[BC] Making money by reacting to the market

[Robert Orban]

At 07:26 AM 10/22/2007, you wrote:
>C'mon Bob!
>
>The major labels have had almost 10 years to come up with a digital
>distribution model. Indeed, years ago they HAD ONE HANDED TO THEM ON A
>PLATINUM PLATTER!! One that already HAD millions of users-Napster! Instead of
>embracing it for the cash cow it would have been, instead they sued it out of
>business! What fools!  Yes, piracy affects the labels, but if they gave the
>consumer what they wanted, they'd be doing fine. What they did was kind of
>like Orban coming out with a rebuild of the Audimax and Volumax instead of the
>Optimod 8000A. Instead, YOU realized what the marketplace WANTED and gave it
>to them! The rest is history.  Actually, I find it very amusing that someone
>like you who: "gets it" is defending those who either can't or won't!

Optimod 8000 offered a solution by increasing loudness by about 3 dB 
compared to older technology. "Cleaner/louder/brighter" was our 
marking hook; we talked more about the *benefits* than about the tech 
behind them.

As for the record companies, the devil is in the details. Digital 
distribution is clearly the wave of the future (and this trend was 
visible in the Napster days), but the record companies' collective 
problem was maintaining their cash flow once the new model is in 
place. This requires more than spouting generalities; it affects 
every aspect of their business and, yes, it requires bean counters.

Record companies' reasons for existence has always been discovering 
and nurturing talent, promoting it, and making sure that people could 
buy the music once they knew they wanted it. This is what generated 
their cash flow. Otherwise, anyone could have a vinyl stamping plant 
manufacture records. But what they would end up with would be a pile 
of records that no one had ever heard of and with no distribution channel.

I suspect that the record companies' fates will depend on how well 
they can continue to promote new artists and music and whether they 
can figure out a way to continue to get paid so they can afford to do 
the promotion. I would hate to be the person running a label right 
now, but if I were, I would diversify heavily into the live concert 
business, including renting movie theaters and selling seats to high 
definition simulcasts of the concerts (something that the 
Metropolitan Opera in New York City is currently doing with 
considerable success.) I would be developing television shows like 
"American Idol" and finding a way to share in the advertising stream 
from such shows. I would make sure that such shows were available to 
stream from the Internet. I would create deluxe packing of audio 
recordings that were compelling objects for collectors and fans to 
own. I would carefully control album production budgets and treat 
most music as promotional, assuming that it was likely to be stolen. 
I would develop musicians as "media stars," which would make it 
easier to license their images to consumer marketers. I would try to 
license as much music as possible to other media, like television 
show background music and commercials. I would do viral marketing, 
including creating shill identities on YouTube, Second Life, and 
other social networking sites. I would do targeted advertising on 
websites appealing to a given artist's target demographic. I would 
get my artists profiled in major national magazines like 
"Entertainment Weekly."  And probably more, but that's just off the 
top of my head. Most of this is being done already, but there are 
potential synergies that are still not being completely exploited.

Where does this leave independent artists? Probably struggling more 
than ever to get noticed above the ever-increasing media din.

Bob Orban