5 Reasons that startup does not get into the music industry

To run a social app , a startup just need to create a platform , then let the users create the content . Game just needs to be made once and it only took a few times after a patch or update . E - commerce needs more investment , but making money from this sector is fairly easy as long as your product is good . Thirdly it is some kind of business model pursued by startups that I think is more realistic than the music .
But that fact does not deter attempts startup to get into this industry . In the past few months alone , there are several music services that appear in Southeast Asia such as Indonesia and MUSiiCO of Amplify from the Philippines . Although both eyeing the local market , I 'm sure they will still be difficult . In China also there Jing.fm , but I think a matter of time until they disappeared under the shadow Xiami Alibaba . Here are some of the reasons why all of a startup that I mentioned above will not be successful , and why I recommend all technology entrepreneurs to not get into the music industry .
Initial license fee
Even before you start , you have to buy the rights to distribute your music collection first. Creating a music player is no longer enough . Customers now want to listen to music , and if your music collection is less , even though the local market , users will not want to use your services . This problem may be easier to bear if your focus is local music . But remember that finding and releasing new music is a never-ending task , and you can not expect musicians will come to you in the early stages . If you want to expand to other countries , you have to deal with different laws .
Heavy competition from big names
There Spotify and iTunes in the west , Xiami in China , and dozens of others . Now there have been at least one site that can meet a variety of tastes and habits of the user . Want a new indie music ? There Hype Machine . Want to become a virtual DJ ? There Turntable.fm . Want to put the devil's music band made ​​your neighbor ? There Soundcloud . Large companies with lots of money and have a large user base such as Tencent and Netease of China and DeNA from Japan often try to enter the music market and never succeeded . In fact , if you manage to find a market that is still empty , large firms can easily imitate and implement your ideas .
Monetasinya difficult
Do not be fooled by its popularity : the music streaming service trouble making money . Spotify does not ever turn a profit . Pandora also at a loss and have to pay royalties . Xiami fortunate purchased by Alibaba , but it remains unclear how monetisasinya . For iTunes Do people still buy music from iTunes ? If you know how to make money or even profit from the music industry , you do not need to worry about everything that we have mentioned here .
piracy
Besides competition , piracy is still a big problem in the music industry , especially in Asia , where intellectual property rights and copyright are not so protected ( maybe even not protected at all ) . You may be prosecuted as a distributor of pirated music , not as people who download music illegally . So , create a service for the hijackers ( eg Limewire ) may not be the safe path .
stay away
I do not want to say that the distribution is the only business model that can be applied in the music industry . Soundhound , Songkick , and Nwplyng are some examples of applications related to music that does not provide services to listen to music . They also integrate themselves with the big names at the top . Without substantial funds , most of the music startup will only reap failure .