As someone who plays air guitar quite frequently, I can understand how Guitar Hero and Rock Band have become an industry in their own right, raking in more than $2.3 billion over the past 3 years. I usually practice my air guitar at the end of my morning runs when the sun is still sleeping and hopefully no one is recording. I will be honest with you, I am a damn good air guitar player. Want to start a band?
Guitar Hero and Rock Band not only have generated money, but they have breathed life back into the bands that are too old to even be seen on “Where Are They Now” TV. As someone who has preached 360 music deals, I am a big fan of companies and entrepreneurs creating value for fans and artists.
I was able to meet and talk to Walmart’s CMO, Stephen Quinn, about his marketing strategy and programs. What was interesting is that the CMO of the world’s largest retailer chose to spend a great deal of time discussing Walmart’s success in music driving value for artists and its customers. Stephen showed a slide and discussed how AC/DC created an album that was exclusively sold at Walmart. It went Platinum after being on Walmart’s top seller list for a few weeks. Then Stephen announced a case study that really had me salivating (read below).
Walmart somehow convinced the Eagles to record an album (after being silent for over 20 years) and sell it in Walmart exclusively. The Eagles gave Walmart customers a double album for $11.00. There was NO music label. Walmart and the Eagles split profits 50%/50%. Customers loved the album. The Eagles loved the incentive. Walmart lived it’s purpose: Save $. Live Better.
- The Album went #1 on Billboard
- The Album went Platinum
- The Eagles made more money than any other album in the Eagle’s history (even Hotel California) despite selling fewer albums
I talked to Stephen afterwards about creating a Milli Vanilli reunion album. I am not sure why he laughed in my face. I think he was giddy since no one else figured it out before me. Can you imagine the lift that Milli will give Walmart’s overseas stores? Milli is HUGE in Europe. I even think that they can get David Hasselhoff to open for them.
My point is this. Walmart wanted to give its customers great brands for great value. They also treated their partners (the artists) as partners. They shared profits!!! Who internally is innovating and finding new ways to unlock value for your customers and partners?
On the other hand, the music labels have failed to look out for the consumers and more importantly partners (artists). The danger is that if companies and departments (marketing) spend their time blaming everyone else instead of taking responsibility, they will fail to innovate and create value for their partners and customers.
There is a great article in Wired Magazine that outlines my bark. Jeff Howe makes a great point, “Instead of demanding greater profit participation, Warner Music Group should be angling for creative participation.” Interesting point Jeff. I believe this same principle applies also to the Entrepreneurs.
As an outsider, I am privileged to be able to criticize without repudiation. However, I am someone who now budgets music downloads as a major monthly expense. I can’t stop it. I hear a song, I SoundHound it using my trusty iPhone application that tells me who and what song is playing and then I download it, all directly from my phone. How can album sales continue to free fall with millions of people just like me doing the same thing?
In fact, I bet if iTunes tracked downloads of songs while monitoring the movement of the phone using the built in GPS, a pattern would arise. We download while driving. WWTD: What Would Twitter Do, “Hey, on I-35, check out the new Chris Cornel Album, just downloaded it between downtown and the river, amazing.”
This may seem elementary, but the music labels continue to give me great content. Stop creating value for your customers and partners, I promise that you will lose market share, profits and morale.
Air guitarists unite!