Music. Marketing. Social Media.

Because I reference my parent company in this post, I’d like to point you to my disclaimer:

This blog expresses my personal opinions and not the opinions of anyone else… unless they’re being interviewed or I’m summarizing something they said – then it does. In any case, this blog is mine and mine alone. I reserve the right to be a “typical female” with regards to opinions and change them frequently and without logical explanation. If you disagree with my opinions you’re welcome to comment, but please do say something slightly intelligent (or positive, we all love a compliment!).

Bonus points if your comment is intelligent AND positive!

My blog may come across as slightly sarcastic at times. That’s because I’m slightly sarcastic at times. Again, this is me, not my employer, my family, my friends or my favorite cactus talking.

Music Industry + Publishing Industry = Same Fundamental Problem

Someone from my company explicitly pointed this out last week, and the sentiment was reinforced by Bill at the Clive Davis SoundCTRL event, as well as post-event discussions with David E. Beats.

The music industry is trying to get their consumers to pay for something that the consumer now believes should be free. Music.

The publishing industry is trying to get their consumers to pay for something that the consumer now believes should be free. Content.

It’s the same problem.

Now, each industry has resorted to increasing focus on their main revenue streams, or capitalizing on the “safest” revenue streams. Things like subscriptions, ad sales, 360 degree record deals, etc.

The real crux of the problem though, is that these are the “old school” ways of making money.

I’m not saying they’re wrong, but I am saying that they can be improved upon.

The disconnect is this: if people fundamentally believe that the product you’re selling should be 100% free, you need to take that into consideration. Their perception isn’t very likely to change with regards to content or music at any point soon, and if anything, MORE of the public are waking up to this “it should be free” idea.

So. You’re a large music or publishing company (in Bill’s case, you’re both – JOY!) and you wake up one day and decide to tackle the problem of “How can I update my business model so that it not only fulfills the needs of my customers, but also makes me money in the short and long-term?”

What do you do?

If I had the answer to that I certainly wouldn’t be writing this blog… I’d be making millions consulting.

In all seriousness, that IS the question. What do these companies do in the midst of not only “the current economic climate”, but also the seismic shifts in their respective industries.

One option is what they’re doing – going back to what works and sticking with that until they figure things out.

Another option is innovation. Otherwise known as “the stuff businesses do when the market changes and they want to keep existing”.

My company is owned by a major publisher. Our clients are publishers and marketers, and I get that it’s difficult for everyone. On top of that, I write this blog and am active in the NYC music/tech “scene”. So, I get that it’s difficult from all sides there too.

Even still, what successful exective have you ever seen throw up their hands and go “We can’t, it’s difficult” when faced with a complex business challenge?

Answer? The one that isn’t around anymore.

The answer for the publishing industry isn’t subscription revenue, and advertisers are re-thinking their spend, so it’s probably not ad revenue either.

The answer for the music industry isn’t signing every single “potentially mediocre or big smash hit” to 360 degree deals.

Both of those are limiting for the consumers, and short-term tactics for the businesses involved.

What is absolutely needed – no, required – is innovation.

So musicians – wake up and smell the publishing industry. Dig around a bit, see what struggles they face. Are they analagous to struggles you face? Can you use any of their tactics to fix your problems; can you experiment a bit?

Publishers – do the same. Go talk to a musician, or a record label exec and see what struggles they’re facing. What creative ways have they come up with to solve their problems?

Bob Lefsetz said something similar in his newsletter today (emphasis mine):

People are always looking for the answer. Usually, the answer comes after the start. You’ve got to begin in order to find out where you’re going. But if you never begin, you never get to the destination.

This is what has been lacking in the music business. It has historically been run by the labels, by the RIAA. Which are about protection of their present business model as opposed to any kind of vision, any kind of leadership. I wouldn’t follow Mitch Bainwol anywhere. Nor the heads of any label. Because they’ve got their heads up their asses. Does Daniel Ek at Spotify have the answers? I’m not sure. But he’s trying to lead in this uncertain world. Even Irving Azoff and Michael Rapino too. They’re in search of answers.

When things are bad, we need to be led out of the wilderness. We’ve got to get behind somebody. Funny, in the music industry, the acts used to be the leaders. Some still are. Trent Reznor is a prime example. He’s trying to do it without sacrificing his integrity, without selling out to the man, because music, when done right, must be pure. Shawn Fanning created a platform where all people could have all music. Was it economically flawed? Of course. But if you think restricting access to copyrighted material is the answer, you’re unaware of how many sites hosting copyrighted material have sprung up since the crackdown on the Pirate Bay. They’re multiplying like crazy.

Get angry, tell me your business model isn’t screwed, promise me that you’re innovating, or tell me i’m 150% right and you’re happy to see this post. Either way, leave it in the comments…

Tags: big business, Billboard, Clive Davis, lefsetz letter, music, publishing