Category Archives: Music

April 16, 2018 · 12:16 pm

Tribute Bands And Your Business

Over the weekend I saw the Dark Star Orchestra. For those of you unfamiliar with the band, they’re one of the leading tribute bands out there and they play the music of The Grateful Dead. I’ve seen them several times and oddly enough each time I do it reminds me of a few business thoughts.

I played in several bands as I was growing up. We always felt we were a cover band. We were playing someone else’s songs but doing so in our own way. Most tribute bands go beyond that and attempt to recreate the sounds and often the appearance of the original artists. If you’re any sort of fan of The Dead you know that their performances were very hit or miss. The DSO is way more consistent and they sound just like The Dead on a great night each and every time. So what does this have to do with business?

I think imitation is more than just the sincerest form of flattery. I think in many ways it’s better than innovation despite the fact that we often hear of the “first mover advantage.” Innovation is great, but by not being first the flaws in the original product or service become way more clear. The fact that you’re building later lets you correct for those flaws and get beyond the original. That usually is something you can do much more cost-effectively too.

What do I mean? The iPod was not the first music player, just the most successful. Anyone who looks at Instagram knows both that they weren’t the first of their kind and that most of their “new” features these days come right from Snapchat. You could video chat someone long before Skype came around and Amazon was not the first retailer on the web. Each of those companies, and other such as Spotify and eBay, were not first movers. They were imitators – tribute bands if you will, who took the best of the pioneers and made it better.

Is it easier to get funding for a copycat? Probably – the business model has been proven and, therefore, investor risk is reduced. Japan, and now China, built economies on imitating successful products and making them better and/or cheaper. A tribute band has a pre-built fan base. If you’re a Beatles fan or an Oasis fan or a fan of The Band, you have no chance to see the original but you can spend a night with their music. If you’re a business, you don’t have to be the original if you can make the original better and capitalize on their fan base. The DSO do it brilliantly. Can you?

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October 13, 2016 · 3:25 pm

Can You Pass The Dylan Test?

I wasn’t going to post anything today, but with Bob Dylan being awarded the Nobel Prize in literature (yay!), I couldn’t let the day pass without putting up this post again. Whether you love Dylan’s music or hate it (although many people love the music and hate his voice), you can’t deny Dylan’s importance in music history. Here is why and what he just might mean to your business.

Yesterday marked an anniversary that I could not let pass without comment.  On March 19, 1962, 50 years ago yesterday, Bob Dylan released his first album, or LP (to signify a long-playing record rather than a single) as they were called at the time.

Bob Dylan performing in Rotterdam, June 23 1978

Bob Dylan performing in Rotterdam, June 23 1978 (Photo credit: Wikipedia)

This piece from Rolling Stone does a nice job of summing up the album and how it got made.  I’m a long-time fan of the man and his music and while I can’t say I love everything he’s ever done, it’s all really interesting and in many cases, his music went beyond popular culture to become transformative (start with “Blowin’ In The Wind“) for an entire generation and country.  I’ve heard so many people dismiss his music and yet when I give them the Dylan Test, they can’t deny his impact.  What, you ask, is the Dylan Test?  Something I think we should apply to way more stuff than Bob’s music – any business could benefit.  Let me explain.

The Dylan test is simple:  I know my grandchildren will hear the music of Bob Dylan.  They may not like it, they might not ever buy it, but they’ll hear it and they’ll know who the guy was that recorded it.  Not because I’m going to ram it down their throats:  I’d make the same statement about my great-grandchildren.  It’s because Dylan’s music is that important, just like Bach, Mozart, Beethoven, Springsteen and The Beatles.  And that’s the test.  Can you make that same statement about whatever music you believe to be “great?”  That ought to be our business objective.  To pass the Dylan Test.

I wrote in this piece a while back that we ought to be creating things that are built to last.  While the tools are temporary – Dylan’s first disc was pressed in vinyl – the content and the core of the business endures, or we should hope it will.  So ask yourself the Dylan Test question as you’re contemplating investing your time, effort, and money on a project.  While very few things pass, it’s not a bad standard to keep in mind.

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September 21, 2016 · 11:37 am

Winners Rethink

At one time in my life, I had aspirations to do music as a career. Even though I no longer have either the band or the hair required to be a rock star I still listen to music and follow industry developments. Because of that, an article on the music industry caught my eye this morning. It comes from MediaPost and its headline reads “Streaming Music Enjoys Revenue Uptick to $3B.” It goes on to report that:

Revenues from streaming services continued to grow strongly both in dollars and share of total revenues. During the first half of the year, streaming music revenues totaled $1.6 billion — up 57% year-over-year. This accounted for 47% of industry revenues, which compares positively with 32% in the first half of 2015.

Impressive growth and reflection on how the business has changed. Spotify, Pandora, Apple Music, and others have changed how people consume this product. What hasn’t changed, however, is how the music business works. In fact, a business model that was written into some laws a century ago still governs how the business operates for the most part. As a result, as Fortune reported a couple of months ago:

Based on almost every metric that matters, Spotify is the most successful streaming music service in the world, with almost 90 million subscribers and close to $2 billion in annual revenues. Yet its recently-released financial results show that despite its massive success, it is still incapable of making a profit—and because of the way the music business works, it may never make one.

You won’t have to search very hard to find many articles detailing how little money artists make from digital music either. So where are these record (pun intended) revenues going? You can probably guess. The people at the record companies wrote the business model, and there are still payments to those companies for things such as “breakage”, physical discs (fragile vinyl when the clause was written into standard agreements) that didn’t make the trip to retail intact. Recently, “New Technology Clauses” were added which charges the artist to ready an album for digital distribution and which are completely unnecessary.

The point today isn’t to rage against the record machine. It’s to point out that this industry and almost every other business has been totally disrupted over the last 20 years. Middlemen serve very little purpose other than to act as legally-protected gatekeepers. Rather than rethinking the business model with an eye toward how to provide value to the customers (the artists and consumers) they serve, the record companies dig in further. They haven’t quite figured out that if they starve the artists and bankrupt the new distribution systems, they too will die.

So ask yourself if the business model in which you operate has been rethought in the last few years. You can watch it happening (finally) in the TV business and countless others if you need inspiration. Winners are rethinking everything. Losers dig in. You?

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