Telefónica, Music in their DNA?
Stephen Shurrock CEO of New Business Ventures at Telefónica Digital announced this week a strategic joint venture with Rhapsody to become a significant global force within music.
Is this a brave move or a glance at the deep and meaningful future commercial insight into the future role and function of the music industry? My online community will know that I have been championing these types of alliances as the current music industry model isn’t seem sustainable with revenues still plummeting.
It is inevitable that with the demise of the traditional purchase channels (malls and physical outlets) that music will entirely be sold in the cloud and streamed via popular music services to a mobile device. As the telecommunications industry enjoys the super fast paced change, companies like Telefónica can rest assured that 4G will be providing new and existing users with superior experiences from content lead downloads from all of the major entertainment producers without fear of the channel becoming out of date quickly.
Needless to say if Telefónica becomes a super power with online music purchasing it will either end up owning significant parts of the music publishing model or be able to charge B2B charges as it defines what customers and companies are reliant on the use of their data and 4G signal. The music industry needs these super bright telecommunications based companies and all of their associate technology and database to survive.
The challenge is when the current music industry model ends and the hungry digital consumer base wants new music to purchase. These consumers will not accept that without a record company and publisher there will be no new music so who will provide new music and who is going to pay for it?
Since the official charts began back in 1952 the music industry has been inundated with change and has seemingly struggled to adapt ahead of the curve with the ever changing technologies that the consumers want more of. This is where I believe the genius idea of adding punchy music value proposition into the telecoms DNA can significantly benefit both brands.
The approach should be that this is the first to market and it is all to play for. There will be mistakes of course just like Apple made but with an intention to innovate and take the music industry ahead of the curve using the brilliant digital experts and leading data insight. The music industry should embrace this olive brand and create more leading entertainment for mobile users and music lovers and then share the profits accordingly.
Telefónica really understand entertainment through live events, wow marketing concepts and superior mobile engagement. Music brands should be thinking much more on a content strategy and how to monetise this through telecoms globally as this synergy creates almost the perfect digital record company. The new music industry should be passionate and fanatical about its new coat of digital armour and welcome these new alliances that provide market leading insight whilst music gets back to basics and improves its DNA through content quality, more likeable wow acts and sustainable songs.