Creativity on developing business models

In our last class we discovered a beautiful and innovative web site called Musicovery. Musicovery has created a beautiful gadget for its customers, well done. For me it’s almost perfect, I can select my music from different periods, different genres, and different mood as well. What else I need, its really brilliant web site. We have discussed at the class the business model used in Musicovery, and we came to know that their revenue comes mainly from the advertisements, commissions on downloads and the premium memberships. I guess we have agreed as well during the class that this business model is sustainable, but after the class I was wondering how could it be sustainable with many others competitors on the scene. I am sure that there are many other businesses like Musicovery which offer music worldwide, not to mention the ones that offer a free downloads of music. As you can see the competition is fierce and only few businesses could survive from my point of view.

Companies have to come up with new business models to guarantee their sustainability. I came across a web site called Musana where the publisher on the first page specified their business offer which I found it unique. They are going to offer the following:
• Store individual customer’s music, CDs in a digital locker created for each and every one (isn’t that interesting!!)
• The customers will be able to listen to their music anywhere, using internet or their cell phone
• Customers will be able to share their taste with other friends on line or on their blogs.

Let’s look into this unique business model and analyze it. The web publisher is offering the customer the chance to upload their own music and CDs.
From my point of view, this offer solves so many problems for the customers. They would be able to store all their music in one place, instead of scattering them among the CDs, laptops, iPods or MP3. In another way, the customer here will be able to create his own digital music library.

As to the web publisher, the idea of allowing customer to upload their own music has saved him the hassle of finding contents providers or retailers (as we have seen in Musicovery case) and conduct a deal with them.

I am sure that many people will be interested on this web site. Regardless of the age group that might be attracted to this site, the customers will surely have a treasure of personal play lists that they like to share it with others. Also, they could be that curious types who like to explore others taste on music. In either way, I think the idea is brilliant.

Let’s look now at the source of revenue from this business model:

• The up-load will be free and I assume the storage would be free as well, if not then it will be source of revenue for the publisher.

• As to being able to listen to the music from the customer’s mobile, I assume this could be free, what the customer need to do, is just to create a profile and log in name and password and bingo, he can log in whenever he/she wishes and listen to his own selection of music.

• Sharing music could be a source of revenue for the web publisher. Say I was on line and I got another friend on line as well, both of us have already our own music play list. We can exchange our music on line and the web publisher can charge us for that.

• The main source of revenue for sure would be the advertisements on the web site.

We have witnessed a rise of some startups companies on the digital world, where within few years they grow to become global leaders, they receive millions of views per day. Good examples here are: YouTube, MySpace and FaceBook.

What makes all these businesses successful? I believe the innovation does that. Being creative and customize the products to customers to suit their tastes is the main reason behind the success of any business.

On the other hand, consumers have changed. We have experienced recently a shift on consumer’s behaviour especially on communication. Consumers nowadays prefer to use the e-mailing, mobiles, SMSs, personal blogs, and on-line communities as a way of communication. Also, you can see them actively getting involved on the voting for reality TV shows and they like to post their own video creations on the web.

As a result of that, businesses need to react and leverage their businesses with creativity.