Jon Vanhala, SVP of Digital Strategy & New Business at Island Def Jam, spoke to Billboard after his presentation at the Billboard FutureSounds conference titled "Applying the API Model To Music Product Development" about music apps, startup companies and the differences between audiences for access models like Spotify and Rdio and ownership models like the iTunes Music Store or physical album sales.
Vanhala discussed the issue with labels spending money on building their own apps without a guarantee of an investment return, leading to their collaborations with startups like EchoNest and, which spreads the monetary risk around and ensures that they can get more high-quality apps out into the marketplace faster. He also quoted studies that said that access models of music consumption do not necessarily cannibalize the audience of ownership models, but that in fact the two attract different demographics. "I don't have many concerns over that cannibalization factor," he said. "I see new revenue opportunities."
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