November 1st, 2005 Q: What’s a record company?
A: An organisation whose survival depends on suing those who are potentially its best customers.
This opening statement from a recent John Naughton piece Striking a bum note brought a wry grin to my face thinking about one of my favourite sayings – that companies are from Mars and customers are from Venus.
And so I thought that in fact there was a part 2 follow up from yesterday’s post.
As Naughton says adding rocket fuel to what we say in our book
Scarcely a week goes by without some salivating music industry executive detailing the latest batch of lawsuits launched against file-sharing teenagers.
In an interesting variation on this litigious theme, Candy Chan, an American parent of one of these errant youngsters, refused to settle on behalf of her 13-year-old-daughter, Brittany. When she announced this plan of action, however, the record companies decided to go after the kid directly.
But in order to do this they had to find a way of neutralising mummy. So they petitioned the court to push Mrs Chan aside and appoint a legal guardian in her place.
Truly, you couldn’t make this stuff up. The whole saga of music downloading is set to become a business school case study on the lengths to which an industry will go to defend a business model that technology has rendered obsolete.
There is a Darwinism that springs to mind here that my good friend Tomi Ahonen taught me.
That it is not the strongest or the most intelligent that survive, but those most adpated to change
The music industry demonstrates a mindset based on analogue mass control – rather than understanding that these digital natives of the music file sharing world are in fact their route to greater profits and revenues.
Naughton asks, and I imagine at this point he is looking up to the heavens
Why has the industry not spotted the potential of the net as a heaven-sent way of distributing its product and increasing its profitability? Why have artists such as Metallica supported record labels in their untenable stance, instead of realising that the net offers them a way of increasing their royalties? And why has society tolerated the ludicrous stance on intellectual property implicit in the music industry’s actions?
Why indeed? And lets not forget mobile
As Tomi will tell you there are 40 million mobile phones in the world that have MP3 players, whilst direct sales of music to mobile (real songs, not ring tones) amounts to $400 M.
As the mobile internet develops the opportunities for new services and business models distribution and two way flows of information and content, will grow.
Still if your company is still wanting to live on Mars then, perhaps a gentle reminder form the Economist from April 2 2005, will help.
Only those firms able to serve (newly empowered consumers) will survive.
So its back to Darwin. and Shoshana Zuboff
These individuals are seeking new consumption choices that can redefine commerce. The new individuals want to make a difference, they want to be heard, and each wants to matter.
Then there is the Artic Monkeys who went from nowhere to number 1 in the UK music charts
Here Naughton drives his point home about how in his view the litigious record industry is not thinking about its customers on venus
Finally, what of the plea (sometimes made by record company executives) that if they didn’t exist, who would find, nurture and market musical talent? Who would spot emerging stars, publicise their work, arrange live gigs, get them played on radio stations, photographed by magazines?
Until last week, this argument appeared to have some validity. And then a Sheffield band called Arctic Monkeys burst onto the scene, and blew even that rationale out of the water. Their debut track, ‘I Bet You Look Good on the Dancefloor’ jumped straight to the top of the UK singles charts. Yet until very recently, they didn’t have a record company. How come?
Well, from the outset, Arctic Monkeys have made brilliant use of the net, distributing free MP3s from their site and encouraging fans to pass them on. The result: sell-out live gigs, a growing buzz and the number one spot in the charts.
Well bugger me, its so obvious it hurts. And the Go Team were also credited by pitchforkmedia.com by building their fan base via the blogosphere.
Then lets look at this recent intiative Artists First which is designed to allow fans to get mp3 files from individual bands websites to mobile.
Naughton finally asks
So can someone please remind me: what are record companies for? Answers on a stamped, addressed plastic disc.
I would also suggest reading another post we made entitled Into the darknet which expands the thinking and debate on how legacy media companies are trying to halt the inoxerable march of digitally connected communities and their use of media content
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