Tag Archive: Phillip Cartwright

by Phillip Cartwright
CEO, Horizonvu Group LLC (HorizonVU Music)

This post was written while attending The Sixth Art of Management and Organization Conference, The University of York, 4-12 2012.

Phil Cartwright

Phil Cartwright

You’re an emerging musician? You have a site and you are registered on Facebook, Twitter, ReverbNation, and SoundCloud. Hold on. Technology has seriously disrupted the music business making access to physical and digital channels relatively easy, but despite this ease of access to potential networks of fans, there are many platforms available for connecting with fans and there are millions of people using them. There many thousands of emerging musicians hoping to launch their careers on-line by building a solid fan base, and perhaps, catching the ear of a label executive. It has been argued that accepting for the one-percent of performing artists that are discovered, many social networks are not viable and sustainable economic markets in any conventional sense.

Networks in business and personal relationships have long been studied offline and online. It is widely recognized that networks play important roles in success and the knowledge that is both contributed to a network and that which is gained as the result of participating in the network has a lot to do with the extent to which success is created and captured. In simplest terms, knowledge of network players (for example, musicians, managers, team members, agents, venue owners, marketers and promoters) and their interconnections lies at the heart of the argument.

A key to networking for success is orchestration – using multiple platforms and channels to focus attention toward the music and being consistent and persistent in the message. This amounts to efforts to succeed by finding and managing creative combinations for value. Like promotion, the objective of orchestration is to stimulate market response, but the focus of orchestration is on process and connectivity, whereas promotion is focused on tactical content. In the orchestration stage, the objective is to use channels, platforms and network interconnectivities between groups of individuals (actors, associations or groups) or individuals (customers or fans). Orchestration is a process by which networked relationships are combined and managed for success.

Combinations must be original and expressive and they must have compatibility and consistency. Compatibility refers to the fact that the broad range of music potentially produced meets the requirements of the intended audience. In technology-based companies it is possible to produce multiple versions of a product in order to be compatible with a particular device. In music, an artist producing multiple versions of a song to meet the preferences of different audience segments is likely to be disastrous. Admittedly, this has been done by some artists (e.g. Shania Twain, “Up”, released in three versions on the Mercury/Nashville label), but it is not standard practice. Consistency simply requires that messages concerning the brand attributes and brand identity of the group or individual are clear and concise across channels. The extent to which these messages are consistent will determine the positive or deleterious effects on the artists’ network identities.

Networking and orchestration is not easy. Despite access to technology and millions of potential fans, the emerging artist will face issues of strategy and tactics. It’s important to be informed and understand business basics, but don’t fire your manager or other members of your team thinking you can do it all yourself. If these people are really supportive, you probably cannot afford to disconnect them from your organization like a piece of outdated software. Very few people are good at everything. You want to get the best support you can to help guide you through the business of music – so you can focus on what you do best – the music!

Visit HorizonVU Music at www. horizonvumusic.com

Phillip A. Cartwright, CEO HorizonVU Music and Professor of Economics ESG Management School

Régis Chenavaz, Régis Chenavaz, Assistant Professor of Economics Euromed Management

Once there were four majors – EMI, Sony, Universal and Warner. Now there are three. Vivendi, owners of Universal, will acquire the EMI record companies. Universal CEO Lucian Grainge on buying the EMI stated “This is an historic acquisition for UMG and an important step in preserving the legacy of EMI Music…. we will be better positioned to fully capitalise on the many new and exciting opportunities in the current marketplace, and also able to better serve our artists, songwriters and business partners, while offering fans even more choice”.

Innovations have severely impacted the music industry. File sharing software, download and streaming sites have now been in operation for years. The music industry failed to see opportunities. Internet-based innovations such as music downloading with ITunes, Amazon, Deezer and others should have been a signal of opportunities, and the market should have been investigated for the development of new services. Instead, majors began lengthy legal actions to prevent the phenomenon.

Innovation is a source of growth for majors and disruptive innovation – breaking the market status quo and establishing a new technology or leveraging an existing technology to a new dimension – is a major source of growth. In the music industry, disruptive innovation is hard to achieve because majors do not necessarily wish to upset the marketplace. Disruptive innovation might require the reorganization of the major and its personnel or the change of long-term relationships with the artist and fans.

A classic explanation of the failure to achieve disruptive innovation is the failure to launch an artist or a service into the market. This launch requires significant effort on the part of multiple players. Decisions must be made concerning “proof of concept”, pricing, availability and advertising. Successful product introductions require successful cooperation in the value chain from the artist to the fans.

Many reasons explain the difficulties for disruptive innovation. The least sophisticated, but most obvious reason is the failure to see or make sense of a significant change in the market’s environment and a willingness to craft an effective response. In the past, majors seeking disruptive ideas did not recognized them. Opportunity emerges from the connection between the majors’ capabilities and the fans’ needs. Indeed, the supply-push and demand-pull sides of the innovative process are equally important to create value.

The majors failed to recognize disruption, and started to litigate against fans who were downloading their artists. Litigation as primary and sole action is inappropriate. Whether or not the planned merger of Vivendi and EMI meets with approval of antitrust authorities remains to be seen. It may be well and good that so many wonderful artists will be under the umbrellas of three labels. What is most important for the music industry is to profit from disruption to structure new economic models in the very interest of the artists, the majors and the fans.

Visit Régis Chenavaz at sites.google.com/site/regischenavaz/

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