In David Lean’s classic film, the Bridge over the River Kwai, an inspired Alec Guinness plays the stubborn Captain Nicholson in his battle of wills with the Japanese World War 2 Prisoner Of War camp commander Saito. The story unfolds with the obsessive Captain delivering his engineering masterpiece despite the fact that it will help the enemy and the final scenes witness him going mad as the bridge – and all that he knows – is blown to bits. In other words, a brilliant illustration of how industries lose sight of market context and the folly of clinging to ideas that have lost relevance as consumers and technology move on. Which reminds me of the global music industry …

It just had to go ...

This Blog has explored ways in which supply chains such as carpets; flowers; cotton; honey that start in the informal marketplace can be transformed into more inclusive value chains. However, there are other industries that are changing like fruit flies as technology transforms scope, cost and reach. The creative industries – music, art, architecture, advertising and design – are big business and technology is transforming who can and how to play the game. This means a bigger role for the developing world and one which technology can unleash. Just think of the contribution to sustainability that retaining the added value could achieve. How can this be done?

Years back, Brian Epstein took control of the destiny of the Beatles; cracked the UK with a single and then an album to move off in screaming triumph through the USA. The formula was used by waves of British bands and remained intact until recently.

Over Christmas, I watched a UK TV programme all about the top singles from the noughties. Half way through a top 20, the DJ explained that the game had changed. Nancy Barclay launched an Album but, offering a free internet demo single, triggered a downloading frenzy that changed the rules. Sensing that they had heard all they needed with the freebie single – fans ignored the album. Disaster – for the band. In 2005, the Arctic Monkeys single ‘I bet you look good on the dancefloor’ may have had too many words and been almost impossible to sing along to but the downloads flowed. Refusing to play Top of the Pops – the UKs time honoured weekly arbiter of the singles chart – or even an arty pop video the band proclaimed that they were “doing a social experiment.” To paraphrase Yeats for the music industry; a terrible multi media beauty was born.

Downloads have wrecked the status quo and the operating assumptions that go with it. The search is on for ways to monetise creative output and this can be an opportunity for the developing world. Albums have become a blunt instrument of market access; the downloaded single is the currency of fame and, the agenda has shifted to multi channel visibility driven by websites; touring; customised merchandise and being relevant to the urgent agenda of now – issues such as the environment and, cultural diversity.

Above all, market access is no longer to be defined by places that would have generated sales for an Elvis or the Beatles – the UK and the USA. Now is the time to build music markets where the youth is – the developing and emerging world; places like India, Brasil and Asia. Just look at the demographics.

The music industry has to wake up to the fact that they are no longer chasing dollars from a money rich and time poor consumer so much as anyone who can download. Walk a favelha, a shanty town or a slum and the number of people with a mobile phone and access to technology is higher than developed marketeers will allow and this fresh reality accelerates as downloads shift more emphatically from computers to the ubiquitous mobile phone. Already, over 90% of Japanese downloads are onto mobiles and, these numbers are being matched all over the world.

As recently as 2002, four record labels generated over 72% of global revenues and controlled the space entirely – Sony BMG; EMI; Universal and Warner. Independents held the rest but the tail is starting to wag the dog. Now, an increasingly fragmented industry has seen revenues and global dominance collapse. In the UK (2009) 1 in 8 records were sold digitally; in the USA this is now 1 in 5 or, 30%.  This is a shift from packaged to online and now, mobile downloads directly. For example, China 73%; France 61% and Japan 91% of downloads have gone mobile. People are paying for access on the move – not ownership in front of a computer at home!

This is the inflection point when the music industry can embrace the technology and grow a consumer led global industry generating the demand that can open up opportunity for content from a wider musical base. Logistics – which is not just about trucks and fork lifts – can play a significant role in transforming the industry model capable of delivering demand and it will play a signficant role in the convergence of everything from social networking sites to the delivering the merchandise that is part of the lifestyle shaped or reflected on line.

Future posts will explore ways in which creative industries can transform the developing and emerging world’s ability to develop content that can reach wider markets and, play a role in shaping ways to monetise and make it sustainable. For example, the marketing concept of the long tail will prove key. This is where hundreds of sales will come from thousands of markets rather than bulk sales coming from few markets.

Josh Hubbard of the Paddingtons makes the case. “The guys in the business seem to be set on the UK and USA – whatever happens. No one seems to have an idea about the developing and emerging world. And yet, we have terrific fans in Japan; Russia; Mexico; India; Ghana; China and Turkey.

Without a record label behind us we can’t afford to produce an album and promote it conventionally – whatever that means these days!  So, we need to look at fresh ways to make things happen.

I keep thinking of all those people playing air guitar in their bedrooms with their computers or mobiles on full volume – listening to the Paddingtons of course. Surely we can pull them all into the same space – build on their loyalty. What do they want? A downloaded live single we do once a month; a JD look through a link to their website; a poster of our artwork; a signed playlist or, our own favourite music and interviews we make on the road with our fans… Who knows? The industry has been hit by a Tsunami and the old row boats have no home to go to …”

One things for sure – a better yesterday is not the place to start!Summing up:

1. Be visible. This is an anytime, anyhow and anywhere world enabled by technologies converging. The band is now the brand – NOT the label. This puts the fans in the driving seat. Pushing the web for your music to be out there as much as possible and linking the web to the tours is the name of the game. People like musicglue have figured this out. Aggregators have a role to play and the band needs to be out there on the web and on the road. Why not? A 24/7/365 tour is on the way! Now, you have the fan base …

2. Be sticky. Download and they are gone. So, can we engage with them by being part of their lifestyle – that means fashion as well as music. The Paddingtons have worked with JD Sports in an innovative approach to product placement and, their music has featured on the catwalks of Milan, Paris, London and New York. Then, there is art and photos as well as dialogue – which means applying social networking techniques to build momentum. Facebook could become the biggest country in the world; Friendster and others are bigger than the BBC and so on. No point in waiting for Top Of The Pops or, a singles chart that never arrives.

The key to visibility is to be multi channel. For example, in an era where the developed world retailers speak of focus; retailers in the fast growing world like the Future Group diversify – they have more than 35 supply chains from shoes to clothing; grocery to home furnishings. In other words, they speak to more than one side of their fan base. The same can apply to music.

Let’s not forget the impact (and opportunity) of video games. In 2004, it surpassed Hollywood revenues and is now pulling away clearly. What can be done to allign with their know how on distribution.

3. Be quick. This means pushing more singles with albums become websites – interactive, with all sorts of things going on. Linking the global fanbase on the issues. People don’t necessarily want to “own” the record as they once did. So, downloading singles means releasing more of them and keeping the dialogue going to open up other possibilities …

4. Be relevant. Global means diversity – offer more for less. Combine the music with film and fashion. For example, the Paddingtons work with Rock against Racism and, there is scope for other work on the Green agenda. Above all, there are more fans beyond the US and the UK that are interested in these issues and we need to respond to that.

After all, for most of us, music has become the soundtrack to our lives and technologies from iPods to Mobiles make this a 24/7 reality. How can the music industry in the dveloping world tap into this?

5. Be realistic. The game has changed – utterly wrecked in what has been called creative destruction. The Business Model has to be re-drawn; based on fair use to protect the artists and, for those who deliver.

A study of the UK music industry in 2004 highlights an industry with 95,000 employees generating £6 billion or 1% of UK GDP. Look closer – 27% are based in London; 69% are males and 96% were white with 57% under 39 years old. Only 11% of the companies in the industry have a turnover more than £1 million. Clearly, technology will open up these assumptions. Technology will drive the diversity agenda and, this will make this incredibly conservative industry be more responsive to global influences. Legacy companies are being sidelined. This is the opportunity for the developing world.

Captain Nicholson’s closing lines from the film sum it up for the music status quo: “Madness … madness”. He could be the CEO of one of the labels that is struggling to rethink the model and explore ways in which a wider world can be part of the offering – building something that cannot work . After all, Elvis, and the music industry that he represented, has definitely left the building.

Note: Thanks to Phil Brophy for the photo.

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