It is the continuous development of digitalization, internet, transmission and bandwidth technologies that changes the delivery of music from physical to digital since 1999. The recent rapid growth of digital music market has introduced a new age of music industry. The objective of this thesis is to study the new business model of digital music industry. Without the unanimous consent of the definition of “business model”, we first define this term as “A simple framework in which one corporation can explain its operating manners and elements essential to create benefits, and to be different from those of other competitors.” And all the succeeding discussion is developed with this definition. There are mainly two parts in this thesis. One is to study what are the key factors that led to the evolution of business model by comparing how customers get the music through traditional and digital channels. A conclusion regarding the fundamentals of business model in digital music industry will be reached in the end of this part. The other part focuses on real case study to examinate the accuracy of the foregoing conclusion. In the end, we will also come to our opinions and suggestions to Taiwanese corporation who participates or will participate in the digital music industry.