The music biz stands at an historical crossroads–almost every aspect of the way people create, consume and listen to popular music is changing, dwarfing even the seismic shift in the 1880s when music lovers turned from sheet music and player pianos to wax cylinders and later, newfangled 78 rpm phonograph records.
The following highlights some of the most ground-shaking and, (in my opinion), enduring “metatrends” currently shaping the biz. The intent is to give guidelines to both musicians and industry careerists to help set their forward sails on this crazy ocean we call music.
METATREND 1: Empowered Music Consumers
Today may be the very best time to be a music fan, especially one looking for a connection to a favorite artist or guidance and access to the exotic or rare.
Be it the iPod, alluring satellite radio services such as XM, the fan-beloved minutiae posted on Web sites, the availability of live music performances on AOL, the esoteric music videos streaming off Launch.com or the self-tailored satisfaction of burning a homemade mix on CD at home, there is a singular zest to the modern fan experience today.
The public is now driving the market. The challenge to the industry is to respond positively in such a way as to secure the future of music while satisfying customer demand and providing choice.
It’s becoming increasingly more difficult for companies to treat us like “mass market” ciphers. The trend is towards “mass customization” where consumers’ unique needs are front and center. Some marketing gurus call this trend “The 1-to-1 Future” and the companies that can dance with this trend will prosper.
What You Can Do About It
- Get to know your fans. They are your chief asset going forward and the better you know them, the better you can communicate with them, build loyalty and enlist them in lending their support to you and your music projects.
- Involve them, empower them, mobilize them, let them co-create with you. None of us knows what all of us know. Build a community, a fan club, a subscription service and learn how to pool the wisdom of your following.
- Provide potential customers with as much choice as possible.
- Learn the technologies that will help you customize your communications with customers and fans.
METATREND 2: Music Product to Music as Service
Presenting music as a service, like radio or TV, would seem on the surface to be less profitable than selling millions of CDs, but actually, this change will be positive for the music industry. It will be able to sell more things associated with music. But the actual sale of music as a product will make less sense. It will be a move from transaction-based push to flat-fee pull.
Consumers have clicked, and they demand access to content by any means necessary. Just as AOL has gone from selling you five minutes of access to a take-whatever-you-want model, music too will move to a flat-fee model.
We’re not there just yet. But in the next few years, the requisite technology will fall into place. Then most of us will carry a wireless Internet uber-gadget wherever we go–a unified cellphone/MP3 player/ digital assistant/Blackberry/ camera/GPS locater/video recorder/co-pilot for life. This device will receive wireless Internet audio, a loose term I use to describe the various forms of streaming audio starting to appear on the Internet. With streaming audio, you can hear the music you love any time, anywhere.
The future isn’t about a change in distribution, it’s about the atrophy of distribution itself. Instead of distributing things, we’ll get access. It’s a critical difference.
The future isn’t about downloading songs and burning CDs. It’s about just-in-time customized delivery. Music as on-demand service not as industry-dictated product. Just as in the early days of the record industry (c. 1900), music publishing will once again assume the primary role in the biz. Music will become available for diverse uses dictated by consumers and businesses.
How fast will the sun set on the compact disc? Quarter-size CDs that can float among compatible music players, computers, game devices, digital cameras and personal digital assistants are already developed.
Of course, a massive installed base of CD players means that the traditional recording industry markets are not going to disappear or even be impacted by digital distribution in the short term. But rising consumer interest in downloads and an increasingly multi-media business-to-business economy opens new opportunities for composers, editors, sound designers, and all forms of audio producer.
What You Can Do About It
- You should be figuring out how to distribute your work through digital music services now. The Net is your Open Mic to the world. Get yourself onto iTunes, Rhapsody and MusicNet. Learn the virtual ropes.
- As the industry moves away from physical product, it becomes increasingly important for musicians to learn the rules of licensing (read, ‘renting’) their music.
- Seek out users of music as well as buyers.
- Prepare for a multi-platform approach–value-added packages containing your music, artwork, DVDs, etc AND a container-less presentation using various online showcases, messageboards and portals.
- Develop marketing plans for both your selected singles as well as for your full-length albums. 50% of current online music sales are in the singles format.
METATREND 3: The Next Music Companies
The writing is on the wall for traditional music companies. The record industry grew rapidly, matured, and is now in the throes of transformation. How successful this transformation will be depends on how creatively the musical industrial complex can dance with all the changes spiraling around it.
Unfortunately, so much of the music industry is beholden to corporate owners, itchy for quick profits, and driven by rigid corporate imperatives. This wreaks havoc with artist development; hell, it wreaks havoc with business development, and necessitates high turnover of both artists and employees. Major labels are also saddled with legacy problems regarding production and retail. Thus the geologic tempo of industry change.
But the same forces undoing the larger music companies are empowering individual musicians and micro-businesses.
As with most modern industries, a silent computer on a desk is the wildcard that makes so much tradition redundant. Perhaps the term “record company” itself is becoming outdated–”Music Company” might be more relevant. Many music biz execs echo the words of Steve Becket of Warp Records when he says, “I think we’ll mutate into a new type of company–mixture of artist management, publisher, marketing consultant, agent and promoter.” “We’re a communications company,” agrees Marc Jones of Wall of Sound, “and that’s what we’re becoming more everyday. I don’t think the model for a traditional record label will exist in this environment anymore.”
But we don’t have to solve the dilemma for the mainstream music business about which future to embrace. We’re living the side-stream music movement that may inspire the majors but, God willing, will never be completely controlled by them.
Unlike mainstream commercial music, the farther you get out onto the fringes, the more helpful people become. The more participants, the greater the chances that something truly interesting will emerge from the collective rabble.
A new generation of music entrepreneurs is rising with a power in its corner it has never had before. The times are ripe for change and these creators are the spearhead.
What You Can Do About It
- The appetite for music only grows around the globe and you can satisfy it. You’ll need to employ your maverick instincts over conventional “business rules”, take fuller responsibility for your own success, and beware of “standard industry practices” that can chain your career.
- Concepts like “company”, “work”, “job” and “career” are morphing. The entire business economy is passing through a transition the likes of which haven’t been seen since the industrial revolution. Rather than seeing your “career” as a ladder, think of it as a rouge wave full of rises, dips and switchbacks.
- It’s time to think outside the normal channels of business and imagine new kinds of companies. Creative alliances and partnerships are the key. Combining good music, cheap, global distribution and business savvy almost guarantees success in today’s music-hungry world.
METATREND 4: Segmenting Music Markets & Niche Music Cultures
I often hear musicians moaning about how consolidation and the monopolization of the media by companies like Clear Channel and Viacom threaten musical diversity, yet I can hear and obtain more interesting music today than I could ever hope to in the 1950s.
The menu of music choices and styles expands daily.
When the Grammys started in 1958 there were 28 categories of awards; last year there were 105! Check out the “Music Styles” page at the allmusic.com and you’ll find over forty styles of music, each with a drop-down menu of several “sub-styles.”
Even the pop charts, which have made room in recent months for PJ Harvey, Modest Mouse, Diana Krall and Franz Ferdinand, suggests there’s an audience starving for something other than junk food.
The music market continues to segment and each segment is a “world”, a portal, through which small companies can create value and success.
While good news for niche companies, this is bad news for the musical industrial complex. The major labels cannot justify going after these smaller markets because they are optimized instead for the larger, pop mainstream. These niche music cultures can’t generate the sales needed to float the major label boat. While 20,000 unit sales are a cause to celebrate at a micro-label, they hardly register a blip on big company radar screens.
The times call for focus. Mass customization and a segmenting market encourage the development of products and services of a “niche” nature. Since few of us have the time, money or energy to mount national marketing campaigns, it is in our best interest to discover and concentrate on a niche, a segment, that we can explore towards successful enterprise. Whether your specialty is house, trance, bluegrass or neo-soul, learn to work that niche and scope out relationships and opportunities within it.
Micro-media targets the tributaries off the mainstream and if the artist occupies one of these “niche streams”, they have an open and ready channel for exposure to their target audience. Each niche stream has its own burgeoning media culture and the smart combination of high-quality music, creative event-making, perseverance and strategic alliances gets people talking.
What You Can Do About It
- What is your niche? Maybe it’s arranging music, or the history of rock, or the intricacies of music software. Whatever it is it will lie at the crossroads where your most compelling desires intersect with your background resources and current opportunities in the real world.
- What is your music’s niche? If your music can be slotted into an established category, then master that area both musically and business-wise. Know the inlets and outlets for your music, become familiar with the influencers and tastemakers in that realm, and start communicating with them. If your music defies categorization then lead with that.
METATREND 5: The Next ‘Big Thing’ is Small
The analogy is television. 30 years ago, the three broadcast networks (ABC, CBS, and NBC) had a ninety percent share of the viewing audience. Today it’s less than forty. Where’s the other 50%? Watching cable channels. Though cable channels have miniscule ratings, they’re profitable. Why? Because they’ve discovered and developed their niche.
And this is what smaller, indie labels do–the Americana sounds of New West Records, Red House Records’ focus on singer/songwriters, the creative acid jazz of Instinct Records, and the deep reggae catalog of Trojan insures listeners they can expect quality discs from each company within their respective niche. Indie market share is on the rise!
Lacking vision beyond their own profit lines, major record companies fail to see that the revolution in music delivery occurred in reaction to the industry’s mismanagement, not to mention its complicity in force-feeding the public a flavorless diet of sonic pabulum. With the increasingly conservative (read, “risk-averse”) stance of the majors today, indie market niches become all the more important to the creative development of music.
The implosion of the musical industrial complex has also resulted in the availability of many formerly-signed artists and talented executives. The past ten years have seen veteran artists like The Pretenders, Rod Stewart, Foreigner, Aimee Mann, Sinead O’Connor, Carole King, Sammy Hagar, Dolly Parton, Hall & Oates, Hanson, Steve Vai, Sophie B. Hawkins and dozens of other either starting their own labels or signing on with smart indies.
What You Can Do About It
- The paternalisms of yesterday have given way to personal responsibility for your own success. The holy grail is NOT a record deal; it’s waking up to your own power.
- Signing with a major label today in most cases is a career risk. These divisions-within-corporations are unstable and anti-art environments, and best avoided by aspiring recording artists.
- If you’re up for it, start your own company and release your music through it. If you want to delegate the heavy lifting seek out a successful indie label to partner with. But only do so when you’ve achieved a level of success appealing to a business partner (that is, you’re showing net profit for an extended period of time).
Record company bosses think society’s top priority today must be restoring record-company revenue and profits. But music lovers and musicians have a different perspective. They want to know how musicians can exploit the extraordinary technology of the Internet to expand the audience and enable more musicians to make a living doing what they love, and improve the quality of life of consumers.
In a sense musicians may be in a better place today than they’ve ever been before. Taking a cue from the cyber-bard John Perry Barlow, I believe we could be seeing a paradigm shift from the domination of the “music business” to that of the “musician business.”
The more things go digital, the more we crave authentic, roots-based music; the more music that’s available to us, the more we seek niches that provide meaning and navigation through all the choices; and the more worldwide radio shows through satellite radio, the more we desire shared cultural experience via local djs.
If we had to, all of these trends can be placed under one banner that reads: the larger the world economy the more powerful its smallest players.
Hey, we’re talking about you.
Peter Spellman is director of career development at Berklee College of Music, Boston and founder of Music Business Solutions, a training ground for music entrepreneurs. He’s the author of The Self-Promoting Musician, Indie Power: A Business-Building Guide for Record Labels, Music Production Houses and Merchant Musicians and his newest, Indie Marketing Power: Finding & Nurturing Your Audience for Maximum Music Sales. Find him at mbsolutions.com