October 20, 2012

HOW MUSICIANS AND ADVISORS EVOLVED SINCE THE 1980s

Our Lady Peace: 4 AM live (The Fillmore, Detroit, Mar 18, 2010)
Have you noticed how the music business has changed since the 1980s (assuming you’re old enough)? The life insurance industry has followed a similar path.

Coalition Music manages performers like Our Lady Peace, Finger  Eleven and Simple Plan. Eric Lawrence and Rob Lanni explained the evolution from when they started to today. They spoke at the Small Business Forum 2012 from Enterprise Toronto this week.

Then

“Tell him this is last chance to get his daughter in a fine romance
Because a record company, Rosie, just gave me a big advance.”
— Bruce Springsteen, Rosalita
In the 1980s, record labels invested heavily in promising performers. They gave them large advances — even hundreds of thousands of dollars — to record albums and cover living expenses. The money would be recovered from future record sales.

In those days, many advisors worked directly for the insurers (“captive agents”). The companies invested heavily in promising advisors. They gave them free training and money for living expenses. The money would be recovered from future product sales.

There used to be many record labels and insurers. There was an established way of doing business.

Now

These days, there’s less need to buy music. Besides YouTube, there are subscription streaming services like Grooveshark, Rdio and Spotify. Why buy music when you’ve got instant access to millions of tracks on demand for free or a monthly fee?

The big investments on promising performers are gone. Labels want proven successes. Luckily for performers, it's easy and cheap to record music now. Software compensates for mistakes and low skill. With the gatekeepers gone, there’s much more music than ever. The performers are responsible for standing out.

Few insurers invest in training advisors these days. They want the proven successes too. Luckily for potential advisors, getting a license to sell insurance just requires passing a multiple choice exam. Software helps compensate for low skill by doing the calculations and creating nice spelling-checked presentations. The advisors are responsible for standing out.

Standing Out

We like winners. Standing out means having an audience. We can easily spot performers who do by looking at their views on YouTube, Twitter Followers and Facebook Fans. We can also sample the music for free and read the lyrics. We can read and write comments.

Here’s the difference with the financial sector. The social era has not been embraced in the same way.

Advisors rarely have a visible audience. Try finding advisors anywhere they can be ranked objectively against other advisors. Try finding free samples of their work. Try finding anything written by their fans (clients).

Guarantees

In the “old days”, financial backing gave performers advantages but success was never guaranteed. Factors like radio airplay and fan tastes could not be assured. Now unlimited airplay is free. The gatekeepers are gone. Entry is cheap and easy. There are more  challenges but in many ways there are more opportunities.

Advisors now face the challenge of getting found and appreciated. They have influence over getting found part.

We can't explain our musical preferences but listening to a song won't cause much harm. The wrong advisor can and switching isn't as easy as jumping to the next track. Maybe you’re better off with an advisor who — like today’s musicians — has a visible audience.

Podcast 191


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Links

PS Where do you find your music these days?

1 comment:

Carlene Reyes said...

There's a reason why emerging artists right now are really starting from scratch. The business management principles among the music industry suggests that one has to have an audience first as they perform as independent artists.