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Disrupting the music industry

Disrupt Dave Allen Luke Williams SanFran MusicTech A quick disclaimer - I haven't had as much time as I would have liked to think this one through so it may be a little sloppy.

This afternoon I will be speaking on a panel at the SanFran MusicTech conference. We will be discussing Strategic Partnerships, which basically means talking about how bands and musicians can find revenue by partnering with brands by licensing their music and images.

Speaking on panels can go either way - they can be engaging and stimulating, and they can also be a rote rendering of the status quo surrounding certain issues. And then there's the music industry. My concern today is that we will not have time to actually discuss strategy. Most likely the conversation will circle around tactics. There is of course quite a difference.

In case I don't get chance to get my postion across clearly on the panel, I'll start here with a couple of question - Why do we never consider transforming the music industry? What would that look like? I'm tired of hearing about streaming music plans, the introduction in the USA of Spotify, selling on iTunes or the Amazon MP3 store, the longing for a "music in the cloud" solution etc, etc. Those are no longer game-changing solutions (if they ever were) and by the way, those are businesses capitalizing on the music industry's travails; by using any of those services musicians are not being strategical, they are being tactical.

Here's the music industry problem - it's "a surplus of similar companies, employing similar people, with similar educational backgrounds, coming up with similar ideas, producing similar things, with similar prices and similar quality." That sentence is from a book, Funky Business by Jonas Ridderstrale & Kjell Nordstrom. Those words were not written about the music industry in particular, they are an example of business clichés. I read those astute words on the 'plane to San Francisco yesterday as they appear in the book I am currently reading by Luke Willams, titled Disrupt. Music industry leaders should read Disrupt.

This is an over-simplification of Williams' ideas in the book, but to get to a disruptive hypotheses he suggests asking a couple of questions: What do you want to disrupt? What are the clichés?

So, some music industry clichés:

Illegal downloading of MP3s is killing the business Licensing music to streaming services will increase revenues Licensing music to iTunes will increase revenues and sales Blocking videos on YouTube will give us more control Blocking licensing access to Spotify will give us more control

I could go on. Here's what I think is going on:

The music industry is spending money in the present to solve the problems of the past Licensing music for a brand campaign actually devalues and commodifies artists' music Only a handful of artists will really benefit from being aligned with brands The music industry is not listening to music fans and how they want to access music

The industry understands the Problem - 'music fans are buying less music these days.' Yet they have come up with the wrong Answer - 'let's license our music to as many companies as possible, as expensively as possible.' That's a tactic, not a strategy. A strategy would be - let's address why people are buying less of our music by understanding why that's happening. Then solve that problem. To paraphrase Williams - If you simply go about finding a brand partner that will pay to license your music you effectively confine your range of possibilities to only issues to do with licensing. You are not looking at ways to sell more of your music. Such a narrow focus will greatly limit your options later, e.g. if your music sales continue to decline, then who will want to license your music?

In brief, to get to a disruptive hypotheses, Williams says "you make an unreasonable provocation." So here's my unreasonable provocation: Would it matter if recording companies completely disappeared?

Find the problem, then solve it. Then discover new markets.

Please let me know what you think.

Digital strategy at the University of Oregon

Digital strategy at the University of Oregon

Deschutes Brewery: A new website

Deschutes Brewery: A new website