History: Current business model for the music industry is a dinosaur; Challenges: Changes, advances and increasing options have left artists with no straightforward solution, there is no guiding hand; Situation: Systems and tools currently offered are not particularly innovative, useful, or fun to use; Solution: Aligning industry stakeholders, automating that which can be automated, eliminating waste, and creating a connection movement that strengthens bonds- particularly those between artists and fans
Despite this reality, the traditional producer-consumer dynamic has remained largely unchanged since records were first introduced to the market. The biggest entities in the modern music industry (mid 20th-early 21st century) continue to rely upon the sale of compositions, recordings, and performances of music as their primary sources of revenue. Physical and digital recording sales remain the primary component of income. Recent gains in digital recording sales and other unique, primarily artist driven initiatives have been promising. However, this boost has not been sufficient enough to make up for the nearly fifty-percent drop in income from physical sales since 2000.
Situation Faced with these challenges, artists and labels continue to see a difficult and competitive market. The environment is full of promising talent, which now has easier access to quality writers and recording facilities. Even if an artist is “lucky” enough to earn a recording contract today, the advantages of beingin that situation are dubious at best, as labels have at least been somewhat proactive in looking for ways to make up for lost record sale revenue: increasingly, artists are being pressured into signing “360” deals. In doing this, they give up partial ownership and creative control of their works to a third party for what amounts to a 1-in-10 chance of actually finding widespread success. The amount of creative control an artist releases to their label is an unnecessary and costly expense.
To summarize, the music industry is one where the cost to record a good sounding album is decreasing; there is a subsequent increase in the amount of quality content available; consumers can be more selective concerning what types of content they spend their time with; they expect it to be available for free; and said content is increasingly becoming more accessible.
Situation Currently, interaction between artists and their fans is mostly a one-way communication. Artists use a variety of tools to communicate with their fans and reach out to a potential new audience. Consequently, listeners are left with a “non-straightforward” way of keeping up to date with their favorite artists. Bands must maintain accounts across multiple platforms. If they are given any kind of demographic information, it is fragmented, difficult to make actionable, and not fun to use.
Examples of portals that serve part of this purpose as digital and new media distribution points include: Myspace, which offers blogs, streaming music and video services, and tour information; Reverbnation which offers tools that help artists improve the musician-listener dynamic, ways to connect with music industry stakeholders such as managers and venues, as well as standard music, video and blog services; Pandora, which offers unique discovery features, in addition to music streaming services; and Last.FM, whose offering includes music and video streaming, as well as iTunes integration. None of these products give a straightforward approach to actively reaching fans with your media and strengthening the artist-listener bond.
Solution In an era where consumers have more choice, and there are thus fewer ears to listen, today’s artists require better tools to make them more competitive, partly by helping them to determine where potential fans may be located and what sorts of experiences they are looking for. These experiences need to then be delivered efficiently to their fans. Despite significant technological advancements during the last several decades, these kinds of interactions have not become similarly sophisticated: Artists produce and market content which fans consume. The only major differences today are the mediums and methods of media deployment.
The future of this industry will lie not with labels devising a set of tactics to rejuvenate sales numbers, but with those who are able to best merge the many fractured individuals and organizations within the industry. This ultimately means bringing together: the musicians who compose and perform the music (artists); the companies and professionals who create and sell recorded music (composers, publishers, studios, producers and engineers, record labels, retail and online music stores, and performance rights organizations); those who broadcast music (satellite, podcasts, as well as internet and broadcast radio); and those who assist in the presentation of live music (booking agents, crews, promoters and venues). This last group is of importance: Live music presentation is becoming an increasingly significant stream of revenue for both artists and those who guide them in their careers (managers and entertainment lawyers). Those companies who are best able to harness modern technology and merge these pieces together, as well as continue to improve the user (fan) experience, will ultimately be successful.
About Chris: I am a dreamer and a rationalist. I enjoy building foundations for growth, whether they be minds or ideas. I love PEANUT BUTTER (TOAST). I am a musician, but have no industry credentials. I believe in effective thinking and practices; the inner drive for continual self-improvement; pride in one’s work regardless of job; life and spirit. I have been deathly afraid of spiders ever since I saw CARAVAN OF COURAGE: AN EWOK ADVENTURE. You can read my blog here: Strengthening the bond between artists and fans.