|Paul Campbell, founder and CEO of Amazing Media Group|
“It was a hugely labour- and capital-intensive business, which was to be expected when dealing with 78s made of shellac,” says Paul Campbell, founder and CEO of Amazing Media Group (AMG).
“The record company would choose the artist and record them, then the albums would be pressed and put in boxes and spread around the world, with the radio industry a separate entity altogether. All parts of the chain were segmented, and the musicians were regarded as the least important part of that chain. They invariably ended up screwed.”
When music could be produced and distributed digitally, much of that logic was destroyed. All of sudden £10 for an album became questionable without a physical product to justify cost, and the economics of the music industry started to look uncertain.
As a result, record labels, much like venture capital firms, that bank on a handful of successes to cover the large amount of failure, grew cautious. Campbell says what occurred was a “flight to tedium”, where the music industry adopted a Simon Cowell approach of bland and mass-marketed music that was safe to sell.
“Radio also has become lifeless, often playing just 20 songs in endless rotation – selling ears to advertisers rather than bringing new music to new listeners,” says Campbell.
All this at a time where the ability to record high-quality tracks on computers meant more talented musicians in supply, and a greater number of mobile devices meant more listeners than ever to demand them.
“Digital brought more supply and more demand, more talent for more consumers, but the bit in the middle was broken,” says Campbell. “It’s that part that we set out to reinvent.”
Campbell – a musician with a lengthy career in media, in part with the BBC – launched the Amazing Media Group in 2007 with backers such as AOL’s Steve Case and Sting. Its first product was Amazing Tunes – an online platform where new artists could upload their content, having the choice to offer their music for free or at a charge with 100% of the proceeds reaching the artists – a business that Virgin attempted to buy.
In 2009, AMG launched Amazing Radio – that, based on popularity within the database and using seasoned DJs to select the content, became the first radio station both online and terrestrial to play only music from new artists with no commercials.
“It is a hark back to the era of Wolfman Jack and John Peel,” says Campbell, where DJs were trusted and respected, and could choose their own music.”
Among the new artists who have debuted on Amazing Radio are alt-J, Chvrches, Bastille and London Grammar.
|Digital banking: Lessons|
from the digital disrupters
Now AMG has expanded to include revenue-generating businesses such as Amazing Artists, which produces and promotes artists, and Amazing Instore – its main revenue source – which compiles instore playlists helping stores with branding and ensuring music licensing costs are met.
And this year and next will see the roll out of Amazing Radio NYC and across North America.
Says Campbell: “It has been like sitting down with a blank piece of paper and saying: ‘If you were starting the music industry today, and making it fit for purpose in the digital age, with what would you do?’
“So we will be there from the very beginning of the process – the artist in their bedroom uploading their song – a one-stop shop taking them to the very end of the process of touring and global recognition.”
And he underlines that even within an overhaul of an industry, it is important to consider what did work originally. What can and should be kept?
“Although we are intrinsically a digital, scalable, disruptive business, we are old-fashioned in some ways, as radio is core to our USP,” says Campbell. “Radio is how listeners have always found new music. They want to hear music they can fall in love with and radio is the best way to do that – curated by people whose opinions and taste you trust.
“And for artists there is something magical about hearing your song on the radio that is inspiring and encouraging. So we go back to pure radio – something organic and passionate, not impersonal or industrialized or full of advertising – and in an ethical model so artists are paid correctly and fairly.”
Slow to innovate
An interesting point Campbell makes is that the music industry, like the financial industry, has been slow to innovate in spite of seeming innovations such as iTunes or Spotify.
“Copyright laws are extremely complex,” he says. “Actually, the whole industry is. And when you look at some of the supposedly innovative developments that have occurred so far, they have not addressed the core issue. Think iTunes is innovative? It’s just a new kind of record shop. Spotify? Its initial proposition, playing music interspersed with advertising, is a concept otherwise known as commercial radio.
“Both businesses have merely retro-fitted new technology to the old business model. Unfortunately it’s the old model that’s broken.”
Much of the hold-up is simply that the incumbents are digging in their heels as much as they can.
“Like the last twitch of a dinosaur’s tail, the incumbents won’t go down without a fight says Campbell. “They will hold on to the very last moment to eke out every 10th of a per-cent margin they can – which is why it is so hard for firms like Spotify to make a profit. They face armies of lawyers.
“But fundamental change will have to occur at some point – and that’s what we do. We’re changing the thing that’s broken.”
How to disrupt an industry
See how digital companies have reinvented areas such as travel, music and education. What can financial services CEOs learn from new, tech-based companies that have successfully disrupted other industries?