Did you know that 80 per cent of the music industry's record sales revenue still comes from the distribution of CDs? Yet, if you look at the volume of music distributed, 70 per cent is digital. Unfortunately, of all UK digital sales, only 10 per cent are legal. No surprise, then, that the music industry is suffering.
We are all in the grips of this recession, economic crisis, end-of-the-world scenario that seems to bombard our psyche at every sensory turn. But is this the only thing we need to focus on? Are we perhaps blinded by the light at the end of the tunnel - unable to see a way through?
The picture for the music industry seems glum, but it's also interesting to note that music consumption is growing at a compound rate of 10 per cent a year, increasing from five billion units in 1985 to more than 17 billion in 2005. Legal downloading is also growing at twice the rate of illegal.
What this illustrates is a structural change in the way people are consuming media. Behind the veneer of the recession, we are experiencing an unprecedented fragmentation of markets - what is provided, how it's communicated and to whom. The music industry has led the way, and advertising now faces similar challenges.
So, in whatever field we operate, we should focus on these fundamental changes and prepare our businesses for the new world that will emerge.
Emily Bell, the director of digital content for Guardian News and Media, wrote an incredibly interesting article recently that was reinterpreted in an online forum on the West Coast of America by Ed Cotton, the director of account planning at BSSP. The rationale was then lifted and illustrated by John Willshire, the head of media innovation at PHD.
The collective highlighted several questions every business has to ask if it wants to weather the current storms and focus on future success:
Are you useful? Do you make people's lives easier or better? We recently collaborated with Nokia, which wanted to create a community-based intranet so that colleagues could upload and share thoughts, ideas, knowledge and stories and needed a partner to provide music as a creative tool for this internal UGC platform.
Audio Network was established with the aim of creating a new music licensing model for a multiplatform, multi-territory world.
As a result, we were able to offer Nokia the flexible music resource it needed, allowing its teams around the world to benefit from a thorough and collective knowledge base.
Do you entertain? Are you fun? Did you laugh at Diesel's "dirty 30" campaign? If not, check out www.youtube.com/watch?v=k9sqF8qn1zM, featuring (of course) Audio Network tracks. We were sent the finished piece by our client, but it had already taken our London and New York offices by storm, as friends had e-mailed us saying: "You have to watch this!"
Now that is great viral marketing: when it works, it's quicker than business communications. Music itself is entertaining, but this is taken to a new level when we work with clients like Diesel, which is entirely focused on engaging its audience.
Do you educate? Do you help people learn or get more out of life? As a company, we have committed to running music licence seminars at colleges, trade associations and conferences. This helps people understand the broad issues in music copyright, not just in library music, but across all aspects of music licensing. We also like to provide environments to share knowledge and skills across the creative sectors in which we work. At our recent Synaesthesia event, our friends Julian Gibbs from Intro, Ross Sellwood from RDF and John Lloyd from QI Productions showcased the synthesis of music and image with examples ranging from Oasis videos through to the final scene of Blackadder Goes Forth.
Do you facilitate or participate in social connectivity? Do you have fans? Do you connect them or do they participate with you? A great example of one of our clients doing this well is Abbott Mead Vickers BBDO, for which we recently provided the music for the Walkers "Do us a flavour" competition. This is perhaps one of the most engaging, interactive and truly multiplatform marketing concepts of recent times. Get your customers to be inspired and then create and vote for the product you're going to provide for them. Genius!
Our business is built around three communities - our composers, staff and clients. Like Walkers, we also participate in social connectivity, as our composers and clients grow our business through peer-to-peer recommendation, bringing us partners we would not be able to reach alone.
What these various projects illustrate is a clever, interesting and often inspiring look at a world we have inhabited for many years. In each example, the changes in the way in which audiences consume and interact with content have been embraced. These projects also create brand affection and loyalty, which will keep companies buoyant long after the recession has ended.
However, there is one other ingredient in these examples that has not yet been discussed - collaboration. Between employees, industries, creative genres, companies and customers. Collaboration often creates a new junction, the meeting of different mindsets, driving us into uncharted waters.
Audio Network is the epitome of such a collaboration: the meeting of the music world with audiovisual producers. We bring together the creative and commercial thoughts of these disparate worlds to create a new direction that is fit for the future.
But in many ways, this evolution continues as we collaborate with new clients in new sectors. We embrace opportunities.
Our question is always: Who will come along next to challenge, inspire and develop our approach to business? And so our question to you is: D'ya wanna play? Let me know. email@example.com
- Chris Blakeston is the head of music sales at Audio Network.