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The Growth of 'Networked' Business Models
By Eric de Fontenay (Founder & Publisher)
(more articles from this author)
2003-03-19
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I've recently been writing of what I see as a transformation of the digital music industry into a sector focused on providing real value through paid services targeting untapped markets over the initial paradigm of offering exposure through free distribution. Underlying the change is a growing appreciation for the role of network effects in the distributed environment that is the Net.

A recent example is Live365's Online Music Library that provides a one-stop service for musicians and labels to pitch their recordings for airplay over the web to Live365 5,000+ webcasters. In this case, Live365 is leveraging its control and ability to streamline access over a network of radio webcasters, tapping into economies of scale and scope that no one webcasters would be able to provide. At the same time, it provides a much more compelling rationale for subsidizing free services offered to existing & prospective webcasters as the value of the Online Music Library service is a function of the size and diversity of its network.

In our own case, we began building a community of music sites around the free syndication of selected content published in MusicDish. A little over a year later, Content Express has grown into a web music network of over 150 member sites featuring sponsor-supported original web content. Similarly to Live365's Online Music Library, Content Express builds on MusicDish's web content production capabilities with a reach that extends well beyond our own media properties.

The latest example of 'networked' business models brings together a collective of some of the top webcasting stations into the Internet Radio Marketing Group, a network focused on leveraging marketing opportunities to advertisers. Much as Live365 & MusicDish, the collective hopes to tap into the "significant critical mass" and network dynamics created by its own collective to work with "advertising agencies, rep firms, and clients to develop advertising and marketing solutions that reach this unique audience." Ironically, the Internet Radio Marketing Group also reflects another trend advocated by FullAudio of targeting the untapped older music market by focusing on the 'lucrative' 25 to 54 year old demographic and offering more 'mature' range of programming.

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