I got into the music business a while ago when a client in that area bumped into some IP issues. Several things hit me right away. The steady stream of complaining that the music industry is in deep trouble. CD sales are drying up and web based platform revenue was not replacing the revenue. Things looked bleak.
Time for a new business model? Well, the only sector in the industry that seemed to be growing was streaming. But no one was making any money from streaming. Why not? Folks like listening to music for free (like they do on radio). So it is hard to get people to pay for streaming. Plus, streaming services have to be royalty fees to use the tunes. So while the streaming platforms are popular, they are not profitable.
What will happen? It is becoming more and more clear that we were thinking too narrowly about what the music business is about. Music is not just about selling recorded music. People want to pay for live concerts. And it turns out that this part of the music business is becoming more and more important.
And in terms of market growth? Expect musicians and fans to get more interested in services that make concerts more fun and accessible. Not just that, but services that allow musicians to connect to fan groups. The poster child for this way of thinking is Amanda Palmer. Her story about her kickstarter campaign gives you an idea of where we are headed. Amanda Palmer is not for everyone (you might think of her as an anti-Beyonce). And she courts controversy. But that is not the point. She survives by connecting directly with her fans – by building a fan base of folks who want what she offers them. And that offer is primarily about the passion of connection itself.
If you think about it, the music business used to be about that. And that spirit used to be what sold albums. So when we talk about changing business models in the music industry, it is time to smile. In fact, we may be getting back to something that was lost. Remember the Bob Dylan song? “Something is happening and you don’t know what it is … do you Mr. Jones.” Is this too wild? Too extreme? Well, Lou Reed seemed that way too. Indeed even Elvis was pretty wild in his early days.
My more basic point here: the tremors being felt in the music industry are not necessarily a bad thing if they bring about something that we connect with better. That is the whole point of “pop” culture, right?