk about scalability: are you impatient, demanding fast results? I would advise you to reconsider. Career Assets are here to ensure an organic growth and scalability, so think twice on which Asset to invest your time in.

7. Essential Activities (EA)

What activities do you need to undertake daily, weekly or monthly, activities that your music business cannot operate without? This is what the Essential Activities block is all about.

A great way to find out whether an activity is essential or not is to ask yourself the question, ‘what will happen if I stop doing X for a month/week? Will things keep on working normally?’ If not doing this activity causes things to stop working, it is an essential activity. Otherwise it’s just an activity that is ‘good to have in the schedule’.

Some Essential Activities could be: songwriting, maintaining/expanding your community, building your brand, maintaining/expanding your network, having fun (!).

In general, one or more Essential Activities are required to ensure each Music Value Proposition is created/maintained/delivered/improved. The same goes for most of the blocks, so each project’s Essential Activities can (and must) be personalised according to the rest of the Business Model. Some offers require problem-solving, others require planning and scheduling, others call for more networking than normal.

What can this block teach you about networking? Knowing the Essential Activities of the person/organisation you aim to collaborate with can be crucial. A blogger wants readership or engagement, a label wants more talent, exposure or business, a public speaker wants referrals for more conferences etc. By figuring out what they want and helping them accomplish it, you will be relevant to them, make their life easier and win their trust.

Enough is enough, though! No more wasting time. What is needed, once all the Essential Activities have been figured out, is an effective productivity system, one that will make things work like a Swiss ticking clock. A checklist that can be outsourced (to contractors or interns) or delegated to external partners. Productivity is a whole new book and is not within the scope of this essay, but my personal techniques can be found in my previous essay (The Modern Ecosystem).

What happens if one is not sure whether an activity is required for the current business model to function or not? You test it. If the activity in mind is a daily one, remove or add it, and then document how your model works for 21 days (or 3 weeks). The test will show if it is essential or unnecessary. If it’s a weekly/monthly activity, simply test it without any specific rules, just in a way that you think is appropriate.

Nevertheless, choosing the right set of Essential Activities, focusing on the right kind of work and eliminating the waste can help a music business become more effective and productive. The right work divides the world into two kinds of people: the ‘busy ones’ and the ‘smart-workers’.

Let’s talk about scalability: value is scalable, but time is not. Being productive, doing the right kind of work, testing a lot before devoting to one specific activity, and finding the right partners to outsource work to, all can contribute towards an efficient and scalable Business Model.

8. Partners/Mediators (PaM)

My favourite block. It describes the network of individuals/organisations that help you accomplish your activities and make the Business Model more effective. Sure, you can do everything by yourself, but external help is often much more efficient.

These strategic relationships can help you obtain Career Assets you did not have before (partner with a band and use the same studio when they don’t use it), reach out to more Customer/Audience Groups (ask a band to send a shoutout about you to their mailing list and social media), access new technology and experiences (collaborate with a governmental organisation that wants to test new technology through music). They can enhance the word of mouth (collaborate with your superfans, giving them incentives to spread about you), distribute your work to external networks (partner with a distributor that will make your music available physically and digitally in specific stores), and so on.

Blatantly speaking,

Strategic partnerships help you get work done without wasting your own resources and time.

Partnerships are a smart thing to do, especially if you are working with restricted resources. Partnerships help you reduce your Business Model’s risk and uncertainty, as well as allow you to take advantage of the economies of scale (for instance, if you partner with another band to create CDs, you can get them cheaper).

One strategic way to think about partnerships: is there any resource/system you are using that could also be used by others? You could grant them access to use it for their own ends.

  • If it’s a digital platform that you have developed for your own use, you could turn it into a software-as-service Music Value Proposition.
  • If it’s a physical platform (series of events, for instance), it could be a great opportunity to allow others to organise these events in other places for you, turning it into a franchise Music Value Proposition.

As you can see, it is great to have your own agenda. However, the most important thing to mention: we are talking about a partnership. Which means, if the other party creates value for your business, you are obliged (whether you’ve signed a legal contract or not) to reciprocate, otherwise you might generate the wrong word of mouth, destroying your hard-earned reputation and by extension, your network. This ethical give-and-take has been with traders since the dawn of humanity and always worked as some kind of social currency.

What I would do, if I were you?

  1. I would see how I could offer help first, without asking anything in return or having an ‘agenda’. I would do some work for free. And I would make sure I do give more than I receive.
  2. I would ensure I have a list of my network available (remember the CRM system?), so I could identify who could help me with which activity and block, in case I ever needed help.
  3. I would ask my satisfied customers/fans/collaborators for referrals.
  4. I would not be afraid to ask for help, in case I needed some. Provided I had given help first.

Let’s talk about scalability: Partners/Mediators can be the key when you decide to scale up. Nurture relationships from an early stage and help a lot — you never know how things might evolve.

9. Expenses (EXP)

The last block is called Expenses. It describes the total cost structure of your business. It comes last, because, in order to figure out what costs might occur and what can be avoided, one needs to have at least a full draft of the Business Model available.

How much does it cost to manufacture the CDs? What are the touring costs? There’s some software you need to buy a subscription for, how much will that cost you? And so on.

Costs can often be reduced with correct planning and strategic partnerships. It is important, though, to make a conscious decision on what kind of music business you want to be: a cost-driven one, or a value-driven one?

  • Cost-driven

These businesses make sure that they minimise their costs as much as possible, often at the expense of the overall experience (think low-cost airlines). This helps them stay competitive in terms of price.

  • Value-driven

These companies structure their business around value, often becoming subject to more expenses than normal. This helps them stay on top of the game when it comes to quality and unique experience.

In my opinion, music businesses are by definition value-driven. You cannot compete on price with an intellectual product that is all about how it makes someone feel. An artistic experience is a thing closer to the very nature of luxury than that of a low-cost airline.

As we’ve seen in before, fans and customers appreciate music subjectively and are willing to pay different price points for the same product, according to how it makes them feel. Which means that, once you start sacrificing the quality of the experience for the sake of lower expenses, then your superfans — your heaviest payers — might turn elsewhere. So, instead of cutting expenses, consider developing strategic partnerships first.

Some practical advice from my own experience: do not attempt to do everything yourself to drive costs down; hire an intern or ask for help and develop a team instead. Even if this means that your costs increase. In the long term you’ll reduce the costs and do things more efficiently.

Let’s talk about scalability: thinking in terms of short-term costs can be a huge mistake. Sometimes costly investments can lead to great long-term results. Ask yourself the question, ‘what would I do, if I didn’t have to worry about the costs?’


Great, now we have an overview on what this Business Model Canvas is about. Your knowledge on the subject will improve by applying everything in practice and by enriching your knowledge with mistakes — it cannot come otherwise. Since every Business Model is personalised, according to your very own needs, having in-depth knowledge of your goals, vision and business structure is the starting point.

If I had to summarise the one major benefit that the Business Model Canvas offers, I would (repeatedly) say that it is the ability to get a glimpse of the big picture. It allows you to see connections clearly (we’ll see this graphically represented in chapter #6), make more well-informed decisions and connect the dots — allowing you to innovate and birth new business models.

Is it difficult to construct one, then? And how much time does it take?

Well, the students of a London university needed just one hour to deconstruct the Miley Cyrus’ Business Model — without any prior experience.

Let’s see how they did it.

Chapter #6

Business model in 1 hour

Grab a napkin. This will be our weapon.

Every business starts with a simple, yet powerful idea. Once it’s valuable to real people and profitable, we scale it up.

But first, we need our napkin plan.

This chapter has to be short to depict the simplicity of our undertaking. After all, it’s an 1-hour method.

Here is my napkin. I drew the basic lines.

Feel free to follow along, as I write down my personalised model. See my rationale and try to apply it to your own idea. Don’t be too precious about whether you’re right or wrong, just do it and see what the outcome is.

Ready?

1-hour napkin plan

I’ll pick one simple MuVaP and will then deploy everything around it. Why? If the triangle MuVaP — CAG — R$ makes sense, then everything else will fall into place too.

In our case, my Music Value Proposition is the ‘interactive, theatrical rock experience’ I’ve created for my live music. (It was highlighted in this essay.) In a nutshell, it is an interactive performance unfolding in front of your eyes, with my music embedded into it. This ‘dresses’ and explains the story of my music dynamically. The audience gets to influence the course of action, too (if they wish to participate).

Who is this referring to? My Customer/Audience Group is ‘artsy adults of all ages, who love theatre and immersive experiences and have more cash to spend’. That means that (probably) I don’t expect kids at or people who want cheap/free pub performances at my show. It’s a conscious decision about who I want to engage with regarding the value I’m offering and, as you can see, I’m quite descriptive with it.

How does the MuVaP make profit, once the CAG receives the value? My Revenue $treams are ‘event tickets, post-show handmade/limited edition memorabilia and patronage (via monthly subscription)’. Having in mind that each customer/fan might want to support me differently, I’m offering different one-off pricing tiers and recurring ways to support the artistic experience I offer.

How do I handle my relationships with the customers/fans? My Communication/Relationships are ‘automatic (ticketing), personal (pre/post-purchase engagement), canned (mailing list), community (superfans)’ and ‘recurring (patronage)’. As you can see, I segment the Communications down to each component of the business model, so I can clarify how I’m engaging with who, while my main goal is not the ticket revenue, but getting more superfans to financially support my work in a recurring way.

Ok, so how will I deliver my MuVaP to the CAG? My Channels of Communication are ‘own website, word of mouth, ticketing service, local communities, review sites’. Since I’m offering a premium experience that is kinda exclusive, my main channels are my owned assets (so we can cut out the mediators and control the experience), while the community will be built through the customers themselves: word of mouth and local communities/review sites.

What assets are necessary for such an undertaking? My Career Assets are ‘brand, human resources, community, reputation, network’. A reputation built around a great theatrical experience will draw business and build the brand/community, while my team and network are invaluable in bringing the vision to life.

What needs to get done to get the business model working? My Essential Activities are ‘rehearse, compose, maintain/grow network, engage community, maintain website, create concepts’. Bringing about the creative part of the project requires constant rehearsing, composing and brainstorming on concepts, while the business side calls for engagement with the network/community and maintaining the website.

How can we obtain value from 3rd parties? My Partners/Mediators are ‘ticketing service, venue, superfans, craftsmen of handmade products, review sites, local communities’. Again, the superfans are the main generators of word of mouth, enhanced by local communities and review sites. Additionally, since our team is comprised purely of musicians, we need to find craftsmen to handcraft the memorabilia that we’ll sell after the event.

Ok, so what is the red area of the model? My Expenses are ‘team salaries, craftsmen percentage, venue fee, ticketing service fee, rehearsal space, website fees’. Most of them are fixed (ticketing, venue, rehearsal, website, salaries), so we can calculate in advance what budget we need for each month. That’s where patronage comes handy. The craftsmen will be paid a percentage of each successful sale.

Well, this is my napkin plan. Pretty tight, isn’t it?

It took me way less than an hour, but that’s because I only focused on one single MuVaP and CAG. When it comes down to creating your personalised Music Business Model, you need to try to write down all the potential elements/scenarios, then start crossing out to focus on the most relevant ones at the current time.

In other words, when you create your own Business Model, just write every single idea down — whether stupid/unrealistic or not. This initial stage is all about brainstorming and compiling a huge list of ideas.

(If you want to create a personalised 1-hour business model together, please get in touch with me at tommy@tommydarker.com.)

Students deconstructed Miley Cyrus

This is what the students of the University of Westminster did when I asked them to break down the Business Model for an artist that everyone knows (in our case, Miley Cyrus).

We brainstormed for an hour and they threw in every possible scenario they could think of. Then, we connected each block with each other. The result? We created a Business Model for Ms. Miley Cyrus.

Now… Cyrus and her label don’t focus equally on each of the elements on the whiteboard. That’s why this model can be simplified by decluttering the less useful elements. It is, however, a dynamic model; each element could be eliminated or prioritised, depending on the timeframe and the commercial/artistic goals of the artist for each period.

Later, I gave them a task: to decode the Business Models for Sam Smith and BBC Sound of 2013. Here you can find some of their assignments: one, two, three.

The point here is, it doesn’t require too much sophistication or experience to create a Business Model on your own. Just a sense of what your goals and vision are. Then, you translate it onto a sheet of paper (or napkin).

Hot questions to ask

Now, I guess you may wonder ‘are there any questions I can ask that can help me generate my business model faster?’

Yes, there are, and let me try and make life easier by highlighting them below.

Music Value Proposition

  • How would you characterise your music?
  • What problems do you solve?
  • Any services you can offer?
  • What experience can you create, instead of a product?
  • Do you have any valuable, transferrable skillsets that you could pass on?
  • What kind of people are you connecting? (which makes you a platform)
  • What does your following know you for (or you’d like them to know you for)?
  • What is your brand about and what themes/ideas/concepts do you stand for?
  • What products or bundles of products can you offer?

Customer/Audience Group

  • Who are your customers so far?
  • What kind of fans do you have?
  • What customers would you ideally like to work with?
  • Who gets most value out of each of your MuVaPs?
  • Who could benefit from your brand and the theme you support?
  • Who do you love engaging with?
  • Which CAG would you rather not engage with at the moment?

Revenue $treams

  • What are your current revenue streams?
  • How many ways have you made money with so far?
  • Any additional ways you’d ideally like to make money with?
  • Does this price reflect your brand/perception of value?
  • Do you offer enough price points, including free?
  • What do your customers really value and are willing to pay for?
  • How much does each R$ contribute to the overall revenue?
  • Which R$s should you eliminate, and which should you focus on?

Communication/Relationships

  • Would you rather be social-first or automate most of your relationships?
  • Would you rather have someone else take care of this bit?
  • Can your community talk with each other?
  • What is your Minimum Viable Living goal (monthly/yearly)?
  • Do you have enough offers to reach that goal?
  • What is your balance between time-for-money activities vs. recurring income activities?
  • At current do you need to focus more on new customers, or on retaining the existing ones?

Channels of Communication

  • How do you deliver your MuVaP to each CAG?
  • Is the Circle of Engagement a seamless and great experience?
  • Have you tested each phase of it?
  • Can customers trust your channels?
  • How can you delight/surprise your customers after each transaction?
  • What will make them talk about you and drive awareness?
  • Are you professional, timely and informative about the delivery phase?
  • Do you provide a Call-To-Action after each transaction?
  • How consistent are your channels? Do they create a pleasant customer routine?

Career Assets

  • What CA are required for each block?
  • What resources would you need to fulfill your vision in the long run?
  • If you had lost all of your money and customers/audience, what Assets could form the foundation of your rebirth?

Essential Activities

  • What are the absolutely essential activities for your music business?
  • How often do you have to do each activity?
  • What kind of work does each block need?
  • Do you know how each activity is carried out in ‘the real world’? Do you have a checklist for it?
  • Can you automate some activities?
  • How can you do the same amount of work in less time?
  • Who can you outsource some activities to?
  • Can you hire interns to get work done for you?

Partners/Mediators

  • What could you do with what third parties could provide?
  • Who could help you with the operation of your Business Model?
  • What activities are outside your capacity, and thus could be outsourced to partners?
  • Do you have the necessary infrastructure for your model to work or do you have to share/partner with someone?
  • Do your fans work already as your partners or is it you against them?
  • How can you minimise costs by partnering with a 3rd party?
  • What value can you bring to the table for your partners?
  • Do you already (and significantly) help your network, without asking anything in return?

Expenses

  • What expenses are associated with each Block?
  • How can you bundle or eliminate them?
  • Who can you partner with to drive costs down?
  • Are you cost-driven or value-driven? (if you’re cost-driven, can you change? And if you think you’re value-driven, can you prove it?)
  • Do current costs prevent you from scaling up?

These are some of the questions I ask myself when it comes to building/re-evaluating my own Business Model. They’re not a formula, just a few rules of thumb I personally use.

Explore whichever questions here that’ll help you complete each block.

After going through this chapter, I’m sure you’ll be able to create your own model in less than an hour.


Great, now we should be a little more optimistic about generating our very own Music Business Model!

Still, wouldn’t it be much more helpful if we had a case study handy? To see what other, more complicated, scenarios and connections could look like…?

We have it.

Let’s fly to Israel to meet a musician with 23 years of experience in the music industry, and explore his case study in the next chapter.

Chapter #7

Case study — Yossi Sassi


Orphaned Land is a band from Israel that has pioneered oriental rock/metal (they are the reference point for this sub-genre of rock), headlining festivals around the world.

Their co-founder, Yossi Sassi, is now developing his solo career, nuancing his sounds with Mediterranean elements, rock and metal, Arabic scales and ethereal melodies.

It was fascinating to sit down with such an experienced and accomplished musician (it was my honour, to be more precise) and develop a business model with him (let alone to get the blessing of his permission to share it with the world).

As a spoiler, his business model is rich with traditional music-related activities, but also with a few unconventional ways of offering value and making an income (at least for the mainstream perception in 2014.)

Let’s dive in, straight away.


The following case study contains parts of my discussion with Yossi, which are then translated into elements for the Business Model Canvas.

Music Value Propositions

When asked about the value he offers, Yossi answered:

“My mindset is all about being more self-aware than self-focused. In my endeavours, I have an angle, which combines authenticity and roots with my passion, music. This is how I created a completely unique instrument, my Bouzoukitara.
During my journey, I acquired various musical and non-musical skillsets, which I now pass on to others (I play 17 different kinds of guitar and traditional instruments). I’m often asked for mentoring about personal relationships and empowerment, infusing people with inspiration and positive energy.
Regarding my art, I aim to keep creating music that is both authentic and that pushes the boundaries. Familiar but also progressive and modern. It blends East with West, rock with folk, traditional acoustic instruments with electric guitars. Music is a legacy, and meaningful music connects people. I am also a touring performer and have produced/composed/arranged numerous albums.
My message talks about multi-nationalism, dualism (hence the creation of the bouzoukitara), innovation, diversity, and being open-minded.
And of course, I also believe that a musician is a startup!”

Interesting insights from Yossi. We brainstormed a bit and discovered that he could speak about innovation, inspiration and creativity to corporate people, bring coolness and prestige to brands (lots of them endorse his equipment already), and understand history’s connection with contemporary culture.

He also possesses academic experience, teaching in universities in Israel, as well as giving international masterclasses about the bouzoukitara. The bouzoukitara itself has a uniqueness and authenticity that could connect with the luxury industry.

Last but not least, he has been working in IT for many years and this extensive programming knowledge allows him to automate certain procedures (such as reports of his activities), as well as translate lessons from one industry to another.

Canvas elements: composer/arranger, touring musician, mentoring (self-awareness, empowerment), themed angle (authenticity and roots with music), social message (multi-nationalism, dualism, diversity), uniqueness and luxury (bouzoukitara), transferrable knowledge (musical/IT skills), boundary-pushing music (rock/metal fused with folk/oriental/mediterranean), corporate speaking (innovation, inspiration, creativity), coolness and prestige (brand endorsements), academic lecturer (guitar techniques, creativity), international instructor (bouzoukitara), music advisor (innovation and culture blends)

Customer/Audience Groups

We discussed who receives that value, and Yossi responded:

“The fans of Orphaned Land are mainly metalheads. Lots of them follow my solo project as well. My core fanbase consists of those who love sophisticated, progressive music. They have a strong relationship with their roots and love folklore within musical elements.
Guitarists are another group that receive value from my skills. I also bring my skills to other artists’ projects, as a guest player, producer etc. The band itself derives value from my experience, reputation, referrals and so on.
Other individuals/organisations that receive value are media platforms (blogs, magazines, review sites), films and series that use my music, universities and schools that invite me as a guest lecturer, as well as conferences and talks (such as TED).”

[Note: check out his amazing talk about the power of music to unite.]

Great thoughts, which connect well with the previous block. We later added a few more elements, such as companies that want to have their staff motivated and inspired, superfans of his bouzoukitara, brands that get a glimpse of his brand/reputation, groups that like to learn about other cultures, and online education platforms.

Canvas elements: progressive metal/rock — folk — oriental music fans (vaguely contemporary world music), guitarists (lessons), fellow artists (collaborations, productions/arrangements, session appearances), the band (experience, reputation, referrals), media channels (interviews, exclusive material), film producers (music synced), schools — universities (lectures, masterclasses), conferences — talks (skillful speaker), Fortune 500 company employees (inspiration, motivation, innovation), brands (coolness, prestige, affiliation), bouzoukitara superfans (tuition, exclusive content, hardware), eastern/western local populations (information about other cultures), online education platforms (online courses, live streaming, calls)

Revenue $treams

After tackling the first two (most crucial) blocks, we moved on to income generation. Here’s what Yossi said:

“Most of my income comes from music-related activities. So far I’ve made money by selling music — in physical (CDs, vinyl) and digital formats (iTunes, Bandcamp, Tunecore, CDBaby, Amazon), selling typical merch (mainly t-shirts), as well as custom, unique ones (pendants, bracelets, logos etc.). However, performing live and touring is my main source of income.
Teaching workshops and masterclasses, as well as giving lectures and talks at music schools, universities and organisations on a variety of topics has been fairly profitable. As an adopter of new technological trends, I’ve also delivered personalised online lessons (in person, too).
Producing music for my band and other artists (locally and internationally) is another revenue stream. When I have time, I also do session work (playing guitar or bouzouki) as a guest for fellow artists’ albums.
Finally, my compositions have been placed in films (sometimes I even compose custom music for them) and through the years I’ve built a big IP portfolio, getting royalties for these tracks.”

Well, there are few things that Yossi hasn’t done!

A few points that we added include some indirectly-music-related (but quite profitable) activities, such as corporate speaking (as mentioned above) with music/creativity/innovation as an angle, a series of products that relate to the uniqueness and authentic vibe of his bouzoukitara, a documentary about his experiences and the unique blend of local cultures (incorporating his views on dualism and multi-nationalism). Plus a superfan club of patrons for his artistic endeavours.

Canvas elements: Selling music (physical, digital), merch (typical, unique & custom), documentary, live performances, workshops — masterclasses, lectures — talks, guitar lessons, series of unique products, corporate speaker, musical productions, film scores, film sync, session player, IP — royalties, fan club

Communication/Relationships

The triangle is complete now. Moving on to the rest of the model, we discussed how he handles relationships and communications. Quite intriguingly, he said:

“I’m people-oriented. I love personal connection. I answer every single message I get.
The way I do it? My first answer is always personal, so I can understand and analyse the purpose of the communication. Is it a compliment? Is it asking for help or advice? Is it about a specific project? To hire me?
Then, I funnel each message to the right direction: to a mailing list, a representative (manager or booking agent) or back to me again. This is a great way to be efficient with my time, which is limited.
From the business I get, I seek recurring patterns when it’s possible. This usually occurs when I really love doing something (so I pursue it as a recurring activity) or when something brings a fair income (so I make the right moves to create recurring income from it, if possible).
Regarding things that are computer-related (metrics, sales etc.), I usually automate them by creating code that generates reports for me.”

Well, that’s brilliant! I had nothing much to add to it.

It’s worth highlighting here that Yossi works mainly on a direct-to-fan basis.

Canvas elements: Initial communication (personal) — then funneled (personal, automatic or representative), automated reporting (code), recurring income if 1) possible 2) enjoyable


[We skipped the Channels of Communication bit, but Yossi mainly conducts these activities through his own website, his strong network and his fans]


Career Assets

This is the most valuable part, where Yossi highlights the importance of strong assets for longevity:

“There are a lot of assets in my career, and I’m blessed to have them in place.
First of all, the reputation (brand name) that I’ve built over time. Orphaned Land is a globally recognised name, and I am the co-founder and pioneer in a niche genre of music that has now reached a broader audience. My vast catalogue of songs (IP) includes over 100 registered songs under my name.
My bouzoukitara (hardware) is another essential asset in my career; an innovative and signature instrument that embodies my journey. It is difficult to replicate and learn to play, so it’s one of its kind.
A major asset is my network (human resources) — the people that I worked with and cannot be replaced because I’ve developed a loyal relationship with them. I first see what’s inside the person (honesty, hard work etc.) and then I move to the skills.
For quite a few years I was also following a career in IT and managed teams of people, so I obtained deep knowledge outside of the music industry, in projects, software, coding, leadership and punctuality. Combining these skills with my extensive musical skillsets — I’m 100% passionate and focused on music — I have created knowledge, skills and experience that can be transferred.
Taking the field of knowledge one step further, I have academic degrees in economics & business management (BA), law (MA), as well as broad knowledge of copyrights. Academic thinking and models have helped me a lot in investigating, being curious and asking ‘why’ about everything.
Finally, my family is a pillar in my career. Without their support, motivation, passion, positive energy and love in my life, I’m not sure I would be where I am now.”

I was speechless. I made sure I was listening carefully and wrote everything down.

Canvas elements: Reputation (brand), IP, network, bouzoukitara, non-musical skillsets, musical skillsets, academic experience/thinking, family

Essential Activities

What does a day/week look like for Yossi? Here’s what he said about his activities:

“Hmmm… without a specific order, I would say: updating social media (where I share ideas & projects), playing music (!!), so it is essential to find time to play every day, staying motivated and planning projects efficiently (as I say, ‘creating dots and planting seeds is the secret’). Also giving lectures, where I make money and share my knowledge/experience, and, finally, responding to email enquiries and fans.
There are many other things I do also, but I think I’d not be able to move forward if I stopped the aforementioned activities.”

Superb! Yossi seems to be a very well-organised musician. All I added in the brainstorming session was to collaborate with one of the universities he’s lecturing at to acquire interns (for short or long-term projects). They would get a great practical experience for their CV and he would get some extra working hands.

Canvas elements: social media, play music, planning efficiently, giving lectures, personal communication

Partners/Mediators

Yossi has a big network of partners, and was happy to share some information about them:

“My manager is a great partner. There are so many things that she gets done. It is great if you have one.
What else? My endorsers, obviously, the artists I collaborate with (many times for free) that bring me exposure and connections, the distributors/label that get my music to online and physical stores, the universities/colleges I’m lecturing at that help me in so many ways, the music business people of my network (A&R, business development etc.), plus various content creators (videographers, image editors etc.). And, last but not least, my promoters and booking agents.
Too many, huh? Oh, and Tommy Darker (haha!)”

Well, except for blushing under my beard, I had nothing else to add here.

Canvas elements: manager, endorsers, collaborating artists, distributors/labels, universities/colleges, promoters/agents, content makers/editors

Expenses

The final block of the Canvas was the red area of each business! Yossi said:

“Ah, expenses (haha). Except for the fixed expenses of my personal life, my ‘music life’ expenses would include the costs of equipment, which are limited (often subsidised by my endorsers), unlike the expenses and time spent on my bouzoukitara, which is a high-maintenance, customised instrument that requires lots of care.
I’d also include my marketing-related expenses, such as reaching out to festivals or using some web-based services, and the money I spend on advertising (mainly on Facebook, Google and YouTube campaigns during the periods of launches and important announcements).
And, of course, the monthly salary I pay for my manager, which is a great investment for both of us.
Oh, sometimes there are some unexpected expenses (or ‘blessed expenses’, as I call them) for flights, hotels and other unexpected activities that happen for a good purpose, feel good and are treated as long-term investments for my career.”

Splendid. That was so interesting! Would I add anything here? Not really, as most of these costs seem unavoidable. I only hinted that there are costs that can be shared with other musicians who share the same goals, especially in marketing (which we call ‘economies of scope’ and ‘economies of scale’).

Canvas elements: gear/maintenance, bouzoukitara (development, maintenance), marketing, ads (Facebook, Google, YouTube), manager fee, unexpected (travelling etc.)

Yossi’s Business Model

As you can probably figure out for yourself, Yossi’s music business contains many of the elements of a successful musician’s career. He has done almost everything, from enjoying mainstream success to reinventing his own sound, from playing sold-out festivals to teaching small classes of musicians.

Why it is important to bear him in mind? This could be the successful you in a few years from now.

If we could see the snapshot of Yossi’s current Music Business Model, it would look like this.

As you can see, most activities are intertwined with each other. One helps another and many of them overlap, making it easy to automate things.

Is everything perfect? Far from it.

Let’s wrap up for now with a quick conclusion.

Conclusion

The problem with Yossi’s Business Model is similar to the problem inherent in most musicians’ models (whether experienced or beginner). It is still a 20th century Business Model.

What do I mean?

There is a serious time-money correlation, which hinders scalability. That is, for this model to make more money, Yossi needs to spend more time working. If Yossi decided to take a break and spend more time with his family for a few weeks, the Business Model would start to become dysfunctional, as it is constructed in a way that requires Yossi to be fully attentive and present most of the time.

If Yossi doesn’t spend time, money doesn’t come and activities don’t get done.
Photo Credit by © Ami Bornstein

Teaching? Speaking? Performing live? Producing? Recording music? The bouzoukitara? All these are activities that require the human presence and cannot be automated, scaled up or delegated.

Before you call me a capitalistic pig, I’ll reassure you it is not just about money. No, it’s about Yossi’s personal welfare. Yossi has a Business Model that cannot take care of him. The Business Model doesn’t care about him, it doesn’t work for him — he hangs on to it.

If he gets sick for 3 weeks, money will stop coming in. If it was your company saying, ‘we appreciate your 23-year contribution to building our business, but, you know, if you get sick, we will stop paying you till you show up healthy again’, you may very well say, ‘Really?! This is not fair. Well, I’ll should probably find somewhere else that will treat me better…

At this point, I should clearly state:

There is a need for the music business models of musicians and labels to be reinvented. The time is right.

I would highlight 3 important points here:

  1. There is no right balance between ‘recurring business’ and ‘time-vs-money business’.
  2. There are ways for the value that Yossi offers to be scaled up, without Yossi having to spend more time on it.
  3. The value you offer is scalable, but your time is scarce.

Finally — and most importantly:

3+1. ‘Busy’ — not Business — Models might need to be revised and de-cluttered. You don’t want to build an empire with years of hard work and sweat, only to discover that without your continuous presence it’ll quickly collapse.

Some questions to help you determine whether your own Business Model is (or will evolve into) a ‘Busy Model’, are these:

  • Is my income heavily correlated to the time I spend working?
  • Can I identify any recurring concepts in my existing model?
  • If I make X income yearly, is there a way to make 5 times X income next year, without spending 5 times more time to it?
  • Are there any elements in my model that are not connected to the rest of it?

Finally:

  • Is there any concept in my business that makes me stand out from everyone else?

This last question creates hope, if you can answer it with a ‘yes’.

If.

Why? We will attempt to answer this question, and many others, in the upcoming essays.

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Tommy Darker is the writing alter ego of an imaginative independent musician and thinker about the future of the music industry. His vision is to simplify scalable concepts and make them work for independent musicians.

He is a writer about the movement of the #Musicpreneur and founder of Darker Music Talks, a global series of discussions between experts and musicians. He and his work have been featured in Berklee, TEDx, Berlin Music Week, ReThink Music, Midem, SAE Institute, University of Westminster, Hypebot and Topspin Media.


Proofread and edited by Koukouvaya.

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