Sunday, April 13, 2008

Art & Commerce

Ethan Kaplan from Warner Brothers Records wrote a wonderful blog post this weekend asking the question: "How do we value art?"

Michael Arrington at Techcrunch jumped all over it and shot it down, referencing the recent idea of a so-called music tax for ISPs.

I don't think Ethan's questions were mis-directed. I think he genuinely wants to open up the discussion and figure out how artists can get paid for their art. The fact that he works at a major record label which has contributed to some of the directions were seeing in the industry might make him an easy target.

In case you haven't noticed, the trend in recorded music (and much of the online world) has been for everything to go free. As you can imagine, this has come much to the chagrin of the major record labels.

One of the fundamental ideas around Sales is the concept that something is worth whatever someone is willing to pay for it. Part of someone's "willingness" to pay for something clearly has a lot to do with the physical controls that have been placed on acquiring the product. I guess that's true for any business, since if you left the grocery store unlocked at night you might come back in the morning with empty shelves. Or would you?

Does the fact that it happens online, instantly & easily, and that a lot of people are doing it, and that there is no real physical interaction or evidence make file-sharing acceptable in the public's eye? (See The Onion: Kid Rock Starves To Death - May 2000)

Historically, the recorded music industry has controlled the value of music by controlling and limiting it's physical distribution. The Record, The Tape, The CD. You couldn't easily copy it and you couldn't give it to someone else without you not having it anymore. All that of course changes with the creation of the MP3 and the industry has been trying to dig itself out of a hole ever since.

Stuff really started to heat up when some Record Labels and Artists sued their fans. While perfectly justified in their own eye, it's difficult to recover from something which serves only to alienate your most passionate and loyal fans. Although I suppose the argument could be made that if they weren't willing to pay for the music, then are they really all that supportive?

Which brings us back to the topic of the value of music, and how to support the artists.

I think there are some things which the music business has forgotten over the past few years:

The fan is the most important person
The fan is the only person in the music business that doesn't get paid (money) for their involvement. In every business, at some point, someone needs to pay for something without getting paid. They're the consumer, remember them?! They fuel the entire system. If there's no consumer, and people are just passing money around like a hot potato, then it's just a fancy Pyramid Scheme.

While advertising models are being floated to supplement free consumer behavior, it still doesn't solve the issue of who in the end is going to pay for all this stuff. The advertising business is a huge one, and I appreciate it's impact and need, but as my marketing mentor Seth Godin likes to point out, advertising works when it's anticipated, personal and relevant. I'm not sure playing a commercial before I listen to a free song is any of those things.

The music fan can be the greatest advertisement for a band in the world. In how many industries do the customers do the work for the marketing department? How many times have you walked out of a concert and told anyone who would listen how incredible it was? Instead of trying to figure out how to shove something down people's throats, it would be a lot easier (and potentially more effective) to give the fans a megaphone and let them go to town.

The market decides
People want to consume music in their own way, and forcing them to buy into a system which doesn't work for them anymore is futile. As Ben Folds says, "You've got to give the people what they want" - Rockstar. Sure, he also says: "You’re a slave to these people who don’t even know you, you think they adore you, they do, then they throw you away", but that's a point for another post.

There was a movie released in 2001 called Josie and the Pussycats. It was kinda cheesy and Hollywood-y, but the sub-plot was that the record industry was controlling consumer behavior by including subliminal messaging in pop songs. "Green is the new black" and everyone would go out and buy Green. I don't completely discount the premise.

But I digress. Back to the original topic: I still believe people are willing to pay for music, but I think it's becoming much harder to control consumer behavior. There are just far too many distractions.

I think people are willing to pay for quality, convenience and access.

There is a reason that Apple is the #1 Music Retailer. They understand the consumer. They've made it fun and easy to buy music.

Now if we can just figure out a way to support those pesky artists...

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