New Music Economy is a term describing the emergent social, technical, political and economic context of the creative industries

Creative industries

The creative industries refers to a range of economic activities which are concerned with the generation or exploitation of knowledge and information...

. This shift in context has been fueled by concurrent evolution within an ecosystem of interdependent technologies, institutions, and individuals; the result of which impacts the nature of creative property, identity, production, distribution and imagination.

The term New Music Economy is evolving out of new consumer behavior

Consumer behaviour

Consumer behaviour is the study of when, why, how, and where people do or do not buy a product. It blends elements from psychology, sociology, social anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups...

, methods of promotion and sales.

Term usage history

Notable changes in the economic stability of the music industry started in the late 1990s with the advent of P2P file sharing

File sharing

File sharing is the practice of distributing or providing access to digitally stored information, such as computer programs, multimedia , documents, or electronic books. It may be implemented through a variety of ways...

. The Long Tail

The Long Tail

The Long Tail or long tail refers to the statistical property that a larger share of population rests within the tail of a probability distribution than observed under a 'normal' or Gaussian distribution...

 theory is a benchmark in the music industry for new economic concepts. The nuance of infinite shelf space opened up economic opportunity for independent record labels around the world. The term New Music Economy first emerged in 2007.

• Tim Westergren (Founder & CSO, Pandora) & Gideon D'Arcangelo (New York University) lead an event March 13, 2007 in Palo Alto, CA titled "Social Interactions in the New Music Economy"
• Venture Capitalist Fred Wilson began using the term "New Music Economy" in his blog on April 4, 2008.
• The San Fran Music Tech Summit used the term "New Music Economy" as a title of a Marketing Panel on May 8, 2008. The Panel & Audience of thought leaders attempted to create a formal definition for New Music Economy. The group wrote a list with 12 necessary components in defining the term New Music Economy:
  • Music Licensing
  • Co-Marketing
  • Branding with New Tools
  • Non Traditional Retail Space
  • Digital Distribution
  • Internet-Specific Content
  • Fan Artist Relationship Management
  • Quality Control
  • Content Management System Structures
  • Legal Structures
  • Live Performance
  • Incorporation of Attention Economy Principles in Marketing Strategies

Music Licensing

Bands, artists & labels are able to utilize music licensing

Music licensing

Music licensing is the licensed use of copyrighted music. Music licensing is intended to ensure that the creators of musical works get paid for their work. A purchaser of recorded music owns the media on which the music is stored, not the music itself...

 for opportunity. Businesses are legally required to pay for the music they use to promote their product. Music has a positive effect on consumer behavior

Co-Marketing

Brands and bands joining together to market their product in sync

Branding

Bands, artists & record label

Record label

In the music industry, a record label is a brand and a trademark associated with the marketing of music recordings and music videos. Most commonly, a record label is the company that manages such brands and trademarks, coordinates the production, manufacture, distribution, marketing and promotion,...

s using digital tools such as widgets, social networks, avatars, and icons

Non Traditional Retail Space

Selling music in businesses that don't normally sell music

Digital Distribution

(For sale and marketing purposes), including music, merchandise, video, concert tickets

Internet Specific Content

Creating and using content online to drive fans toward exclusive content of economic value to the band/ artist/ label

Fan Artist Relationship Management

Creation, moderation and maintenance of fan groups, fan sites

Fansite

A fansite, fan site, or fanpage is a website created and maintained by a fan or devotee interested in a celebrity, thing, or a particular cultural phenomenon...

 and fan activities which includes exchanges of data ranging from email addresses to shared taste in music. Increased interaction between fans and artists/ bands/ labels with the use of blogs, fan clubs, forums, SMS, geo tagging

Quality Control

Boutique licensing agencies, promotional companies, licensees, record labels and broadcasters focusing on curation & quality

Content Management Systems

Content Management Systems

Content management system

A content management system is a system providing a collection of procedures used to manage work flow in a collaborative environment. These procedures can be manual or computer-based...

 (CMS) for bands, labels & artists, building development platforms for artist content and aggregating data for artist usability

Legal Structures

Exploration, interpretation and invocation of music law to accommodate real changes in technology (example: DMCA)

Live Performance

Bands & artists utilize new tools to book shows, accrue audiences who will attend shows, communicate tour dates to fans, sell tickets to fans, broadcast performances to fans who are unable to attend, provide attendees with immediate recordings of live performances, perform in creative venues ranging from vineyards (Wente Vineyards) to virtual worlds such as Second Life

Second Life

Second Life is an online virtual world developed by Linden Lab. It was launched on June 23, 2003. A number of free client programs, or Viewers, enable Second Life users, called Residents, to interact with each other through avatars...

.

Incorporation of Attention Economy Principles in Marketing Strategies

Monitoring attention of consumers online with new metrics and measurements of consumption, rating systems and time spent

External links

• Interactions in the New Music Economy http://www.baychi.org/calendar/20070313/
• San Fran Music Tech http://sanfranmusictech.com