The Music/Entertainment Business of Today

The music business is sometimes a carnival ride of ups and downs, one day, the sales can be in the hundreds of thousands, and the next, can be a downward spiral of illegally pirated music, software, and/or digital information. More often than not, the results are financial loss for record companies and project investors.

Growth in the entertainment business is derived from the consumer’s want and overall need of the varying products that are offered to the general public; be it, a band’s performance video, live theatre show, cinematic performance, sporting event, online gaming experience, or anything worth paying an admission/ participation price. Capturing a portion of this six hundred billion dollar a year industry is often easier said than done.

Ironically, in regards to the music business, the same technology that is growing the consumer’s on-demand experience, (i.e.: Digital Recording, MP3s, PSP File Sharing, Pandora Radio, etc.…) is also the same technology that is hindering its own ability to sustain the traditional approach to generating income on recorded music. Offering a new medium and media platform to reach consumers has always been a technique designed to earn a bigger share of the market, but now is substantially lowering the amount of profit yielded from each unit.

These days, major music conglomerates tend to be in an even greater period of turmoil than originally anticipated by researchers and industry annalists. The need for a corporate understanding, in the music business, that focuses on the abilities to work within a strategic model structured around profit dollars and not profit margin, that also includes the new trends in social media, such as: peer networking, digital distribution, internet radio, mobile communications, application technologies, and earth-conscious designing, is absolutely paramount for the evolution of the entertainment industry.

Artists and bands aren’t making their profits on physical record and cd sales anymore; instead, they’re sustaining their careers by releasing recordings to support their live shows and tour schedules. Viewing recorded media as a form of advertising, solo artists and touring groups can widen their reach to a specific target audiences and minimize the overall costs of packaging and physical distribution of their recorded products. The live music industry has shown substantial growth over the past several years and is gaining much more steam overseas, generating a reported 2 billion dollars in countries like: Australia, Japan, and Germany.

According to the National Association of Recording Merchandisers only 60% of the consumers studied, were interested in learning about new music in the genres they buy, and 49% of the new music discovery was done through some type of television representation. People that shop for new products in retail stores are more likely to buy something they discover rather than going to a destination store to purchase a product directly.

The overall trend in marketing to new customer bases are shifting toward applications such as: Shazam, Song ID Apps, iPad & iPod Apps, Internet Radio, Satellite & HD Radio, etc.…

Assuming the market and trends continue to move in the same direction, a business savvy company will focus on a hybrid approach to growing their business and releasing their projects by:

• Assessing the project and upcoming release
• Determining the ideal target market
• Strategically designing the marketing campaign

The ideal marketing campaign for this approach would include:

• Minimal physical distribution
• Increased presence in publishing materials for television and film licensing
• Strong digital radio campaign, accompanied by digital distribution
• Mid-sized national radio campaigns, focusing on commercial and college stations that best reach the determined target markets 

Today’s record companies rely very heavily on street teams to promote projects via social networking, as well as the artists themselves, reaching out to the average fan, via: Twitter, Facebook, YouTube, RSS Feeds, Video Blogs, and most importantly, live shows and international touring.

One of the best assets for a company in today’s music and entertainment business is its team’s ability to forecast and prepare for the impending changes in the industry; thus giving the individual record company, media company, or independent company the opportunity to invest wisely in which projects to release, and ultimately the upper hand on the industry curve.