The Gift Economy and how it can be applied to today’s music industry
Yannis Iliopoulos, our Music Business & Entrepreneurship tutor, tells all on his research into the Gift Economy...
The music industry has changed beyond all recognition in the last decade.
With digital music and music streaming now the norm and the power seemingly more in the hands of independent artists than ever before, there have been dramatic developments within the sector. But what changes could be next?
Yannis Iliopoulos, our Associate Teaching Fellow in Music Business & Entrepreneurship tutor, believes the financial structures surrounding the industry have the potential to morph too, an idea he has explored with his research into the concept of the Gift Economy. This premise pivots on how services or goods are exchanged without relying on monetary gain.
We caught up with Yannis to learn more about his research and where he thinks the music industry's ecosystem is headed...
How did you begin your research into the Gift Economy?
Initially my research was on the power of the subscription business model. In 2014, when I was researching its early success, I started speculating that by the end of 2020s everything will be available to consumers through them.
Even though back then, the model was not as dominant as today, it wasn’t hard to predict that the concept of accessing goods via a subscription would quickly become far more attractive to consumers than the traditional concepts of purchase and ownership. This was especially since the growing pace of technological developments could soon deem the ownership of certain products financially meaningless.
I started incorporating in my lectures my prediction that within 10-15 years from 2014, 'everything will become a subscription', claiming that all of our fundamental needs would eventually be covered through a monthly subscription package."
I took my prediction as far as claiming that the companies controlling access to the internet would eventually control everything, since they would be the ones more likely to offer those monthly 'life packages'. They would cover bills for everything you would need to go about your life, i.e. energy, communication, transport, groceries, entertainment, education, main types of insurance and basic shopping (clothes, shoes, personal care etc).
The companies offering these packages would become more significant in defining our identity. Therefore, we might see our society restructured and regrouped according to the brands we pay our monthly subscription to,in order to live. Hence, we might end up being classified as the 'Apple' people, the 'Google' people, the 'Amazon' people, the 'Tesla' people and so on.
In addition to this, my 2014 prediction concluded that further down the line, possibly by the end of 2050s, 'everything will become free' and then 'humanity will be free at last' (free has two meanings here!).
It was an arbitrary, bold and provocative statement that caused intense reactions in the classroom, but I truly felt that somehow money would eventually collapse. I just didn’t know what money could be replaced with. This prediction was jokingly referred to by my students as 'Yannis’ Law’, in the absence of a more innovative name (!)
What were the next steps with your research?
A few months later I was researching competitive strategies in order to build a unique selling point for the newly founded UK offshoot of my record label, The Sound Of Everything Records. I came across several case studies on how hard it is to compete with companies that offer free products to consumers (YouTube, Google, WhatsApp etc). It made me think that I had to adopt free products and services in my offering If I wanted to see my label grow faster and safer.
I started researching the Gift Economy in more detail, then I connected the dots between the power of 'free', the power of the subscription model and my gut feeling that 'everything will eventually become free'. I realised that the hidden answer behind all these issues is kindness!
Kindness will replace money! How silly and utopian this sounds … true, but I was a man on a mission and wanted to see just how far kindness could go within a business context.
How did you do this?
Well the music business was the easiest industry to begin my research with. Why? Because clearly Gift Economy is commonly applied by artists as a critical part of the initial phase of their development. Unsurprisingly though, the businesses and investors, who exploit or administer intellectual property are not interested in embracing this model.
I wanted to explore whether Gift Economy could be implemented in a way that is attractive to investors. In simple words, I had to test whether it could be a valid and effective business model for monetising services provided to artists and creators."
This marked the beginning of my experiment around early 2015.
What is the main premise of how the Gift Economy idea could be applied to music industry intellectual property?
My principal aim was to investigate the relationship between the investor offering the services in the form of a 'gift' and the creator receiving it.
I started offering my services to selected artists for free and documented each side’s expectations, intentions and their ability to communicate those effectively.
I thought the main keyword of this experiment would be either ‘free’, ‘gift’, ‘freedom (no commitment)’, or ‘kindness’.
It became obvious after a few case studies, that the most prominent keyword of the experiment was actually ‘trust’!
There is a sense of trust and gratitude inherent in a relationship under this model which is very powerful. Hence the main premise of my research, is that since Gift Economy is very effective in building trust and trust has tremendous value for all the parties engaging in a business relationship (especially in a copyright-based industry such as the music industry). So there must be an efficient way to convert trust into money!
Ultimately, trust is what holds our society and economy together. So if using Gift Economy is a powerful mechanism to build trust, we should be able to use this trust to generate revenue, in a fair, transparent and mutually beneficial way.
What is next for you and this research?
Due to the recent disruptive developments in banking, investing and cryptocurrency, we will soon have to redefine money, whereas trust remains conceptually unaffected.
A ‘kindness revolution’ has already begun. Clever businesses finally realise why kindness actually pays off and how generosity is contagious. Successful companies now appreciate the power of making kindness the foundation of their brand."
Gifted leaders put empathy and compassion as their priorities towards every person they lead.
I am striving to be part of this revolution by showing that Gift Economy is a simple and very effective way of building trust, co-creating value and most importantly generate revenue in a fair and transparent way.
Follow Yannis on LinkedIn for more insights into his research.
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