I think most of us can stop arguing and agree
that over the last 10-15 years the major players in the music game have missed
the bus and done their best to try and blame the loss of revenue on all but themselves. Mostly consumers and piracy have been the blamed; clearly
this is not the case. Those of us who have been paying attention know that the
decline of music revenue is also due to many other factors including the hyper-fragmentation
of the entertainment market and greed; let us not forget that consumers were
pirating music long before the Internet with just a bit of scotch tape and
rolled up paper to fill the holes in cassettes. There are hundreds of
micro-niche television channels, many new consoles for video games, thousands
of sites to stream or preview music and of course all of the different ways
consumers can find media in vending boxes outside convenient stores. Even
embedded on their Myspace or Facebook and ready to go PPV. That's a lot of ways
to break up a consumer's extra dollar and these are just the tops of the list.
So now with all of these new channels for
media to travel "direct-to-fan", and the "majors" in the
music business still crying out in confusion from their glass houses inducing
shaking knees in the multitudes of the unwashed masses, how does a modern
musician or manager confidently decide what will best fit their value-chain to
actually make some money from their craft/product/service? Should they
"damn the man" and refuse digital distribution and streaming options
by only allowing a preview on their website and attempting to go "street
gold" selling 50,000 copies out of the trunk on tour? Perhaps only fulfill online
hardcopy product directly from Amazon? Perhaps modern musicians and management
would do best to simply embrace all of the different services that are
available in an attempt to "save the empire."
We all have our favorite products, stores,
and services. Rarely straying from these unless there is great savings in hard
economic times and there is a need to drift from normal goods, occasionally
wind is caught of a great product or service from a trusted friend and a new
brand relationship is born. Why would media be any different? Should we assume
then that there are those who prefer digital to hardcopy product, stream vs. own and
that these consumers rarely deviate from their comfort zone? Of course we
should, so the questions really become where should the product be offered,
will one service or distribution outlet take revenue away from another, and
should we care?
If fans get your content how they want, when they want it and they chose your product out of all of this
hyper-fragmentation should you sweat the penny? If they are happy,
buying/streaming/downloading, or otherwise "sharing" the content with
"friends" who are in love with "likes" and thereby inducing
even more buying/streaming/downloading then I say damn the man and save your
empire. In other words, if there is a dollar on the ground, pick it up. Realize
that there are fans who don't buy songs but do buy T-shirts and after they listen to the song on Spotify everyday they will be at your concert wearing your T-shirt, maybe they will buy another
one. Move your most popular song to a piece of online real estate where you can collect some
advertising royalty and license it by territory, offer it on obscure ringtone
sites in Romania and Finland. Diversify or die.
For those of you who are reading this and
saying to yourself, “I thought the Black Keys said streams aren't worth
anything" I say to you again diversify or die, and if there is a dollar on
the ground pick it up. Even the Black Keys started out somewhere and until you
get to where they are now through stupendous viral activity I suggest not
sweating the penny and catching your future fans wherever they may be
fragmented. Of course, I would like to offer a bit of professional
"backup" on the matter and direct you to a couple of amazing articles
by David Touve, Assistant Professor of
Business Administration and Strategy and Entrepreneurship at Washington and Lee
University. In these articles Professor Touve does the math to break down
royalty generation for streams and radio plays per listener in the USA
and UK
as well as itunes downloads vs. Spotify streams A bit of outside perspective on the articles
can be found here in a Billboard article covering the pieces written by the professor.hyper-fragmentation
