It's pretty well-known that our economy—and society—is transforming from one where wealth and prosperity came from industrial products and material goods to a system where new ideas, human creativity, and experiences play a greater and greater role. As societies become more educated and basic needs are fulfilled, the attention of their populations shift to favor experiences and self-actualization over physical goods and even luxury items—what sociologist Ronald Inglehart calls the rise of "post-materialist" values.
But my sense is that perhaps the best place to observe this transition is in the rapid evolution of the music industry. Music is a highly competitive business—one I like to think of as an innovative market in miniature. Musical entrepreneurs compete not only on the basis of musical talent and their ability to create new sounds and arrangements, but also on fashion, design, business acumen and even spectacle. Music was one of the first industries to experience the brutal effects of the digital transition, and it's clear that the ability to make money has shifted—even for the most established acts—from selling albums, CDs, and even digital downloads to live performance and, well, designing experiences.
White Stripes founder and musician-entrepreneur Jack White has long been on the cutting edge of understanding and harnessing the trends that are reshaping the music industry and creative industries more broadly. Having already set up his own skunkworks—a combined label, studio, and collaborative workspace in the musician-friendly hub of Nashville - in a new interview (h/t: Patrick Adler) White discusses the broader transformation of the music industry, seeing the upper-hand going not to the virtual world but to the production and consumption of real-world, authentic experiences.
I would never say we're anti-Internet at all, I'd say we're pro-real experiences. Pro-things that occur when you get up out of your chair and experience things with other human beings face-to-face. When we have concerts [at Third Man Records headquarters in Nashville], we don't allow people to film and take photos. That's not about not letting people have a memento, that's about: how sick are you of watching people in the crowd not looking at the stage? They're watching a tiny little TV screen in their hand instead of watching what's really going on in life.
White also provides intriguing insights into the superstar and hit-driven nature of the music business.
You can't really sit down and write a hit. Hits are just magical. They come about when the stars align. If they were that easy, everyone would choose to have an album full of hits.
Even in the White Stripes or the Raconteurs, we'd have songs that we would listen to and the label would come by and everyone in the room would say "This is a hit!" and you'd put it out and it wasn't. You just never know. Even my biggest hit, "Seven Nation Army," we didn't think it was that big a deal, we just moved onto the next song. Nobody thought there was anything interesting about that song when we recorded it.
He's got a point—one that's supported by the preliminary analysis being done by the music project at our Martin Prosperity Institute. Using the full history of the Billboard Hot 100 chart from 1980 to 2000 as a dataset, we found that generating hits is a very difficult and highly unpredictable business. We found very weak correlations between having a hit in previous years, and also between critical acclaim and hit songs. There's a lot of luck—or as White would say, a lot of random magic—in creating a hit song.
Music is a particularly good "fruit fly" for learning what we can expect as other industries undergo the wrenching and disruptive transition to idea-driven, creative, and experiential capitalism. So, our music project is examining the role of management, perseverance, and interdisciplinary collaboration in the development of a successful long-run musical career in the hopes that we can generate insights that are relevant not just for music, but for improving our broader understanding of the evolution toward more a free-wheeling, idea-driven, and experiential mode of production across the entire economy. Lots more on this in future posts.
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