Dave Kusek, Vice President at Berklee College of Music and CEO of Berkleemusic (http://www.futureofmusicbook.com), joins us to discuss changing distribution in the music industry and what it means for businesses everywhere... Read the Transcript

Dave Kusek CEO Berkleemusic http://futureofmusicbook.com

David Kusek is a digital music pioneer, author, businessman and entrepreneur. David is Vice President at Berklee College of Music and CEO of Berkleemusic, the world’s largest online music school. Kusek helped develop the Musical Instrument Digital Interface (MIDI), was co-inventor of the first electronic drums, and founder of Passport Designs, the first music software company.  In 2005 he co-authored the best selling music business book  "The Future of Music: Manifesto for the Digital Music Revolution”.

In some industries, producers are now looking to create their own distribution methods so that they can gain more profit. In this article we explore one of our favorite precursors, the music industry, and its increasing attempts to create a direct to profit relationship between its products and its end consumers and what it all means for your business. Previously, producers didn’t want the headaches of finding the markets, marketing the products, and delivering them. One must look at the signs of the times, though, and realize that new technology and market platforms have provided producers with a lot more avenues to get their products onto the marketplace. Howard Leese noted to Trend POV that, “Most of the distribution (now) is digital which in a way levels the playing field.”  These new distribution avenues (such as the Internet) bring the artist closer to the consumer again. Davy Knowles said, “The whole social media movement... is a huge way of marketing.” They’re actually building a stronger fan base by relying on distribution themselves. The consumer dictates needs and the more nimble artist can provide better than the large distributor. Leese noted that these new methods provided the artist the ability to create freely because they don’t have to worry about a big label dictating the product. Newer artists also benefit by having these methods at their fingertips.  Producers face many issues going directly to consumers as they are responsible for the production, marketing, distribution, and sales altogether. They also have to be aware of fraud, leaks, and cheaper markets. While newer artists face easier times breaking into the business with the new model they also face stiff competition. Given these new routes for distribution and low cost entry for musical artists, the direct to profit model will continue to demonstrate to other industries that anything is possible. Big record labels have little utility anymore. The rise of technology allowed these changes in the industry at the same time that big distributors began hemorrhaging money which made for a perfect storm. The most ironic part of the music industry story is that it has finally let the producers do what they do best... make music for the sake of the art. These lessons transfer from the Music Industry to our own industries. Consider the following. Direct distribution is coming to your industry sooner than you think. Distributing directly to your customers is good on so many levels. Abandoning distributors for direct methods means more profit. However, moving to direct distribution has its challenges. Because of that, know when and how to move to direct distribution.