FINDING HARMONY IN MUSIC BUSINESS

The music business of old is a dead beat?  Oh really? In light of the oft-repeated talk about generational clashes, a paradigm shift is purported to be occurring due to an evolutionary battle between the old music business Titans and the young tech savvy Gods of today's entertainment trade. Many of the changes occurring in the music business are a result of technological development during the last decade (i.e Apple iTunes, MP3, Napster, consumer demand shifts, etc.); however, the more things change-the more things remain the same, thus, a need to appreciate the wisdom of the elder Titans of the music business.  Let's take for example the need for identifying a niche market; moreover, let's examine the value of market research instead of assuming that the global use of computers and mobile devices translates into a need to merely focus on producing a digital song file for iTunes. A recent discussion about the value of understanding a distinct market was discussed during the opening of this year's Midem Music Conference in Cannes, France.  According to Saul Klein of Index Ventures, staying in your special market instead of going global was successful for Netflix, Pandora, and other companies. By focusing on one sector, oppose to trying to function in other countries like the U.S.A., companies like Spotify, Deezer of France, and Simfy of Germany are raising eyebrows in their respective territories without enterting the US marketplace. Furthermore, Klein noted that consumers in different markets respond to different offerings, therefore, a music offered within the iTunes America store may not be successful in the iTunes store of a different country (the same principle of consumer tastes could apply to different regions in the U.S.). The example of marketing is one of many traditional aspects of the music business - music publishing, touring, and merchandising being others - that has not been fundamentally altered by technological development.  The need for identifying, understanding, and maximizing other aspects of the traditional music business model is why companies like Live Nation are making 360 deals a standard practice in today's music business.


REFERENCES:
1) Generational Clash @MIDEM 2011: Can The Old Guard And The Young Guns Get Along?, by Antony Bruno; Billbaord Magazine,  January 23, 2011;
http://www.billboard.biz/bbbiz/industry/digital-and-mobile/generational-clash-midem-2011-can-the-old-1005009072.story

2) Pick Your Battles & Your Market, Says Index Ventures' Saul Kelin @ MIDEM, by Glenn Peoples; Billboard Magazine; January 23, 2011;  
http://www.billboard.biz/bbbiz/industry/digital-and-mobile/pick-your-battles-your-market-says-index-1005008962.story

MAGIC OF THE MUSIC BUSINESS

SHAZAAM! Instant downloads, viral videos, and reality television shows are a few of the electronic elixirs being consumed by aspiring music stars and consumers.  More often than not, popular songs or artists who are benefiting from this alchemy for success are missing some key ingredients. Vital factors for long-term success in building a music career are music publishing and market strategy or development. The ‘long-term’ is the operative word opposed to ‘instant’ success. Whereas, the music business is NOT an instant result, the opportunity for popularity and ‘fifteen minutes’ of fame is possible. Distinguishing between instant and long-term music business success will help one more successfully navigate a career. Examining a similarity between music and magic can help to clarify the instant and long-term career approaches. The thrill from a magic trick and viral video is the instant product, understanding how to ‘consistently’ produce the mechanisms (operating systems), consumer audience (target market), and magic (publishing or intellectual property) is the long-term business. An addition of the Social 50 charts in the Billboard magazine for the music trade is another reminder about a new “trick of the trade” (note: the magazine did not cease reporting publishing or marketing).  Not understanding how the instant popularity of songs can convert into sales, market share, and stock investments is to only see the tricks without the trade; therefore, the consumption of many popular music offerings is like enjoying the tricks in a great magic show – entertaining illusions.   

REFERENCES:

1)  Billboard Magazine; Social 50 charts; http://www.billboard.com/#/charts/social-50   

2) Clive Davis: Inside The Record Business; Clive Davis with James Willworth, 1975.