Margins. If you had to select one word that described the most important thing in our industry, that could be it. Sure, some might say “Internet.” Some might say “chains.” Some might say “location.” You could even say “lessons,” “repairs,” or workforce. All of those words are crucial to our industry. But without margins, you can’t keep the lights on. You can’t pay the employees. Perhaps, you can’t keep food on the table at night.
When searching for margins, look no further then publishing/media products.
To learn more about the industry, we asked manufacturers three questions. Providing the answers are Bryan Bradley, chief operating officer at Alfred; Kevin Cranley, president of Willis Music; Joe Palombo, co-founder of The Rock House Method; and David Jahnke, vice president of national sales at Hal Leonard.
Question # 1: How are print music sales holding up compared to CDs/DVDs/Blu-rays? Are visual mediums taking market share from print?
 Bradley: CDs/DVDs/Blu-rays are not taking share from print, but rather enhancing it. Many of our top-selling products have both a book and a CD or DVD. Learning to play an instrument—whether general instruction or learning a specific song—is an interactive experience. Bringing multi-media elements into the process allows for audio and enhanced visual experiences—which not only makes learning easier, but makes it more fun as well. For example, teachers rarely teach from DVDs, so anyone studying with a teacher will be buying print. However, instructional DVDs are great in that they start the ball rolling to create a life-long musician. Not only does it go from learning the basics via a DVD to buying print music to play, it also goes the other direction. Someone may have studied with a teacher and a series of lesson books for many years, but now that they are more accomplished, they like buying DVDs of great artists to understand better what they do. Guitar players love our Paul Gilbert DVDs for example.
 Cranley: Willis’ print sales have held up extremely well in all territories. Worldwide fiscal year 2008 was our best year ever. There are many reasons for this but I have to give credit to our partners around the world. Willis owns some of the most valuable copyrights in the world with names like John Thompson, and Edna Mae Burnam. When your copyrights are that desirable, it’s easy to partner with the best companies. Most recently our partnership with Hal Leonard has allowed Willis to produce products and compete more effectively than when we were alone. So we are riding a wave of new and exciting products that make it difficult to compare. As far as CDs/DVDs/Blu-rays, the impact on educational piano music has been insignificant. With Hal Leonard, Music Sales (our partner in Europe) and several other partners around the world, we continue to look for ways to transfer our copyrights to other formats.
 Jahnke: We view ourselves as a media company where audio/visual mediums enhance print and vice versa. One example is our Essential Elements Band and Orchestra methods. We were the first publisher to include an audio CD and DVD in every book. For the beginning student, it’s easier to show the proper way to assemble an instrument and what a proper embouchure looks like on a DVD as compared to explaining it in print. On the print side, it’s easier for students (and music directors) to read and practice their scales and lessons from a book as compared to “looping” a DVD. By putting both components together in one package, we are satisfying all elements. The marriage of print/audio/visual even goes back to the early days of video instruction. Videos included a small print booklet so you could watch how it’s done and then work on the exercises at your own pace. That philosophy still exists today where some instructional DVDs come with a printed booklet or at least give you the ability to print the lesson material from your computer. As the quality of DVD players progressed (multi-angle options, improved slow-motion viewing options…), DVD’s like our Guitar Play-Along DVD series were created that included the lesson material and tab notation on screen so you can see how it’s played as well as see how it’s notated at the same time.
 Palombo: Because Rock House products focus primarily on a visual medium and are targeted toward the next generation of players, we have not really felt the pinch that most traditional print media companies are feeling.
Question #2: As a publisher, how concerned are you about possible copyright law infractions? Is this a big problem facing the industry? If so, what efforts, if any, are you making to counteract the problem?
Palombo: The landscape of music and video and how people consume these mediums has changed for everyone. Yes, it is always in the back of our mind, but we feel that having relevant content people actually want; let your customer access how they want; and price it in a way that doesn’t make sense to steal your content; you can minimize your exposure. Once you hit the digital world, there will always be someone who figures out how to steal it and there will always be someone who wants it for free.
Cranley: Copyright violations have always been a big issue for Willis. Our piano methods are very well known all over the world and have been for many years.
Because of that success, we have always been a big target. It sounds strange, but decades ago, when our products were being pirated in countries where we had no chance of enforcement; we were building tremendous market share.
When those countries worked to join the community of countries who respect intellectual property, we were able to capitalize. Our strategy has always been to partner with the strongest company in each territory.
Jahnke: Copyright infractions are a big concern for everyone involved with intellectual property. We are extremely protective of our rights and the rights entrusted to us by our publishing partners. A growing area of copyright infraction concern is Internet piracy. Our dealer network is very good at letting us know when they come across a Web site with questionable content. Our Business Affairs department will investigate the site to ascertain the infringement and based on its findings, will send a cease-and-desist letter or turn the site over to the Music Publishers’ Association (MPA) for action. The MPA has been successful in shutting down many sites, most notably “OLGA” (On-Line Guitar Archive) which was a network of sites offering “free Guitar Tab.”
However, we also realize that there are copyright infractions occurring right under our dealers’ noses in their own lesson studios. It’s happening every time a teacher decides to “transcribe” a song for their student instead of buying it in print. The really sad part about this infringement is that it not only breaks the copyright law and teaches disregard for intellectual property, it also steals money from the store owners (not to mention wasting the students time and money). Fortunately, the solution is easy: Store owners can educate the teachers on basic copyright law and then introduce them to our Hal Leonard Digital Retailer in-store digital download program. The Digital Retailer program has our database of legal, authorized songs ready for download in the store at a touch of a button. Now the teacher can easily find the songs they are looking for and print them out in a fraction of the time it takes to transcribe.
Bradley: Copyright infringement is always a concern, but at Alfred we tend to focus on finding solutions for infringers to legitimize their operations instead of jumping straight into a cease-and-desist law suit. For example, we’ve recently adopted a strategy to work with illegal Web sites to legitimize them instead of trying to shut them down. We recently came to an agreement with Ultimate-Guitar.com where we were able to work out a licensing arrangement that would allow them to offer the copyrights we control without changing their site’s model. It’s a win for everybody. They’re able to operate legally, and we’re able to compensate the copyright holders for their work.
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