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When we last we spoke, I said that customisation was the best approach to the web. Making your own internet out of the tools provided. Let’s go one step further. Let’s make NEW internet out of the building blocks we find.

toolkitMaking money with music online takes more than just uploading your mp3s to the internet and hoping for the best.

Marketing is important, but perhaps even more so, innovation and the design of new services is going to be the key to online music success. Fortunately, we’re in a very specific period of history that makes this process very simple.

I teach a class at UCE Birmingham called Music Online. It’s a second year undergraduate module that forms part of the Music Industries degree, and is an optional module for the other media specialisms. I have journalists, TV students, radio students, media photographers, web & new media specialists and PR students — as well as the odd broad course Media student.

In it, we talk about the sorts of things this blog is all about: what the online environment means for the music industries. We take “Music” to mean everything from music education right through to record labels, retailers, managers, sound engineers, publishers and venues — and we take “Online” to mean far more than just the web.

There are a number of metaphors I like to use to explain the online environment, one of which is that it’s like electricity.

A web browser is like a toaster: an appliance that you can plug in to that electricity.

There are other appliances (email clients, ftp programmes, chat, IM and a good deal more) — and lots of room for more to be invented. It’s a good idea to think of it this way, because some things work better than others for different purposes.

You could probably dry your hair with a toaster if you put your mind to it, but that doesn’t mean it’s necessarily the best tool for the job. Likewise for the online promotion, distribution and management of music.

With that in mind, it’s helpful to think of ways you could innovate in order to reap economic benefits to your business that go beyond the ‘off the shelf’ website with (for instance) a contact page, ‘about us’, a gallery and download shop. While you might still like to have that particular appliance in your arsenal, you might also wish for a hairdryer (and with that, I think we can finish with the appliance metaphor — you get the idea…).

As I see it, there are three phases of innovation in any new media environment:

1) When the environment first comes on the scene, there’s a blank canvas. So someone invents a web browser. Someone does the file transfer protocol thing. Someone else invents a chat programme. Another person invents RSS. Before long, we start to have all of the most fundamental tools that the environment allows for.

2) Then there’s a second phase of innovation. It’s a kitset approach. Someone takes the idea of file transfer, and puts it together with RSS to create the media enclosure — and hey presto! Podcasting is born. It’s not a new idea, as such, it’s a combination of older ideas put together in a new way to solve a problem or address an issue. That’s the second phase — one of intellectual experimentation and assembly, rather than of pure invention.

3) Like the first one, the third phase of innovation is a bit tough. It’s when it looks like everything that can be invented has already been invented. All of the combinations have been tried, and in order to come up with something new, one has to genuinely look at the world in a completely fresh way, and enter a crowded landscape with something truly revolutionary in order to make any sort of a mark.

We’re not there yet. Things are moving quickly, but we’re still only really toward the beginning of phase two. The kitset stage — where innovation is as easy as looking at two technologies, and asking ‘how could I put these two things together in a new and helpful way that will be of use to this particular activity?

And for that, we need to fully understand what each of these technologies enhance and encourage — and what they de-emphasise. In other words, there’s plenty of innovation to be done, and it’s really easy to do… but you have to understand the raw materials first.

Is there a way, for instance, you could integrate bittorrent with instant messaging in a way that would be useful to the music education sector? A way that streaming audio and RSS feeds could combine to help venues? That email and user-generated content could be integrated to benefit record labels?

It’s this sort of kitset connection-making that opens up the simplest — and probably most economically vibrant — sorts of innovation, and now is exactly the time to be making them.

My students have to come up with a proposal and prototype for a new online music venture that would benefit existing types of music enterprise, or create a new one… and their success will be largely linked to the actual viability of such creative endeavours.

They’re in exactly the right position to make these sorts of connections, assemble something new and interesting that would constitute a genuinely helpful innovation for the music industries. And I hope they become very wealthy as a result.

But it’s a simple technique, and a straightforward brainstorming approach. There’s nothing difficult going on here, and plenty of room for you to do the same. There’s nothing to stop you having these sorts of ideas of your own as well… and I hope they provide you with some new and interesting routes to revenue generation, audience growth, cost-cutting, marketing strategies, new efficiencies — or some other form of economic advantage.