Paris de L'Etraz. Professor. IE Business School
2 January 2014
Internet and apps are revolutionizing the music industry by enabling young entrepreneurs to develop their business ideas in this sector.
The convergence of the world of music and brands is moving closer all the time. Until recently students had to make a much greater effort to render the world of music compatible with business models that worked, but now Internet and apps have changed all that. For example, recently I saw a presentation by a group of young entrepreneurs from Valencia studying at the Berklee School of Music of a project that lets people compose their own music using sounds taken from well-known songs or musical themes. Is there a market for that kind of thing?
If we apply the "Lean Startup" methodology, we could create a minimum viable product (MVP) to test the level of acceptance the product would have in the market. The MVP, in this case, would be a small series of songs created using sounds from known songs in order to showcase the idea. Once we have this MVP we have to launch it on the market together with an online survey. In order to gauge if there really is a market for our business we have to first confirm if there are consumers out there that value the origin of the products they use. If it turns out that the origin of the product is important for them, they will enjoy the product much more.
In order to confirm this, you have to put it to the test with questions like: Is there a need for a product like yours? Is there a market willing to pay more for software that helps you design songs? Is the idea interesting enough to justify creating a platform? Depending on responses to the questionnaire, you could put the attractiveness of the idea and business model to the test. There are great ideas out there, but sometimes they are aimed at markets that are not willing to pay for them.
It was with the objective of examining entrepreneurship potential in the music industry that we recently organized the IE Berklee Rethink Music Venture Day in Berlín, a competition organized jointly by IE Business School, Berklee College of Music, and Midem, in which German, French, Swedish and American entrepreneurs took part. The event included talks, and round tables with investors and top managers from companies like Napster, Soundcloud, Crown Talent, Creandum, Epidemic Sound and Ampya. The competition was won by a team of entrepreneurs that transform data into musical movement and see their idea as a base for the karaoke of the future. The second prize went to a French business that had developed a platform for concerts. The third prize was won by a team of entrepreneurs from IE Business School who have designed a platform that enables you to share music with your friends while you are listening to it. All these ideas show that the future holds potential for entrepreneurs in the music industry.