In the music industry, you could call Terry McBride a bit of a rebel….
Or a hell-raiser, a boat-rocker. The Recording Industry Association of America may very well have a few other choice (four-letter) words to describe him. But coming from the customer’s standpoint, I would associate a completely different type of four-letter word with the Nettwerk CEO: HOPE.
Many people would say that the future of the music industry is on shaky terms. The RIAA continues to pursue litigation against people who it believes are ‘illegally’ sharing music files (a practice also known as ’suing your own customers.’)
At the same time, online music sales are booming, but many industry leaders are pushing for higher prices and/or a tiered price system that could more than double the standard 99-cent download price. While music fans are looking for ways to get music on their terms, the industry continues to attempt to deny their customers that freedom.
But despite the adversarial tone that many industry leaders seem to be taking toward their own customers, the music label from Vancouver, British Columbia, is doing something that’s pretty remarkable for their industry: They are embracing their community.
Last August, Dave Grubel from Texas learned that the RIAA was filing a ‘complaint’ against him for ‘illegal’ file sharing. Grubel would later learn that his family computer had been used to download several songs, including some by one of Nettwerk’s artists, Avril Lavigne. When McBride learned that Grubel had ‘illegally’ downloaded songs by his artist, and that the RIAA was considering legal action to recover losses for his company, the Nettwerk CEO jumped in the middle of this fight.
But not on the side you might expect.
Instead, McBride not only took the RIAA to task for pursuing litigation against the Grubels, he offered to pay any and all legal fees and/or fines that could result from the case, if the Grubels would agree to fight the RIAA.
And to this day, McBride continues to speak publically about how suing music fans doesn’t help his industry. (Yes, apparently this DOES have to be said out-loud.)
“Litigation is not ‘artist development.’ Litigation is a deterrent to creativity and passion and it is hurting the business I love. The current actions of the RIAA are not in my artists’ best interests.”. While the RIAA believes litigation will stop file-sharing, McBride supports LOWERING the prices of music downloads. “If the price comes down.. to between 25 and 49 cents a song.. the P2P marketplace will begin to go away.”
Starting to realize why McBride isn’t the most popular CEO in some circles?
But from a purely marketing-standpoint, McBride seems to be the only sane person in the room. He wants to remove any and all barriers between music fans and their favorite artists. He wants to make it easier for fans to buy music on THEIR terms. He doesn’t see file-sharing as an economic threat to his artists, but rather as a way to expose new fans to their music, and as a tool to build and expand the community of fans for that artist.
“You should never tell the consumer how to consume your music. You should make it available wherever they want. I don’t want to dictate how people buy our music,” McBride stated at last month’s Bandwidth Music and Technology Conference.
This quote goes to the heart of why Nettwerk’s marketing philosophy is so far ahead of the industry curve. All the Vancouver music label is doing, is embracing the activities of their community, and empowering them to more easily perform these activities. That’s it, embrace and empower. While many of their competitors have taken a sort of ‘us versus them’ view of their customers, Nettwerk has completely broken in the opposite direction, and sided with the community of fans for their artists.
One of the key takeaways from my talk with Nettwerk’s Marketing Director Erin Kinghorn back in January, was her claim that within the next few years, we would begin to see the cultures at music labels shift toward a philosophy of empowering artists, and their fans. If that happens, it will be because the industry has followed her boss’s lead.
Sounds like a plan to me.
What sane business person sues his customers? That goes to the depth of the definition for death wish. On the other hand, as one who once traveled with a rock band, I fear the artists, especially those below Tier 1, will be harmed financially. Record Companies have a history of cheating their artists, and reduced incomes can only lead to more of the same.
Well done, Mack! At its core, this issue is about the music industry’s resistance to reframing its business, from one of “music as product” to “music as service,” which is much more in line with the moves smart brands are making to faciliate the development of communities and, as you point out, empower consumers.
Music futurist Gerd Leonhard talks more about the music as service (he calls it music like water) here:
http://www.marketingpopculture.com/the_spark/2006/08/podcast_gerd_le.html
“While music fans are looking for ways to get music on their terms, the industry continues to attempt to deny their customers that freedom.”
Well said. But sad we have to keep saying it. At the heart of control lies insecurity–the music business, by protecting their “space” is deeming themselves wholly irrelevant. And their insecurity is deafening.
Vision isn’t easy for the visionary but using “Hope” to define Terry was an apt word.
Mack–this is a piece that you should send to some of that media list I sent you. I think this is a keeper.
Inspiration piece for me.
Great piece.
I think the key point here is, Nettwerk sees their relationship with their artists and fans as being one where they are the employees, and the artists and fans are the employers. Erin told me that’s exactly how they view the relationship, as if they are working for their artists.
And just from reading Terry’s comments, you can tell that the actions of the RIAA truly anger him. You can sense the passion he has for this business. That’s what we need, more passionate people that realize that the future belongs in the ability to empower their communities, not regulate them.
Another great post about a very deserving company, Mack.
Mr. McBride, if you’re reading this, ask Mack if he’d consider a role as chief blogger at Nettwerk here in Vancouver!
No kidding, Jordan. Wouldn’t Mack be the ideal guy for the job!
LOL! Thanks Jordan and Ann. It’s funny because the last time I talked to Erin, I told her that ‘I think I’m going to have to put a disclaimer on my blog that I am NOT being pay by you guys to blog about Nettwerk!’
I do write about Nettwerk a lot, but that’s because I love to bring attention to companies that truly understand the power of community.
And in an industry where most labels treat their customers as the enemy, Nettwerk’s efforts to empower their fans really stand out.