How to deal with a Coronavirus-hit music business: ‘It’s not fair’ is not a strategy.

The following MBW blog comes from corporate communication and reputation management expert, Andy Saunders (pictured inset). The founder of UK-based Velocity PR, Saunders’ current and/or recent clients include Universal Music Publishing Group, Reservoir, Jockey Club Live, First Access Entertainment, XL Recordings, AXS, [PIAS], YMU Group and Partisan Records.

To quote former US President John .F. Kennedy: “There is a Chinese curse which says, ‘May he live in interesting times.’”

Like it or not, we now live in interesting times, ironically due to a problem that originated in China.

The music business has always evolved faster than other creative industries. It has a restless consumer base that demonstrates a promiscuous tendency to resist conformity and the status quo. Whether it is a constant desire for new music, an obsession with celebrity or a fascination for technology, the music fan can be hard to truly understand at times.

Yet some things are constant: music fans want to listen to music, and they want to see that music performed live. The means of distribution, delivery systems and venue spaces may have changed over the years, but those fundamentals remain.

By sticking more-or-less to those basic tenets, artists, fans and the music industry have rubbed along pretty successfully in modern years. The music is good, the fans are sophisticated, the marketing is slick and the industry has experienced an upward tick – thanks in no small part to a digital revolution.

All is good; things are heading in the right direction.

But what happens if things go wrong? What happens if something disrupts that harmony?

What happens if there is a crisis?

In recent days a somewhat abstract concept that started in our peripheral vision has suddenly arrived right in front of us – COVID-19 or, as we’ve come to know it, the Coronavirus.

This virulent and highly contagious influenza strain started as a mildly worrying item on the TV news and has quickly become the single most important news story in the world – with whole countries currently in quarantine, and more looking likely to join them.

The threats to the music industry are obvious. Putting aside the fact that some experts estimate 1 in 5 people could become ill, which will affect vast swathes of the workforce, the potential damage to entire sectors of the music industry could be catastrophic.

The most vulnerable sector is live music. We have already seen European countries starting to implement bans of public gatherings – from the complete lockdown of Italy to the restrictions on 1,000+ capacity events brought in by Germany. In all likelihood a number of other countries will be following suit in the forthcoming days and weeks.

A number of major events, including SXSW, have already been called off and the world’s venues and festival organisers are monitoring the situation nervously – as are artists and their managers who rely on the summer touring circuit for a large chunk of their annual income. And that’s to say nothing of the many ancillary businesses that rely on the live music market such as ticketing , lighting, sound, catering , transport, staging, security and more.

“Venues and festival organisers are monitoring the situation nervously – as are artists and their managers who rely on the summer touring circuit for a large chunk of their annual income.”

Compounding these fears, one of the world’s largest and most robust music companies, Live Nation, has seen its share price tank by over 36% in the last 15 days, as a result of the panic surrounding the potential Coronavirus pandemic.

Those companies who operate in the music rights sector aren’t unaffected, either. As reported in Music Business Worldwide, Universal Music Group parent Vivendi, Sony Music Group parent Sony Corp, as well as Spotify and Tencent Music Entertainment have all joined Live Nation in seeing their combined market cap valuations fall by billions of dollars.

So, how should the music industry handle this crisis from a communications perspective?

Clearly all crises are unique to the individual or company experiencing them, so there is no one-size-fits-all solution. But there are protocols that, if followed correctly, can mitigate commercial and reputational damage.

Whether or not a business is currently affected, having a plan in place for staff, customers, wider stakeholders and, if relevant, shareholders will allow companies to get on the front foot and become proactive in their approach.

Identifying the risk factors in an organization is always a good place to start. (i) What are the potential stress points and where are the areas most susceptible to pressure? (ii) Where will any potential reputational damage most likely come from? (iii) How can staff, customers and other stakeholders be reassured?

A corporate crisis can be described as: “Any emotionally charged situation that, once it becomes public, invites negative stakeholder reaction and thereby has the potential to threaten the financial well-being, reputation, or even survival of the firm, or some portion thereof.”

The credibility and reputation of organizations, therefore, is heavily influenced by the perception of their responses during crisis situations.

It is generally accepted that there are four key elements to enacting any crisis management plan:

  • Take charge quickly;
  • Determine the facts;
  • Tell your story;
  • Fix the problem.

With that in mind, it is absolutely crucial that a company has a clearly defined protocol should a reputational crisis occur.

It is important never to underestimate a potential crisis. What may start out as a small, internal issue could quickly gain external momentum and spiral out of control if not managed efficiently.

At a time of crisis, a company needs to be seen to be speaking with one, clear voice and with that in mind it is important that there is one spokesperson – and only one.

A crisis management team, who will agree responses to any potential crisis, should be appointed. This team needs to be small and senior.

It is vital to manage internal staff responses to any crisis and therefore to issue an internal message – sent to every employee – instructing them, no matter their level of seniority, to refer any and all media enquiries to the person appointed to liaise with the media.

All statements must then be approved by the crisis management team. These can be either proactive statements issued directly to the media via news agencies, or a reactive ones that can be issued to the media on request. The type of statement will depend on the unique nature of the crisis.

The benefits of a written rather than a verbal statement are that the message remains consistent and accurate throughout the duration of the crisis, which is vital for good media management.

When preparing a statement, information should be accurate. Providing incorrect or manipulated information has a tendency to backfire and will greatly exacerbate the situation.

Any company statement, therefore, needs to be factual and, wherever possible, brief. It is also important not to leave any potential questions unanswered as this may lead to speculation and inaccurate media coverage.

All media enquiries must be responded to. The most effective way to manage the media response to a crisis is to provide them with accurate information and a statement underlining your company’s position.

It is important that the company demonstrates throughout any crisis that they are both in control of the situation and able to deal with any potential consequences in a professional and pragmatic fashion.

Remember: “It’s not fair” is not a strategy.

There is an old cliché which goes, “Fail to prepare, prepare to fail.”

If there is any upside to this current situation it is that there is small window of opportunity for companies to prepare for the potential storm ahead. This rarely happens and should be seized.

The time to figure out your communications strategy is now. Not tomorrow, or the next day – now.

You only get one reputation. It is the most precious thing you have; make sure you look after it.Music Business Worldwide

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