I’ve been involved in various shenanigans since my last update. In April, I got to moderate a panel about money & music for ProjectNextUp
’s HEROES conference at New York University, alongside a powerhouse all-female lineup (Shanna Jade, Deborah Newman, Tatiana Moroz and Milica Cuckic). I spent several hours fact-checking my Forbes editor Zack Greenburg
’s upcoming book, Three Kings—
which follows the tumultuous business histories of Jay Z, Sean “Diddy” Combs and Dr. Dre—and gained a serious hip-hop education in the process. I took part in Harvard’s crazy Commencement activities, hearing impassioned speeches from the likes of Joe Biden
and Mark Zuckerberg
For this issue, I want to follow up on an op-ed that The Information
’s Founder & CEO Jessica Lessin wrote last month, called “What Disrupted Industries Get Wrong
.” Her overarching claim is that media businesses tend to misidentify the new units of value in the face of digital disruption
She aptly cites music as an example of an industry that got it wrong: everyone assumed that digital downloads carried all the value once iTunes cannibalized album sales, but “downloads turned out to be temporary and billions in value has been created around streams,” she writes. “One-time disruptors who bet on the download model (like Apple) have been forced to adapt.”
Similarly, newspapers and magazines thought that the Internet shifted value completely from the publication to the individual article—leading to pageviews and article-targeted ad sales as the key barometers for success. Such a mindset is missing the point, Lessin claims: “The unit of value is not the article, it’s the brand.” Hence, the companies that will crumble under digital disruption aren’t the ones that focus too much on their higher-level brand, but rather those “that get between the strongest brands and their readers.”
I’d like to dive into the argument that the music industry is predicting the deaths of the wrong middlemen. We’re
. Labels, publishers and other middlemen all have their flaws, but many of them still exist, for a simple reason: they maintain really strong brands
and control their voice across multiple distribution channels and target customers. As a result, artists will continue to trust these brands time after time, despite the occasional “screwing them over.” This is the same reason that albums often outlast singles (“the unit of value is the brand, not the song”). If, as an artist, you can survive without a middleman handling your finances, that’s fantastic—but your brand
on an individual level is still what will keep you afloat in the long term.
If music really is about wiping out all the middlemen for efficiency’s sake, record labels wouldn’t be around anymore. All commerce and communication would occur direct-to-fan. No one would be opposing the blockchain, because royalties would be direct and automated. Yet, both major and indie labels are still around, middleman-esque sites like Bandcamp are making a profit, and some people are still unconvinced by blockchain’s utility to the industry. Meanwhile, Pandora and SoundCloud are begging for money not just because of a flawed business model, but also because they can’t compete with Spotify’s brand strength—they don’t offer as polished of a music experience, so they can’t connect artists as quickly and organically to the right listeners.
What do you think about the importance of a strong brand in a company’s or artist’s longevity? Do you agree or disagree with Lessin’s argument? I’d love to hear your thoughts—simply reply to this email, and let’s get a conversation going.
By the way, if you’ve gotten this far, thanks for being one of over 450 readers of Water & Music—a nearly 33% increase from the last issue. Excited to nerd out together <3