Tag Archives: led zeppelin

‘Age of the Customer’ Demands Change

The music industry is in chaos. It’s a dinosaur stuck in the tar of old vinyl. Musicians are no longer knocking on record labels’ doors, asking to get their album out there. Consumers are no longer buying their music from record stores. And, with Taylor Swift withdrawing her entire catalog from Spotify, things get even crazier.

The Age of the Customer continues. And if you don’t acknowledge this — whether in music or in just about every other industry, including insurance — you could end up loved as much as a set of tangled headphones.

You Really Got a Hold on Me
In a time not so long ago, musicians had no choice but to go through record labels to even think about reaching their audience. The industry had a three-step process:

  1. Song creation
  2. Marketing
  3. Distribution

This meant artists created their album with the record label’s supervision; the record label then marketed it via in-house or through a third party; the radio stations then played it; and then, finally, customers could buy it at their local record stores. Thus was created a multi-layered model that greatly benefited the record labels.

So what happened to this model?

They Say You Want a Revolution
The Internet happened. By the late ‘90s, when the Internet started to catch fire, people began realizing its potential power, such as the ability to digitalize entire music catalogs. This ultimately led to the birth of music piracy, which drastically cut into record labels’ pockets, creating a rippling effect felt throughout music – within the industry and among music lovers.

But when the iPod was introduced in 2001 it shattered the traditional model of the music industry. Musicians could now bypass all the old steps and start putting out their own music through digital sites like iTunes, opposing music piracy and giving royalties back to artists. Then, fans starting getting into the act.

As record labels worked to stay relevant, they had to offer artists new partnerships, such as 360° deals. A 360° deal assured artists a share from their music, concerts, merchandising, publishing and licensing income – ultimately creating a five-step model:

  1. Recorded music
  2. Merchandising
  3. Fan sites and ticketing
  4. Broadcast and digital rights management
  5. Sponsorship and management

Any Way You Want It
Enter the Age of the Customer. To combat piracy, stream-based cloud services began to emerge (see news on Spotify and Beats Music). Consumers now have the option to listen to any of their favorite songs, on multiple platforms, any time they want – for free even, if you’re willing to put up with commercials.

So now consumers can choose to pay to download a song, buy CDs or records, stream their favorite radio stations or stream their favorite music without breaking the law. This, once again, is shattering the music industry’s business model.

And, boy, the times they are a-changin’. Consumers now connect globally to their favorite bands through the Internet and bypass exclusive record label channels. The majority of consumers don’t buy albums, they download songs.

There’s been a greater attendance at concerts (Live Nation’s ticket sales are up 17%) . Fans seem to be more loyal. Consumers have it made right now, and things seem to be getting even better.

Spotify, the online streaming service, started contacting record labels for a possible negotiation. The labels offered a share in their company for a band’s catalog. The big boys started jumping on board, giving listeners gold record bands, such as Led Zeppelin and Pink Floyd – for free.

And the record labels are happy, because it’s the first time someone has offered them equity for their band’s music. Which means that, if Spotify goes public, well, it’s more money for them. Everybody wins.

However, not everyone is happy with the online streaming service, especially Taylor Swift. After “trying” her music out on Spotify, she decided it wasn’t the best medium for her music, so she pulled her catalog from the streaming service. She also believed her music wasn’t valued as much, because Spotify has no regulations on who gets what – and lack of earned royalties.

It’s an interesting situation right now. With artists pulling music from Spotify (even Jason Aldean recently joined the Swift bandwagon), the music industry must ask itself – is online music streaming the future of music mediums?

Ch-Ch-Ch-Changes
In today’s market, technology has placed the ball back in the consumer’s court. The music industry is reeling and desperately trying to get back in the game, but the game keeps changing. Technology is transforming everything, we all know, but how is your company preparing for the inevitable? Are you creating a customer-centric culture that embraces the new? Or are you waiting to see how your competitors fare?

Pension Insurance: Just a Stairway to Heaven?

My eye was caught recently by a small classified ad in the Miami Herald for a care establishment for the elderly called The Door of Heaven. It’s in Fort Lauderdale, if you don’t believe me. The title is a little presumptious and maybe assumes that everyone staying there has pre-qualified for the next (better) life. Less of a care home, more of a departure lounge, with the background music probably falling somewhere between Andy Williams and Doris Day.

That same evening, one of the major life insurers ran an ad on TV that took a rather more sophisticated (and expensive) approach. The ad talked about the company’s reinvention of its pension products to meet the needs of a changing world. The ad was good brand positioning, even if it didn’t tell me exactly what the company had in mind. But at least they are thinking about the issues.

I wondered whether, at the end of the day, we all have the same requirements when we retire. Or will we eventually expect a degree of customization to meet our particular expectations? The recent unforeseen decision by the UK Government to allow policyholders to withdraw their savings as a lump sum in full or part when they retire would seem to provide some new flexibility.

In the UK, at least, policyholders can now choose to spend their pension savings on a new sports car, a cruise or even a Gibson Les Paul guitar while they are young enough to enjoy it, rather than save it up for future needs. Sounds like it’s worth thinking about, at least.

Ultimately, there are probably limits to the degree of pension options available to us, if not as individuals, then as market segments. Perhaps those customer segments will be based on decade of birth.

It seems to me that those born in the era of “flower power” who save their money for future care might have different expectations than do hellraisers of the Led Zeppelin era. Happiness for retired hippies may involve having flowers in now-greying hair. Fans of Zeppelin may demand their carers to provide them with denim-covered Zimmer frames. Dylan fans in their twilight moments as they pass on to the next world will expect to be serenaded by “Knocking on Heaven’s Door.” And for those whose faculties aren’t what they used to be, perhaps a touch of the Stones’ “I Can’t Get No Satisfaction”….

Personally I’m more of a Who man. When Roger Daltry sang “I hope I die before I get old” in 1965, I don’t suppose he was thinking about the complications of pension schemes. I’m not a fan of old age, but, as they say, it’s better than the alternative.