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Joint Ventures – A Blueprint for Success

Joint ventures used to be a term that caused a lot of confusion over who, what and why. The “who” related to the parties working together; the “what” referred to the goals of the joint venture; and the “why” was really about the decision to partner rather than to go it alone. These days, creating joint ventures make a lot of sense both offline and increasingly online.

In my most recent blog about the California governor candidates, I pointed out that there is an inverse relationship between marketing spend and Internet “success.” Witness Meg Whitman’s $900,000 investment in Internet marketing and the poor results she’s garnered with Facebook “Fans” and Twitter “Followers” compared to her rivals, Gavin Newsom and Jerry Brown.

Joint ventures in this case made a lot of sense. From an offline perspective, it certainly did not hurt Gavin Newsom to get an endorsement from the hugely popular Bill Clinton. Mr. Clinton likely pushed Mr. Newsom’s acceptance level in this political battle by several percentage points.

In fact, Mr. Newsom has some 58,000 fans to Ms. Whitman’s 4,500. What is not so obvious, though, are the online joint ventures he created to drive his popularity into the stratosphere … including his one million plus Twitter followers. While it’s possible to grow ones followers and fans organically, it generally takes a lot of time to create that many followers.

Let’s flip the analysis. Over the last several months, I’ve been fortunate to work with a number of celebrity personalities. A common theme always seems to pop up, “doing great, but would like to do better.” This, by the way, is what makes America great … striving for improvement … not just sitting around being happy with the status quo.

When evaluating joint ventures it’s always a great idea to create win / win / win scenarios. Make sure you understand what each party gets out of a relationship. In addition, since these days everyone has limited financial resources and are time constrained, creating a joint venture makes a lot of sense for a very simple reason – shared risk, shared reward.

Let’s take a real example. In creating a new online marketing campaign, we have several requirements for success: testimonials, saleable products, exclusive content, a well known brand, and much more. With limited time and financial resources, the decision to build vs. buy vs. joint venture becomes glaringly obvious – joint venture for those areas where you lack resources or talent and build or buy those pieces which you can control.

Joint ventures don’t have to be complicated. In fact, the simpler they are the more likely they are to succeed. Another simple example of this is obtaining content. Imagine that you are selling timeshares. You can try to create content on your own, but it would be much easier to joint venture with a real estate company. In return for their support, you promote their timeshare inventory.

The possibilities for joint ventures are limited only by your imagination. These days the blueprint for success is to think WAY outside the box. Don’t let naysayers say that it’s never been done before. President Obama didn’t!

Read more articles from David Chan.

Market Dynamics In The Music Industry

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.