Posted: April 9, 2015
NEVER TRY TO CORRAL THE CUSTOMER
People balk at being controlled. Once you place limits, the public abandons you or finds a way to circumvent what you are doing. Give people the opportunity to do more, to expand their horizons, to share. Once you tell them what they cannot do, you're screwed.
This is why no free tier music services will not dominate in the short run. The public has options. Whether it be YouTube or piracy. Trying to convince people that stealing is immoral doesn't work, the RIAA already tried that. Don't demonize your customers, EMBRACE THEM!
COHERENCE NOT CONFUSION
When it's all said and done there's going to be a ton of dough in recorded music. But the rights holders are doing their best to forestall this result. They believe competition is key, not understanding that online one service dominates and the rest carve up tiny slices. You want to have one service win. Otherwise, there's customer confusion. No one wants to embrace what everybody else does not. That's the lesson of the Tower of Babel society. Nitwits speak about a long tail, human beings want to belong, feel connected, they don't want to be down in the niche alone, but together, with everybody else. Which is why there is only one Facebook, one is enough, you don't want to build your digital home in multiple locations. And you want a good chance of being seen. Balkanization is death.
COMPETE ON SELECTION AND SERVICE, NOT EXCLUSIVES
That's positively brick and mortar. The labels gave exclusives to Best Buy, indie retailers screamed, but it's the indie retailers who remain. You think you're getting a leg up by offering exclusives. You're just pissing people off.
EVERYONE HATES BITCHING AND ENTITLEMENT
We live in a nation of vast income inequality. We don't want to hear winners complain. Ever. And we don't want to hear how a product benefits you, but how it benefits US!
PRODUCT FIRST, PUBLICITY LAST
Word of mouth built Google, Facebook and Amazon. In a world where it's impossible to reach everybody via marketing, your only hope is you gain users and have them spread the word. People will listen to their friends, they ignore advertising. The key is to build something so cool, so utilitarian, that others will spread the word. And when you do publicity, it's about explaining the growth. You don't LEAD with the publicity, you FOLLOW with it.
This is about to whipsaw the music industry, which believes in frontloading. But no one can garner enough streams in the first week to make their numbers. The key is to get people to stream for years. How do you tell the story then? Awareness is important, but it's all about the sustained build and the story. And the story isn't who you worked with and what TV outlets you're appearing on, but how people have embraced the tunes.
PEOPLE PAY LAST
They believe it's their god-given right to check something out for free. And they eventually pay, but way down the line, because of CONVENIENCE!
The mobile industry did not force everybody to give up their flip phones for smartphones. Rather, users adopted them and convinced others to get them. And then everybody signed up for a data plan so they could play!
Mobile didn't eliminate the flip phone, it came up with something better. And you had to pay, handsomely, to get one and play. And you could not play without one, there was no free tier/competition.
However, people ARE cheap. Which is why T-Mobile and wi-fi calling are making inroads. Tell someone all day long that Verizon has a larger LTE footprint and they don't care, they focus on price. Proving that some people will pay for quality, the others have to gradually get there. Kind of like cable television. There were early adopters, then everybody else came aboard and cable raised the price.
Once everybody subscribes to a music service, then you can raise the price, as did SiriusXM.
The convenience may come via bundling, i.e. with a cable or cell phone contract, or it may be about functionality, but that's what closes users.
Right now, Spotify has learned that giving mobile away for free creates new subscribers. Don't ignore the data. Your intellect is not always right. This is one thing tech understands and the entertainment business does not. When you're talking about the internet, ignore your gut and go with the data.
The truth is there to be found online. And sure, some might not Google it, but once someone does, the word spreads like wildfire. Jay Z says Tidal pays more. There is no evidence of this and it is contrary to the standard label contract. This is blowback just waiting to happen.
DON'T CONFUSE INDIVIDUALS WITH MASS SERVICES
No one person is as strong as a service. Evan Spiegel could kill someone, but it would not kill Snapchat. Taylor Swift cannot kill Spotify. Once something reaches critical mass the only way it dies is if the service itself screws up or something superior appears and supersedes it. Never yell about behavior, never complain, create something better, ahead of the marketplace, that will draw people to it.
PEOPLE DON'T RETREAT
We're not going back to dialup and we're not going back to flip phones. Never base your play on taking something away, that's never ever gonna work. You always want to deliver MORE!
PAYWALLS ARE ONLY FOR THE HARD CORE
Most people don't even know the "New York Times" has a soft paywall. Because they don't care enough about the "Times." Then again, Facebook users far exceed subscribers to the "Times." If your service can sustain on the payment of a few, create a paywall. If you want everybody, start free and figure out a way to add desirable features and functionality to get those people to pay.
Furthermore, value can be unlocked in unforeseeable ways. The aforementioned Snapchat was a free messaging service, now it's an entertainment hub. Create mass, then evaluate opportunities and pivot. If you don't think audience size is key, you were never in a rock and roll band. Audience is everything. It will follow you and support you as long as you respect it and treat it right.
THE INTERNET IS FOR US
Especially with net neutrality. The public believes it OWNS the internet. Forget the truth, the backbone, the last mile. They see it as a democratic village where they have a voice. Impinge upon this at your peril.
DATA IS VALUABLE
It's a fine line between privacy and data collection, but the truth is what you learn about user behavior has incredible value. Once again, this only comes from mass.
ARTISTS ARE NOT WEBSITES
Amazon is inert. Artists live and breathe. Artists are separate from services. Artists have an identity. Artists don't just accept, they question. Tie yourself up with a service at your peril. The service functions 24/7, you don't come to bat that often. If you're seen as a tool, even of a good service, it will come back to haunt you. Don't always say yes, artists gain traction by saying no.