How To Split An Atom

Consider these two scenarios.

Elton John could walk into almost any venue in the country, write down a price and a time on the back of a napkin and he would have himself a gig. Not only that but he’d likely sell that gig out in all but the largest venues. So could Prince, the Red Hot Chili Peppers or Travis Tritt.

The second scenario,

Sarah Parker lives in Podunk, Indiana in the year 1989. She has never heard of Sting, until one day when she is introduced to him from a mixtape given to her (illegally?) by one of her friends. She goes on to become a huge fan. She goes to concerts, promotes his music everywhere and invests hundreds of times more money into Sting than the price of that illegal tape she heard back in ‘89 (which she would never have purchased to begin with).

Keep those in the back of your mind. Now, let me tell you everything that is wrong with the music industry.

Welcome To The Internet

If you are a star of the caliber of Radiohead, Madonna or Sir Elton, why do you need anyone helping you with distribution? Keep in mind that by going solo you have the benefit of keeping almost everything that you earn and the freedom to hire a PR firm to do some of the legwork for you. Even if you make less money (in an absolute sense) because you can’t be everywhere at once, you are earning just as much money now that you don’t have to worry about overhead. Not only that but you now have much more control over what you do and when you do it — which is a benefit in and of itself.

Looking at the other case. If you move the timeline forward to 2007, little Sarah Parker could be liable for several hundred thousand dollars worth of damages if she did the same thing, over a filesharing network, that she did in ‘89. Not only that but she would never go on to spread her love of “Roxanne” to the world.

Does anyone else see a problem here?

I’ve asked myself these question, and I hope someone at one of the majors is reading this because I think that ego and inertia is getting in the way of business sense. Here are a few points to discuss at the next strategy meeting.

Do The Oz

1. No matter what anyone says, the industry isn’t dying or is it being reborn. Instead, it’s in its awkward adolescence. It’s used to getting its own way and is only now realizing that, “The times, they are a’changin.” What needs to be done is for someone with enough clout to realize that it’s a brave new world and it is time to reevaluate business models.

2. What I’ve learned from working with startups is that the most fundamental goal of business is to be able to adapt to changing market conditions. The majors need to stop reading all those overblown memos from their legal team telling them how great the war on piracy is going, and instead look at the people who consume music as distribution channels.

This is the crucial disconnect that they need to repair. Everyone who listens to a song (no matter how it is obtained) can become an evangelist. If they promoted this sort of evangelism instead of creating an atmosphere of fear, they would open up entirely new industries. The first major to really recognize this will change the entire landscape.

2. In this new world the recording industry needs artists, not the other way around. People who really love to perform can find distribution channels. The web has reduced the barriers to entry to almost nothing. You could argue that only a tiny fraction of them will ever become “truly famous,” but isn’t that how the game has always been played? How many people submit music to labels and how many actually get signed? If you run the numbers, I don’t think they are too much different for those who go it on their own.

3. The best thing the industry could do for its artists is to support each and every site and service out there that is trying to help distribute their music. I am not saying that they should release their catalogs for free, but they have to be more willing to make deals. If they waste time worrying about whether their catalogs are locked down with the shiniest new DRM schemes, they are missing opportunities. It is entirely possible that one of the dozens of distribution networks out there will find a way to market music better than they can. Why waste so much time when you could just work with the companies that are trying to market for you?

Web 2.0 Roundup

Here’s the bonus round,

The music industry needs to get over its sense of entitlement and get back to their real business — building successful artists and making money doing it.

They need to get over the fact that they will never be able sell physical media until they can add enough value into a CD that your average consumers sees it as better than a download.

They won’t restore artist confidence if they are fighting them at every turn. Given just a tiny bit of savvy, almost any band can get its name out to a huge number of people. Just like every business does not need venture capital, every musician does not need a label to make it work.

In short, they need to be looking for news means to create evangelists, monetize the cottage industries surrounding bands, and saturate the market with their music instead of squirreling it away.

Until then, they are just going to have to deal with the zits and growing pains.

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