Business Model Innovation The Case of the Record Industry Emilien Moyon, PhD Program Director Global Entertainment & Music Business Associate Professor

What are the most successful music companies/organizations? 1

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#1 challenge Business Model Innovation 3

What does the academic literature tell us about business model innovation? 4

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What did we learn from the digitalization of the industry? 6

How did the majors change their business models

Research on Business Model Innovation (Lecocq & Demi, 2006) Resources & Competencies Organization Value Proposition Revenue structure Cost structure 8

Economic concepts 9 Value creation VS. Value capture

1. Business Model Optimization Resources & Competencies Organization Value Proposition Revenue structure Cost structure 10

2. Creating value in alternative activity systems Resources & Competencies Organization Value Proposition Revenue structure Cost structure 11

3. Redefinition of the scope of activities Resources & Competencies Organization Value Proposition Revenue structure Cost structure 12

4. New BM Resources & Competencies Organization Value Proposition Revenue structure Cost structure 13

4 Innovation Strategies Logic Impact on RCOV Examples BM optimization Restructurations Change the structure of external activities Creating value in alternative activity systems Partner with electronics manufacturers to introduce bundled offers Redefinition of the scope of activities Stop manufacturing discs New BM Develop live-music entertainment (Warner 360°) 14

15 Creating value in alternative activity system New BM BM optimization Redefinition of the scope of activity Value creation Value capture Less riskMore innovation

Number of decisions Dynamic perspective 16

Interactions with external networks enhance innovation 17

Value capture vs. Value creation 18

Are they solutions to the problem? 19

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Business Model Innovation The Case of the Record Industry Emilien Moyon, PhD Program Director Global Entertainment & Music Business Associate Professor