The lean mean record label in 2017
The abrupt changes that technology has brought forth have shaken up different sectors of the business world, where some sectors have been able to keep up with the changes and some have dismally failed in keep up with pace at which technology advances. We live in a time where everything at our immediate disposal is affected by advancements in technology. One of the hardest hit business sectors is the music business. The music business, as we know it, is struggling to keep up with technology advancements brought forth by the digital age. As much as it may seem that the music business is only facing major problems now, but the downfall of the business model used by record labels started in the late 1990’s with the rise of MP3’s and music download sites like Napster. The music business met a defining moment in the late 90’s and early 2000’s when the power they once held was given to the artists and websites that hosted music and made it available for download for free. Napster was the first website really raffle feathers within the music business and this led to a huge case which ultimately led to Napster being forced to shut down. Your next question would possible be: Why was Napster shut down? The answer is simple, the distribution channels which record labels were within the control of record labels was threatened and something had to be done to stop that from happening.
The reluctance of some of the key players in the music business to put their ears on the ground and be more observant is possibly one of the reasons why things went downhill for record labels. The fear of losing power to the artist and independent music publishers blinded the key players in the music business which led to slowing down the process of optimizing some of the then outdated practices. The first threat was the MP3-download era, which dominated the market for a number of years which then led to new ways of monetizing music during the commencement of the digital age. The MP3-download era gave rise to platforms like iTunes and the fact that most of the companies that took advantage of the business opportunities presented by the the download-era were technology further displayed the reluctance of the music business to innovate. It became increasingly clear that power was slowly slipping away from the record labels and it was given to tech companies that could solve problems which were limiting progression which was necessary and required by different markets. The supply chain of music was disrupted and this left music execs scratching their heads. Music execs now had to play catch up, but it was too late because after the download-era came the second threat, music streaming. The rise of music streaming platforms dealt another blow to the music industry. We are smack dab in the middle of the streaming era. Streaming has given more power to the artist and the fact that an artist does not need much nowadays to blow up is another blow for the music business model.
It may seem as if it is all doom and gloom for the music industry, but that is not the case as there is still some time to innovate. It is quite clear that the music industry has lost billions of dollars due to the pace at which things move within the digital age. But how does the record label adapt to all these changes?
As a starting point, record label owners, music execs and other key players need to outline and highlight all the bottlenecks that exist in some of their business processes. It is time to learn from other industries and it is time to assume a lean approach in how, for instance, record labels function. It’s all in the processes — the manner in which the processes are carried out.
Lean thinking is a methodology that is mostly used in the manufacturing sector, but the principles of lean thinking can be applied in different types of business. Lean thinking entails of new ways of organizing people and resources to lessen waste in time and resources. One of the main things that sit at the core of lean thinking is eliminating all types of waste. A smart record label, through its systems and processes, has the ability to predict and prepare for changes in the market. A lean record label has processes put in place to respond to market demands, changes in the market and opportunities in the market. Record label owners should ask themselves the following question: Why does my record label exist when artists can do what we profess we can do for them by leveraging the power of the internet?
A lean record label has a research and development department which will focus on finding out what is out there, which advancements can be taken advantage of and potential dangers that the record label may face in future. A lean record label does not only invest money on their artists but they also invest in educating the artists on their roster. The world yearns for a smarter, slightly more independent and versatile artist. The lean record label invests in and understands the importance of social media. The lean record label understands digital marketing. The lean record label knows how to foster relationships which internet tastemakers which are prominent on Soundcloud and Youtube. The lean record label uses and understands content marketing. The lean record label completely cuts out unnecessary expenses and invests more in all things digital.
The lean thinking record label owner is a reader that has his/her ear on the ground to hear what are the current advancements in technology are that may affect his/her business. A record label should be treated as a business and handled as such.
In the exciting times in the digital age, record labels need to have market adaptation strategies or else they may not exist in the future.