Six Pixels of Separation - The Blog
November 29, 200710:48 PM

The Marketing Industry Can Learn A Lot From The Music Industry - Especially When It Comes To Technology

"Morris insists there wasn't a thing he or anyone else could have done differently. 'There's no one in the record company that's a technologist,' Morris explains. 'That's a misconception writers make all the time, that the record industry missed this. They didn't. They just didn't know what to do. It's like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?'

Personally, I would hire a vet. But to Morris, even that wasn't an option. 'We didn't know who to hire,' he says, becoming more agitated. 'I wouldn't be able to recognize a good technology person — anyone with a good bullshit story would have gotten past me.' Morris' almost willful cluelessness is telling. 'He wasn't prepared for a business that was going to be so totally disrupted by technology,' says a longtime industry insider who has worked with Morris. 'He just doesn't have that kind of mind.'"

This is only one part of a great article featured in the December 2007 issue of Wired Magazine entitled, Universal's CEO Once Called iPod Users Thieves. Now He's Giving Songs Away. It features an interview with Doug Morris, chair and CEO of Universal Music Group. While the music industry is a passion of mine (and one I spent over fifteen years working in), I've had multiple debates with signed artists, band managers, record company executives, and music publishing professionals about how the music industry can adjust, move and win. The biggest challenge it faces is moving from a product to a service model (which is never easy), and the flexibility of removing the layers of infrastructure and physical production chain supplies. At it's primal level, shouldn't you be able to make more profit selling a product that no longer needs the support of a physical supply chain?

Every industry is adjusting to the Web's pervasive move into verticals, and the Marketing industry has the chance (much like the film industry) to get ahead of the curve. Leveraging the digital channel for everything from business-to-business to collaborative tools is a great place to get started.

Keep in mind, even when there's hope... there's still a little bite:

"Finally, there's the company's move to sell select songs DRM-free. Amazon, Best Buy, Wal-Mart, and several other online retailers are currently offering MP3 downloads of Universal recordings. Unlike those sold by the iTunes Store, the files can be duplicated at will. (They do contain a watermark, presumably so Universal can track how many end up on peer-to-peer networks.) Of all Universal's digital efforts, this is probably the most significant, as it finally delivers legitimate files in a format that works on any device or computer. 'It's surprising to see Universal out in front of new initiatives,' says Mike Paxton, an analyst at the market research firm In-Stat. 'But I hesitate to really give them credit for being groundbreakers. They're not too forward-thinking.'"

Thankfully the analyst do see hope for the Marketing Industry. Now is the time for all of us to keep our chins down, heads up and eyes on the prize. As a final push of motivation, I'm reminded of my favourite business quote. It was in the book Re-imagine! Business Excellence in a Disruptive Age by Tom Peters. The quote is from General Eric Shinseki, Retired Chief of Staff, US Army: "If you don't like change, you're going to like irrelevance even less."

By Mitch Joel


Comments Comments Feed
  • Posted by Chris Clarke
    Mitch Joel

    Jay-Z doesn't want people buying his singles - he wants them to buy the whole album, even if it's just for one song, like the good ol' days of music.

    Reply
  • Posted by Rob
    Mitch Joel

    I still remember the days (just a couple short years ago) when I tried to convience records labels to get their digital marketing efforts up to par. Granted, my advertising network was smaller in scale back then. Plus I was a "nobody" in music industry circles (save for minor infamy by way of Blistering.com, a publication that I founded in 1998).

    To make a long story short, major labels refused to listen. Indie labels didn't have the budget to execute neither. By in larger, labels refused to outsource their creative/design in order to save a few bucks. In many cases labels also refused to spend ANY MONEY on digital ad campaigns.

    At first dawn, they even received free advertising from emerging entities called "internet web sites" and if you threw enough content and giveaway prize packs at all of these fan sites, it enabled them massive exposure with very little associated costs.

    In modern terms the blowback is obvious. The music industry is clearly struggling but it is definitely not out. Every day I feel that things are getting better. It feels like labels are getting a much clearer picture now versus 3 or 4 years ago.

    That said, I've learnt a great deal from my experience in music / marketing / advertising. I suspect labels will be more receptive to my message of constant evolution & experimentation in 2008. (Maybe that's Jaffe's message though? haha)

    Meanwhile, I'll stick to my gatekeeper role. As Russell Simmons once said (and I'll paraphrase)... there needs to be an honest broker between the corporate world, media and the people. He was spot on when it came to hip hop but in today's world it couldn't be more important. Perhaps vital I would dare say.

    Reply
  • @ Chris Clarke - I don't think that changes anything. What's he going to do - charge $8.99 for one track on iTunes? I think, if anything, these channels force artists to listen to the fans and give them the music they want on their terms.

    There was a recent study done in Canada that showed the people who use P2P services buy much more music - just not CDs. I have to dig that one up and Blog about it.

    @ Rob - thanks for adding the insights. I know you're right - the music is industry is healthier than ever - look at tours, merchandising, sales of iPods and the adoption of digital downloads. One quick read of The Long Tail by Chris Anderson and you can "feel" how much people like getting music they like, when they like (without the plastic).

    The issue that the major labels have (as Blogged about above) is that they are reliant on the plastic and manufacturing for the revenues. I would think that removing those costs and making everything available as a download would increase ROI and revenue.

    My understanding is that illegal downloads to legal downloads is about 40:1. Had the majors acted sooner and embraced the digital channels, my guess is that people would not have sourced and created alternate channels.

    Reply
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