Monday, December 8, 2008
Thoughts on Music Industry (Part 3) - Stepping aside from spotlight
As I was listening to Eran Egozy at the MIT VC Conference last week, I was struck with a theme of music as a complementary services as opposed to the sole purpose of enjoyment.
I'm not trying to argue that listening to music by itself gives me a tremendous pleasure. This is exactly the reason that music has been around for centuries (perhaps since the beginning of human beings if you count "thumps" to be music). Music labes, artists, and songwriters are used to standing in the middle of spotlights. I've gotten to know several celebrities in my personal life, and all of them tell me that it just feels to good to be in the spotlight with all that attention.
With the proliferation of digital piracy and free music widely available, I'm going to try to argue why the traditional music industry should also consider stepping aside from the music industry. In summary, music is a mere means to improving other products and services in this innovation economy.
Let's look at the gaming industry in this context. Rock Band is undoubtedly one of the wildest success stories. People (not just gamers) just love holding that plastic thingy and rock 'n roll to the hundreds of titles available. Now, who's getting all the spotlight and who's making money? The creator of Rock Band (Harmonix Music Systems) is getting all the glory. People really don't really care whether a certain song is available or not as long as they can just bang their heads with the plastic guitar (and drum). But then.. who's making money? Some songwriters and labels that licensed those songs to Harmonix probably made some big bucks (though not huge money).
This is somewhat analogous the love and hate relationship between VC and entrepreneurs. Often, entrepreneurs are in the center stage getting all the spotlight while VCs take credits for putting their money into the right people's pocket. That's precisely the reason why VCs "back" companies, not "brings life" to them. At the end of day, both of them are successful.
Back to the music industry, the stakeholders need to understand that nobody has a panacea for all the problems. Instead, we need to understand how one product/service is complementary to other stuff like movies, devices, websites, etc. It's somewhat hard to digest the fact that you are all of a sudden bystander not central to the success of others while you are a "must have" complementary product/service.
As we know in today's world, a traditional business model of selling music doesn't work. However, music is a must-have service to numerous products. With this paradigm shift, a change of attitude needs to change.
Step aside from the spotlight.... and enjoy riding success with others.