Thursday, 15 February 2007

1,000 Campfires

Peter writes ...

The music industry stepped up for its annual Brit awards on St Valentine's night but, somehow, it felt like the end of an era. Was it just me? Perhaps, it was that I had been reading this article in the Sunday Times. Or maybe it was that the double winning Arctic Monkeys did not turn up to collect. Their reason? "Rehearsals." It somehow seemed symbolic that it was they, alone of all the winning acts, that did not make it to the ceremony. After all, the Arctic Monkeys had an alternative birth.

I am too old to be asking these questions, but going on regardless, I reflect on other news stories these week, like the recent Unicef report and this on teenage victims of gun crime. If the UK is indeed the pantheon of youth culture, then one question might be, is this a good thing? Would it be better to be a lot worse at youth culture but a lot better at parenting? I am the right age to be asking this particular question.

Coming back to the Brits, it was Noel Gallagher who predictably enough had the best one-liners: “The reason Oasis are accepting the BRITs Outstanding Contribution Award is that I want to do it before I go bald. Simple as that.” But perhaps the most astonishing quote was to be found in that Sunday Times article. It is attributed to Ian Grenfell, MD of “We felt we’d rather die on our feet than live on our knees.” In it he articulates the frustration motivating Mick Hucknall's decision to live without a major record deal.

So, with Simply Red, we see one model emerging of how the future music business will be organised. It applies to those like Hucknall who already possess high brand value. Its key principle is disintermediation. The product grabs control of the sales channel and, in many cases, distribution too. Alongside this is a principle of product variety, the brand sells as much as it can e.g. CDs, downloads, t-shirts, tickets. Marketing is direct, and key gateways (such as radio and music press sites) are addressed as peers.

However, for the fledglings without brand, alternate strategies apply. The key in this case, surely, is to generate an effective viral action. The new artist seeks to light a thousand campfires of approval across the internet, each campfire igniting more interest and activity. One thousand campfires becomes ten thousand etc. Marketing is thus indirect, and key gateways are converted through a kind of tipping point pressure. To make this work, product focus is beneficial, at least in the early stages. The good news is that like their established rivals, the fledglings can also sell direct, and even make profit if costs are tightly controlled (no long sessions in residential recording studios).

What goes for the music business will be replicated in similar industries such as book publishing and video production. The only other thing you will need, then, I guess, is talent.

See also Martin Cahill's musing on the music business as an innovation process.

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