Saturday, March 28, 2009

The Mellencamp article was interesting - I hadn't realized that they had fundamentally changed the way they track "listens", or the effect that it's had on the industry. This is clearly an opportune time for a new record company to emerge with an entirely different model. Mr. Cougar is right that artists can't take on the burden of their own marketing and business management. But he's wrong that this is the end of creative music. It's the end of the old business model. With the existing companies dropping the ball on tracking their customer's tastes effectively, the time is ripe for a new record company - let's call it MetaBeats Music (MBM). MBM would offer artists the same kinds of services they've received in the past - funding for recording and touring, marketing, promotion and royalty payments. But instead of working with conventional radio stations in major markets, MBM would work with Internet radio stations and music sellers distribute the music and track "listens". MBM would also nurture relationships with online music bloggers and reviewers to help the artists find the listeners who are inclined toward their kind of music. Because this model is much more efficient and scalable (and less corrupt) than the traditional approach, the business model would allow for a greater share of the revenues to go to the artists, which would help attract them to the label. I also disagree with John that today's problems are caused by focusing on the shareholders instead of the customers. If the business is run right, their interests are aligned (the shareholders make money when the customers continue to spend, which they will only do if MBM can consistently provide good music over time). The opportunities for greater segmentation of the listener base, more precise tracking of playlists and online purchases and the ability to offer albums and songs indefinitely (because of the virtual shelf space in online stores) will make it easier for people to find new music that they like while generating a robust ongoing revenue stream to satisfy the shareholders. Everybody wins except the old record companies, who will be forced to adopt a similar model or die off. I suggest that we all quit our jobs immediately, pool our funds and seize this opportunity!

No comments: