Music Industry: Adapt to Changing Times or Be Left Behind

"One credible analysis by the Institute for Policy Innovation concludes that global music piracy causes $12.5 billion of economic losses every year, 71,060 U.S. jobs lost, a loss of $2.7 billion in workers’ earnings, and a loss of $422 million in tax revenues, $291 million in personal income tax and $131 million in lost corporate income and production taxes."

Sounds like an enormous loss, doesn't it? It almost makes you feel guilty for downloading that song you heard on that radio or accepting a copy of that CD from your friend. However, before you consider confessing your sins, there are a few things you should be thinking about. For example, who ever said that corporations had a fundamental right to succeed using the same methods they have used in the past? The rise of the internet revolutionized so many other industries, what caused the music industry to believe that they would be the exception? I am not saying that piracy is wrong or right; however, I do wholeheartedly believe that the music industry business model, that was once successful, is now outdated.

Nowadays, everyone can download music at almost no cost. Using legislation to fight piracy is like dumping loads of money from a helicopter, while flying above busy streets with a sign that says, "Don't catch the money." Without doubt, most of the people on the ground will take it, especially if everyone else is doing so without apparent consequences. Downloading songs illegally may not be right but it is widely available and it is easy to do.

Rather than changing the consumer environment, I believe it would be a lot wiser for the music industry to reconsider its business model. In fact, I believe the music industry would benefit greatly from the book "Who Moved My Cheese?" Its simple story reveals profound truths on change. Below I have outlined its lesson and how they have applied to the revolution in the music industry thus far:

Lesson #1: Change happens.

Long ago, artists spent loads of money recording albums and then made loads of money selling those albums to a wide variety of customers. However, that is no longer the case.

Lesson two: Anticipate change.

The internet came about. Perhaps the utility of the internet was not as clear during its initial stages as it is now; however, through the times many useful innovations came about, such as YouTube and Facebook, and revolutionized our lives and the way we do business.

Lesson three: Monitor change.

While technology quickly progressed, some artists believed that  they could satisfactorily sit on their pile of money, without keeping an eye on Napster, LimeWire and YouTube.

Lesson four: Adapt to change quickly.

Some of the folks in the music industry began to realize that the days of making money off record sales were ending, and began to adapt to the change by focusing much more on live performances than ever before.

Lesson five and six: Change and enjoy the change. 

Wise artists began to focus most of their time and energy on image and brand development. It happened with the phonautograph; it happened with the cassette; it happened with the CD; and it is now happening with digital media. The landscape is continuously changing and so must the artists.

In short, piracy has not killed the artist but rather it has challenged the methods that have been used in the past to make a profit. Those who wish to remain in the industry must learn to adapt, and those who wish to enter must be ready for more changes in the future. It’s going to keep happening. Behaviors that prove successful in the past are not necessarily successful techniques for the future.

My fellow music industry friends, fighting digital media and piracy will only cause you to stay behind while others successfully adapt to the changing times. I recommend you pick up a copy of this book and apply it to your business today.

Source: http://www.riaa.com/physicalpiracy.php


http://www.bainvestor.com/Who-Moved-My-Cheese.html

Social Media for Small Business Owners

Not so long ago, large businesses dominated the world of advertisement. It was not economically feasible for a small business to consider airing a 30-second commercial or perhaps paying for an entire page on the Yellow Pages. However, social media has changed all that. Social media offers businesses, both big and small, the opportunity to advertise to large crowds.

Small businesses are employing different strategies to gain referrals and increase their market, such as "Like Competitions". This month, "Poetic Visions Photography" held a contest in which several people voluntarily emailed their photos to be posted on the company's profile for about a week, and the person with the most "Likes" on their photo received a free 30-minute photo shoot at their home. Contestants eagerly brought in hundreds of friends to "Like" their photo in hopes of winning the free photo shoot, and I am sure that the small business owner smiled as she gained numerous potential future customers from the competition.

However, when opening this treasure chest, it is important for small businesses to recognize that there are definitely several drawbacks involved. For example, unsatisfied customers are only clicks away from posting lengthy comments on how bad your service was. How should small businesses respond to this? Should they publicly answer each bad comment? Should they answer some and ignore others? Or should all of these bad comments be deleted as a means of keeping the company’s page nice and clean?

Last week, a customer posted "Worst Store Ever! Furniture Falls Apart!" on Value City Furniture's page. Within 2-3 hours, the company posted a response apologizing for the way the customer felt, reminded the customer of how long the company has been around, and sent the customer an email so that the issue could be discussed further in a private manner. I thought that was a great way to handle the issue: Letting the customer voice their concern publicly but dealing with it privately. However can you imagine the amount of time needed to respond to every customer that decides to post a detrimental comment on the company's page?

Furthermore, it is important to remember that the majority of Facebook users are not there to buy, but rather to socialize. Therefore, it is vital for small businesses to make the transition from simply sending brand messages to actually interacting with their customers. I believe that the giant Procter & Gamble does this very well. Their Facebook page highlights important accomplishments of the company, encourages interaction of their customers through company trivia questions, posts upcoming events, and teaches consumers about the company in general, including core values.

All in all, small businesses should definitely consider using social media to their advantage. According to the online competitive intelligence service Compete.com, social media growth continues to skyrocket

-The top three social networks—Facebook, Twitter, and LinkedIn—collectively received more than 2.5 billion visits in the month of September 2009 alone. Twitter grew by more than 600% in 2009, while Facebook grew by 210% and LinkedIn by 85%.

-In fact, if Facebook were a country, it would be the world’s fourth largest.

Is that something you want to miss out on? I don’t think so.

Source:

http://www.ducttapemarketing.com/socialmediaforbusiness.pdf

http://siteanalytics.compete.com/facebook.com+twitter.com+linkedin.com/

http://e-marketingforsensiblefolk.blogspot.com/2010/11/blog-post.html

Neuromarketing: Breakthrough Technology or Shopping Robots?

Neuromarketing is basically measuring the brain activity of the human being to analyze the decision-making process behind purchases, and subsequently adapting advertising practices to increase the chances of that purchase. Among its obvious advantages, neuromarketing offers marketers the opportunity to gain real knowledge of what motivates consumers as opposed to the sometimes-misled knowledge gained from traditional customer surveys and focus groups.

This sounds great! To who? Well, to the marketers, of course. By getting inside the brains of human beings, marketers may be able to close more deals, deliver more convincing sales presentations and create compelling commercials and advertisements. After all, poor advertisement costs them money and time.

However, where do we draw the line between the marketer's control over the consumer's mind and the control retained by the consumers themselves? It may even be that as technology continues to develop, consumers will simply surrender all of their control to marketers and no actual decision-making will take place by the consumer.

According to the New York Times, Jeff Chester, executive director of the Center for Digital Democracy, which works to safeguard digital privacy, says the government traditionally hasn’t restricted advertising for adults because adults have defense mechanisms that can distinguish between truth and untruth. “But if the advertising is now purposely designed to bypass those rational defenses, then the traditional legal defenses protecting advertising speech in the marketplace have to be questioned.”

Call me old-fashioned, but I might prefer the good old days where I actually had a choice between Coke and Pepsi or McDonalds and Burger King based on the P's and C's and not brain scans.

Source: http://www.nytimes.com/2010/11/14/business/14stream.html?_r=1&scp=1&sq=Making%20Ads%20That%20Whisper%20to%20the%20Brain&st=cse