In a Struggling Music Industry, Taylor Swift May Have Cracked the "Successful Album Release" Code

The last decade has been awash with reports about the imminent demise of the music industry.  And while the industry has certainly dealt with major disruptions from a variety of sources (most notably new technology and shifting consumer habits), at the end of 2012 the major record labels remain (mostly) intact.

Album sales have declined steadily over the last decade. So a successful album release strategy for a major artist is still largely unknown.  But with that in mind, the innovative strategy behind the October release of Taylor Swift's new album, Red, may have finally cracked the code, selling 1.2 million copies in its first week.

Swift first leveraged her existing marketing partnerships to make sure promotion was at a peak leading up to the actual release. She also limited the availability of the record in its initial release to those outlets that would give her the most money for each album sold: i-Tunes, Walgreens, Wal-Mart, and Target.  Some of those were partnerships she made specifically for the release of Red, for instance Walgreens is open 24 hours which meant that true fans could pick up the album at 12:01am the morning it was released.  Creating new opportunities where I can't imagine anyone saw one previously, she also partnered with Papa Johns, offering a Taylor Swift pizza deal that came in a special box with a copy of the new album-- at the full price of $14.

The distribution strategy is also significant in the outlets that she chose not to allow the album to be released through.  Generally speaking, these were the streaming music services such as Spotify.  By withholding the album from these outlets, it forced fans who wanted to hear the album to go out and purchase it. The thinking behind this strategy is simply that streaming music is an advertisement for the artist, and Taylor Swift is already so huge and has so many loyal fans that there was very little value added by those services. 

This strategy is also based around an assumption that fans needed to hear the album first and early. While the album has been incredibly successful in the weeks after its initial release, this release strategy (of which, the distribution strategy was just a part) prioritized first week sales, and did so very effectively.

Questions: Can the release and distribution strategies used by Taylor Swift for the release of Red be used by other artists in the music industry, or was this a unique case?  What lessons can be extracted and applied to other industries?  Have you heard Taylor Swift's new album and if so, what did you think of it?  (It received a 77/100 rating on MetaCritic)  Finally, is this release strategy applicable outside of her unique demographic?

Links:
The Guardian - "Music is thriving, but the business is dying. Who can make it pay again?"
TechDirt - "Where Record Labels Ran Into Trouble: Monoculture"
ThinkProgress - "The Record Industry Is In Even More Serious Trouble Than We Thought"
Planet Money - "Album Sales Hit Record Lows. Again."
Billboard - "How Taylor Swift's 'Red' Is Getting A Boost From Branding Mega-Deals"
Planet Money - "The Secret Genius of Taylor Swift"
Taylor Swift - Official Site

What matters most to strategy execution in a startup?

Neilson, Martin and Powers in “The secrets to successful strategy execution” say that information and decision propagation are key you successful strategy execution but the conclusion is derived from a biased data set. This can be applicable to large organizations but start-ups and small companies give exactly opposite observations in this context. The paper emphasizes on information, decision rights, motivators and structure as the four major strengths of a company and discusses their relative importance. The article explains how motivators and structure are more importance for small companies and start-ups.

Usually, it is easier for small companies to propagate the decision making through the organizational hierarchy because of small size. The common problems faced by large organizations like middle managers, deep hierarchy, complex informal networks, indirect performance measurement and appraisals are very uncommon for small companies. This makes information flow much easier and flexible to manage. Small companies have lesser levels in their hierarchy and thus the strategy makers work closer to executers and workers. Decision making process becomes transparent and even if decisions are not transparent, they are propagated very quickly. Strategy requires the same level of transparency and hence, small companies are better able to execute their strategies.

On the contrary, what small companies lack is a structure for decision making and information management. Information is a major strength for any organization and there lies the opportunity for most small companies. If small companies achieve a concrete structure for operations from the beginning, they can leverage this strength in long run for competitive advantage. Assigning right employees to right roles, performance based promotions, internal competition are some of the areas where structure can bring motivation and strength to the company. Thus, motivators and structure can help the small company to execute their strategy in a better way.

The blog presents one of the reasons why many large companies try to implement flat hierarchies so that they can get advantage of “startup-like” information flows and decision propagation efficiency. On the other hand, almost all the start-ups strive for a structure like large organizations. Both kinds of firms try to come closer to a balance where strategy execution is most efficient. Summarizing, the key factors for strategy execution remains the same, it’s just the relative importance that changes.

Reference: “The Secrets of Successful Strategy Execution” by Gary L. Neilson, Karla L. Martin, Elizabeth Powers