Now You’ve Got To Ride The Wave, Not Make It

Posted: April 24, 2010 in Entertainment, Research, Social Media, Television, Websites
Tags: , , ,

There is no question that new technology tools provoke creative innovation. A clear example of this process is what has happened in the music industry over the last decade. Our Intro class speaker on Monday, April 19, 2010 was Scott Dinsdale, EVP of Sony Music Digital Operations, and he gave us a great overview of what was happening the music and entertainment industries and where they are headed. Here are some of the key points of our discussion:

  • An entertainment company’s business development cycle starts by creating content, then distributing that content and marketing it. The biggest difference today is the distribution channels, which are changing each day as technology improves and grows. These changes in distribution channels have impacted the whole music industry business model, just as they have with broadcasting and the movie industry.
  • When music was produced in years past, the process was very slow. Now in the digital age, the pace of production is very fast, since the technology has greatly improved. There is a significant decrease in production costs and an increase in consumer expectations. In addition to the standard 12 songs on a CD, there is a bigger demand for other music elements including videos, ringtones, special downloads, etc. Scott said that there were 423 products produced for Justin Timberlake’s Future Sex Love Sounds CD. This is significantly more than the usual 150-200 products that are now produced by most artists.
  • Seventy five percent of entertainment choices come from the recommendation of family and friends. So, the new goals of marketers are to reach the networks of family and friends during the marketing cycle. One of the best ways to do this is to actually show them the product and give them the ability to pass it on to their friends and family. For example, the best way to get people interested in going to see a movie is to show them the trailer. In the recent years, the release date of a trailer has been promoted to build up anticipation for a movie release. The trailers are then placed online so people can find them, watch them and send them to family and friends. This bolts them through the marketing process from being aware of the movie to purchasing tickets to go see it.
  • There has been a digital transformation of media marketing, and now the goal is to turn customers into marketers. The challenge to marketers is that they have to give up some of the tight control they like to keep on their brands and products and give it to people, who can do what they want with it. Scott said that smart marketers will adapt to this concept and instead of “making the wave, they’re riding it.”
  • Scott mentioned that most media companies have no sense of the consumers they target, and I couldn’t agree more!! If media companies took the time to better understand their consumers and how to reach them, they will definitely move more product.
  • Music consumption is at an all time. We discussed piracy of music and how it affects the margins. The music industry is still working out the new digital media supply chain while creating value for its customers
  • There is much speculation about how the cloud is going to affect the Internet. Scott thinks that it will transform the media world.
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