Introduction

Concept

Put on your flight jacket and buckle in for the time of your life, as you are now officially on the front lines of teaching and learning an entirely new way to understand the business of entertainment and music. As you and your students read Monetizing Entertainment you’ll start to understand the process of creative destruction and its role in the rebirth of the new entertainment industry. Creative destruction, though the name seems a bit ominous, is a process that happens in most business cycles brought on by many variables such as technology replacing old and dated methods of production, sales, and distribution channels for creative products. The creative destruction of the entertainment and music industry has caused disruptions and interruptions (what I call here “the perfect storm”), modifications to traditional business strategies, the forced adoption of new business models, and increased need to understand consumer behavior changes due to streaming, enhancements in digital and virtual technologies, and the prevalence of personal devices for customized entertainment consumption anytime and anywhere.

As I started to write the fifth chapter of this book, I just stood up, screamed, and realized that Passman’s All You Need to Know about the Music Business, Hull’s The Music Business and Recording Industry, Baskerville’s Music Business Handbook and Career Guide, Krasilovsky’s The Business of Music and my previous books just do not explain the new industry. I took a deep breath and started over!

I have great respect for all of these authors, some of whom I’ve had the honor of meeting and, of course, sharing a laugh with as well as their knowledge. However, times change, and much of what is really going on in the new industry can’t be captured in their books. Heck, by the time you are reading this book, I hate to think what has changed while writing Monetizing Entertainment over the last two years, something new has literally cropped up daily that we need to address if we are going to sustain and build a successful entertainment industry for the future. As one who has devoted his career to teaching and working in the entertainment industry, I hope you share my passion and understanding that business knowledge and the ability to embrace creative destruction is the key to the future in this industry.

To get to the heart of the discussion that became Monetizing Entertainment, I decided to take a leap of faith and talk to a lot of very successful creative artists and industry executives about “what’s going on” in the professional world today. To all of them, I am forever grateful for their direct, supportive answers. It is time for an innovative, different conversation about what the industry is and what it needs to be that looks at the bigger picture from a historical, informed, and fresh perspective.

In the course of my research for this book, I discovered how dated much of what I had been teaching had sadly become. I talked to executives at Spotify and labels to hear both sides of their struggle in keeping their businesses profitable. With little guidance, they have been forced to rapidly launch entirely new business models based on advances and changes in available technology, increased uses of personal devices, trends in the law that support safe harbors, and the ever-evolving ways consumers access entertainment products—without paying for them. I learned how important the creative teams still are in the movie and recording studios; yet, now it’s also vital to know digital technology and the capabilities of software programs to enhance and sometimes bypass older production techniques, not to mention the advent of the at-home recording tools and other ways the amateur creative may attempt to break into the industry in hopes of indie success. With YouTube and Facebook as their guides, many wannabes today think all they need to do is record something at home, post it on social media, and the world is theirs! This is a challenge to the entertainment and music business in particular, as wannabes now have to sell themselves and their professional skills as artists, when they already think they are successful. In other words, you are not famous just because you posted something on YouTube, no matter how good you may be, because the world still does not know you as an artist. Millions of wannabes with varying degrees of talent simply bog down the system and waste consumers’ time as they are searching for talented industry-signed artists and acts.

One of the great things about the new software used in film production is in editing. In conversation with one of the techs at Disney, he explained how software such as Flame is used to correct takes on different days under various weather conditions to make them appear the same. He also explained how an airliner streaking through a scene in a historical film can just “disappear” without a retake. Just think what Pirates of the Caribbean would be like with a jet plane zipping through a sword fight. Similarly, Artist and Repertoire (A&R) executives at major labels have talked to me about how the signing process now has little to do with selling albums and more with branding, imaging, and psychographic research to determine a new act’s potential market based on consumers’ preferences for entertainment consumption and the immediacy of social media as a way for them to think they “know” the entertainer they follow. Today, executives are learning how to make Twitter, Snapchat, and other ways to follow their acts effective monetizing tools.

I had a quick conversation with a Google executive who addressed how much the world has changed to embrace safe harbors, amendments to the copyright laws, and what appears to be the highly unethical act of streaming without paying for the downloads of entertainment products. In my conversation last year with the members of the US Senate’s Judicial Committee (including the chairman), they emphasized they are struggling to find a solution to royalty issues, among others, that will be fair to all the parties involved in the entertainment and music business without sapping innovation and technology. Never have the understanding and ability to apply sound business thinking with solid legal knowledge been more important to the future of the entertainment and music industry.