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 2 #1 challenge Business Model Innovation 3 4 What does the academic literature tell us about business model innovation? 5 What did we learn from the digitalization of the industry? 6 How did the majors change their business models 1998-2008 7 Research on Business Model Innovation (Lecocq & Demi, 2006) Resources & Competencies Value Proposition Organization Revenue structure Cost structure 8 9 Economic concepts Value creation VS. Value capture 10 1. Business Model Optimization Resources & Competencies Value Proposition Organization Revenue structure Cost structure 2. Creating value in alternative activity systems Resources & Competencies Value Proposition Organization Revenue structure Cost structure 11 3. Redefinition of the scope of activities Resources & Competencies Value Proposition Organization Revenue structure Cost structure 12 13 4. New BM Resources & Competencies Value Proposition Organization Revenue structure Cost structure 4 Innovation Strategies Logic BM optimization Creating value in alternative activity systems Redefinition of the scope of activities New BM Impact on RCOV RC V O RC V O RC V Restructurations Change the structure of external activities Partner with electronics manufacturers to introduce bundled offers Stop manufacturing discs O RC V Examples O Develop live-music entertainment (Warner 360°) 14 15 Value creation Creating value in alternative activity system New BM Less risk More innovation BM optimization Redefinition of the scope of activity Value capture 16 Number of decisions Dynamic perspective 60 50 New BM 40 Redefinition of the scope of activities 30 Creating value in alternative activity systems 20 BM optimization 10 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Interactions with external networks enhance innovation 17 Value capture vs. Value creation 18 Are they solutions to the problem? 19 20 Business Model Innovation The Case of the Record Industry Emilien Moyon, PhD Program Director Global Entertainment & Music Business Associate Professor