Trusted Advisors, Not Gatekeepers

The future is already here. It’s just not very evenly distributed. –William Gibson

If you make your living dealing with the online world, this insight probably says more about what we have to deal with on a daily basis than a whole stack of business books. While others pontificate about tipping points or long tails, Gibson’s statement points to an inescapable fact: the future is a lot closer than we think. He warns us to get ready for changes already knocking on our doors. The question is, are we ready for them?

I got to thinking about this recently when I stumbled upon this article on Condé Nast’s Portfolio site. It celebrates the success of South Korean music mogul Jin-Young Park. Not only is Park a highly successful producer and promoter of some of Asia’s biggest acts, he’s also single-handedly revolutionizing the music business in the process.

Park has realized what so many in the entertainment biz here in the U.S. have failed recognize: the CD is dead.

“In meetings with music labels here, they talk to me about releasing albums,” said Park in the article. “They can’t accept that there’s no such thing anymore. Where I come from, CDs are nothing — they’re just souvenirs. I tell them, ‘Wake up!'”

Going around typical distribution channels, Park has moved his music distribution to the Web, bypassing the traditional label structures and distributing single songs directly to fans. As a result, online music sales in South Korea have soared over 400 percent since 2000, as CD sales declined 89 percent.

The same sort of thing has been going on here in the U.S., too. According to the Pew Internet & American Life Project, U.S. online music sales increased 45 percent between 2006 and 2007. And while Apple has dominated the market, new players such as Amazon.com and eMusic have begun to cut into Apple’s pie by offering DRM (define) free downloads in the form of MP3s. The result has been an explosion in sales and a radical restructuring of the way music is sold and distributed.

The Recording Industry Association of America (RIAA) and its cronies have continued to thrash around in increasingly embarrassing ways. But while they continue to pay high-priced lawyers to save the old-school music biz, the world keeps changing around them. Like a chicken with its head lopped off and running in circles, they’re dead…they just haven’t figured it out yet.

Park’s genius is he’s realized the old models that rely on gatekeeping, centralization, information control, and distribution control no longer work. Rather than fight the changes, he’s embraced them. Sure, he makes a pile of money distributing individual songs online, but he’s also branched (and doubled his company’s revenue streams) by diversifying and repurposing his musical products into ring tones, merchandising, TV shows, and ticket sales to live performances.

It’s a brilliant strategy and truly embraces the changes the Internet has wrought on his business — and ours. He’s knows that music sales have always been about the sale of information and that he can only do so much to control that information. Rather than fight how information is distributed, he’s moved into things that can’t so easily be distributed by the masses: physical merchandise, licensing, and live performances. In effect, he turned the music into advertising for these other products (advertising that just so happens to add a bit to the bottom line).

If you’re not in the entertainment biz, why should you care? Because the forces that have made Park such a success (and have sent the labels into the gutter) are the same forces at work on us all, no matter what we do.

Consider the industries that have been most radically transformed by the Internet: real estate, travel, automobile sales, and financial services. All these industries (like the music business) used to be dominated by those who controlled the flow of information. Real estate agents were useful because they had access to the multiple listing service. They knew what was for sale and for how much. Travel agents had access to airline booking systems. Car salespeople used to be the only ones who knew new cars’ invoice prices and used cars’ service histories. Brokers and financial advisors were once the only ones who had access to real-time stock quotes, and reams of research data was only available to financial professionals. All these industries thrived because they had the info and you didn’t. If you wanted the information, you had to go to them.

But when was the last time you used a travel agent to book a leisure flight? The last time you called your broker for a stock price? Or relied on a real estate agent to tell you the price of the house that just sold down the street? When’s the last time you walked into a car dealership without a stack of information you downloaded from the Internet? If you’re like most people, it’s probably been a long, long time.

These changes rocked the industries I’ve mentioned, but they’re also changing the way all of us do business. Want a cheap TV spot distributed to local markets? Head over to SpotRunner. Need some quick and dirty IT consulting or Web design done on the cheap? Pop over to Elance and find the lowest bidder in a global market. Want to find a global workforce ready to do small, quick tasks? Amazon’s Mechanical Turk is the place to go…and they’ll do just about anything. Heck, doing your own online media is cheap and easy with tools like Google’s AdWords or tools like Federated Media’s media planning tool.

The future is here. The old stuff most of us get paid to do is increasingly irrelevant. While agencies used to be able to rely on controlling information and offering specialized skills to be useful, much of what we do is becoming available to the general public. When someone can outsource design, plan their own media, and run their own campaigns without our help, where does that leave us?

If any of the above-mentioned industries are any indication of where the trends are pointing, the answer is providing services and expertise that can’t be automated. Real estate agents and financial advisors are beginning to figure out their value isn’t in the information they can dish out, but in the expertise they bring to bear on making sense of that information. Travel agents now make sales based on their ability to take the tedium (and confusion) of planning a trip out of your hands. In many ways, the Internet revolution has revealed that it’s not the information that’s valuable but the expertise to make sense of that information that’s worth paying for.

As the future becomes more evenly distributed, we must learn from those who have gone before us. Moving away from services that have become commodities and roles that can’t be commoditized is what will keep the money flowing in. We need to become trusted advisors, not just gatekeepers.