For musicians and music lovers alike, the past several months have undoubtedly proved one thing to be true: most deafness is the incredible sound of silence. After the closure of locations around the world, the impact of the Kovid-19 was far-reaching and financially devastating – after the tour is The financial engine of the music industry. The devastation brought on by the epidemic was indeed unprecedented, but even a casual historian knows that big problems present powerful opportunities.
If you are considering starting a business or growing an existing one during this upheaval, then go for it. Just be sure to learn from another recent disruption: the rise of digitization that brought the music industry to its knees.
When record labels were concentrated elsewhere, a music file-sharing platform would soon shatter industry norms forever: Napster was not just a disruption, but an earthquake that crippled the multi-billion dollar industry overnight. will do it. Music-tech start-ups changed the creation, distribution and marketing of music in profound and sustainable ways. For those who tried to step back (mostly major labels), the effect was severe. For those who optimistically adopted the new normal, as well as the challenges of new technologies with creativity and curiosity, the transition to the millennium halted a period of artistic construction with significant financial growth.
The innings was not easy. All artists need to be paid, and the theft that came with digital sharing was challenging. While the big five continued to wrestle in the courts, an entertainment outsider made the leap forward: Apple’s iTunes platform offered legal and profitable, and a user-and artist-friendly model for music consumption. At the time there was no need for a physical delivery of music – the primary business model for record labels.
Sales metrics such as SoundScan no longer provide an accurate measurement tool to value an artist’s influence. As record stores wither and indefinitely jeopardized by revenue streams, agile leaders march forward, creating new avenues for stability.
The social sharing of music encouraged deep intimacy between musicians and music lovers, and the possibilities of online branding were widespread. Despite a decrease in sales of radio plays or CDs, less well-known artists began returning awards on the road, with music consumption at an all-time high. Very soon, revenue opportunities that could only be enjoyed before more established acts were becoming available to smaller bands, parting ways. Looked strange and irrelevant.
So, as we all face uncertainty during this global epidemic, what can we learn from the record business’s reactions or rectangles?
1. Go boldly
Instead of trying to squeeze a new circle into your old box, be flexible with your boundaries. Consider revenue streams that you may have ignored in the past or closed down as untouched.
2. Embrace New Metrics
Resist the sole reliance on traditional methods of determining possible outcomes. Consider the unsigned artist of the early 2000s who sold a dismal number of CDs that skyrocketed. That artist would become Justin Bieber or The Weeknd or, today, Billy Illisch.
3. Be inspired by the boundless creativity of others
Imagine that the record label adopted digital distribution and learned from Napster instead of stopping it and fighting the teenagers in court. Since well into the decade of the late 90s, the music industry was catching on and mostly losing.
4. Compensate artists (partners, customers) appropriately
Artists, team members, partners – all are equal parts of a successful model. Sharing profits is not only morally responsible, but also drives creative collaboration development. We are “all this together,” right?
These lessons are still paramount. In the same way as digitization disrupts an industry, the epidemic is now causing smart musicians and their teams to adapt and look for alternatives.
New platforms have emerged to offer unexpected media collaboration, representing win-win revenue builders:
Twitch and Minecraft, for example, have become virtual spaces. Paid subscriptions to streaming channels are providing exclusive access for fans. Music publishing, and IP rights more broadly, have emerged as a hot income generator. With low interest rates and easy entry into the publishing sector, finance experts and major private equity firms find real value in the artist list. In a new data-driven business world, the proprietary model allows a more reassuring path to predict ROI on future earnings and even less-known actors can reap these benefits.
Someday, and hopefully soon, live music will once again shake the walls of Wembley Stadium and Tipitina. It won’t look different, but it may sound a little different. The innovations of the last six months will not go away when the first “real” ticket is sold; Many are here to stay. Smart entrepreneurs and leaders, take note! History has taught us that those who are transformative, optimistic and willing to adopt change are true rock stars. ahead!
Jeff Walker is the Managing Director of Stelvagen Ventures, a strategic global venture company working in the fields of music, sports, media, investment and entertainment. Our ethos is to promote a win / win model that supports a shared success thesis around everything we do. We are about winning – winning together. Artist, buyer, seller, brand, franchise, broker.