Photo: iHeartMedia
Embracing new technologies and the changes they bring can be difficult, stressful, and even a bit frightening. In the business world, fighting against these new ideas can have serious consequences and could bring down entire industries.
It almost happened to music industry until Steve Cooper was named CEO of one the nation's biggest record companies in 2011, Warner Music Group. The business legend sat down with iHeartMedia Chairman and CEO Bob Pittman for an episode of his podcast, Math and Magic Stories from the Frontiers of Marketing with Bob Pittman, where he discussed the challenges waiting for him in the music business.
“It was obvious that the major players had all shifted through mergers and acquisitions,” Cooper said. “The industry was in survival mode.”
He explained that record companies and labels had a long history of fighting each other and resisting change. Some of the big players in the music industry fought back against digital music, allowing Apple to swoop in and dominate the market with iTunes.
“Their view of technology was something to be rebuffed, not embraced,” said Cooper. “You know technology is like an avalanche. If you are standing on a mountain and you see the avalanche coming at you, you either get out I front of it and get on the leading edge, or it is just going to bury you.”
Pittman jumped in to share that even before digital music, the idea of CD’s was widely criticized by some in the music business. They feared that the CD would lead to widespread piracy and the death of the industry altogether.
“There was this real fight over the CD,” said Pittman. “There were these folks, very smart folks, who said, ‘The CD will be the worst thing to ever happen to the music business because it is a master quality recording, and the pirates will use it to kill us.' ”
The critics lost that battle, and the CD became one of the most profitable eras of music. They did, however, succeed in fighting against digital music instead of using it which led to a decade of decline. So how did Cooper turn it all around?
“We did see this emerging technology, streaming,” Cooper said. “This, you know, little Swedish Company (Spotify) that had an approach that was based on access, not ownership.”
If you’ve ever streamed music, you know how it works. You pay a monthly fee, and you get access to almost every song on the planet. However, this doesn’t work without the rights to that music. Rights that one of the biggest record companies on the planet could help provide.
Cooper doubled down on Spotify and their success forced Amazon and Apple to reassess their strategies. Pittman noted that Apple had sworn to never leave the download model behind and get into streaming, but the avalanche Cooper created was too big to ignore.
Listen to “Steve Cooper: ‘You should never get too comfortable.’” to hear the full conversation. Join iHeartMedia Chairman and CEO Bob Pittman every week for new episodes of Math and Magic Stories from the Frontiers of Marketing with Bob Pittman. Find it on the iHeartRadio app or wherever you listen to podcasts.
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