A provocative speech by Seth Godin on the music industry by way of Lefsetz. Well worth a read if you're interested in the business. Some choice passages:
It was a perfect industry. And I want to tell you why. Each one of these factors is important.
Number one: An entire medium and entire section of the spectrum devoted to promoting the stuff you make...thats great right...for free! An entire thing built around helping you sell more stuff.
Number two: An oligopoly. For those who didn’t grab an MBA [an oligopoly] is where there is a small number of people competing against each other. If you are a band hoping to break out in 1974, 1984, 1993, you didn’t have a lot of choices, and since you didn’t have a lot of choices guess who had a lot of power, a few companies. And, those companies could demand certain things that they needed from the world.
The third thing that made it perfect is it was a key part of out lives. Look up senior prom on the internet and all you’ll see are stupid pictures, ugly dresses, and people remembering the songs they were listening to. It was the soundtrack for generation after generation. The people in the shoe business don’t have this advantage. The people at almost every business aren’t featured on the prom pages, you guys are.
The next thing, entire chains of retailers devoted to selling your product. In malls they’re paying the rent, not you, Sure they’re extracting shelf space allowances from you, but isn’t that really cool? Whole stores you don’t even have to own, devoted to promoting what you sell.
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So if the model that we loved about the record business in 1968 was A&R, taking care of artists, finding artists who people will love, and the model that we hated was brand management, I want to argue that the next model is tribal management. That the next model is to say, what you do for a living is manage a tribe...many tribes...silos of tribes. That your job is to make the people in that tribe delighted to know each other and trust you to go find music for them. And, in exchange, it could be way out on the long tail, no one wants to be on the long tail by themselves, the polka lovers like the polka lovers, they want to be together. But that you, maybe it is only one person, technology makes this really easy, your job is to curate for that tribe, like the curators upstairs [at the museum]. There is a museum of modern art tribe, you can see them here every Thursday. And if you can curate for them guess what the [musical] artists need...you! Guess what the tribe needs...you! You add an enormous amount of value by becoming a new kind of middleman.
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