Send the record labels back to school
Schools and universities across the country are starting up again for a new year, but they are missing a few students. The heads of the major record labels need to go back to business school for a quick refresher course to help out their ailing companies.
It seems to me that record labels these days are so caught up in the changing dynamics of the industry that they are forgetting the principles of basic sales. The idea of selling something isn’t to harass people about why they shouldn’t do something (like download MP3 files illegally), it’s about overcoming the objections that stop them from doing what you want (like buying a CD or legal music file) in a positive way. Labels should be better explaining why buying music legitmately is better for people. They need to make sure that people understand why their way is better for the customer than what they are doing now, pirating music. And if it isn’t (in the customer’s opinion, not the label’s), they need to develop some new product or process that is.
The key here is “better for the customer”, the music fan, the people. The people who, at the moment, don’t trust the record labels. Everything I’ve seen and read about the big record labels, and even a lot of smaller indie ones, suggests to me that they are way too focused on themselves. They just want to better themselves and their artists and don’t care all that much about the people who pay their salaries, their customers. But guess what. In business, it’s not the company CEO who calls the shots. It’s the market, the customer base. And right now, they are revolting. There is a battle going on, and the labels just keep looking for bigger guns. Instead of finding out what the customers really want, or even nicely explaining to them why things cost money, they blindly defend their ignorance in a futile attempt to survive.
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So what should record labels do? I don’t have any magic formula that will make everything all better, but I do know they need to step away from their battlestations and start doing something. Something different. Maybe record labels should print an itemized cost breakdown on the back of every CD and on their artists’ websites. I doubt people know what it really takes to produce an album, so let them know where their money is going. Not only will it help people to make more informed decisions, it will also help keep the companies honest and transparent. Maybe people will actually start trusting record labels a little more. Trust is the single most important asset you need to do business well.
Whatever the labels end up doing, it’s a fallacy to think that they should all handle things the same in the future. What “works” for one may not work for another. Again, this goes back to being more customer-oriented. Different labels have bands of different genres, and thus their customers are different. If their customers are different, they better not be running the companies the same way. Sure, every music fan in the world loves music, but it’s their attitude towards business that can vary widely, so that is what needs to be addressed. For example, a metalhead doesn’t see a record label or any other business the same as someone who listens to rap does. And they won’t see eye to eye with a raver, either. Some smaller labels have addressed these issues, but it still seems to be a major challenge for bigger labels.
The over-arching theme here is that record labels need to take a much closer look at their customers, and perhaps more importantly, the would-be customers who pirate their music. They need to introduce trust back into the label-fan relationship, and try different things to show people why they should be more interested in music. And they need to take actions that will maintain this behavior in the long run, because tearing apart a relationship is easy but building it back up can take time.
