Long, Strange Trip
Despite what some people might claim, the business disruption was not invented in Silicon Valley. Easy example: Our grandparents (or great grandparents probably) traded an icebox for a refrigerator or a radio for a TV at some point, but were quite accustomed to driving around in a car. Disruption is literally in the heart of any business, but in the music business, disruption is in the soul because that’s what art is all about.
When I got started in music merchandising in the mid-1990s, I was entering a field that was dominated by large, established, corporate owned merchandising companies with at least a 20-year head start. Companies, like Winterland in San Francisco and GEM in New York City, had roots straight back to the early 1970s and had grown tremendously during the 1980s, riding the wave of MTV and Arena Rock. By 1994, Winterland was owned by MCA, and GEM was owned by Polygram. (Note: Both MCA and Polygram have long been folded into Universal.) On the other hand, my motivation was simple: My band had just broke up and I needed to pay the rent. Back in Boston, I knew some guys who were doing some screen printing. I also knew a few bands that were still in the 1990s post-Nirvana corporate-alterna-rock bubble who needed merch. So, I created myself a job.
I don’t think I heard the phrase “disrupt,” as in “disrupt an industry,” used until the start of the Internet boom (the one that stuck), but that doesn’t mean we didn’t immediately set out to disrupt music merchandising. We were punk rock kids, which meant that mainstream business was evil and all our competitors were old school hippies. Years later, I conceded that not all mainstream business is evil, but I am sticking to my story when I say that all of our competitors were old school hippies. However, I digress (or maybe not). Read on…
So, we started to disrupt the only way we knew how. To us, big was bad and small was good. To us, big meant no creativity, and small meant cool art and cool product. On one side, being big meant many individual bands didn’t get any attention. On the other side, being small meant we were attentive to every detail. Being big meant the bands got screwed and made no money (we conveniently didn’t mention royalty advances in our pitches), and being small meant we paid much higher royalty rates. Over the next few years, we built up a pretty good clientele of bands and had ourselves a good, if barely solvent, business.
We weren’t the only ones doing this, of course. Over time I met other people with other startup merchandise companies, and we have all ended up somehow working with each other over the years. Many of these people I met in the early days are still involved in the business. We all took our own separate paths, but I like to think that we’ve all left our own mark on the business and changed it— hopefully for the better.
Yet, here’s the thing. In retrospect, what we were doing really wasn’t all that unique, especially in the music industry. Remember all those “old school hippies” who started Winterland and GEM? Well, I eventually realized that they themselves were also counterculturists sticking their nose up at the establishment, were razor sharp and whip-smart, and were becoming legendary rock and roll characters while inventing a billion dollar industry. Sure, there is a very sound argument to be made that the punk rock and hardcore kids needed to come through 20 plus years after the “Summer of Love” and kick a few butts. I was one of those kids, however, at the same time I’ll be honest. I’m writing this on a Saturday morning from my home in suburban Nashville, drinking an Americano brewed in my espresso maker sitting on a marble counter, and I will readily admit that I have not slept on anyone’s floor in over 25 years. So, there is no doubt that my butt is ripe for a kicking, and there definitely is a new generation that will do it. They might not have been fueled by angry music, but were most definitely fueled by technology, access to information, and the lower barriers of entry that such things afford— like gaining entry into a world full of all sorts of cool stuff.
Esports is one of them. In a word, it’s huge; a multibillion dollar global industry and growing. Kids are going bananas over it, and it’s not just playing the games, but it’s going online and getting a group of friends together to play against a group of kids somewhere else. It’s getting that same group of kids together and making the pilgrimage to Dallas, or Las Vegas, or Anaheim to compete in an open tournament. I don’t know about you guys, but this feels like an awful lot like an indie band putting out their own music and booking their own tours… Am I right? It also feels like the world of surf and skate because the kids who watch the pro gamers are also playing themselves, which keeps the community authentic. There is also a music angle, too. Don’t forget that Marshmello recently played a concert in Fortnite that, according to Variety, drew nearly 11 million viewers. Talk about disruption!
The truth is that popular music, on both sides of the fence, is built on disruption and always has been. Let’s start with Elvis because, of course, he needs no explanation. In 1961, Sam Cooke started his own label in a licensing joint venture with RCA records where he, not RCA, owned the masters. A few years later, The Beatles turned a prim and proper recording studio called Abbey Road on its head by coming in at all hours to record, and by also (gasp!) making their own tea. The year 1967 saw the release of countless timeless rock masterpieces from Pink Floyd, The Velvet Underground, The Kinks, The Rolling Stones, The Beatles, Jimi Hendrix, and many others. Punk rock and hip-hop were born in the 1970s, and underground dance music arrived in the early 1980s. The invention of the compact disc in 1982 gave the recording industry a massive shot of adrenaline when everyone replaced their vinyl with CDs. In the 1990s, independent labels, like Creation and Epitaph, enjoyed a massive market share due to artists they were signing. By 2001, Napster launched and then came Spotify in 2008. The age of Internet music was upon us. This was bad news for the labels, of course, but it was good news for anyone with a creative muse, some high-quality, but low-cost music making software, and an Internet connection. The beauty of disruption is that it will always go both ways.
Over the history of the music business, the power dynamic has always shifted. In the early days, some artists were (under) paid with Cadillacs. Then, the artists got *some* power back, then the labels got consolidated by multinationals, then the super-agencies were formed, then the promoters consolidated, and then streaming came along. Regardless, at any point on this timeline, there was also disruption going on. So, let me present you an alternative timeline: rock and roll, punk rock, indie labels, indie promoters, e-commerce, and the resurgence of vinyl. What’s old is new, and it pretty much always happens this way.
Therefore, what will the next disruption be? I don’t know. However, what I do know is that the business is primed for it— simply because it always is. The winds of change always blow. There is always an industry related business out there that is top-heavy, and that is going to need to restructure, adapt, contract and grow to survive. Meanwhile, there must be a hundred bands out there that are going to have their first practice tonight. Sooner or later, something new, cool, and different is going to connect.
I will end by saying, there is one footnote to all of this. I recently spent the day with one of the original founders of Winterland. The stories, of course, are incredible, but so is the subtext. Even if you think you have the greatest, most disruptive idea ever, don’t forget history. Even at 50, I am still learning because at some point, perhaps not as early as I should have, I realized that those who started before me did get some things right. I also hope that I got some things right, so that the next generation can keep building and moving forward.