The Way Forward: Small Steps Not Leaps and Bounds For The Music Industry
Lessons from the Music Industry for Evolving Media
The past decade has been an enormous time of tumult across most businesses due to the technology revolution and the effects of globalization. This is a period that long from now will be spoken of, written about, and be given the same historical weight as the industrial revolution. We are fortunate to be living in it and shaping the future. But we can learn much about the way forward by observing the recent past.
Music was the first of the entertainment industries to undergo a top to bottom transformation – and not entirely willingly. Technology fundamentally changed how music lovers chose to consume music. They preferred singles to albums. The advent of the iTunes store answered this new marketplace. The resulting change in business model served as a warning bell for all content creators that the controlled business model was over. It also signaled that going forward in the new era – consumers would be in charge.
At the time, music companies were still wrapped up in their land of riches. They either did not fully understand technology or they chose to ignore it completely. They were accustomed to controlling distribution, pricing, creation, and the timing of entry into the marketplace. Many warned that unless they acted quickly in a united way with a seamless end-to-end solution that would appeal to changing consumers they might lose more battles and eventually even the war. The music business had to change or risk death to the existing business model.
The sister entertainment corporations that all rely on each other in some form, movies, television, games, publishers and others in legacy media buried their heads in the sand and blamed competition for dwindling audiences and denied that lack of innovation could possibly be the problem.
In our own company, we could not see the future clearly but we instinctively knew one thing. We needed to sail west. One by one the early adopters if-you-will began to sail west too. A number of publishers, broadcasters, and other media content owners were willing to be bold. They acted despite the fact they did not know exactly how the model would evolve. They understood intuitively that they needed to move or eventually perish. The vast majority, however, took a wait and see approach. We attended a national broadcast conference just three years ago and the digital panel descended into an argument over whether stations should stream on the Internet. Talk about missing the boat! In 2009 even!!
Those media companies that dared to venture into the digital world were unwittingly, or perhaps wittingly, helping to define and refine the models that exist today… and continue to evolve almost on a weekly basis. And now the mostly traditional media operators who stood still — people who print stuff on paper or broadcast via transmission towers — are encountering a public with a dwindling appetite for killing trees, getting ink on their fingers, or making an arbitrary appointment to watch a program chock full of interruptive advertisements. Couple all of this with a public that demands interaction and, most oft-unrecognized, a new and less rigid style of presentation, and no wonder so many media brands are out of sync.
The aptly named and unmoved legacy media can learn from the experiences of the music industry. Music was forced to change early. They learned the hard truth about what consumers wanted. They partnered with technology and opened themselves up for reinvention. This year, digital sales account for almost 50% of the music business. The music industry is on the road to a bright future.
As an aside, our company recently worked with a national broadcaster on music rights acquisition for a digital music platform for all their brands. The client’s approach to the music industry, in a collaborative spirit of partnership, was quickly reciprocated – another indication that the music industry gets it and they are eager and willing to play in new territories.
Content publishers and broadcasters need to rethink their businesses, resolve to place their audience first, and build out the content to suit the needs of information age consumers.
With regard to revenue, there will be no magic “aha.” The new days will not be like the old days. For now, media brands must focus on delivering solutions across as many platforms as possible and monetize all of them. The aggregate will sustain, grow, and inform the future business as all the models solidify and morph again.
We will all get there. We just need to reach back and bring the stragglers along west with us. That’s the part that really turns us on.