My friend Elliott Cunningham of Westgate Marketing writes about the health of the music industry in his blog today. USA Today also covers the topic: Bands Warm Up for a Busy Summer on the Road. And the news of Michael Jackson’s death and the impact this has on the fortunes of the touring companies with his comeback tour’s cancellation and the possible addition of the Jackson family doing a tribute tour has everyone thinking and talking “LIVE!”
The Bonnaroo Bus brings fans from Indiana to Manchester, TN
Fans enjoy being part of the Moonalice Tribe (Moonaliceband.com)
Live performance is one of the healthiest segments of the music industry. Summer blossoms festivals of all types from Bonnaroo to Creation to Folk Festivals to country music’s CMA Fest and more. And the live music scene at clubs and other venues around the country is growing. A recording is great. Seeing the artists you love in person can’t be beat. And seeing them under the stars… priceless.
Which tours and festivals will you catch this summer?
Over the past several years I have been moving more and more of my life into the cloud. Not familiar with the term?... The "cloud" is the Internet. Hosting applications and your data on servers that you will probably never see versus an internal IT department or computers in your home is living in the cloud.
The term "cloud computing" has been growing in popularity in recent times. And with good reason. Just a few years ago the risks and downside of moving your data and applications to the cloud out weighed the benefits. I believe that has now changed. And I believe the "winner" of the movement to the cloud will define the next super company.
IBM did not make the move to the PC as successfully as new competitors and lost its entire hold on the computing market to Microsoft as a result. Microsoft, my alma mater from March 1985 - February 1993 and again in late 1994-1995, faces the same risk of being unseated.
Who is the prospective heir to the throne? In my mind the top contenders are Google and Apple. Both have been taking several successful steps in advancing cloud computing and getting consumers to move their life to the web and into the cloud. Amazon is also in the hunt for software applications moving to the cloud with IT and developer services like EC2 and S3.
And Microsoft? Microsoft is playing catch up with Live Mesh and other solutions. I am baffled as to why Microsoft's strategy is to look at its belly button and buy back its own stock at a time when Google is threatening its crown jewels and is snapping up new leading technologies... Android is a serious threat to Windows and Google Docs is a serious threat to Microsoft Office. Google is experimenting and enhancing its footprint with new cutting edge services like Google Voice, Google Calendar, etc. I know more and more companies moving from Microsoft Exchange to Google's GMail platform. OWA is not a valid response to Gmail. Exchange is feeling less and less nimble when compared with GMail. And Google Gears should be sending shivers through Redmond, letting users work offline as easily as online with the Google Docs suite of applications. Just try collaborating with Microsoft Word and then try the same thing with Google Docs. Now do the same with Excel and then Google's spreadsheet. You will quickly see who is in the lead.
I didn't start down this path on my own. I walked into a conference room in our offices and saw five of our team, all in their 20's, using Google Docs as they worked together on a project. I asked why they were not using Word and they looked at me in disbelief, showing me in a few seconds how they could collaborate and do things Word could not do. We were paying hundreds of dollars per employee for a Microsoft Office license. Google Docs is free. That was some time ago. I have long since been a convert. And it is getting easier and easier to be one as Google enhances the platform. The economy and the move to lean business practices will force those who have not considered looking at relocating to the cloud to do so.
Google, Amazon, Microsoft and many small and nimble companies are working to get your attention with their cloud applications. Which ones have my attention and have become staples in my daily computer usage? More on that in my next blog.
History is not a definitive predictor of the future. At the same time, we can learn from history - ours and others. Let's start the dialog on moving forward by first taking a look in the rear view mirror...
In 2001 and 2002 the consumer was already speaking. They wanted their digital music to be easily accessible across their devices. They wanted MP3 files. In fact they were screaming, "I WANT MY MP3." in full parody of Dire Strait's "I want my MTV." Napster had opened pandora's box. The record industry's plans for SDMI (secure digital media initiative), an early version of DRM (digital rights management) had failed miserably. So it seemed obvious to many that the issue would be devising distribution models that worked with MP3 files. Who would have thought it would take until 2008 and 2009 for the industry as a whole to stop fighting the consumer and to offer MP3 files everywhere digital music is sold. Not me. And not most of my friends. We were all wrong. Old dogs didn't want to learn new tricks. Most had to fade into the sunset or be put down before their companies would listen to their consumers.
Lesson 1: Listen to your customer.
Lesson 2: Your customer is not your enemy.
Apple got off to an early lead in 2003 by buying up an 18 month supply of new tiny hard drives from Toshiba. Following this brilliant strategic move, Apple extended their lead by buying up huge quantities of newly minted larger flash memory sizes, giving their iPod platform a continued and growing lead over the pack of media players from every other consumer electronics company. And during this time, the stroke of genius was buying player technology from a third party developer to deliver the iTunes + iPod knockout punch. Most beautifully, iTunes + iPod simply worked. All technology should be this beautiful... plug it in and it works. No need for a call to tech support.
Lesson 3: Simple is beautiful. Real technology is magic. The best technology is invisible.
Lesson 4: Strategic marketing is more than just messaging. It means taking bold moves to understand the key drivers and critical success factors in emerging markets. Southwest Airlines did it by buying futures on airplane fuel, allowing them to operate profitably in the gas crisis of 2007-2008 while all other airlines started collapsing under the weight of simply flying their planes. Apple's strategic moves were equally brilliant.
Apple's iPod was an exception to the DRM rule. Even though Apple's files all came in the AAC format with Apple's proprietary DRM known as "Fairplay", consumers didn't care. iTunes + iPod worked. It would take years before the cry of the more technical users reached enough volume to demand the removal of DRM so the files could play on all devices. And, even with this consumer demand, Apple chose to deliver "DRM free" in the less popular AAC format, continuing to extend the "walled garden" approach of iTunes + iPod even longer.
Lesson 5: Simple lets you change the game. Elegance is rewarded - your customers will let you get away with things they will not let your competitors get away with (at least for a period of time.)
During this same period, Creative Labs delivered MP3 players that also played Microsoft's WMA format files with DRM. And for over a year the first thing a consumer would see when pulling their new Creative Zen from its box and turning it on for the first time and connecting it to their PC was a message stating that a firmware update was needed. Are you kidding?? Creative was too lazy to update their existing inventory and fix this problem. They had strong patents that showed they had pioneered in the digital media player space. It didn't matter. The poor consumer experience and lack of marketing prowess to take on Apple by Creative and others proved fatal to many players in the market.
Creative then decided to release so may different flavors of its MP3 players that even its employees couldn't explain why you'd want one over the other. Compare this with Apple who reduced the number of options in the market. "Would you like the Baby Bear, Mama Bear or Papa Bear size of porridge?" Keep it simple.
Lesson 6: Laziness is death. If you see a major problem, fix it. In this day of social networking, a slow response is no response and will be broadcast from the highest mountains to all of your prospects. Respond strongly. Tell your customers you are sorry. Turn a disaster into a win.
Lesson 7: Simple is better. (I know I said this earlier. It is worth repeating and deserves multiple places in this top ten.)
Who, in 2002, would have bet that Microsoft and its army of OEM's and ODM's would be totally ineffective at playing in the digital media space. Not me. And I am a fan of many of the things Apple has done over the years. None of my Apple friends predicted that Apple would, even 7 years later, maintain such a dominant market share lead.
Lesson 8: Past success is no guarantee of future success. When I was at Microsoft (1985-1993 in sales and marketing and then 1994 - 1995 in product development) we took on IBM and won. They were entrenched and the saying was "Nobody gets fired for buying IBM." You must keep re-inventing yourself. Nokia used to be a tire and oil company.
Lesson 9: If you call something "Plays For Sure" make sure that it does. Your consumers are smart enough to see through the marketing.
Lesson 10: Continuing to repeat the same steps and expecting a different outcome is the definition of insanity. Many players in digital media space are guilty on this one.
A key to success is to learn and grow as we move forward. The creator of the Dockers line of clothing for Levi Strauss failed on his first two clothing line creations. Edison is said to have tried 99 different options before he found one that worked, creating the lightbulb, and changing the world as a result of his persistence. I am totally optimistic for digital media's future. We have learned so much. Time to apply what we've learned as we look ahead.
What lessons have you learned as you look in your rear view mirror? And, more importantly, what will you do next as a result?
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