5 THINGS TO CHANGE IN THE MUSIC BUSINESS

In Saturday’s Lefsetz Letter, Bob talks about how the music business’ analytics are still using unit sales (CD’s), airplay, and a little paid downloads to measure success…or failure as these numbers continue to plummet.  Whereas music streaming is on the  rise through services like Spotify, MOG, and YouTube. Things are changing and we aren’t leading that change.

Bob’s letter reminded me of a book I recently read that he coincidentally recommended. SLEEPLESS IN HOLLYWOOD: Tales from the NEW ABNORMAL in the Movie Business, is a new book by film and now television producer Lynda Obst.  You may remember Lynda’s first book, Hello, He Lied and others tales from the Hollywood TrenchesThis one is even better!

Why do I think “Sleepless” (a name Obst took from the hit movie she produced, Sleepless In Seattle) is a step above Lynda’s previous work?  You can take her lessons about movies and TV and apply them to the music business.

“Sleepless” starts out with Obst examining the changes in the movie business and how she had to first learn the new rules and then adapt to survive.

The book gives you a step-by-step of how the movie business moved their profit centers from DVD sales (which dried up) to making movies geared for an international audience. No more American humor (although there are exceptions of those that can cross over like Brides Maids) and “chick flicks” (which is Obst’s specialty), now there needed to be a “preawareness”…a hit book (Harry Potter or Hunger Games), a remake (Karate Kid, Les Mis), or movies based on comic book superheroes (Batman, Ironman, The Justice League).

With less material to pick from, there was what Obst call “The Great Contraction” in movies. Fewer movies being made meant more people out of work.  The catalyst for this change was the writer’s strike of 2007-2008.

The writers were fighting for more.  They felt burned by their last contract with the studios because DVD sales were where the profits were and the writers felt they weren’t being compensated fairly for their contributions.  They saw the Internet and new technology as the new DVD’s and fought to get a bigger piece of something that really didn’t exist yet.

The strike lasted much longer than it should have.  The studios ended up making a deal with the Director’s Guild first, which took any leverage the writers had away.  In the end, everyone just wanted the strike to be over…especially those that worked (a majority of union members who voted to strike weren’t “working writers”).

With fewer movies being made, many great writers, producers and directors moved over to television.  This is why we have such amazing shows today (The Newsroom, Madmen, Modern Family, etc.).  So how do we use Lynda’s book and the examples she gives to change our business and survive?

Let’s start by going back to how we measure success with recorded music.  We are now in a singles business, so why make an album’s worth of material…for the publishing?  Why are we still making CD’s instead of leading music fans towards streaming?  Why are we still catering to traditional radio when there are so many other ways to introduce music to an audience?  If we’re fighting for “broadcast time”, why would we make it so hard for TV, movies, video games, and now online content to use our music?  Is there any better way to promote it…other than going on the road?

Were Napster and other file sharing sites downfall the start to our own writers strike?  If yes, what can we do to move our business forward?  Here are 5 suggestions to get started…please share yours too.

1)   Stop making CD’s even if it is currently a profit center…or just make them for collectors like we are with vinyl.

2)   Embrace and monetize streaming sites.

3)   Make it easy for fans to discover your new (or old) music by partnering with TV shows, movies and other content providers to increase broadcast time.  Also share new music with fans for free so they know what they are getting.  That can be as simple as streaming a new single or two on an artist or label website for as little as 24-hours.

4)   Stop looking at North America as the be-all end-all and start working harder on developing an international audience.  It isn’t just movies that are seeing profits from overseas.  Look at companies like Apple or even Coke who derive most of their profits and growth from international sales.  Need music examples, how about the fact that acts like the Chili Peppers, Foo Fighters, Pink, Beyoncé, Rihanna, Bon Jovi and Metallica are just as big if not bigger overseas than in America?

5)   Create true partnerships between content creators and providers. The producers and studios do this all the time in movies and TV (just look at Jerry Bruckheimer).

Lynda Obst’s book is a good read for the music business because it explains how Hollywood adapted to changes to survive.  Music can do the same.

Ps, If Lynda or anyone who knows her reads this, we would love to have you/her as a guest at the Aspen Live Conference, December 12-15 at the St. Regis, Aspen http://www.aspenlive.com.  Please email me at jim@liveworksevents.com.

For those reading this who haven’t registered for Aspen yet, do it now and save!  50% of our spots are already filled.  Don’t miss another year! http://www.aspenlivecom

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