I N T E R V I E W W I T H M I K E W A L S H
Interview by Michelle Sullivan
Photography Daniel Nadel
Mike Walsh is the CEO of global business consultancy, Tomorrow. His best-selling book FUTURETAINMENT won an award at the Art Director’s Club in New York. Based in Istanbul, he advises business leaders about thriving in the era of changing technology.
How does one become a Futurist?
Mike: When I was 23, I set up a technology company and I was studying what consumers were doing in digital. This is the late 90s; it was the first internet boom so I think that really got me started. I’ve never had a normal job since. Then about five or six years later I met one of the Murdoch’s in a bar and I ended up working for News Corp and that was in the newspaper business so I worked for them for a while in newspapers and then worked with them in television in Asia. I think when I was up in Asia that was the beginning, when I realised what my real path. Long before the iPhone, long before a lot of the stuff we use every day I saw kids in China, Japan, Korea, living these incredible mobile lives and when I saw that I realised that this was really the future. So I quit, set up my own company, wrote a book and that’s how I would up becoming a futurist.
What’s your next book about?
I’ve been thinking a lot about this question of what the future of the company should be. It’s actually more interesting than it sounds, in that we design lots of things. We design products, we design brands and we even come up with amazing ideas for how we think businesses should work. So we take all of that important information and then we shove it into a 17th century construct. You can have the most disruptive idea for a new type of platform but then all the mechanisms of the business and the scale are the same. The HR Department’s the same, you still have Lawyers, you still have Accountants, Finance department. So I want to write a book about how you design a company for the 21st century.
Have you ever worked with any music companies?, do you have any experience on that level?
Music to me is fascinating because in some ways it was the first real crucible of the digital age; all of the most difficult issues were faced first by the music industry, it became a real litmus test for what has now happened in other industries, for example television and movies. So if you think about what’s changed in the music industry, we’re sort of gone from a huge war of traditional music against consumers.
Consumers were the ones who disrupted the industry. They were the ones who said we’re interested in songs not albums, we want to change the business model of how we consume music and we don’t want to be told on how we listen or how we engage with it, and to some extent they ran ahead of where the industry was prepared to follow.
If you think about it, in media traditionally technology has been about incremental improvements in fidelity – so we went from AM to FM. Each advance in the music industry was about making quality, but the internet was actually a step backwards because suddenly people were willing to trade off high quality CD sound for dramatically worse MP3 quality tracks. They could have gone the other way. Remember super audio CD was the technology at the time that the music industry was really starting to push, because they made so much money when people upgraded from tapes to CDs. They felt ‘what’s the next thing’, you know? Can we get everybody now to replace their CD collection for better CDs – that’s what they would have liked. People did the completely unexpected. They were like OK, I’m actually happy listening to really crap sound now because I can have more freedom with how I listen to music. I can download it the minute I hear it, I can maybe even not pay for it and so this changed the whole dynamics in the industry. That was a behavioural thing – that wasn’t a technological thing, and what it forced the industry I think to do was after years of fighting it and denying it, they then embraced it and then realised that the economics in the industry changed. So for me the economics and the music industry are now about artists building direct connection with their fans and then commercialising that in new ways, whether it’s concerts or merchandise or other things. And that’s happened in the last 10 years.
So, one of the topics that we talk about incessantly in music is making money in music. What do you think is the next step in this process?
I mean in some ways this is what people have under-estimated. They thought these new tools would allow everyone to become a mega star. What they’ve actually done is made it hard, because now that everyone has the access to the same technology that Madonna does, the same distribution models – the challenge is not actually producing an album or releasing an album, the challenge is getting anyone to pay attention to you. This has happened in every industry now from music to publishing, and in some ways it becomes a winner takes all game.
There’ll be fewer and fewer people who make mega star status because the chances of that happening are this – you either need lots of money behind you or you need to basically win the lottery. The good news is that there’ll be lots of people for whom music will become a cottage industry and they’ll be able to survive. It will be harder and harder for people to become mega famous.
I think it’s quite a complex question. To me it’s a question of survival. What is the new model for really commercialising your fans? This is the key question, and I think the starting point is you have to build yourself a direct relationship with the people who are interested with you; you have to own them so you have to actually be able to measure in concrete terms not just how many people follow you on Facebook or twitter or anything else, you’ve got to say I literally have a data base of this many people, and there are X number of things I can do to commercialise that relationship. It’s not just selling music or concert tickets or a release, it’s yourself as a brand and more.
What is your position in the discussion of free content; whether free music degrades the value of it?
The real threat to all of this is that the pattern of consumption of music has changed. I even saw this years ago as I noticed that teenagers were not only not listening to stuff on CDs, they were listening to music on YouTube. So if you asked a kid to play you a song they’d go and load up YouTube and then use YouTube as their juke box and it’s not because they want to watch the video it’s because they like the experience of streaming. That’s why Spotify was so successful in Europe. It actually makes logical sense to kids that they don’t need to actually own it they just need access to it. So this makes it really hard – because then what are you actually selling as a musician? Whatever you can earn relative to your stream rights is actually tiny compared to sales. It’s actually almost pointless. I think the idea of ownership is fast coming to an end. Even the iTunes model, I think, is in big, big trouble, digital downloads model is in big trouble.
So if we’ve move through a download phase, to a streaming phase, what comes after that?
Well I think what you then pay for is this – Let’s say brand X eventually has to own their own platform; so you literally become a member of their club, that’s how they commercialise it. So you pay x number of dollars a year and it’s all things Billy Joel, for example. You’ll get personalised messages from him, you’ll get invitations to his concerts, you’ll get updates of when he’s writing new material and basically pay a certain amount of money to enter his world. It’s loosely like following someone. I mean there’ll be degrees of following – when you just kind of vaguely paying attention to stuff; you listen to free songs and then there’s the deeper commercial premium following where you move deeper into their world. I think what artists will start to do is to draw people deeper into the fold. They’ll release lots of stuff out to the world and hope people will engage with them and then they’ll try to pull them into a deeper relationship. There’s broader degrees of engagement and this is what’s happening in other industries – that you try and engage people with your material and then you bring them closer. So there’s a lot of science behind how you do that.
TM