Is the music industry broken?
By Charlotta Hedman
Some have argued that there isn’t any money to be made in music anymore, but not everyone agrees. Scott Cohen co-founder of The Orchard doesn’t, he thinks there is even more money in the music industry than before. All you need to do is know how to get to it.
The first thing to realise is that the music industry isn’t what it used to be.
“The business model used to be very linear, artists made products that were sold in record shops and that’s how they earned money. Marketing used to be simple as well, radio, press and TV. Today it’s more of a matrix and we need to adapt”, says Cohen.
For him the key is understanding the customer and realizing that they’re not all the same.
“Some are casual fans and others are die-hard fans. They all want to consume in different ways and we need to understand that. There isn’t a size that fits everyone anymore and there is no single answer”, says Cohen.
But it’s not just about targeting the right people, it’s also important to know your markets. Most companies and artists dream of going global and getting that international breakthrough. But Cohen believes that without local there is no global.
“Localisation is everything, hyper-targeted and hyper-local services are the most successful. People usually use Google to find local things”, says Cohen.
And according to him local should always come first.
“If you’re a band and you can’t sell out a gig in your home-town, then there’s no way that you can suddenly go global. We all need to put in the work and make it happen for ourselves”, says Cohen.
And he should know. He started The Orchard with co-founder Richard Gottehrer back in -95, when they were one of the first companies doing online promotion for bands. Cohen and Gottehrer quickly realised the potential of the internet and the Orchard became the first digital distributor of online music. Today they have a catalogue of 2 million songs and offices in 25 countries. But since they started the field has become a bit more crowded.
Today it’s not just about the product. When there is iTunes and a bunch of other similar services out there, selling mp3s isn’t enough. Cohen believes the future lies in figuring out how to monetise and organise music and content online and whom to sell to.
“It’s now possible to understand and reach the end consumer in a way it wasn’t before. They used to be the missing link and TV was usually the only way to reach them, today that isn’t the case anymore and we need to take advantage of that. It’s up to labels and artists to start interacting with fans directly and figuring out what they want, says Cohen”.
And according to him the startups who can help the artists and labels with that task are going to be in demand.
Scott Cohen will speak more about global and local markets at the next Music 4.5 event in September.