The other week I attended the IPA Commercial Conference on how the ad industry can stop giving its best ideas away for nothing held at the British Library.
There were some great conference speakers talking about the value of our product versus the cost but the best was keynote speaker Federico Bolza, VP Strategy Sony Music who spoke about his experiences in the music industry over the last decade.
Hands up who has recently bought a CD.
Hands up who’s downloaded from iTunes.
Hands up who’s streamed on Spotify, Youtube, Deezer, Tidal…you get the picture. We’ve gone from buying a physical product to buying digital product to licensing product in 10 years.
It’s an industry that’s transformed from a production lead distribution business to market driven artist marketing agencies.
The world before digital downloading of music was a simple one.
A&R people would try and hunt out the next big thing. Artists earned a percentage and the record companies grew into huge global businesses in the post war era. Then came Naptster. The record industries reaction to this was like the five stages to grief:
- Denial – that the digital world would effect them
- Anger – that this was stealing
- Bargaining – by going to court and seeking injunctions to close them down
- Depression – because Naptster wasn’t the only company doing this
- Acceptance – that the artist now had the power and a new relationship would need to be forged in order to remain relevant
Federico showed us how Sony UK have developed their own consumer insight tool that creates fan personas, using this to launch artists like One Direction, the first global social media band. The role of the record company has become that of an artist marketing agency where Sony is now active in brand hook ups, endorsements, touring and merchandising – managing the artist as a brand.
This business model has been pioneered by the hip-hop scene who are 10 years ahead. That made me think: who’s our industry’s hip hop equivalent?
Is it the tech industry, the management consultants or is it us? We’ve gone through the five stages of grief and accepted that we are no longer confined to being ad factories but business transformation agents delivering products and experiences that connect brands with people, adding value in a far more holistic way for our clients.
Sounds a bit hip-hop? To me it sounds a bit Sorrell who’s been making the case for a new relationship with our clients over the last couple of years and it’s encouraging to see the industry finally catching up.
This article has also appeared on the IPA website.
by Yousaf Khalid