Business lessons from an unlikely source

By the time my family got cable in the mid-’90s, MTV was already a cable network staple for kids across the country and I never questioned why the network was created, why videos were played or what programs were aired. While reading I Want My MTV: The Uncensored Story of the Music Video Revolution by Craig Marks and Rob Tannenbaum, I realized that some network decisions were carefully thought out and others were unplanned. Nevertheless a few key business lessons can be gleaned from the book:

  • Expertise helps, but it’s not always necessary. A successful start-up requires dedication and imagination but not necessarily expertise. The book quotes Steve Wozniak, co-founder of Apple Computer, who said in the early days of Apple, when he didn’t know how to design a floppy disk or printer interface, he’d make something up without knowing how other people do it. He said “all the best things I did while at Apple came from (a) not having money and (b) not having done it before, ever.” The same proved true for MTV executives.
  • Free content is king. Music videos existed long before the founding of MTV but they were undervalued. American record companies some but they didn’t know what to do with them. In England they were considered filler programing. When MTV started, they acquired their content from record companies for a great price, FREE.
  • Whoever gets there first can win. When MTV launched as a 24-hour cable TV network, they needed content. As the authors said, “If there had been videos for Bad Company and Deep Purple, MTV probably would have played them” but there weren’t. As a result, British New Wave bands like Duran Duran and Flock of Seagulls quickly produced videos and sold more records as a result.
  • The content has to meet the medium. Any web designer knows you can’t use the same design for an email template, a landing page and a Facebook page, it won’t work, they all designed for a different purpose. Bands performing in the early 1990s had to learn the same thing with music videos. Bruce Springsteen and U2 may have been great artists but they didn’t understand the medium at first. Billy Squire’s career may have even ended due to music videos (let’s just say his message didn’t meet his audience).
  • Different mediums require different formats. MTV was run by Bob Pittman and Les Garland, who adopted a radio-style format called AOR (album-oriented rock), where you play rock and only rock. Only that didn’t work on TV. Since they were the only mainstream music video channel around and many different music groups and labels wanted exposure on MTV, they had to expand to include R&B and rap with Michael Jackson first and then Run DMC later.
  • Advertising rules, especially on TV. MTV’s coverage of spring break was created for one reason—they needed beer companies to advertise on the network. If Budweiser wouldn’t go to them, they went to Budweiser.
  • Did I mention advertising rules on TV? Videos are seldom played now due to one reason—advertising. MTV executives quickly learned that video viewers are too fickle for videos. While channel surfing, viewers would land on MTV, watch the video they liked and if they didn’t like the next video, they would move on. Although MTV had experimented with non-music video shows since the late 1980s (see Remote Control and Club MTV), the point was confirmed with the introduction of The Real World in 1992 to triple the ratings. According to Jonathan Murray, “When the first episode aired, we came out of a 0.3 (0.3% of the total number of households with TVs in the U.S.) rating for the videos, and The Real World popped to a 0.9 (almost 1% of the total number of households with TVs in the U.S.).”

This isn’t a business lesson per se, but I thought it was interesting. MTV may have been created to sell financial services to consumers. American Express wanted to sell financial services into the home so they bought half of Warner Cable in 1979. The two companies later founded Warner-Amex Satellite Entertainment, which launched MTV in 1981.

Read a short interview and listen to a podcast interview with the authors here.


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