“I got a job washing cars…across from the high rise building where PolyGram Records was. I would stand there with the hose in my hand and look up at the building with reverence, like it was a monument”.
Mark Oliver Everett (Eels) “Things The Grandchildren Should Know”, Little, Brown publishing, 2008.
This quote encompasses everything about the romance of the record companies as they were until very recently - dream factories, star making machines – institutions with a glam factor matched only by the movie studios or the plushest ad agencies. These days they are barely recognisable as such and are gradually becoming monuments of a bygone era. The irony is that Majors are the ones with the resources to affect a real shift in landscape and achieve market tipping points in their favour, yet they are so encumbered by existing systems, contracts, relationships and skills, it’s questionable whether or not they can transform successfully.
I can hardly write an opus here on a blog to suggest how every aspect of a major label can be transformed and it would be pointless anyhow, since writing is so much easier than doing. But based on my study of the majors while at IFPI and more direct experience of working within a transforming EMI, i can at least make a shortlist of areas in which i think, music companies can focus to achieve successful transformation.
I suggest three focal points as a way to begin to turn things around, but essentially, the name of the game is Content Development. There’s a lot more besides of course, but it has to start and end there. It’s also about Creating Culture – much more significant than ‘creating communities’, since communities follow culture. It’s certainly not about being a ‘record company’ – that model can only exist in the medium term for the most A&R savvy, cost conscious indies. The majors must very quickly, really shift (i.e. not just claim to be shifting) to being artist-centred, production and marketing companies.
My three points on which to focus the transformation are:
1. Shift from a products business to an artist business. Walking around the HQ of a major it can be a shock to see that the CD is still the core business – CDs (in some cases CD singles!) stacked everywhere in exec offices and staffers desks tell a graphic story – a travesty of wasted plastic. A visionary artist would be concerned about this. A visionary business leader would now simply ban CDs in the office (physical products of course still exist, but those are for fans, increasingly made-to-order, too valuable for freebies). Basically, the artist is now the brand and everything they create is part of the product portfolio for wide exploitation and revenue sharing. To think of the products as simply the recordings is limited and a ticket to continued slow decline. It’s the Marvel moment – when the iconic comic book company recognised that its core product wasn’t comics but the characters themselves.
2. Shift from an album producing business to a production company built around artist projects. Artists should no longer be stuck on a two-year album-to-album treadmill. Through working with a visionary company, they will create projects periodically whenever it makes sense, depending on profile and preference. Every tour would then be an opportunity to showcase new material and work better synergies between recording and live performance. Artist projects can be wider than just music. If Robbie Williams wants to make a documentary about UFOs or retro gaming, there is a market for that and EMI could be producing this content rather than letting others. The mandate here is to turn the promotional model on its head - to commercialise content based on live, pre-release and exclusives - and to widen and deepen audience relationships through improving content and making it bespoke for platforms and brands.
3. Shift from a promotions business to a marketing business focused on high value audiences. Radio plugging, advertising, securing a TV slot, tour support...the list of promotional activity around ‘working an album’ is a long hard slog. And arguably none of it can really be called marketing. Do these cyclical tasks really deepen the relationship between the artist and their fanbase, or broaden that fanbase significantly? Few of these activities collect any customer information or sense changes in consumer habits. Many artists are already cynical about the promotional treadmill already and will only become more so as all this activity promotes nothing much more than ever-decaying album sales. A visionary content company now needs to be brave enough to take all this activity and stop doing (some, not all of) it in the name of album promotion. Meanwhile, with production values at the core, music companies need to increase the quality of artist sessions, interviews, documentary footage and all else – and package this material for sale, license, or at the very least, direct marketing to the fan base or genre base for the artist. A move to bespoke marketing plans (increasingly digitally-led), for each artist rather than a throw it all at the wall and see what sticks model must prevail.
These would be my three main areas of focus. I deliberately don’t choose a focus on shifting from production to distribution - why take that risk when the distribution business is so fast-moving and over-crowded? I deliberately don’t choose a move away from content to technology – why fumble about in areas outside your core expertise? And i don’t think the model of advances needs such a radical rethink either (though advances do need to come down). The way the relationship is funded should make no real difference to overall revenue and profit outcomes really.
Obviously these shifts do mean that label-artist contracts must change to the sharing of the full portfolio of IP rights, there is no way around the need for this. There is also no way around the need for better creative decisions in A&R, since this model requires smarter investments in a smaller portfolio of artists (with digital, the tricks & tools for reducing A&R risk are now springing up everywhere and can be used far more systematically).
Organisationally there are obvious shifts required in culture, ethos and skill. In all content companies, ‘suits’ and ‘creatives’ sit alongside each other in a fragile juxtapose. Investments in skills should focus around filling this ‘white space’. It takes creativity – both commercial and artistic creativity – to do this. And a new relationship with artists based on transparency, trust, understanding and a shared vision. Artists would come to a new label for this, knowing that this is the environment in which they can achieve their best work and find the widest audience that deserves to see & hear it. That is the new dream factory model – to do great work and be rewarded for it with the widest most loyal audience your music company can find for you both.