If you follow this blog or my writing you know I’m strongly opposed to subscription models, and business as usual in the record industry. Conventional Wisdom is tossed around so freely and often, we’re all literally soaked in the sputum of those bad ideas. ”Napster and now torrents have destroyed the industry.” “You can’t make money selling music.” ”If we all got a small cut of everyone’s ISP bill, we’d all be rich.” ”Forget recordings, live music is the only form that counts.” All of those ideas: Bullshit.
Yet sometimes we find a connections between new and old worlds. If we pay attention, we can learn a lot from past failures and set ourselves up for future success. In two recent video lectures we can see a bridge being built to the future. Starting in the past, Todd Rundgren: Time for the Music Industry to Evolve provides a solid pier from which our span can extend. While I disagree almost entirely with his conclusion (he sees subscriptions as the most logical solution to the industry’s problems), we share a common perspective on the history and nature of music. The 20th century’s celebrity-based music-industrial complex, not more recent digital initiatives, were the aberration from historic norms. And indeed, music is more service-oriented and experiential than other products. Since both sides in the debate accept the premise and historic analysis, this presentation is a starting point for a solution, as well as a must-see.
The second piece is Michael Masnick’s case study of Trent Reznors NIN digital model, which has a written companion article on Techdirt.com. In my CityBeat columns, I explored the same models, but Masnick does a better job breaking it down to it’s simplest elements. Some of the terms and ideas are new in the world of product marketing. So new in fact that they scare Rundgren’s friends inside major labels to death, because they simply don’t understand.
To begin, the baby boomers at the tops of major corporations around the world reject the notion that a “non-zero sum” model is possible. Born in a world of atoms and molecules, they cannot accept the existence of intangible value, and the nature of “free” wealth represented by bits. The new economy is as absurd to Rundgren’s generation as cold fusion is to nuclear physicists. Despite their crisis of faith, the new economy and cold fusion are squarely in the realm of the possible in our era.
Masnick presents a simple but powerful formula:
Connect With Fans (CwF) + Reason To Buy (RtB) = The Business Model ($$$$)
This formula makes little sense to the existing music industry, which has never before needed to give fans a reason to buy, and always relied on artists to make the connection with fans. They have no expertise whatsoever in either arena. So it’s not surprising they find little success in their digital ventures, and have become prey for bigger Consumer Electronics giants, who are playing the whole music industry for suckers.
Finally let me point out that Reznor’s model is far from the only, but simply the first model to emerge from the wreckage of the 20th Century music business. It’s the simplicity of Masnick’s analysis of Reznor’s approach that makes it as powerful as E=MC² when it comes to moving forward. In short it’s a schematic for other models; it provides terms and suggests new quantifiers and values. It can be adapted easily to other models, which baby boomers like myself will find equally troubling.
Take a look… it’s definitely worthwhile.
-d-
PS: I’ve stumbled across a couple practical examples of putting all this into action that I’m adding in this postscript…
Building Personal Brand in Social Media is a hypebot.com story, with another lecture video attached (readings faster here!). Asthmatic Kitty Shares Whats Working for them, providing another data point to back up the points made above.
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