Time On My Side

Michael Hedges July 31, 2008

Maybe it escaped your notice but Mick Jagger just turned 65. Two days later the Rolling Stones ditched label EMI for Universal. Jagger has made no other comment on becoming eligible for a free bus pass in the UK. EMI said they were sad. Universal said they were glad.

From the music industry’s Legendary Don Sundeen there came an email, forwarding a few thoughts on the music industry from Jeff Balke’s blog Broken Record. Serendipitous that this would arrive in the melting pot of thoughts and ideas just as Mick Jagger turned pensioner and the Rolling Stones jumped record labels.   

Balke’s blog on the record industry – yes, he refers to ‘records’ – thoroughly condemns the labels for their mistakes. Like everybody bowled over by the shockwaves of technology and finance he believes his sector of the media world has been effectively killed. Replace ‘record’ in his list of greivances and insert ‘newspaper’ or ‘radio’ or the medium of your choice.

“In each critical moment,” Balke begins, “record labels had the opportunity to think ahead and look beyond their immediate revenue streams. Like many large corporations, they were unable to do so. As a result, they forgot that music is about people and they continue to ignore that fact at their own peril.”

The Rolling Stones had sold their recorded work through EMI for more than 20 years. But the EMI of the 1980’s is not the EMI of today. Last year it was bought out by private equity firm Terra Firma. Vivendi’s Universal label will now be selling Sir Mick’s greatest hits – beginning with “Sticky Fingers” – and whatever happens to get recorded in the future.

It’s a fine thing to think about the future. Jeff Balke says the record industry’s leap into the future – high tech, high finance and highly consolidated – ignored the people. He lumps the radio business in with the record industry, a common error among the record people, but we’ll excuse that for the moment.

“Longevity,” says Balke, “trumps the flavor of the week.” In the record industry context, he refers, partly, to the longevity of catalogue rich artists like the Rolling Stones. The record companies, he explains, “focused on one-hit wonders and bubblegum pop to push profits ignoring their own rich history and tradition.”

Brand science tells us that, indeed, longevity is a factor in sustainable media brands. Innovation is helpful, too, lest we forget Paul Revere and the Raiders. It is rare, so rare as to defy probability, that a new brand is introduced and survives in a marketplace dominated by a ‘heritage’ brand. Of the dozens of personal, portable MP3 players put on the market in the last decade only Apple’s iPod became a must-have accessory.  Apple has longevity.

A quick scan of media brands’ strength across nearly every market shows the power of incumbency – longevity. The BBC has a grip on the UK media market in part because of three generation deep longevity.  Mr. Murdoch – The Elder – gladly spent billions for the Wall Street Journal, a 'heritage' media brand.

The best examples of ‘flavor-of-the-week’ thinking are the social network platforms. The endless twittering about Facebook, MySpace and their clones flies in the face of the devastating reality that a great portion of Web-based media could disappear tomorrow and nobody would notice. Yes, something is happening there on the Web, but “what it is ain’t exactly clear.”

Balke’s most salient point about the record industry relevant to the broader media world is as frighteningly obvious as it is true. The record industry failed because it cut out the most valuable instrument of value creation, the multiplicity of contact points up and down the value chain.  “The chain of people working on selling music for them was,” he says, “key to making sales.”

Every local market sales manager – those paying attention, at least – knows that nothing affects ad sales more than the aggregate number of salespeople on the street, making sales pitches, telling the story. As the record industry consolidated into four giant companies, for all practical purposes, it ‘found efficiencies’ by shedding as many contact points as possible, like the record shops where music fans, buyers and sellers, met. “A good record store could not only steer you towards a great alt rock record,” writes Balke, “but also to a blues record that influenced that alt rock band you like so much.”  It’s a hard concept to explain to an accountant.

But it’s just a matter of time.