Last week, I discussed the first of my six things that I consider to be crucial to a successful music company in the digital age – being able to freely share music, and passion for music between people without let or hindrance, as my passport would say. This week, we’re down to more business-focused principles:
- Music must be sharable – word of mouth is more important than ever
- Revenue must come from multiple sources – if one bit of the industry becomes obsolete, it shouldn’t sink the whole ship
- New technologies are to be welcomed and understood, not feared and litigated against
- A&R can be crowdsourced, but remember the long tail
- “Added value” is key – give people a reason not to pirate things – carrots, not sticks
- Your artists are your most important spokespeople
Click over the jump for my thoughts on the second one, and stay tuned over the next few weeks for the finishing chapters.
Revenue must come from multiple sources
This is absolutely crucial. A music company, as we’ve seen, is going to be buffeted by advances in technology that are going to become more rapid as time goes on. When asking the question “what’s the technology that’s had the biggest impact on music in the last five years?”, the answer is long and rarely-agreed upon.
These advances might make certain parts of the music business obsolete. No-one’s been buying singles for ages now, so a company that just sold top-ten singles would be screwed, if such a company existed. That might sound silly – but in the future, your kids will be asking “why did companies exist that just sold plastic discs?”.
Diversification is so important to the future of music. A music company needs to have fingers in as many pies as possible, so that if one of those pies is eaten, then there’s always another to tuck into. Also, no-one else will want to eat it, because your fingers have been in it, and they’ve got no idea where your fingers have been, you mucky pup, you.
Artist management. Event curation. Brand representation. Movie soundtracks. Merchandise. Tour planning. Rights licensing. Style consulting. I could go on and on. Selling physical and digital music is only one tiny piece in what the future of a major music company should be. You don’t have to be an expert in all of it, but you should at least have a presence in every single bit of the music consumption food chain.
I hestitated a little when writing that last paragraph. God forbid that a massive company should run my entire music experience. But then I thought – well, if they do it well, and aren’t ‘evil’ (nod to Google) then there’s no reason why I have a problem with them doing that. As long as they aren’t preventing me experiencing other amazing music from other companies, too.