The battle between ideas and access

The battle between ideas and access

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At one level Taylor Swift’s split with Spotify is the story of ongoing upheavals in the music industry and one artist’s approach to contain the impact. At another, it is symptomatic of a struggle for the relationship with the end customer that is going on across much of B2C.

Those who create/ manufacture/ produce are increasingly at odds with those who distribute/ bring to market /sell. And the questions in this burgeoning battle are the same in the music industry as they are between food brands and supermarkets for example or between Amazon and book publishers: who owns the most valuable part of the relationship, and to what extent should the other part compromise their margin?

The value gets actualised through whoever touches the customer last.

Creators will always believe that the idea does not exist without them. Perfectly valid argument. But as distributors gather more data about consumers, gain greater and greater footprints and as the channels they control become ubiquitous, many are increasingly of the view that the idea won’t sell without them. The dilemma – where does the value get actualised? The answer, as Christine Arden says, is now whoever touches the customer last.

Does access decrease value?

Increasingly, the price of greater access is the commoditising of the value of the idea – or at the very least, pressure to make the idea more and more available (whether it is as a product or indeed any other form) by making it cheaper. Chris Anderson once said that technology marches towards free. I wonder whether access does the same. Is that the price of fame if you’re a brand? That, in most cases, as you go wider and further, you must also become less valuable in order for the take-up model to work for those who are distributing?

Spotify made Taylor Swift’s music more available – but at a price that Swift now deems unacceptable. That price is more than the pirated price – free – and presumably less than what Swift makes from album sales. But as David Holmes noted in this article in The Guardian, “She is one of the few artists today who can really drive sales and not just streams … I think you could count on one hand the number of artists that could pull this off and remain popular – as digital download sales are in freefall. I do think eventually every artist is going to have to be on a streaming service … Over time, if artists want their music to be heard in any meaningful way, they need to be on a streaming service.”

If Holmes is right, the future looks like more and more artists competing for listens on globally streams that may (look to) pay them less and less (as the competition to be heard intensifies).

Finding the sweet spot

It makes for an increasing balancing act in my view – the sweet spot between a brand that consumers know and value and a brand that is spread too thin with margins it considers unviable, disrespectful even; margins that in essence make it next to impossible to continue to invest and therefore condemn a brand to spiral out unless it can find enough critical mass to overcome the margin deficit and somehow pull out of the dive. This won’t be Taylor Swift’s problem – but it is an ongoing issue for many brands, particularly those that are looking to establish footprint.

It raises an interesting question doesn’t it for those looking at whether to scale or contain. “How popular can our brand afford to be?” Will the margin you retain by having more control compensate for the volume you achieve by partnering with another party with global reach?

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