Down is the new up. Even the dotcom deadpool Fucked Company has gone belly-up. Don't get left behind.
Failure is big part of the dotcom experience. If your business hasn’t imploded in a cloud of VC-funded, coke-fueled hubris, you haven’t lived. Most of the world lost their ass on the Internet ten years ago, but here in the classical music world, we’re old school. We still use real words as domain names. Luckily, ProperDiscord.com is here to help with a remedial freeconomics lesson: ten sure-fire ways to set your music startup on the slow but steady route to bankruptcy.
1) Plan to take market share from a massive multinational company by implementing something they can copy faster than your tiny startup can gain a foothold in the marketplace. Make sure that your company leaks like a sieve so all your well-funded competitors know what they’re copying before you’ve finished it, ruining any chance that they might buy you out instead of stealing your idea. Bonus points if you can’t patent your idea. Even more points if you could have but didn’t.
2) Put the word “portal” anywhere in your business plan. This isn’t 1998. Just to be clear, at no time soon will you pay for good classical music editorial by selling advertising, and people won’t visit a site that doesn’t answer a specific and clearly identifiable question or need – especially one that is adequately covered by a combination of Google, artist/venue websites and wikipedia. Bonus points if people who have visited your website keep asking you what it does.
3) Run it as a hobby. Nothing spurs innovation like a wealthy auteur who doesn’t need to listen to anybody’s advice and can afford to run for years without ever turning a profit. Bonus points if you undermine the whole market by giving away free content while you play at being a dotcom impressario.
4) Market your niche retailer on accessibility – because what people really want is to discover something they didn’t know they wanted in a place they never go.
5) Create an information product that is only useful if everybody adopts it simultaneously, or which requires your partners to undertake massive engineering work for no discernible reward to anybody but you. What are you? A communist? An anarchist? An idiot? Companies won’t do this. Not even on the Internet.
6) Launch your high-end, niche retailer before it is even halfway finished, and invite comparisons to established mega-budget multinational superstores in the hope that everybody will judge your shop not on the way it works now, but on the way you expect it will work in about a year’s time. Make it ugly on the principle that classical music consumers are too interested in high art to be distracted by mere aesthetic concerns. Bonus points if you expect people to give their credit card details to a website with multiple spelling errors on its homepage.
7) Design a site that is perfectly easy to use once people have read the help file. Behave as if that’s ok. Conduct useability tests with members of your family. Keep interrupting to show them how to do stuff that they’re obviously too dumb to work out.
8) Use an audio format that plays on exactly none of the most popular jukebox applications as if people didn’t have record collections until they started shopping from your store.
9) Create a complex and expensive technological solution to a problem that doesn’t exist. Sell it to non-profits. Expect their excitement to last more than two news cycles.
10) Create something that has repeatedly failed before. Make no effort to identify the causes of those failures, and anticipate a radically different outcome to an almost identical business plan. If your idea is to build a platform that lets artists create cheap, simple, customizable websites with widgets for streaming music, tour dates, photos, videos, a forum and regular fan updates then congratulations: you’ve invented MySpace.
I might just start a hosting company. Seriously. It’s like taking candy from blind sitting ducks in a barrel.
Proper Discord 
Extra Credit:
11) Aim your product at a consumer that you have never met, but which you imagine probably exists. Do no research on this.
12) Don’t for one moment imagine it’s a bad sign that the only strategic partners who will work with you are people who clearly don’t understand your product.
13) Do a “composer of the week” promotion. Pick Bach, Mozart or Beethoven. Expect people to think you’re not new at this.
14) Only employ former musicians with no experience of marketing or product management.
15) Try to impress potential partners by peppering everything you say with technical terminology that you clearly don’t understand.
…but when you inevitably *do* launch your classical music start-up because you JUST CAN’T HELP YOURSELF, say at least three of the following terms in meetings and people will think you’re a World Wide Web Wizard:
Meta Data
Tag/Tagging/Meta tag
Content Management System/CMS
App/Apps
PDA
Streaming
E mail Client
Optimization/Optimize
Oh, you don’t know what those words mean? Eh, that’s cool – just throw them in anywhere! For example, “I’m gonna tag some metadata for the streaming vids on my optimized website after I go get a chicken caesar wrap from the deli downstairs.”
And once you’ve started it up (because you are a wealthy enthusiast of classical music) and a year later find that revenue is not exceeding investment, THEN start to scrabble around for a business model that might make you a revenue stream.
And, Amanda, you can go one step further by hiring expensive and arrogant developers who can spout technical terminology for you, i.e. delegate that role to save time for other worthy pursuits.
And just a reminder…”number of eyeballs” are no longer an accurate indicator of potential success. They never actually were.
I worked for more than one failed classical music start-up by the way and these were continuing themes. Note that I was unable to rescue them myself, so the criticism is partly directed at myself.
It wasn’t your job to rescue them, though, was it?
In general, it’s only the moron running the company that can fix it, and he won’t because he’s too busy ignoring all the evidence that he’s wrong.
The technology world is tough. It keeps evolving – fast. You have to be prepared to change direction.
It’s no coincidence that successful businesspeople tend to be unsentimental about the stuff they sell.
Real easy to jeer at the supposed “morons” and “idiots” who run classical music websites — but out here in the real world, at least half a dozen elephants stampede through the room that you’re not talking about.
Let’s start with downloads. The common wisdom? Downloads compete with CDs and live performances. Right? Right!
Wrong. Downloads compete with amazon.com used CDs (1/3 to 1/4 the price of the download, but a lossy mp3 format has less musical detail than the lossless CD format) and downloads also compete with bittorrent, which costs zero.
Consider this example from amazon. com, Beethoven’s complete piano concerti box set, Georg Solti, blah blah blah, yadda yadda, buy the box set new for $23.98. Or you can buy the exact same box set used for $9.53. Gee…that’s a tough one. Which should I buy? New? Or used for about 1/3 the price? Of course you can also buy the download version. And what’s the price for the mp3 download? Why, $23.98, of course.
Before we start castigating the amazon.com execs as “idiots” and “morons” for that $23.98 download pricing, let’s ask whether even $9.53 sounds like too much. Because the erstwhile classical music consumer can hie herself over to google and search for Beethoven complete piano concerti on bittorrent, and guess what? Yes, about half a dozen box sets on the torrents, all in FLAC lossless format, and the cost there is…zero.
Hm. Which will the classical music lover choose? Tough choice, huh? 24 bucks, 9 bucks, or zero bucks. That’s a hard one.
Then there’s the little issue of the Catch-22. “Proper Discord” says:
11) Aim your product at a consumer that you have never met, but which you imagine probably exists. Do no research on this.
Okay. Let’s say you research the market thoroughly. You find out what classical consumers want. And guess what? The giant conglomerates already got there before you. So now you find yourself competing with”a massive multinational company” which you describe as the kiss of death in 1). So which is it? If you do no research, you’re cooked because you don’t know our market…but if you your research, you wind up aiming at a customer base already owned by the giant multinational classical music conglomerates so once again you go broke and fail.
So according to “Proper Discord’s” logic, it’s impossible to make a go of marketing classical music on the web. Damned if you do, damned if you don’t.
Whenever we reach this kind of conclusion, we can immediately conclude that the reasoning is faulty. Clearly, small classical web companies DO exist, and very often they succeed precisely by marketing products/services for which no one in the classical music community suspected there was a market.
In fact I can give several examples. One small startup sells downloads in “high definition audio” of classical concerts. That’s 24 bit 96 khz lossless. Now, one of your recent tests suggests this is witch doctor stuff — people can’t even remotely hear the difference twixt 24 bit 96 khz and 16 bit 44.1 khz. In fact, most people can’t even hear the difference twixt standard CD-quality 16 bit 44.1 khz and 320 kbit mp3 lossy format.
But people are apparently paying for these supposed “hi definition” audio downloads. So there is a market for ’em. But there shouldn’t be.
Another example — Frog Peak (run by Larry Polansky) markets damnably obscure scores by composers most people have never heard of. Folks keep buying ’em, though. If you did market research to see how many classical music lovers want scores by Johanna Beyer, the marketing director would come back with the survey results and tell you to shoot yourself in the head. But Polansky keeps selling those scores.
Yet another example — do a marketing survey on Bernard Parmegiani. Obscure French electroacoustic composer. So his complete tape music from 1957 to 2001 comes out in a 10 CD box set, and surprise, surprise….it’s a smash hit. Run focus groups among classical music lovers and mention the name “Bernard Pargmegiani,” everyone in the room will say “Who?” Obscure electroacoustic modernist tape music is not supposed to sell a ton of copies. But this box set did. If the people who released that box set had done a marketing survey beforehand, they’d have set Parmegiani’s master tapes on fire and quit the business.
Lastly we have Pandora and last.fm and live365.com and that whole host of streaming audio radio stations. How hard is it to record streaming audio? Gee, let’s see — you fire up Audacity, press RECORD, and there you go. Tough, huh? So somebody running a classical music website is not just competing with bittorrent, you’re competing with all those streaming audio radio stations _plus_ used CDs on amazon.com. But wait — it gets worse. You’re also competing with the local library, where Joe and Jane Classical Music Lover can find about 70% of the classical music they want on easy-to-rip CDs for a total cost of (once again) zero.
You know, before we start throwing around terms like “moron” and “idiot” it would help to explain what business model is going to successfully compete with free CDs the classical music audience can check out from the local library. It would be a good idea to explain how some new classical music startup is supposed to beat streaming internet radio stations when people can get almost all the music composed prior to 1900 for free by capturing the streaming audio.
Fine, so maybe instead of selling classical recordings, your website can sell classical scores. Right? Wrong — you run smack into number 1) above, competing with Universal and Peters.
Or maybe you should run a startup that specializes in helping composers market themselves — whoops, now you’re re-creating MySpace, FaceBook, et al.
Or how about a startup that gives composers an opportunity to upload multimedia of their performances? Let’s make it free! Yeah, that’s the ticket, that’s…YouTube.
Or maybe you should kick-start a website devoted to helping classical performers fund their projects, which already exists…and you get the picture here. The classical music space is fully populated. If an idea can make money, someone’s thought of it. Been there, done that.
The only new model left seems to involve “pay what you want,” which boils down to “give it away for nothing.” Better than remaining completely unknown, I guess, but not a viable business model.
Then again, viable business models do seem to be crashing and burning everywhere you look, don’t they? Network TV finds itself giving away its programming for free on hulu.com. An increasing number of authors like Cory Doctorow give away their books for free on their own websites (as well as publishing ’em in dead-tree versions in the bookstore). Restaurants are now opening up with a “pay what you want” pricing system. Wikipedia is whipping the tar out of Encyclopedia Britannica, and the cost for Wikipedia is zero. Most magazines and newspapers now give away their content online for free. Open source software has a zero-cost give-it-all-away-for-nothing business model.
Sounds like instead of dealing with “morons” and “idiots” we’re dealing with capitalism as a whole crashing and burning. As Bruce Sterling pointed out in his “state of the world” essay on The WeLL at the start of this year, we’re rapidly heading toward a world where everything is sort of free, and no one has a job. Read Clay Shirky’s essay “Help, the price of information has fallen and it can’t get up” and tell me how to make money off selling access to any kind of information.
Kind of hard to figure a viable classical music website business model in that kind of world, eh?
Who said it was supposed to be easy?
Wow. I feel depressed after reading this comment, even if I’m happy to know who B. Parmeggiani is 🙂 . Classical music business is changing a lot and there are constantly new opportunities. Don,t be so negative.
Another good way to crash your start up : don’t believe in what you do and think 10 years backwards instead of ten years forward.
The problem isn’t just with the classical music business online, its the same problem with just about any web business. You have a situation where the big players like Google or Facebook or Microsoft bogart most of the business.
Even small porn companies can’t make money as they are squeezed out of existence between the likes of large companies like Hustler and the free content sites that essentially steal content producers paid top dollar to create and offer it for free from countries like Russia where they can’t easily be shut down or sued.
But at the same time individual composers/performers are able to use the web to make a living. My teacher Yuval Ron makes money from doing a combination of film music work and running his own classical middle eastern group that has a large enough following to provide him with a substantial income from classical music, but done completely independent of the old school music industry.
An analysis of what constitutes “classical” music wouldn’t go amiss. After all, if there was music that was so obviously “first class” (as the OED defines the term) surely it would sell itself; its brilliance would be self-evident? Maybe self-proclaimed “classical” music distributors would do well to forget genre and consult the market? Most people do not want to listen to what is popularly described as “classical” music. One obvious reason why such businesses seem doomed to failure is their inability to recognise that meeting the needs of a market is fundamentally irreconcilable with the needs of certain individuals to “preserve” the music they see fit. Music that is now considered classical, e.g. Mozart’s, was not considered classical, nor was the term even applied to music, when his was composed. Determining which pieces are “classics” is done by consensus: either that of society at large with their wallets or by a small number of elite musicologists. Either way it usually takes some time. The whole notion of a classical music “business” therefore seems conceptually flawed: a business operates in the present, whereas classicism is a retrospective invokation of judgment.