In An Era Of Low Music Sales, Sony Music Reinvents Itself
July 6, 2010 at 3:27 AM (PT)
SONY MUSIC, looking for new revenue streams beyond traditional music sales, recently packed an outdoor theater in BERLIN, normally host to acts like U2, R.E.M. and the Rolling Stones. But this was no rock show. THE NEW YORK TIMES reports a crowd "gathered for a reading of the 'Three Investigators' mystery series. Before an expected sellout crowd of 22,000, three men, dressed in red, white and blue jumpsuits, take turns reading from a children’s detective novel in the 'Three Investigators' mystery series."
The book series has a cult following in GERMANY, and their shows have sold more than 100,000 tickets since last FALL.
"Three years ago I said, look, we are dying, we have to go into new businesses," SONY MUSIC CEO ROLF SCHMIDT-HOLTZ said.
"Company insiders, who did not want to be identified because SONY CORP. does not publish financial information for SONY MUSIC, say that in the current fiscal year, businesses that did not exist when Mr. SCHMIDT-HOLTZ took over as chief executive in 2006 are expected to generate more than $300 million in revenue and more than $40 million in profit. That would be about one-tenth of SONY MUSIC’s total revenue and more than one-quarter of its overall earnings," writes ERIC PFANNER in THE TIMES.
"We had to change the stretch limo culture that prevailed in many areas of the music industry," said SCHMIDT-HOLTZ.
SIMON COWELL has become SONY MUSIC's biggest nontraditional businesses, with reports estimating more than 30% coming from COWELL’s TV shows, which have been spun off into dozens of other ventures.
[What else do you think the music companies could be or should be doing to grow their business in this new era? Please share your thoughts below.]