Music Is Free–Let It Loose… and Reap the Benefits. PART 1

Intro: Back to the Future

I recently tee’d up final group projects for my Principles of Marketing classes this semester. Since I started doing classes in 2002, I have had students attack the music industry and break up into teams that represent major or independent record labels with the goal to create marketing strategies to grow their business from these two perspectives.

This is no small feat when you consider that the music industry was disrupted by peer-to-peer and other technologies that have empowered listeners with capabilities to distribute and secure music for FREE, and it committed suicide by suing customers and refusing to adapt. Who could have predicted in 2002 that a computer company, Apple, would operate the most successful legal digital distribution system, iTunes? Extraordinary!

How do you compete against FREE?, and make money at the same time?, is the knotty challenge, and there could be no conversation about this in class without taking a look at the visionary band that understood it all so long ago, and built a business and marketing model that made it happen, and happen on a grand scale.

A Bit of Historical Perspective

In 1969 I had the great good fortune to get a job at the best rock club in town called The Boston Tea Party. How I got the engagement is the story for another posting. It was a winter weekend in January that I started and the band, a little combo from Britain, was making their debut in Boston.

For the next year and a half or so, I had what I would describe as a front-row seat to one of the most creative periods in music, at least in my lifetime. Artists I was able to see, hear and hang out with ran the gamut from Ricky Nelson, The Who, Jeff Beck and Pink Floyd to B.B. King, Rahsaan Roland Kirk, Big Mama Thornton, Eric Clapton and yes, the Grateful Dead, the band that redefined marketing for me.

Since one of my duties was to help these bands load in (up two flights of stairs!!!) and set up their gear, I would really get to know the roadies, road managers and other behind the scenes facilitator of the music, as well as the artists themselves.

The Dead were unusual even then. They were as far out as you can go… very smart and very unique, obviously. More than anyone else they embodied the “be ‘hear’ now” hippie spirit… and expressed many dimensions through the music.

Their road manager whom I got to know a bit was a fellow named Owsley, otherwise known as the Bear. Bear was also a world-famous chemist and from what I now know, an all around Renaissance man and resident genius.

Looking back I don’t know how The Dead could play sometimes, especially once Owsley had done his thing. And yes, there were moments when they really couldn’t, like the first they night they followed the The Bonzo Dog Band (another story) in the Fall of ‘69. There was no way to follow this rock and roll musical circus, which was part of the extended Monty Python family, that had the audience freaking out and running for the exits by the time they finished.

Then there were the nights, when it all came together… and the music, created on the fly just for and with the audience, transcended everything. Electrifying. So when it worked, it worked… and when it didn’t, oh well, there was always tomorrow.

Hippie’est to Highest Grossing Concert Band of All Time: An Amazing Transformation

So how did The Dead go from hippie’est of the 1960’s hippie bands, to the highest grossing concert attraction of its era well into the 1990’s?, an era of Rolling Stones, Michael Jackson dare I say Neil Diamond, another huge draw?

Leesons for us all, 40-years later!

Of course it’s the marketing!

David Meerman Scott and Brian Halligan give us great insight into this with their recent book, Marketing Lessons from The Grateful Dead. They identified the genius level marketing developed and adopted by the band… best practice and learn’able lessons that are applicable to all products today.

I will argue that what The Grateful Dead understood, perhaps intuitively at first, was the sense of community they were a part of and had the power through the music to create, nurture and grow.

A 360-degree business perspective

As you can see from this pie chart, from the article in Rolling Stone*, A New Life for the Dead: Jerry Garcia is Checking Cash Flow Charts, from way back when in the November 22, 1973 issue, they were able to see themselves not only as a concert band, but as a business from a 360 degree perspective that included concerts, importantly, but also the totality of their business. They then created a variety of companies including a record label, a sound design and production company, a travel agency and much more to support the enterprise.

Building Demand

Around & Around It Goes: More demand = Larger Halls, More Equipment, More Gigs, Larger Overhead, Bigger Organization -- Repeat

At its center or core, was the live music itself, the concerts. As it turned out, this was where when the 60’s ended and the 70’s and beyond began, the overall Dead experience could be monetized as they played bigger and bigger concert halls.

They consciously realized that since each performance was basically improvised and different, it was possible that demand for tickets could be increased, where fans would come night after night, market after market, and invite their friends to share a unique musical experience each and every time.

The other, was the understanding that the music once played was no longer theirs alone. In other words, the notes once in the air, were no longer owned by the band or anyone for that matter. This was and still is counter-intuitive, in stark contrast to how the rest of the concert/music business views it – where the music in all forms is still considered the property of the artists themselves and fans are prohibited from “capturing” it in any and all forms, except for artist-authorized versions, and of course in our memories.

Live Music Creates a Connection between Artists and Audience

In creative terms, the one thing I learned by having had the opportunity to watch bands play multiple night engagements at the Tea Party over a two-year period was see how instrumental the audience is to the creative process.

There would invariably be a night, THE night when the connection between the artist and the audience would be at a more intense level. Bands were “on”, and we the audience didn’t just passively hear the music, we actively listened and a two-way connection was made that fed off and built on each other.

These were the nights we lived for and there was no doubt that the audience was integral to the creation of that night’s music. The Dead always understood and respected this connection and surrendered control.

Who Owns It?: Let “Remarkable Content” Loose…

Knowing this also allowed them to open up the concerts themselves freely to “tapers,” die-hard fans who wanted to record a living document of the show. These tapers, were then free to share the recording with friends and other fans as well, and in doing so foster and feed a community of friends and fans, who in turn would fuel more demand for the live, real thing and so on, round and round it goes, growing all the time.

Yikes!

You would think that considering their extraordinary success, other bands, and even products and services would surrender control and follow down this road. But sadly, this has not turned out to be the case, at least not yet.

…And a Community Flourishes

Today we need to understand that music is in a way like “information is free” (to quote Stewart Brand) and by that I mean not necessarily free relative to cost, but free in terms of being un-tethered by artificial restrictions. The marketer’s way is to let it loose, let the audience control it and in doing so give them a reason to share, to connect and then experience the real thing for themselves.

As the Dead proved with music, letting it loose unleashes the marketing power of the music (information), the more compelling and in today’s terms “remarkable”, the more the demand, the audience will grow and the more opportunities to monetize the total experience will emerge.

In today’s world with tools like social media where such a strategy based on collaboration with the audience aligns perfectly with transparency and customer control, who knows how much “further” the Dead could have and would have taken it!

Part II to come: How it all worked… From What I Could See, Owsley was The Guy who made it happen.

* I wanted to acknowledge the Rolling Stone: Cover to Cover, the DVD set that includes every issue, every page of Rolling Stone from 1967 to May 2007. You can read it all, as it happened, and see music and music journalism evolve from those heady days of the late 1960’s to today. If you love the music, you will love this!

I also wanted to call out the Grateful Dead Archive now housed at the University of California in Santa Cruz. They are in the process of digitizing massive amounts of the Dead’s memorabilia and making it available to all, in the same spirit that made this all happen to begin with.

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One Response to “Music Is Free–Let It Loose… and Reap the Benefits. PART 1”

  1. David Meerman Scott Says:

    The Grateful Dead always did right by fans. When making decisions that pit “the industry” or their labels agains fans, they always chose the fans’ side. Thanks for mentioning our book.

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