Changing music industry landscape

Chicago Tribune pop music critic Greg Kot had an interesting piece this weekend on the way technology is changing the music industry by changing the way people acquire and listen to music. Two points he makes early in the article drew my eye:

"Album sales have plummeted in three of the last four years; so far this year 265 million albums have been sold compared to 299 million last year, an 11 percent decline," while "Digital album sales have jumped to 11 million from 3.4 million, a whopping 226 percent spike."

This tells me two things, and the first isn't something the music industry wants to hear: People are buying less music because your product stinks. Specifically, they don't want to buy an entire album of garbage to possess one hit song. When they had no legal choice, that meant they downloaded the songs they wanted, for free, and left the rest. The second thing? Given a legal option, people are choosing to buy digital copies of songs, hence the tremendous jump in digital sales. However, because your overall product is still poor, overall sales are suffering.

Giving people the options they want in terms of delivery and media is a good start, reacting to a problem you had years ago. Now, if you want to rescue your dying industry, give them better product. Sure, you'll argue that you give people what they want, and that there are more artists in more genres than ever before. That's true, to a point. But people buy that to which they're exposed. Keep pushing one-hit pop stars on them, and that's what they'll buy. Cultivate career artists, and you'll build loyal customers who keep coming back for more.

This is something I'd love to see Chris Anderson at the Long Tail delve into: Are the pop music charts appreciably different these days, with more artists charting over the course of a year than in past decades? I'd guess they are, because it doesn't seem as if you have artists who spin three or four successful singles off an album any more. Artists would likely cringe at the comparison, but it's like the building of any other brand. If there is no trust that quality will continue, there is no loyalty and thus no assurance of future sales. Why buy the album when you can get the hit song for (something close to) free?


MPAA vs. BitTorrent

The Motion Picture Association of America and BitTorrent have reached an agreement by which BitTorrent will somehow remove links to copyrighted material, putting up a small roadblock for those using the technology to download movies. It's a finger-in-a-dike sort of effort, more symbolic that effective, but it does show an interesting new side of the entertainment industry.

In the past it would simply lash out at services like Napster and Grokster; here, it seems to be willing to work a bit to find an equitable solution. What it will find, of course, is that people are going to use technologies to get what they want. If free is the easiest way, so be it. Seeing how a badly hobbled music industry has been able to rebound thanks to iTunes and other services, the MPAA ought to be looking for a way to harness the power and market reach of BitTorrent to facilitate sales of movies. Cheap, easy distribution is the key, and it would seem that this uneasy truce with BitTorrent might indicate just such a direction.


Friedman, Drucker & the arts-commerce collision

Not that he needs any more publicity or plaudits at this point, but Thomas Friedman deservedly nabbed the inaugural Financial Times and Goldman Sachs Business Book of the Year Award for his book, The World is Flat. The other finalists include Freakonomics, DisneyWar, The Search, and The Travels of a T-Shirt. Some of these are classic business books, of course, but some would certainly be included on a syllabus for Creativille, if there was such a thing. Most do more than simply talk about business techniques and management strategies. Rather, they comment on and offer context for a world that is increasingly interwoven, where arts, commerce, business and culture collide.

I have been reading more about Peter Drucker, and a phrase in a nice piece about the late management guru in The Economist caught my eye. "Mr. Drucker told his clients, who included the American Red Cross and the Girl Scouts of Amercia, that they needed to think more like businesses -- albeit business that dealt in 'changed lives' rather than in maximising profits." There will be those who fight this confluence of business and culture, but, in a with-us-or-against-us sort of way, they will be the ones left behind. Reading the above books, and others, is a good way to stay on top of that wave rather than let it capsize your organization.


Tribute to a thinker

As a nascent business writer who reads a lot of books and articles on management practices, I have been bombarded over the past year with references to Peter Drucker. The author and, well, he's often called a guru, but thinker seems to apply best, passed away over the weekend, so there are numerous tributes and links to his work.

One that struck me the most is this interview in the third issue of Wired from 1993. Drucker has long been credited with coining the term "knowledge worker," and it's clear that he foresaw things that we now take for granted about the transition of our economy over the past several decades. But reading the interview, I couldn't help but feel like the recent spate of "creative economy" talk is just a new wineskin of sorts. How about this from Drucker in response to a question from Peter Schwartz about relative competition between the U.S. and Japan:

"The traditional factors of production -- land, labor, and capital -- are becoming restraints rather than driving forces. Knowledge is becoming the one critical factor of production."

That, in a nutshell, is Richard Florida's first big book.

Later, in the same answer in which he talks about how Japan, the U.S. and Germany approached the need for innovation as opposed to production, he offers this:

"Knowledge has become the central, key resource that knows no geography."

That's Florida's most recent book, and, to an extent, Thomas Friedman's. Now both clearly have dressed these thoughts up in new data and reporting that make them contemporary and relevant, and neither has claimed to invent the wheel here. But it's amazing that so much of what passes for cutting edge thought was being tossed off in an interview with Drucker a dozen years ago and in his books and other writings even earlier. Though I came late to the party, I'm going to take advantage of the deluge of information about Drucker and his work to immerse myself in it. He was clearly a visionary.


Silver screen blinking

Over at the TEDBlog is a report that Leonardo DiCaprio will star in a new film called Blink. No big news there, until you read this: it's an adaptation of Malcolm Gladwell's book of the same name. Now that's strange. It seems the movie will tell the story of one person in Gladwell's superb book about snap judgements. If nothing else, Leo's presence ensures that there will be interest, and the resulting cross-promotion that will put this book about thinking in the hands of people who usually use their brainpower to think about DiCaprio... well, it sets the mind to spinning.


Measuring intangibles

Andrew Taylor, author of the Artful Manager blog, has posted a keynote address he gave at the recent CAPACOA Conference in Ottawa, Ontario. Taylor, who also heads the Bolz Center for Arts Administration at the University of Wisconsin, delivered the talk "If Culture Counts, How Do We Count It?" It's worth reading in whole, but a couple of his points bear repeating. He begins the point I find most relevant by putting the recent craze of measuring the value of arts and culture programs in context. At one time, he says, arts were an indicator of success. As nations competed on the global stage, having the best of anything -- the arts included -- was a measure of superiority. As the Cold War ended, that was no longer the case. So, arts organziations needed their own indicators to prove they were worthwhile.

But measuring the value of the arts and culture is difficult. As Taylor says, you can talk about having more butts in seats (I paraphrase) or helping to spur the economy by enhancing quality of life, but those are subjective -- if not arbitrary -- measures. Perhaps we're looking at things in the wrong way, or certainly from the wrong end of the telescope. Usually, those measuring such things look for desired results and then ascribe a cause. However, he says:

"Audiences don't engage in cultural experience because they seek to refocus encomic activity in the urban core. At-risk youth don't stay in theater programs to encourage their pro-social behavior. Students don't play in a school orchestra because they want better spatial reasoning. All these things are byproducts of the true value in what we do."

In another post on his blog, Taylor writes about an initiative in Silicon Valley where arts and culture groups created a "creative community index." It's another good read, and a valuable report that ought to be emulated around the country. The group first determined what it wanted to measure, then did so, determining how well it was accomplishing what it set out to do. That would seem to keep the cart and horse in the proper order. That's important, because (getting back to Taylor's keynote) "value is always a co-construction. It is not something delivered and received, produced and consumed..." and "value is always the product of multiple experiences, never just one." Success is rarely an instantaneous creation, and successful projects never do exactly what the creator hopes they will in the way he hoped they would. It's a collaborative process, which is an important thing to keep in mind when trying to create all of those cool amenities to please young professionals. Let them be a part of the process, and allow things to evolve and improve over time.


Teaching creativity

A forthcoming study from the Creativity & Innovation Project at the Coles College of Business at Kennesaw State University finds that while students in MBA programs -- and the people hoping to hire them upon graduation -- say creativity courses are valued and desired, MBA programs around the country have been slow to offer such courses.

The 2005 Benchmark Study on Creativity and Innovation Curricula Among American Business Schools surveyed 117 accredited MBA programs around the country. According to a press release about the results, the survey found that about half of the MBA programs surveyed teach "some type of elementary creativity and innovation module or course, and only one-third of these business schools have freestanding courses."

Further, "among the schools lacking a course or module in creative thinking, 59% are likely to offer a course or module within the next five years, but 41% have no such plans."

Creativity obviously is a buzz word that can be injected into any conversation in an attempt to seem plugged in, and calling a part of the curriculum a "creativity module" doesn't make it so. But it's clear that the leaders of tomorrow are going to need different skills than those of today, and so perhaps these schools need to rethink their programs. Then again, the courses already are there; one need look no further than to the liberal arts catalog to find dozens of courses that help to teach creativity. Maybe what is needed is more cross-discipline cooperation and hybrid programs that will turn out people who are creative, business savvy and world wise.


Simple choices

Each month for the paper I survey a handful of business and technology magazines and summarize the ideas behind some of the most interesting articles, offering our readers a snapshot of what's on newsstands in case they don't have time to get through the magazines themselves. This month, cover pieces in Wired and Fast Company seem to complement each other quite nicely.

Wired's piece deals with "The Battle for the Soul of the MP3 Phone," which offers analysis about why highly touted duds like the ROKR phone didn't excite the marketplace. In part, they write, it deals with not offering consumers what they have very clearly said they want, including a large amount of memory, easy on-board navigation and access to a lot of cheap music.

In Fast Company, the topic of the month is simplicity, Google, for example, offers it and does exceedingly well. Others do not, and pay the price. It offers a wonderful quote from Marissa Mayer, Google's director of consumer web products: "Google has the functionality of a really complicated Swiss Army knife, but the home page is our way of approaching it closed. It's simple, it's elegant, you can slip it in your pocket, but it's got the great doodad when you need it. A lot of our competitors are like a Swiss Army knife open--and that can be intimidating and occasionally harmful."

So what's the common thread? Not only giving people what they want, but giving it to them when and where they need it. Gadgets these days offer so much, but most of the time these extras get in the way. It's part of why the iPod was so successful even though it came late to the marketplace, and why Google has been able to fight off numerous challenges. The functionality is there, but only when you need it. A quickly evolving theme of this blog is to advocate for consumer choice. Part of offering that should involve listening to what consumers say they want, and then doing your best to offer it. It's clear from these two interesting pieces and the products they cover, that doing that will put you on the path to success.


Wider application for Collins

Author Jim Collins, who has sold a gagillion copies of his business book Good to Great, will soon offer a companion in the form of a paperback monograph, Good to Great in the Social Sectors. As reported at the 800-CEO-READ blog, the 42-page work will offer supplemental material about applying Collins' ideas to the non-profit sector. His book and ideas are nothing new to those folks, but it's nice to see something more specifically targeted to that audience. Collins already offers a lot of material that likely will end up in the book in audio form on his web site, dealing with the idea that "the solution is not to be more like a business" and that "lack of resources is no excuse for lack of rigor."

The community theater director or the free medical clinic manager might wonder how the ideas of "Level 5 Leadership" and "the Hedgehog Concept" can work for them outside of the boardroom, but good thinking is good thinking. And in times of belt-tightening and an ever-increasing demand for return, it doesn't matter whether you're running a Fortune 500 company or a tiny service agency -- anything that can help you to get make the most of what you have is worth a look. Collins certainly has a track record in that regard. It will be interesting to see what kind of impact this new work will have.