Unsustainable Business Models?

Posted by tom.dennehy (M) on August 8, 2012 at 18:12:01

I just had an op-ed piece published at Music Think Tank (link below) discussing how some enterprises respond to their business models tanking. In particular, I highlighted four music/audio business models that may be unsustainable in the long run:

1. Selling music on CD. Why? Unless you are in the business of Christmas music, sales have been falling since 2010 and the pace of decline is accelerating. CD is a dying format.

2. Manufacturing electronics only targeting consumers who listen to physical media in dedicated listening rooms. Why? The mobile generation doesn't listen to music this way, and there is no evidence their habits and preferences will change once they start nesting.

3. Selling MP3-quality digital downloads. Why? Streaming services may render music (file) ownership obsolete, though not immediately. It is possible to imagine a post-iTunes world.

4. Listener-paid streaming services with only low-res content. Why? The software industry would call this level of service a reader/viewer app. If there is one universal truth in the software biz, it's that the reader is always free.

What do you think? Are these business models destined for the scrap heap of history? Are there others equally vulnerable?

Cheers!

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