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Hostess Twinkies and the Music Industry

If you love food or music, this is a great time to be alive.

Following customer demand, segments of the food industry have been emerging over the past 30 years with a focus on quality and variety, rather than just sheer quantity.  Even in a modestly urban place like Salt Lake City, the food choices are astonishing, and constantly improving.  From natural and specialty food stores, to innovative new restaurants, microbreweries, farmer’s markets, cooking classes, and affordable new cooking technology, the landscape is amazing and growing quickly.

Meanwhile, other segments of the food industry have remained stagnant.  The recently announced (second) bankruptcy of Hostess Brands, Inc. has been blamed on labor unions and corporate mismanagement, among other things.  However, the recent history of the company reflects a slow downward spiral, driven by an increasing mismatch between the food landscape, customer values, and the products the company chose to produce and market.  In the 1960s, Wonder Bread and Twinkies were great products with large and growing markets.  At the time, even “supermarkets” didn’t have anything near the variety of products available today, and our understanding of the relationship between food and health was not particularly well-developed.  Sliced puffy bread and tasty treats with essentially infinite shelf life were just the thing.  Success generates momentum, and the company moved forward like a freight train.  Unfortunately for the company’s 18,500 employees and their families, nobody seemed to notice when the fuel was running out.

Similarities with the music industry are hard to ignore.  Anyone interested in music, either as a listener or as a performer/producer, is met today with a practically endless variety of products, services, and technology.  The quality is there, too, although it may not always be easy to find.  The internet has made it possible for practically anyone to understand and experience music in far greater depth and detail than ever before.  Learning an instrument has never been easier, and producing a track (or an album) is a task easily within the grasp of a sufficiently motivated amateur.  Innovative companies are serving customer demand and developing new technologies, immersing themselves in this new environment, having fun, and making a good living.

And then there is the music recording industry.  Locked in an outmoded business model, lacking innovative ideas or technical expertise, and overstaffed with lawyers, their freight train is running out of fuel.  Their traditional role of identifying, nurturing, and developing talent, while providing a strong marketing platform, has degenerated into that of a marketing-driven producer of banal wonder bread.  Nickelback, anyone?

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