The Future of Digital Music Services in Three Stereotypes; How Focus Groups of End Users See the New Business Models

“I am just a stereotype” sang Terry Hall in 1980. Ariola records took them in and made the band The Specials a world success. How will that process go in 2014? Will they put it on You Tube for free? Do they need a record company? Will they have less or more fans, earn less or more money? Focus group interviews with 90 people between the ages of 15 and 25 were successfully employed to create 20 new business models for the digital music industry. Analysis with grounded theory revealed that a new business model is necessary and three types for future music services to create and capture value from digital music were found: Social focus; Artist focus and Extra Value focus. More than 50% of the research subjects put the emphasis on social functionalities of the music services, while the value network was underestimated. For artists we see opportunities and threats in the business models: on one hand they can use the worldwide niches to earn money, on the other hand the new business models do not seem to reimburse them enough. Finally, value capture is an overall problem that is best solved in the extra value focus business models. A combination of the three types using the best of each of them guides the way to a successful business model of the future.