When Business Models Go Bad: The Music Industry's Future

The music industry is an interesting example for how business models from the pre-Internet area can get into trouble in the new Internet-based economy. Since 2000, the music industry has suffered declining sales, and very often this is attributed to the advent of the Internet-based peer-to-peer file sharing programs. We argue that this explanation is only one of several possible explanations, and that the general decrease in the economic indicators is a more reasonable way to explain the declining sales. Whatever the reason for the declining sales may be, the question remains what the music industry could and should do to stop the decline in revenue. The current strategy of the music industry is centered around protecting their traditional business model through technical measures and in parallel working towards legally protecting the technical measures. It remains to be seen whether this approach is successful, and whether the resulting landscape of tightly controlled digital content distribution is technically feasible and accepted by the consumers. We argue that the search for new business models is the better way to go, even though it may take some time and effort to identify these business models.