A survival strategy for the music industry
As the music industry begins to buckle under the weight of digital downloads it is finally dawning on the Empire that the rebellion cannot be halted. No amount of marketing mind tricks are going to stop the decline in music sales.
According to research commissioned by British Music Rights 63% of people illegally download and some 48% of MP3 tracks are not paid for. Worst news still is that only 15% of people are dissuaded from uploading because of the risk of being caught. Clearly the industry is facing a challenge greater than a ’small minority’ of serial uploaders! PricewaterhouseCoopers is predicting a 0.6% compound annual decline in music spending over the next four years ($33.4bn in 2007 to $32.5bn in 2012. Not exactly the end of the planet as we know it but the Music Industry can certainly see it from there.
So what to do? Well for all you Music Fat Cats out there here is my top five survival strategies.
1. Pay the artists less. Rather than making them multi millionaires in a couple of years, why not aim for mega-rich status in say four years?
2. Pay your executives less. If you cut their packages by a half they wouldn’t even notice. Trust me. And even if they did they would get by with plain old fantastically rich rather than obscenely rich. Honestly.
3. Spend less on lawyers. Suing john and Jane Doe just hacks everyone off. Don’t do it, save some money and win the hearts and minds of the people.
4. Ditch the DRM. Its costing the Industry millions and it doesn’t work.
5. Tap the trend of social networking, learn to bundle to create value added packages, call buyers to action. If you stop hollaring for a moment and look at what is happening you will see that the youth of today are enjoying the social interaction of music sharing - ripping you off is just a side effect of a wider need to interact. They enjoy picking out songs, sharing them, recommending them, talking about them. Tap into this and you will find a rich stream of willingness to pay. you just need to unlock the right service combination.
What would I do? All five (well maybe not number 1 - at least not straight away). I would make a concerted effort to use free downloads and web 2.0 interaction initially to drive CD sales (yep, strangely enough they are still selling), then to drive gig and merchandising revenues. I would also look to tie artists to sponsorship deals.
Use the force - while you can!
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