‘Social Media’ IS NOT Media, ‘Social Media’ is Social.

Posted: February 11th, 2011 | Author: | Filed under: Kev's Thoughts On... | Tags: , , , , , , | No Comments »

Social Media Wordcloud

Every time I read or hear someone use the term ‘Social Media’ I shudder. That’s because nine times out of ten the term is used for instructing how to Use social media, with little attention paid to what actually Is social media.

A Google search for the term ‘Social Media’ quickly provided a whole slew of article titles I abhor:

“Top 20 social media monitoring vendors for business”

“7 tools to monitor your competitors’ traffic”

“10 ways to measure social media for business”

“14 strategies to grow your blog’s audience”

“Losing Control and More: 5 Fears Of Social Media”

“Hidden Social Media ”Gems”: Three Useful Twitter Case Studies”

“Get to Know Your Customers Through Social Media—It’s as Simple as a Digital Handshake”

“Five Things Most Social Media Marketers Forget (and Shouldn’t!)”

“Top-Level Metrics Are Just Candy for the Boss”

“How Blogs Are More Useful Than Email Newsletters”

“15 Tips to Increase Twitter Followers for your Local Business”

“10 Reasons Your Facebook Page Is Not Taking Off”

I’m sure we have all either written, read, or re-tweeted an article like these at one time or another. My grievance isn’t that discussing how to use social media is wrong or somehow false, but the over abundance of these articles shows that the social media professional community assumes social media is static and just needs to be properly optimized. The misconception comes from an error in focus.

People approach Social Media as Media, instead approach it as a way to understand the nature of Social.

Social Media is an evolving, perpetually changing thing. Not simply because technology continues to get better and enables new capabilities, but because the way people interact and the meanings of each ritual & action continues to be interpreted and reinterpreted by different peoples, different groups, and different regions, creating new opportunities and insights about how digital technology can add value to their lives.

Social Media Cluttersource

Even if social media marketers and professionals don”t get this, social media developers certainly do. Take Facebook as case in point. Its rise to success wasn’t from any breakthrough technology. It was successful because it chose a highly influential and underserved market (Ivy-League students) and created a service based on deep understanding of the social dynamics, social needs, and social capital most prized by that target group. (It also didn’t hurt that the founders of Facebook were at the time Ivy League students themselves, so they were intimately immersed and versed in the micro-social nuances of that community.) You have all heard of Mark Zuckerberg, but how many of you have heard of Chris Hughes? Chris is one of the co-founders of Facebook. And do you know what his job was at Facebook? As described in a Fast Company cover story about Chris Hughes:

“…unlike Zuckerberg and dorm mate and cofounder Dustin Moskovitz, he didn”t write software code and didn”t want to. Instead, he tried to figure out ways that people would want to connect with one another and share stuff more easily. (His nickname among Facebook insiders is “the Empath.”) Hughes began to make product suggestions, “screwing around with the site,” as he puts it. When they decided to open Facebook to students outside of Harvard, he argued that different schools should have their own networks, to help maintain the site”s feeling of safety and intimacy. He became the official Facebook explainer: part anthropologist, part customer-service rep, part media spokesperson.”

The co-founders of Facebook are more anthropologists and sociologists than they are developers.

Twitter is another great example. The three co-founders, Jack Dorsey, Biz Stone, and Evan Williams created Twitter in a matter of a couple weeks as a ‘side project’ while they were all working for a podcasting company back in 2006. The code I’m sure wasn’t rocket science. And yet some people call them ‘lucky’. It wasn’t luck. It was the fact that the founders were probing the nature of how people interact online, and saw an emerging social need that had to be filled. And they filled it.

Social Media Snoopysource

This brings us back to social media marketers and professionals. If they could just shift their focus from social media as media to social media as social, they’d be in a better position to create real value for clients. Today’s social media practitioner is occupied with learning these platforms to build clicks, impressions, likes, followers, re-tweets, comments, etc. The problem is 1) these easy-to-count, hard metrics have never fully answered the client’s deeper needs of branding and cultural relevance with the end user and 2) even before the practitioner has successfully learned how to utilize the platforms competently, newer social media platforms, based on new social interactions change the game yet again.

In this fashion, the social media practitioner is constantly playing catch-up, and never fully delivering on the client’s key needs.

Start with the end in mind. Seek to understand what is the user’s social need that is being met with this new social media platform. How does your company, brand, product, engagement, elevate this social nuance? Perhaps instead of thinking, “We need to have a presence in all social media platforms” you should instead ask, “Which kinds of social pain-points does my company, brand, product, engagement, alleviate?” then, “Which platforms have mechanisms that successfully treat that social pain-point?” and then, “How can my company, brand, product, engagement best work with that platform to provide a new value-added mechanism?”

Its even better if there is no current mechanism existing to solve the social pain-point you’ve discovered. That means you can create a whole new platform (or partner with an existing platform to develop) and offer totally new value, to the user and to your client.

Social media professionals need to be experts on social, not experts on media. They need to take the lead and understand why the user is really using that platform. They need to clearly understand why they’ve chosen to engage the user in that particular way. And then they need to elevate that engagement and show users that social media professionals can truly add value to the user’s experience. Marketers need to stop asking, “What kind of interaction is available?” and instead start asking, “What kind of interaction is sustainably beneficial?”

I truly hope one day soon when we use the term ‘social media’ we will be referring to the social meanings being created and enhanced by digital, instead of as a tool and channel to further our communications campaigns.


Building a New Model for Agencies and Consultancies in China and Beyond

Posted: February 6th, 2011 | Author: | Filed under: Kev's Thoughts On... | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

Reinvention is a constant that all businesses and industries go through. Ad Agencies, Media Agencies, Market Research Agencies and Management Consultancies are currently going through one such reinvention, and a dramatic one at that. These professional services help organizations interact and influence the end individual. They exist and thrive in what I call the Insight Economy.
The future for these kinds of companies are not very clear. Industry and organizational experimentation is happening in all areas. The successful new professional service will be one that accurately understands the nature and needs of the new industry environment.

Digital DisruptionSource:http://boldink.co.uk/
The Pains of an Industry:
The Digital Disruption has made interacting with the individual exponentially more complex and nuanced. The plethora of new channels not only makes reaching a segmentation more difficult, but traditional segmentations are obsolete as individualized digital experiences are creating people with multi-faceted, multi-layered and unique identity points.
Digital has lowered barriers of entry to many industries and professional competition is on the rise in all domains. Tech companies are becoming media agencies, management consultancies are becoming digital agencies, and digital agencies are becoming traditional/creative agencies.
Competition is not only rising in the professional practices, but where it actually counts too: the ability to influence. Digital has enabled each connected individual to potentially be the king of their own domain, or the multiple domains in their sphere of influence. The open stream of consciousness that now exists means the work and influence offered by professional services is even more at risk of being belittled and relegated to irrelevance.
The ever-evolving nature of Digital means everyone, including those traditionally seen as ‘experts’, has fallen perpetually behind.
And so clients have lost confidence in the ability of these professional services to provide a reliable and appropriate return on investment. If the professional service’s influence on the end individual is diminished, if they don’t even know what would influence the end individual, and if they may not even have the capacity to learn what could influence the individual, why should clients pay?
What makes matters worse is that most professional services are still organized in large, lumbering, un-adaptive institutions that derive their revenues from over-charging on services that are fast becoming obsolete themselves.

In other words,
Its chaos out there
We’ve got our backs to the wall
And we don’t know what to do

So what is the most promising and versatile business model for the agencies and consultancies in the Insight Economy?

Formation & Scale:
Military Tactical Unit
1) Be Lean & Tactical, Modular in Growth
Lets take a page out of the geopolitics strategy playbook. Traditional military units are ineffective in engaging trans-border terrorist groups, but we’ve now created tactical military cells specially equipped to handle specific needs and objectives in specific circumstances in specific locales. Professional services need to be reformed the same way. No longer can we operate with large, generalist divisions. We need to live in small cells of tactical units; each designed to be the expert on a specific purpose, in a specific environment, in a specific localization. Only then can we be flexible and focused enough to stay on top of the learning curve, and adapt to evolving situations. It’s also cost-effective. Operating a smaller group means the unit can survive at a time when the work required becomes more piecemeal while still requiring a high state of intensity.
Lean and Focused doesn”t mean alone. Like terrorist cells or elite military units, professional services need to live in fluid integrated networks that work in tandem, coordinated to achieve one objective. Different units of the same expertise should be built in different localizations to master the nuances of the diverse geographies. Professional services should drop in and out of different situations, working with different partners, and solve different problems.
It”s the only way to operate in this influentially-fractionalized environment.

2) Be Upward+Downward Scalable
Lego building blocks
Fast Company recently published a fantastic article about advertising, and in it they described a company called Co, a 5-person consultancy that can draw upon a network of 44 multi-disciplinary partner agencies in the event they take on a project more than their 5-person team can handle. In this way they can scale up and down to precisely fit the project size. In addition, they can invite the right combination of talents together that fit the project scope.
Upwards+Downwards Scalability may not be the most job secure, but its more sustainable than the status quo. Clients and the work require greater and greater customization. If you cannot offer the exact solution, a competing team will. The industry can no longer afford or tolerate redundancies. Those that expected an advertising or media job to mean a steady paycheck should wake up. The future of this industry will look a lot more like the film-production industry, where everyone lives project by project.
Such frequent scaling may pose problems for quality control, but this is the challenge of the new professional service. Creating replicable guidelines, procedures and methodologies to ensure highly integrated collaboration from Day 1 will be the mark of a successful company.

Scope:
3) Be Highly Specialized, Non-Integrated, and Positioned to Frame the Question
AdAge published an article by TB Song, Ogilvy’s Greater China Chairman that talks about the changing trends in China. Song states:

“Marketers often spend 10% of their budget to produce the average TV spot and 90% to blast it across mass media. In the coming years, budgets will look more like those of movie studios –80% for production and 20% on promotion. The stronger the content, the less one needs to spend on publicity.”

Indeed, today’s individual will only pay attention if there are nuanced, resonating, and timely personal meanings and relationships involved. But in this chaos its not only content production that will grow, the more important issue is What the content production should be, and Who it is for.
Song proposes that Ad Agency Planners will break away and form their own niche practices. I agree with Song’s forecast. Successfully answering “What content production should be and Who it is for” requires long-term, immersed specializations in categories/practices to develop the proper insights and trust. As traditional segmentations give way to tribal rituals, secrets, and micro-social interactions, the important question becomes which tribe, ritual, secret, and interaction should the organization/brand be involved with. Only a highly specialized professional service has the chance to answer this question. Specialists need to detach themselves from their present integrated service units in order to focus on particular areas and find the greatest relevant value – that”s what clients are really ready to pay for.
Tribal Immersion
Unfortunately not all specialists –and by extension agencies– are created equal. Planners are already positioned to capture high individual value because they are helping make sense of the chaos, and helping to frame the question. By the same logic specialized market researchers and management consultants may have a similar value-added.
This leaves Creatives in a particularly difficult position. In an age where one ‘Big Idea’ has a harder and harder time convincing its value and ability to resonate, Creatives are at risk of becoming a commodity. The earlier mentioned Fast Company article suggests that the way to capture higher value is for Creative Strategists to evolve from story-tellers to story-builders, meaning they curate, participate, and add to a never-ending storyline/lines in co-creation with the end individuals. This again would need to be highly specialized, as story-builders need to be adept at maintaining and innovating intricate interactions that are relevant to the cultural nuances of the particular community.
There are some services following de-integration that will be commoditized, and have already begun so. Media buying, media metrics, and to a lesser extent creative production are becoming more interchangeable and will become generally support-services, because they don’t answer the main value question “What content production should be and Who is it for”.
Those that will offer the highest value, and reap the greatest rewards, will be those professional services that can de-integrate, and be highly specialized with the ability to Frame the Question.

Value:
While the above Formation, Scale and Scope sections deal with organizing oneself for tomorrow’s industry, this Value section is about defining and defending a sustainable positioning.
4) Give Free Data-Points, Get Paid for Insights
A great blog article interviewing the founder of PSFK reveals the new nature of information value-creation, and anyone in the Business of Information –professional services, publishers, media– should pay attention. The small team at PSFK navigates through an immense amount of information and data points at a voracious speed. Acting as a media platform, they freely share and broadcast the information they come across with the public. PSFK instead gets work and makes its money consulting on concept development and trends. Their value-added is not from the selection of information they broadcast, but from linking disparate data points, synthesizing patterns into insights.
Why freely publish what you’re looking at? Shouldn’t keeping it secret give you more advantage?
Sharism PresentsSource: celinecelines
PSFK has embraced the new reality that information flows free, and the benefits gained from free broadcast outweigh the loss of potential revenue from taxing that information access. Consider why you use Twitter. What benefits come from freely tweeting and re-tweeting all those links? For one, you gain a following of people who begin to associate you as a credible source for a specific kind of information — sounds to me like the best kind of advertising you could hope for. Perhaps more importantly, you build conversations and relationships with a growing network of like-minded and equally amazing people. A network that will elevate the quality of information you consume by in turn sharing with you what they’re looking at. In this new insight economy, professional services are only as good as their information community. The traditional model of market research that ignores community immersion and commitment is dead. Give free data-points. Build your information community. Get paid for deeply nuanced insights.
5) Narrow-Casted Community Connectors
Your community is your long-term defendable competitive advantage because it is one of the most difficult assets to build and copy. Ask any Web 2.0 platform and they’ll attest to this. Communities are not just important for social media, but as we’ve just discussed, for professional services as well. Once you have immersed yourself with credibility and trust in a distinguishable community, clients won’t just want to draw on your insights from that community, they’ll want to connect to the community itself. And they’ll hire you to help them do it. This is the professional service’s next value added beyond insight. This is the real influence industry.
As a community connector, a professional service will ‘narrowcast’: strategically identifying and working with a small group of community leaders who influence the influencers. Each company will narrowcast in the community they’re immersed in. PSFK offers connection to high-level creative thinkers. Co, narrowcasts from their extensive network of media, branding, technology and other experts in North America. Victor & Spoils, another company mentioned in the Fast Company article, crowd-sources creative production from their base of operations in Boulder, Colorado. China Youthology, the company I help lead, will explore connection opportunities between passionate organizations and the China Youth community.
Being a connector can produce powerful win-win opportunities, but can only be achieved by first having credibility with the community. This credibility is rooted in deep immersion, commitment, passion and membership.
Mr.Rogers
“Won”t you be my neighbour?”

Where could we see this new model of professional service enter mainstream use?
It would have to be a place that a) Clients are willing to try new things and are thirsty for an edge b) There is less dominance by conglomerate holding companies c) There is a sufficient supply of talented specialists d) There is an entrepreneurial spirit by those in the industry e) There are growing communities of interest
I’d say that China has some challenges when it comes to growing the supply of quality talented specialists, but this problem is already on its way to solving itself as more and more talent migrates to Asia in search for new opportunities. The other hurdle for China are the clients. It is not that China’s domestic clients aren’t willing to try something new, but the unsophistication, immaturity and general lack of standards in the client-agency/consultancy relationship has in the past made progress difficult. A lot of education, hand-holding, and culture-building continues to be needed. But perhaps this is also China’s saving grace. With less legacy impeding the breaking of convention, maybe China will have an easier time embracing a new agency and consultancy model.
However, I can also see other regions being the first to champion this model. All have their weaknesses and strengths, but all are in desperate need for change, and a model — like this one — that can help solve their ills. I would also surmise that the adoption of this model may arise by industry instead of by geography. Ad agencies and Market Research agencies I would expect to be the first.

Some last thoughts:
With all this reinvention going on in agencies and consultancies, the onus is really on Clients. In the new Insight Economy marketers will not be able to rely on a one-stop-shop to answer all their questions and do all their work. It won’t be only a matter of assigning budgets and deliberating on pitches. While able to help clients frame the right questions and connect highly nuanced strategies, new agencies and consultancies will only be able to add value if the client is sophisticated enough to know what kind of professional service they need, and what kinds of value creation really matter to the organization.

If you’re finding yourself in the Insight Economy, and feel the pains of the industry, start your reinvention by first asking, What’s your specific community of connection? How do you immerse to capture the right, relevant insights and build to provide a unique, value-added professional service?


The Music Industry: 7 Dying Sectors & 8 Growth Sectors

Posted: July 25th, 2009 | Author: | Filed under: Kev's Thoughts On... | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 7 Comments »

music-industry

Artwork Credit: www.budikwan.com

As most of you know, part of my blog is dedicated to reviewing Jazz music as it is one of my passions in life.  Naturally as a business professional and entrepreneur, the restructuring and transformation of the music industry is something I monitor closely and ponder often.  As I attend music festivals and concerts, the question of commercial music’s future viability is foremost on my mind.

Music will always be an integral part of our lives, in one form or another.  The quality, creativeness, beauty, authenticity and relevancy of Music is not at risk nor now being called into question.  However, the commercial model that has supported the music ‘industry’, and the channels, players, and processes that have been in place to provide us the music we love, are all going through major flux.

To better understand where the Music industry is going, here are some generally accepted Facts & Trends:

1) Digital music is here to stay

2) Free & instantaneous sharing of music is here to stay

free_sign_med

3) Because of points (1) and (2), the competitive price for owning/storing/listening to recorded music in any format is fast becoming $0.00, and the general public is accepting the idea of “Freemium” as the norm.

freemium

4) Because of point (3), the largest portion of the Music Industry’s revenue pie being reduced to zero, and as a result there is heavy consolidation as existing players try to find new avenues to monetize music.

5) Because of point (3) and as seen with recent free releases Radiohead””s ””In Rainbows”” (2) (3) (4) and Trent Reznor +NIN””s ””The Slip””, recorded music is being giving away for free.  Recorded music is now a tool of marketing to generate buzz and popularity for the artist.  It is then believed that the artist can use the popularity to leverage and commercialize other assets the music artist can profit from – entrance into film & television, merchandising, concert tickets sales, endorsements, etc.

6) There continues to be demand for ””Mainstream”” and popular music, especially in the social age groups where music & fashion plays a more critical role (between ages 12-22).  Mass broadcast media like TV and Radio will continue to remain, but music consumption will continue to hyper-fragment with ever-more new media channels bringing greater exposure to independent and niche music genres.  The idea of mainstream & popular music may wane as social groups become more complex and are less defined by the style of music the group identifies with.

What is under threat?
As the business around selling recorded music become obsolete, here are some areas that are coming under threat:

a) Album art/artists
No Albums, no album art.  While I love the tactile experience of buying whole albums, looking at the album art and reading the album material, I have to admit that these features will soon disappear.  While music artist websites will thrive and house information about the artist & music, artwork will fall by the wayside as it is not essential.  Creative photography and good Photoshop will be all that is needed.

b) Music Labels

big_4
Contracts and relationships based on management & production of an artist”s recorded music in exchange for a percentage of the proceeds from the sale of that recorded music is not going to work anymore. Music Labels must transition to the management of other aspects of the artist””s career that has more moneymaking potential.  These opportunities will be discussed in the next section.

c) ”Superstar” producers & music/album consultants
I am not saying that music producers will become obsolete, far be it.  However, ‘Superstar’, celebrity-status producers will become exceedingly rare, simply because the economics of supporting these individuals is disappearing.  Quality music producers do wonders for a music artist, but the future payoff of being a producer is in jeopardy and will continue to fall as their income will need to be derived from something other than recorded music sales.  As the Internet is now providing more ways for collaborative producing simultaneously from around the globe, old barriers to entry for a producer that had helped to prop up producer fees – such as location and scarcity of expertise – are becoming less relevant.

d) Big-Budget Music videos

The MTV Generation was born with Michael Jackson’s ‘Thriller’ music video.  Coincidentally, the death of the music-video-watching culture is also marked by Michael’s recent and unfortunate passing (2) (3) (4).  Big budget music videos are a feature of the past for a number of reasons: 1) There is decreasing demand and dwindling viewership for music videos.  This can be seen from the type of non-music video content that now occupies the majority of MTV’s timeslots.  Viewership is decreasing as music consumption and music discovery proliferate to different media channels. 2) As seen with ‘Superstar’ producers, there is less money in the industry to be spent on costly & lengthy video productions. 3) The use of computer graphics will increase in Music Videos as the lower-cost and broadening availability make it first choice among music artists.

e) Ultra-wealthy music artists
The last few decades have been littered with memorable celebrity-music artists who are known just as much for their flash and spending power than for their music.  Think Michael Jackson & his Neverland, U2, The Rolling Stones, Paul McCartney; think of a whole subculture that grew up with the idea that the only ways to become rich were by playing in the NBA or becoming a rapper.  Flashy music artists like Jay-Z, Eminem, Kanye West, Dr. Dre, 50 Cent and P. Diddy canonized such ideals of a lucrative music industry.  However, the high number of exceedingly wealthy and extravagant musical artists – star pop recording artists who made all their money from selling recorded music – will become rarer as the industry moves forward. “Artists walk in to his office, who used to make $300,000 to $500,000 a year in royalties from selling recordings. And now that’s diminished to less than $50,000 a year.”
While we will still have musical pop stars, fashion & social icons that will define subsequent generations, these people will not derive the majority of their wealth and income from their music.  Most likely they will be signed, early on, to a multi-media production company & talent agency where they will be trained, branded and promoted to the mainstream through many channels.  Disney’s Hannah Montana star, Miley Ray Cyrus, as well as the lead performers from Highschool Musical are valid examples of this emerging business model.  Certainly, being ultra wealthy by being a pure musician will no longer be a viable dream.

503983_Hannah-Montana

HIGHSCHOOLMUSICAL

f) Recording Studios
Recording sound quality is still a bottleneck, albeit a widening one. A local function, the recording studio will still be around supporting a local industry of sound recording technicians.  However, time and technology are not on their side.  As technology continues to improve and prices continue to fall at an inverse rate, the professional recording studio has pressures to eventually become obsolete.  The barriers to entry to offer professional recording services (the barriers are mostly technological and operational know-how) are all lowering.

e) Intellectual Property (ASCAP + Worldwide affiliates)

There is no area I am more concerned about than the future of Intellectual Property (IP) for music.  If the protection, management and monetization of Intellectual Property is unable to transition with the Music Industry, it will have permanent and crippling negative impacts on the industry.  By Intellectual Property I do not mean the ‘rights’ of free sharing of recorded music.  That IP has already been nullified. ASCAP (The American Society of Composers, Authors and Publishers) and its worldwide affiliate organizations, are responsible for finding a way to pay for the Composers, Authors and Song Writers whose contributions behind the scene are the foundation of music.  If ASCAP cannot find new ways of tracking and charging for the use of the materials it manages, in a free-sharing, digital world, being a song writer will no longer be a sustainable profession, and the music cannot go on.  What singer can sing without lyrics, or a composer? They are essential pieces to the puzzle.  Perhaps some music performers can hire an entourage of personal songwriters and composers to their staff, but how many music artists can afford that?
The other problem facing ASCAP is one of economics and Game Theory.  An over supply of poor musicians and even pooerer song writers will continue to push royalties down on existing monetizable rights.  When you consider the growing music industries of other developing countries, where there are an increasing number of non-ASCAP members, lead by non-US music creatives, the law of numbers can help you extrapolate that eventually the American-led ASCAP business model may become obsolete.

Where are the Opportunities?

a) Tour coordinators/managers/companies
So if music artists can no longer sit back and sell CDs to make money, how can they? Get up and sell some concert tickets.  People seem to forget that before the era where most of the money was made from selling records, musicians made most of their money doing performances.  Musicians would be on the road perhaps 300 days per year, doing live performances.  It is only a recent phenomenon that musicians could record an album, sit back and let them sell, and ‘choose’ if and when to go on tour.
If music artists need to return to the road, return to live concerts to make the bulk of their money, then the ancillary services like tour coordinators, tour managers, and tour companies, may have some room to grow.

r329118_1481038

b) Media consultants, Music distribution specialists
With the rapidly diversifying new media landscape, musicians can hardly keep up.  Like all creative industries, let the talent focus on what they do best: perfecting their craft.  In this case, let musicians make music. Then let the professional marketers and agencies do the rest.  If giving away recorded music falls under the umbrella of marketing, then professional media consultants and music distribution specialists will be needed to help artists maximize their exposure to their target listeners.  This role can be an amateur individual helping out one artist, to a professional working for a large music group handling multiple music artists.  A great growth area for Music Labels.

c) Music discovery services/products
As music becomes available from many different channels, and we wean ourselves off of single-broadcast channels like Music Television and Radio, we will be overwhelmed by the depth & breadth of music variety out there.  To make sense of all the noise, we need better music discovery services/products.  A lot of companies are already trying to capture this field: Last.fm, Pandora, iTunes, to name a few of the big ones.  There are wonderful specialty services such as Musebin and NeochaNEXT Player.  Regardless how this market plays out, it is extremely lucrative on the basis of social networking, ecommerce, and advertising.

d) Individual Artist Management & Talent Agent
With ‘the business’ moving from music sales to all sorts of other revenue streams, management will be less about the management of the music and much more about the management of the talent.  This is one of the areas that Music Labels can consider moving into.  A professional talent management agency would be able to consolidate a number of functions becoming increasingly important to the success of the artist.  This can include putting together and coordinating tours, having a media management division, setting the artist up with different music producers and musicians, and helping the artist find endorsements or develop beyond a music artist.  Most importantly, a talent management agency should be consciously building its talent’s personal brand, and executing high-reach, highly effective PR campaigns.  A good talent agency will craft its artist’s image from the very beginning, consciously identifying fan bases, pinpointing locations with a high-enough concentration of fans to put on a concert, and molding the talent into an identifiable icon.  Revenue for the management agency then comes from multiple streams: management fees, a cut on endorsement deals, a percentage take on ticket sales, and rights to merchandising.

arigold

e) Sponsorships & Endorsements
Artists will start looking more favourably on corporate sponsorships as they look elsewhere to diversify their revenue streams.  As touring increases and artist branding intensifies, the attractiveness of artist sponsorship in exchange for corporate association with the music artist will rise.  It may be a strange idea for us to imagine today, but do not be surprised if one day in the near future, it is the norm to see music artists sporting clothes and logos of their sponsors.  Just as Tiger Woods wears and uses all things Nike, so will you see the same for successful music artists.
Sponsorships will go beyond the individual artist.  We will see more festivals and tours being headlined by a corporation seeking to build brand recognition and association to a certain target group.  In these ways the music business will be able to tap into the much larger pool of Corporate PR & branding.  “Selling Out” will no longer be valid, it will just be reality for the industry.

celeb-food-endorsements-story

f) Sound Recording & Sound Editing Equipment & Services
Technology will continue to offer growth opportunities for music. As mentioned earlier, local professional sound recording studios and technicians are currently a bottleneck, but that competitive edge is fast eroding.  As technology enables cheaper, better quality sound recording & editing equipment, price & production will hit a tipping point that will render sound studios mostly obsolete.  Artist will then be able to self-record high-quality music, fully edited and produced, and disseminate the music for free as a form of marketing to gain a fan base. With simultaneously improving video recording and editing equipment, self-produced, innovative music videos will also be available for distribution.  No longer will we only have low-budget amateur music artists showing themselves to the world YouTube style, it will be a whole different experience, and a social experience at that.  Those in the business of digital sound recording & editing have a lot of potential to make huge waves in the music industry.

g) Open-source producers, Open-source artist collaboration
Mentioned above we discussed the demise of the ‘superstar’ producer.  The growth opportunity for this field is the new practice of ‘open-source’ producing and music collaboration.  These Open-Source initiatives are already underway, with projects like Kompoz, Musicollaborate, and The Net Studio.  They are effectively removing the barrier that was locality, and have released expert and best standards producing power to the entire globe.  Now a ‘superstar’ producer can be working on multiple songs for multiple artists from multiple continents.  Music artists and/or management agencies will be able to seek out, commission, and pay for, the producing of music to anyone in the world as it sees fit. I genuinely hope we get on average better music as a result.

h) “Exposure” tours/festivals
Unlike musical-genre festivals like Lollapalooza, and Jazz Festivals, or tours & concerts performed by music idols, we may expect in the future to see the rise of a third style of tour/festival, something I’d like to call an “Exposure” tour.  An Exposure tour is a show/concert featuring a medley of different bands or musical artists, each singing only a few songs each. In this way the audience gets a to hear a greater number of musicians.  Conversely, an Exposure tour allows a number of lesser-known artists, who may only have a small or medium-sized following to band together and pool their fan bases to build a large enough audience for a profitable concert.  This tour format was in fact heavily used in the 40’s through to the 60’s, and is still in use today by touring groups of yesterday’s favourite pop-stars in Hong Kong and other parts of Asia.  With tools like SNS application iLike that can track pockets of fans in far-flung cities, a shrewd tour company/talent agent could gather a number of emerging artists who share similar fan bases or music genres, and piece together an Exposure tour.  It is a great way for the artists to make some money, gain touring experience, and acquire new listeners who come to the concerts for other participating artists.

A message for music artists

Music Artists, you have to learn how to self-promote, be media savvy.  For now, try to make as much money as possible by still selling music.  Eventually though, you will be forced to give music away for free as an essential part of your marketing.  But track where listenership grows, be active in the communities that emerge around your music, and perhaps sell higher-end ‘premium’ content like music videos or even online interview/chat sessions.  Eventually, when the demand for your music is large enough, begin planning concerts and join festivals.  If lucky and with the right numbers, you can have a professional talent management company represent you, help you promote and manage your media, build your brand presence and disseminate your music.  Then focus and work hard on your music, but never forget that your revenue will likely come from a variety of different sources, so be open to trying new things!

Asia Perspective

The above Opportunities & Threats are related primarily to the North American and Popular Music markets.  In Asia, musical taste maturity, musical diversification & sophistication still need time to develop.  Media channels and the societal/cultural need to develop better national ””popular music”” still has strong and growing demand in Asia, and will therefore perpetuate the old model.  Sound recording technologies, even if/when the prices come down, will still be too high for the purchasing power of Asian music artists.  The large income disparity still being experienced in Asia will make self-recorded music lag behind North America, in quality and volume, still for some time.  But, as Asians have proven that their ability to copy foreign innovation is uncanny, I hope that Asia can follow quickly in the steps North America is taking in the new music economy.  I have a suspicion that, as a result of it’s numbers, Asia will be able to innovate new business models unreasonable or unsustainable in the North American market.

background