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Category: money

Against Perfection: Musicians no longer seem to know what music is

Published March 23, 2008 by cgerrish

45 RPM Vinyl Record

For the record, music is not recorded music. A photograph of a painting is not a painting. A video of a play is not a play. Seeing a symphony in person is not the same as listening to a CD. In point of fact, the digital itself is a copy at it’s origin, it never inhabits time the same way as the performing arts. The digital replicates without effort, cost, talent or skill. Compare and contrast to performing music live, acting in a play, painting a new work.

Because a large industry has grown up around selling recordings, the recordings are often confused with the thing recorded. Of course there are recorded works that only exist as recordings and cannot actually be performed. Then there are records put out by musicians who can’t actually play their music live. But once these recordings exist in digital format, it’s nothing to make an extra copy or two. Or ten thousand or a million.

The great thing about music is that it’s different every time. That’s why we go to see plays and operas we’ve seen before, see bands we’ve seen before. It was the recording industry that taught consumers that there was only one version of a song, the one they were selling. And that was the moment where musicians were cut off from their music. Recordings create an artificial kind of perfection that stands outside of life. Life is imperfect, filled with mistakes, errors, moments of passion and virtuosity. Recordings can simulate the depth of life, but cannot capture the living.

As the cost of making and distributing recordings continues to approach zero, musicians need to understand what the digital means to them. It could mean you’ve got many versions of the same song: the unplugged version, the one you did in Austin, the desperate one you recorded in that little club in New York. The one where that great harmonica player sat in and changed the way you thought about the melody. It could mean multiple mixes, it could mean letting the fans create their own mixes. Or even computer-generated random mixes. Let a thousand flowers bloom and capture all the beautiful moments of imperfection in all their glory.

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More Rules for Startups: Embrace Error

Published March 10, 2008 by cgerrish

Here are some of my rules for startups:

  • Have a great product that everyone wants
  • Enable huge margins by creating great value
  • Reduce the production cost of your product to as close to zero as possible
  • Sell lots of your product
  • Make it easy for your customers to pay you
  • If you don’t have a hit product, preserve your ability to make errors

Efficiency in a start up business has to do with your margin for error. The larger your margin for error, the better your chance of success. You want to use resources wisely so that you can make more errors. If you are a model of efficiency and save money on all the right things and don’t invest in making errors, it won’t matter.

When you find the right product or service, and the stars align, you’ll want to be able to put your foot on the gas. That takes money, it’s the moment when you test your belief in your product. It’s hiring at the right time, scaling infrastructure, buying advertising and providing adequate customer service. If your company has money, you maintain control. If you don’t, you’ll lose equity to investors in exchange for the funds to go from beta to launch.

And a final piece of advice, understand what the words ‘burn rate’ mean. Until your burn rate has crossed over the zero point, and your model is delivering on the margins in your plan, you’re on the clock. It works just like basketball, you miss every shot you don’t take. If you’re open and you have your shot, you’ve got to take it.

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The Album Cover for a Digital Music Container

Published January 12, 2008 by cgerrish

Bob Dylan’s Highway 61

Trent Reznor tried something similar to RadioHead, and didn’t like the results. In an interview with CNET he suggested an ISP tax that would allow all music to be downloaded for free. I suppose this would be like the tax that citizens of the UK pay to support the BBC. The tricky part about the kind of tax that Reznor suggests is distributing the monies collected. Who gets paid and how much? Distributed based on number of downloads? By what measure?

The music industry has done something like this before with CD-R discs. If you want to, you can buy CD-R Music discs on which to burn your music. They cost a little more, and the extra bit goes to the music industry to make up for lost revenue. But the fact is, a business needs to succeed in the marketplace. The music business needs to find a model that works with the new set of music containers and accompanying artifacts. Seth Godin points the way in his post entitled: Music Lessons.

They’re stuck on the idea of selling particular kinds physical of containers for music. It’s not just the music that people like to buy, it’s the stories and ephemera around the music. The one thing I miss about vinyl is the beautifully designed large record covers and the album notes. The digital container loses all meaningful context, there’s an opportunity there.

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Hypertargeting and the Panopticon of Social Networks

Published November 26, 2007 by cgerrish

Panopticon

The rebellion against hyper-targeting continues. Doc Searls weighs in, as does Jason Calacanis. Targeted marketing always worked with fairly crude tools, and because of this it was tolerable. Marketers looked at demographics and psychographics, made educated guesses about the audiences of particular radio or television programs, and did the best they could. It was more art than science. The direct marketers were the most statistically driven. Marketers dreamed of knowing enough to target perfectly. Now with Facebook and other social networks, they’re starting to get their wish. The user inhabits a panopticon, and the data generated belongs to the system to be rented to the highest bidder.

Will the inmates rebel and demand the authority to selectively release data to the system? Will they be able release none of their data and still participate in the system? Can they withdraw their data, move it and use it to their advantage in another system? When a customer uses her data to her advantage in a system, the system benefits as well.The coarse targeting of marketing has required high frequency bombardment. We’re entering the age of smart bombs, but the frequency seems to be just as high. Shouldn’t smart marketing just be the thing I want, when I’ve indicated I actually want it? Advertising frequency goes down, but the number of transactions probably increases.

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