It’s a Beginning
Almost 90 years ago, the musician’s union was faced with it’s first catastrophic shift in industry structure that resulted in the unemployment of 20,000 musicians over a period of 3 years. These jobs were replaced by a handful of studio jobs as musician’s laid down soundtracks rather than playing live music to accompany motion pictures. Talkies were assailed by the American Federation of Musicians but to no avail. The change was unexpected, as even many studio heads did not think the public wanted to watch talking actors.
Tim Schoonmaker has some perspective about how technology changes content businesses. Whilst at Emap, as a new MBA, he was in the right place at the right time. He sold an electronic publishing venture to British Telecom just as the Internet boom was gathering steam in the US, and the City (London Stock Exchange) traded the stock aggressively, boosting the share price and funding a series of acquisitions as a result. He then acquired newspaper and radio properties with equal finesse, and developed the British version of MTV before going on his own to become an independent dealmaker.
In an interview with KPMG media advisory practice chief Calum Chace in today’s Financial Times, he opines on the tough spot media companies are in, where success breeds complacency. “When a company grows big and successful on a particular business model, it falls in love with the present.”
Schoonmaker says what the new business models will be may not be clear, but there is a growing awareness that be they must. “The cleverest people at senior levels in the music industry now say that they don’t know what is going to happen. This is the first step back to success: they are going to have to fall in love with some kind of future.”
Five Easy Pieces
Online Collections
Albums are an anachronism in the online world. Collections that cut across artists or even styles could perform a similar function of selling groups of songs. Record labels will offer these in bundles online for different niche markets (i.e. genre, nationality, demographic) and occasions (i.e. party, workout, study aid, meditate, chill out).
Prerecorded Memory Chips
Prices for these storage devices are finally getting reasonable for MP3 recordings. Offering albums or collections particularly as promotional tie-ins with product or concert ticket sales will generate some buzz and incremental revenue. Wireless handsets, PDAs and laptops can all play them.
Music Videos
No longer limited to the highest grossing acts, music DVDs were, with online song downloads, growth media for the record industry throughout the past several down years. Most acts can afford to make them, or to put it another way, most acts cannot afford not to make them.
Wireless Song Downloads
The Celestial Jukebox is the bigger prize for record companies who today are content with the bonus reward of music ringtones downloaded to mobile handsets. But it is not a giant leap to 3G always on access to prerecorded music transmitted to the handset for realtime streaming or anytime playback from storage on a memory chip.
Electronic Track ID
Anticipating that the Home Jukebox is a higher likelihood for the foreseeable future, record companies need to tag songs with common ID information in a format that can be automatically gathered, indeed, and displayed by any storage system with minimal processing resources.
posted by julia b schwerin