How to Choose Bad Strategy
I guess you won’t find many questions like above around. Although sometimes I think those strategy-creators up there would use some of these. Not so long ago I wrote how bad strategy labels had chosen trying to kill internet radio stations. It wasn’t much later when I saw this appeal on Pandora:
Today RIAA won another skirmish. Pandora welcomed me with the message:
“We are deeply, deeply sorry to say that due to licensing constraints, we can no longer allow access to Pandora for most listeners located outside of the U.S. We will continue to work diligently to realize the vision of a truly global Pandora, but for the time being we are required to restrict its use. We are very sad to have to do this, but there is no other alternative.”
Congratulations guys, I guess you’re much closer to Pandora’s death. The problem is you don’t see that your strategy is just a lengthening of your agony. Instead of supporting ideas, which would allow you to exploit new possibilities, you try to kill them. You’ve already killed Napster's first life but, be honest, had it changed anything? Kazaa, BitTorrent, eMule and whatever-is-the-coolest-p2p-now came instead. You could have been a part of the new business, but you rejected transition. You stay in your castle waiting for flood which is coming fast. Instead you could have had a nice ship by now. Now you dismiss another chance. What a strategy! I’m impressed. Really.
I prophesy death of labels and incarnation of Pandora-like services soon. By the way last.fm still streams the music to Poland. Another enemy to hit? Nevertheless, if someone wants to follow the way of labels and RIAA I have several advices.
• Don’t look forward. If something works now it will forever.
• Look back. Analyze your past strategies. There are true pearls. Don’t listen to moaners, world hasn’t changed so much to reject ideas which were successful in seventies.
• Don’t look for partners. Especially small ones. Especially new ones. Your only possible partners are companies like yours. Hey, they understand you perfectly.
• New ideas are bad. They always endanger your business. They’re never a chance.
• Stay. If you make bucks it does mean you’re in good place and moving somewhere else wouldn’t be wise.
• Don’t accept what you don’t understand. It would be even better to kill it. Leaving it alive is unnecessary risk. The law is probably on your side... yet.
• Pretend there is no Internet. Hey, people lived without the web 20 years ago so they can live without it now. I guess.
Sometimes when I look at companies’ strategies I think many of those rules are followed. When I look at labels they are all compliant. I take a pity on people like Tim Westergren who have to pay for labels’ politics.
4 comments:
I have just come across a brilliant piece by Professor Charles Nesson of Harvard Law School.
Prof Nesson mentions the Noank Media project as a glimpse of how technology / legal future may evolve. "Forward-thinking copyright holders recognize that this system may offer them more rewards, not less control.", he conludes.
BTW The labels are already dead with their approach...
I think Professor Nesson's conclusion is a great summary here. While he writes about RIAA vs universities conflict I think his points can be widened to the whole market.
Haven't you seen companies rejecting to close down the product even when it had no future? Haven't you seen companies developing new projects without properly prepared business case or clear vision, making them doomed from the very beginning? Haven't you seen companies burning their cash in barely controlled way and praying for another round of VC financing? Haven't you seen monopolists ignoring legal acts just to protect their empires?
You can see examples almost everywhere - it doesn't really matter if the company is big or small or if they're number one or number fifty nine. Even companies like Microsoft have some issues with adjusting their strategies to constantly-changing world.
The problem is most clearly seen when one has some law to support his position, like with RIAA or major tech companies and their constant patent wars. And you're right, the winners are those who will exploit new possibilities. Unfortunately, during the process pioneers usually die (vide Napster, and Pandora soon).
Your blog was 1st class.
I think, the only problem ist now, that the artists have to learn that they can earn money and be famous without any label but in near future they could´n do this without internet.
Waldemar Cichon, Brunswick, Western Germany
I was talking a lot about the labels case with my friends. We generally had two conclusions:
1. As you say: artist will learn how to live without major labels. My personal guess is that we'll see a new kind of service - something like album production and marketing services. Small companies which will take care about whole process of preparing new album from renting the studio, to mastering, to productizing the album, to marketing it (in new channels, mostly in the Internet), to promoting songs in radio stations. The first league of these companies will be able to produce videos and put them in music televisions and internet incarnations of MTV. All of those are things which aren't so difficult that only a few major companies can succeed. And small competitors will be cheaper, more flexible and more open than labels.
2. We don't think that being "famous" will play that important role as now. With easy access to become an artist and easy access to new music crafted on the other end of the world the role of long tail will grow, and the role of the most famous artists will fade. You will be forced to listen only those which are available on radio stations and music televisions no longer. With services like Pandora or last.fm you'll find a lot of artists which (for you) plays music which you like. And, as an artist, global market will allow you to reach millions of people without just by the word of mouth.
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