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I’ve written several blogs about business development and joint ventures. But there’s far more to business development than just knowing how to make deals or closing a sale. A key component of business development is knowing how to be a leader. There’s a famous quote by Vince Lombardi, “Leaders aren’t born, they are made. And they are made just like anything else, through hard work.”

No one knows about hard work better than Kenny G, the Grammy award winning Saxophonist. His performances and on-stage presence are legendary. No one gets to his level without good old fashioned hard work and practice. Even a person of his caliber continues to work hard. I’m sure because he loves his art, but also because i think that music is not an end-game, but a journey.

Today, I had the great opportunity to participate in an event with Kenny G. He honored the George Mark Children’s House by visiting with us today, cajoling with the staff, playing with the kids, and just plain hanging out. He even directed his own video footage of the house to use at his concert tomorrow evening in Saratoga.

So, what makes a person a leader? Kenny G defined that today for all the families and staff at the George Mark Children’s House. One can only imagine the amount of requests Kenny G has on his time. And, just think about the amount of available time he has to give, considering his concert travels, set up, practice and even family time.

The fact that Kenny G took the time out of his busy schedule to visit a small, unknown care facility for terminally ill children is an example of what defines a leader. The fact that he spent twice the amount of time visiting than what we expected further illustrates his leadership qualities. And, to top it off, he just made people feel good, which is the real hallmark of a leader.

I’ve previously discussed why the music industry needs to change. New business development paradigms need to be developed which are more aligned with the realities of today’s world. One of these paradigms is the shift to cause-based marketing. This entails taking music and aligning it with a cause. Kenny G’s involvement today serves as an example of how a celebrity, wrapped around a cause, can move mountains. It’s a wake up call for the rest of the “me” celebrities that the whole is greater than the sum of the individual parts.

Kenny G, collaborated with three of his colleagues: Skyler Jett, Robert Damper and Genevieve Goings on a song called “Eternally.” It’s a song dedicated to the cause of George Mark Children’s House. The song celebrates life, dignity of soul, and compassion. Here is a wonderful example of celebrities giving back to the very people who need it most, our children. You can follow the journey at www.EternallyTheSong.com.” Thanks, Kenny.

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There are many factors that are conspiring to create a sea change in customer buying behavior in the music industry. Not the least of which, include the Internet and mobile devices. These media have created a generation of frenetic, “A.D.D.”, “always-on” texters.

The vast tentacles of the Internet (300 million websites and counting) vie for Googlers’ attention every second of every day. Competing for ones attention are a billion text messages per nano second, a plethora of social networking sites, micro blogging services and, yes, even Twitter.

However, there’s also another very important market dynamic that’s evolving … the social awakening of America. Our aging society has grown weary of the excesses of the past decade, which has been punctuated by the serious downturn in the US economy. Combine that with the re-emergence of “Camelot” (i.e. Obama) and we have the ingredients for a public looking for a more meaningful “being.”

Witness the new Hannah Montana movie that opened on April 10th. OUT is the brash talking, skimpily clad Miley Cyrus. IN is the fresh, modestly-dressed and, yes, humble Hannah Montana. One recent Tweeter remarked, “Hannah montana is the best movie evaa. Boom boom clapty clap. .” Is this the start of a new trend?

The Music Industry Evolves into The Industry of Music
The music industry (especially certain genres) has a unique opportunity to re-invent itself and capitalize on these market dynamics. The rallying cry for this re-invention incorporates aspects of:

·    Caused-based social entrepreneurship
·    Teamwork and collaboration
·    Wellness and Fitness
·    Education
·    Ecosystem

By incorporating these aspects into the music ecosystem, there is a higher likelihood that music can transcend “the song” or “the album.” In other words, more people will likely “opt-in” to the message, which becomes part of the brand.

Many analogies exist in today’s market. Martha Stewart, Oprah Winfrey, Suzy Orman and Tony Robbins come to mind. Each one of these celebrities has transcended their categories of talk show host or financial wizard to become a brand trusted by their fans. When a product is introduced, there is a high probability (30% or more) of a purchase by their following.

The music industry has a unique opportunity to re-invent itself by looking beyond the traditional licensing models. It has served the industry well for many years, but today the model is broken and a new model must emerge. Rob Caraeff, EVP of Universal Music Group was quoted as saying “don’t focus on total album sales .. look at consolidated revenue from dozens of revenue lines behind a given artist …”.

The new profit models for the music industry will be created by those visionaries with the leadership and commitment to turn the tugboat into a speed ship. Technology in this context is both a blessing and a curse. The convergence of technology into our lives has hastened the “perceived” value of digital content down to close to zero. But the technology blessing is that now the world is literally at your fingertips. Online advertising and marketing take on new meaning. You now have near instant ability to test and respond to changes in consumer demand. You can create loal, national, or global campaigns at the flip of a switch. And, quantitative data makes your decisions much more precise.

Now, the $64,000 question is which music industry icon will lead the charge.

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Somewhere between then and now the music industry almost died. Did it happen because of the digital revolution or because the revolution passed up the music industry? The fundamental dynamics by which consumers discover, digest and distribute content have been irreversibly changed.

Technology makes for a fickle bedmate. On the one hand, if you understand how to stoke the fire, technology can reap millions for the astute business. On the other hand, if you “diss’” technology, it can turn on you like a scorned lover.

Every industry from travel, music, movies, newspaper publishing, and, heck, even software itself is being pummeled by the ferocity of the online world. This new world order has leveled the playing field for global companies of ONE versus oversized, over budgeted multi-nationals of MANY. Simply put, one smart entrepreneur who knows how to leverage the right technologies can decimate an industry.

Witness the story of Marcus Frind, CEO of PlentyOfFish.com. In the last 10 years online dating has evolved into a billion dollar industry, dominated by companies like e-Harmony, Match.com and Chemistry.com. These companies make millions of dollars annually, but they have huge staff overhead and spend millions of dollars in advertising to acquire new customers.

Along comes Marcus Frind (cover of Jan 2009 Inc. Magazine). He decides that his dating service should be free … nada … zero. The result? 1.6 Billion … yes Billion … website visitors every month … $10 Million in annual revenues … 50% margins … 3 employees. What does he sell? $180,000 a week in advertising sales. Why do people pay him for this privilege? The demographics and the traffic are an advertiser’s dream come true.

Throughout the years, the music industry, like many others, has struggled to keep a tight grip on its intellectual property … and, rightly so. Singers, songwriters, and musicians all have the right to be paid for the work that they’ve lovingly produced.

The problem? Technology has leveled the playing field. Now a musician who wants to get his or her music “heard” can just plug in a mike, flip on an electronic keyboard, switch the dial to record and upload to YouTube or Vimeo … Voila, instant “channel”. In this era of digital music uploads and downloads, the world is literally ones oyster.

Instead of imposing artificial constraints, such as digital rights management (DRM), inflated prices or limited availability, the music industry should re-invent itself as the Industry of Music. The magic switch is to think of music as just one component of a broader merchandising platform. For example, sell a 99 cent (or less) song, follow it up with a $9.95 e-book, then a $4.95 fan base newsletter, a $30 / month coaching service, and so on.

The key is to grow ones subscriber / fan base. Then build a relationship with the base by continually “touching” them with quality content. Once trust has been established with this community, complementary products and services can be introduced and sold. The mantra? Sell plenty of fish to selected, qualified markets, rather than trying to sell the same fish to every market.

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