Chris Dixon wrote a great piece on the developing experience economy. An excerpt:
An economy of experiences is emerging in [place of an economy of products]. Experiences make people happier than products (a fact that scientific studies support). The popularity of experiences like music concerts has skyrocketed compared to corresponding products like music recordings. Apple, the most valuable company in the world, maniacally focuses on product experiences, down to minute details like the experience of unboxing an iPhone. Customers want to know where their food and clothes come from, so they can understand the experiences surrounding them.
Going to a concert is an experience. Sharing music with friends is an experience. Talking about music online is an experience. Watching a live stream of an intimate performance is an experience. Reading about an artist is an experience. Wearing a band t-shirt and being noticed by fellow fans is an experience. Tailgating is an experience. Music streaming, and broadcasting your listening behavior on facebook is an experience. Contributing to a Kickstarter is an experience, even if you might get a product as a reward. The music business is so rich in experiences that our insistence on focusing on the product, buying a set of digital files to own, boggles the mind.
Ben Elowitz speaks on the need for companies formerly self-identifying as content management companies to more strongly focus on audience development. This includes newspapers and other publications, but it includes traditional record companies.
Media companies have collectively spent billions of dollars on content management systems. As they upgraded their offline businesses to the digital world, they turned to big enterprise systems to organize their content in an orderly digital database. [...] But after so much investment in such important systems, why are media companies still miles away from a profitable model? In part, it’s because these intricately designed systems have been based on one big misunderstanding: that a media company’s most valuable asset is content.
Companies that are primarily advertisement driven, like newspapers, should realize that content is there only to draw in an audience. The audience is where the value lies, because advertisers pay for eyeballs, not content. Companies that focus on the sale of content, like traditional record labels, should determine whether or not the changes in consumer behavior warrant changes in the way they approach their content and their audience. Artists fall in the middle as they can sell both eyeballs, through brand collaborations and sponsors, as well as content and experiences.
Monetizing an artist’s audience is a key necessity as consumer behavior shifts away from buying the content. Fred Wilson comments and focuses on the newspaper industry:
[...] a few fundamental facts about the internet: First, you need to make your content available for search engines and social media linking. That drives as much as half or more of the visits these days. And if you have an ad model at all, and most newspapers do, then you need those visits and that audience. Its also true that the ‘drive by’
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