Hey Fastlaners! Good to see you all again, it's been a while. I was here for 2 years or so a while ago, and learned a lot during my time here- I was working in online marketing consultancy at the time. Not doing that any more for a variety of reasons (and it's besides the point for me to go into it here), but I wanted to address a question that I'm seeing a couple threads about on various sub-forums, and one that I'm working on answering every day.
Can the music industry be a Fastlane road to wealth?
Now somebody somewhere else mentioned that MJ used music as a slowlane example in the book somewhere, but I quite frankly don't have the time to figure out whether that's true or not. In any case, I think it certainly can be fastlane, but you're going to have to give it a lot of thought, plan carefully, and constantly check your vision against the Fastlane Commandments. I'll break down what I'm working on with my record label HEY WTF Records to give you a good example and some food for thought:
Need
Is there ever really a consumer NEED for music? Well, a lot of people might say "not really". But let's take a look at some of the things that MJ says about "need" that fits running my record label (I'm referring to a list on page 211 in my book): "MAKE THEM FEEL BETTER". Well isn't one of the core things that makes music so compelling to culture as a whole that it effects our mood? Makes us feel?
"RAISE A POSITIVE EMOTION" Kind of the same point as above, but again.
Even beyond all this, let's talk about a Maslow's Hierarchy of Needs type thing here: a sense of belonging. With our particular business, we're looking to build such a strong brand and fan community experience that it creates a sense of belonging. We're very careful with the language we use- fans are part of the "HEY WTF family", and the company works every day to "spread the HEY WTF love". We carefully craft a community and belonging in everything we do, from live events to social media to our clothing commercials.
On top of this, there are ways to fill gaps and needs within the industry- for example, most indie labels don't also own/operate publishing companies (which are key to earning a residual, passive income stream for both artists and labels), so we fill ARTISTS need that way.
Takeaways: the "Need" for music is usually focused on emotional responses, but can be supplemented by unique or particularly effective business models that fill market needs.
--
How about ENTRY?
Well, the internet has revolutionized the music industry in quite a few ways… one of them quite bad: literally anybody can make "music" and post it online. And I only need 3 YouTube links to show you that this usually isn't a good thing- there's a tremendous amount of crap out there. However, this now means that there's a big gap between posting music online and gaining significant listeners or fans, bridged only by curation from a trusted source. So sure, anybody can make music, but to truly enter the market, you're going to need to get noticed and recommended by an established, trusted source. Any artist can put something on Soundcloud, but how many make the home page of Pitchfork? Anybody can "start a label", but only 5% of them build a truly solid catalog of 5+ releases, each featuring great music, so that listeners are convinced that this label is a trusted source for good music, and they become fans.
This is one of those markets where exceptionalism is needed. If you're going to do music, you better damn well be the BEST. And if you're starting a label, you better DIG and find unsigned artists who could easily be picked up by Sony in a year or two (except you found them first, and oh hey! Maybe you'll be selling them to a major label deal and pocketing some big bucks yourself). Of course, this is exactly what we're doing with HEY WTF- signing the best talent we can, working to develop them, build their following, and maybe even eventually sell them much like other entrepreneurs sell businesses.
--
I won't spend too much time talking about CONTROL. As a label, we control the rights to master recordings, the rights to distribute them, the rights to compositions (important for publishing income- money made by getting TV/movie/commercial placements), etc. etc. If you're an artist- control as much of your rights as you can without sacrificing profits.
--
SCALE is by far the most important commandment when it comes to music. The number of fans you have (Law of Effection) will directly determine how many albums you can sell, how many tickets you can sell to a live show, what kind of major label deals you can get, how much merchandise you sell, how much money you can make. Yes, to go Fastlane you need to go global, but sometimes that's tough to do at first. One of the things that makes the music industry slow is the need (in 90% of cases) to start building a following in a specific geographic location, and then branching out and exponentially expanding your effection.
You can also change magnitude by creating tiers of premium products like many consulting businesses do: Give your super fans what they want with expensive, but unique experiences (just go on Kickstarter and browse through music projects to read rewards, if you want examples of these higher magnitude offerings to try).
--
And finally, TIME. In our example, a record label, we're operating right now with human resources seedlings AND money tree seedlings. Our catalog of releases is a GIGANTIC content system! Every artist we sign brings at least a couple new pieces of content to the table, and with every NEW piece of content, fresh attention is drawn to the old ones, and we acquire new fans. We're also creating an almost referral program to help find new artists independent of our time- we find people with great ears and connections, and tell them that for every artist they point us to that we end up signing, they get a (very) small cut of the revenues we make from said artist. A win-win in all areas for us.
--
With a little thought and tweaking, the music industry can be home to a Fastlane business. I was kinda rushed writing this because I only had 45 minutes and wanted to come back to posting on the forum, so PLEASE ask any questions you may have or point out flaws in my logic.
I may come back later and clean this all up. At any rate- good to see you all again!
Can the music industry be a Fastlane road to wealth?
Now somebody somewhere else mentioned that MJ used music as a slowlane example in the book somewhere, but I quite frankly don't have the time to figure out whether that's true or not. In any case, I think it certainly can be fastlane, but you're going to have to give it a lot of thought, plan carefully, and constantly check your vision against the Fastlane Commandments. I'll break down what I'm working on with my record label HEY WTF Records to give you a good example and some food for thought:
Need
Is there ever really a consumer NEED for music? Well, a lot of people might say "not really". But let's take a look at some of the things that MJ says about "need" that fits running my record label (I'm referring to a list on page 211 in my book): "MAKE THEM FEEL BETTER". Well isn't one of the core things that makes music so compelling to culture as a whole that it effects our mood? Makes us feel?
"RAISE A POSITIVE EMOTION" Kind of the same point as above, but again.
Even beyond all this, let's talk about a Maslow's Hierarchy of Needs type thing here: a sense of belonging. With our particular business, we're looking to build such a strong brand and fan community experience that it creates a sense of belonging. We're very careful with the language we use- fans are part of the "HEY WTF family", and the company works every day to "spread the HEY WTF love". We carefully craft a community and belonging in everything we do, from live events to social media to our clothing commercials.
On top of this, there are ways to fill gaps and needs within the industry- for example, most indie labels don't also own/operate publishing companies (which are key to earning a residual, passive income stream for both artists and labels), so we fill ARTISTS need that way.
Takeaways: the "Need" for music is usually focused on emotional responses, but can be supplemented by unique or particularly effective business models that fill market needs.
--
How about ENTRY?
Well, the internet has revolutionized the music industry in quite a few ways… one of them quite bad: literally anybody can make "music" and post it online. And I only need 3 YouTube links to show you that this usually isn't a good thing- there's a tremendous amount of crap out there. However, this now means that there's a big gap between posting music online and gaining significant listeners or fans, bridged only by curation from a trusted source. So sure, anybody can make music, but to truly enter the market, you're going to need to get noticed and recommended by an established, trusted source. Any artist can put something on Soundcloud, but how many make the home page of Pitchfork? Anybody can "start a label", but only 5% of them build a truly solid catalog of 5+ releases, each featuring great music, so that listeners are convinced that this label is a trusted source for good music, and they become fans.
This is one of those markets where exceptionalism is needed. If you're going to do music, you better damn well be the BEST. And if you're starting a label, you better DIG and find unsigned artists who could easily be picked up by Sony in a year or two (except you found them first, and oh hey! Maybe you'll be selling them to a major label deal and pocketing some big bucks yourself). Of course, this is exactly what we're doing with HEY WTF- signing the best talent we can, working to develop them, build their following, and maybe even eventually sell them much like other entrepreneurs sell businesses.
--
I won't spend too much time talking about CONTROL. As a label, we control the rights to master recordings, the rights to distribute them, the rights to compositions (important for publishing income- money made by getting TV/movie/commercial placements), etc. etc. If you're an artist- control as much of your rights as you can without sacrificing profits.
--
SCALE is by far the most important commandment when it comes to music. The number of fans you have (Law of Effection) will directly determine how many albums you can sell, how many tickets you can sell to a live show, what kind of major label deals you can get, how much merchandise you sell, how much money you can make. Yes, to go Fastlane you need to go global, but sometimes that's tough to do at first. One of the things that makes the music industry slow is the need (in 90% of cases) to start building a following in a specific geographic location, and then branching out and exponentially expanding your effection.
You can also change magnitude by creating tiers of premium products like many consulting businesses do: Give your super fans what they want with expensive, but unique experiences (just go on Kickstarter and browse through music projects to read rewards, if you want examples of these higher magnitude offerings to try).
--
And finally, TIME. In our example, a record label, we're operating right now with human resources seedlings AND money tree seedlings. Our catalog of releases is a GIGANTIC content system! Every artist we sign brings at least a couple new pieces of content to the table, and with every NEW piece of content, fresh attention is drawn to the old ones, and we acquire new fans. We're also creating an almost referral program to help find new artists independent of our time- we find people with great ears and connections, and tell them that for every artist they point us to that we end up signing, they get a (very) small cut of the revenues we make from said artist. A win-win in all areas for us.
--
With a little thought and tweaking, the music industry can be home to a Fastlane business. I was kinda rushed writing this because I only had 45 minutes and wanted to come back to posting on the forum, so PLEASE ask any questions you may have or point out flaws in my logic.
I may come back later and clean this all up. At any rate- good to see you all again!
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