Marketing Essay

"In the Music Industry, the power of marketing online is the most useful asset in the promotion of music products." To what extent do you agree with the statement? 50 marks.

This is a statement which many people have differing opinions on. The power of marketing online has been the most useful asset in the promotion of music products in more ways than one however one can argue against this statement, and I will demonstrate this in my essay. New media have changed the relationship between the recording industry and fans. The fact is that networked technologies allow fans to share copyrighted music in peer-to-peer networks and Web 2.0 platforms. However the Internet could be a challenge to create new business models. First, e-commerce allows the creation of new markets, and the reduction of the cost of storage and distribution. Second, synergies between producers and consumers could emerge. In fact, fans are not just ‘pirates’, but also promoters and co-creators.

One could say that marketing online is the most effective and useful way to promote music products. Connecting with fans is essential in today’s competitive music industry. It’s that connection that can give them a reason to buy and support your music. Utilizing social media and having a strong online presence makes connecting with fans much more achievable. 'Arcade Fire' are a band that found their success through an online campaign. Arcade fire utilized HTML5 to create an interactive music video for “We Used to Wait.” Users are prompted to enter the address of their childhood home at the start of the video. While watching the video, scenes from your old neighbourhood are pulled in using Google street view.  The elements of new technology, interactivity, nostalgia, experimentation, and personalization all aided in making this video a huge hit. This is a great example of how bands use online marketing to their advantage. Another person that tried a similar technique is Amanda Palmer.

Amanda Palmer is widely known for her social media expertise. Advertising Age said, “Palmer is more sophisticated than almost anyone on the internet — musician, brand or otherwise — when it comes to gathering her audience around her and keeping the conversation going.”

In one night alone, Amanda managed to rake in $11,000 in just two hours. It all started with her tweeting about how she was alone, again, on a Friday night sitting in front of her computer. Others started chiming in and began claiming how “we are all losers.” Dialog continued and grew at a rapid pace. A faux organization was started called, “The Losers of Friday Night on their Computers.” Amanda created the hashtag #LOFNOTC and thousands joined the conversation.

A follower suggested the group create a t-shirt. Amanda quickly decided to run with it. She took a sharpie and made a t-shirt design. A website was thrown up that night with the t-shirts available for $25 a piece. 2 hours later… $11,000.

Big names such as Beyoncé and One Direction both use online marketing to their advantage. Beyoncé's Lemonade, the visual album, had no release date when the single “Formation” was surprisingly released on February 6, 2016. Prior to that, Beyoncé had not released an album since December of 2014. While remaining silent about her endeavours for this new album, she released a single right before her second Super Bowl halftime performance and made sure that the visual addressed the controversial racial injustices of America. Prior to her album being released, her marketing team along with HBO released a 5-7 second clip of “Lemonade”. There was no indication as to what it could’ve been. A short film? A music video? A documentary? The album everyone was waiting for? The release was announced and set for April 23rd, leaving a week for suspense and anticipation. As the date grew closer a longer promotional clip was released, and it still kept much of what it was a secret. It was definitely a friendly reminder that the date for release was approaching. The visual album celebrated black women throughout her entire short film, and shed light on the pains of black women who have lost their sons due to police brutality and racial injustice. Showcasing many sides of the artist herself, it was undoubtedly the most innovative piece of work that Beyonce has put together. Directly after the release of the visual album, the album was available via Tidal. Lemonade then went on to break the internet with a record of 4.1 million tweets in under 48 hours.

One of the biggest social media success stories of the last few years has undoubtedly been the rise to fame of one of the UK music industry’s much-loved exports, One Direction.

The group’s success is also a testament to how, in this digital age, UK record labels have become experts in building fan bases around the world and have embraced social media and placed it at the centre of marketing campaigns to ensure global success. Genevieve Ampaduh, Head of Digital Marketing at Sony Music, who masterminded One Direction’s social media campaign, (which included fifty-five 'Go1Den Tickets' promising a “once-in-a-lifetime experience” with the boys in New York being released globally. Each was won in a completely different creative way. The band joined the dots with its constant presence via Facebook, Twitter and the official 1D site, where an interactive Bring Me to 1D map enabled fans to follow what was happening around the world.

Millions of fans took part. Tens of millions engaged.) says: “Social media has changed the face of music marketing forever. The ability for artists to reach out to their potential fans in every corner of the globe in real time is incredibly powerful and cannot be replicated by traditional media."

Netflix can attribute much of its growth over the last couple of years to its flagship ‘Netflix Originals’ such as ‘House Of Cards’ and ‘Orange Is the New Black’.  It is an appealing model but the Netflix Originals approach cannot so easily be transferred to music.

A very successful form of online marketing is windowing. With this, an artist can release a song or album strictly on one music accessing platform. There are three types of windows, the first one being Service Window, this is when an album is released exclusively to a single music service for a fixed period of time e.g. only on TIDAL for 1 month.

The next type of exclusives is Tier Window, where an album is released across one type of music service tier before others e.g. only on paid subscription tiers for 3 months. The final exclusive is Service Exclusive: music service acquires exclusive rights to an album so that it will never appear anywhere else unless the service decides to let it.

To conclude, one could say online marketing is the most effective and powerful form of marketing in todays modern day and age where the internet is central to our day to day life. Online marketing is an extremely useful asset to the music industry, and can help promote new albums and artists and spread their influence all around the world. It is for the pure simplicity and effective factor of online marketing that makes it extremely beneficial to the music industry.

Marketing notes

MARKETING 

PARTCIPATIONS.ORG

 New media have changed the relationship between the recording industry and fans. The fact is that networked technologies allow fans to share copyrighted music in peer-to-peer (p2p) networks and Web 2.0 platforms. Major labels and their representatives have reacted mainly with ‘prohibitionist’ strategies. They identified file-sharing as the cause of the recording industry’s crisis and labelled file-sharers as ‘digital pirates’. However the Internet could be a challenge to create new business models. First, e-commerce allows the creation of new markets, and the reduction of the cost of storage and distribution. Second, synergies between producers and consumers could emerge. In fact, fans are not just ‘pirates’, but also promoters and co-creators.  

Cultural scholars argue that the industry should adopt a ‘collaborationist’ approach to create an ‘affective economy’ (Condry, 2004; Jenkins, 2006a; Varnelis, 2008). In an affective economy audiences are not passive consumers, but are active, emotionally engaged and socially networked users who cooperate with producers and musicians in the promotion of media contents. Empirical research has demonstrated that both indie labels and pop artists can benefit from ‘fan labor’ (Beer, 2008; Baym & Burnett, 2009; Yang, 2009). 

New media have changed the way cultural industries produce, distribute and promote cultural goods. Since the mid-nineteenth century cultural production has taken on an industrial model due to the high capital investment required to produce and distribute music, movies, radio and TV programs. Cultural industries are characterized by a high cost of production and a low cost of reproduction. Because of that, Hollywood, the broadcasting system and the recording industry have all invested large sums in the production of a small number of high value cultural goods with the aim of maximizing their audience. However, since audiences use media contents in highly unpredictable ways, producers tend to minimize the damages of the unsuccessful productions by formatting their contents in three main ways: through the ‘star system’ (i.e., associating the name of star writers and performers to the texts), through ‘genres’ (i.e., associating labels to the products such as ‘horror film’ or ‘hip hop album’ to suggest the kind of pleasure that audience can gain from the consumption), and through ‘serials’ (e.g., TV series, hit list albums) (Hesmondhalgh, 2007). 

In the new millennium, the rise of networked digital technologies is enabling a decentralization of the production and distribution of cultural goods (Benkler, 2006). In fact, digital technologies such as recording devices (e.g., the digital camera), digital editing tools (e.g., GarageBand), p2p networks and Web 2.0 applications (e.g., social network sites such as Facebook and Twitter, and content sharing sites such as YouTube) allow people to record, store, copy, edit and distribute media files via the Internet at low cost. On the one hand the Internet is thus a new opportunity for industries to create new markets. But at the same time consumers have access to distribution platforms that are no longer exclusively controlled by cultural industries.

Web 2.0 applications -  free services that create an ‘architecture of participation’ where users share multimedia content and connect with each other. 

Web 2.0 fosters ‘media participatory cultures’ that emerged online (Jenkins, 2006a; Varnelis, 2008).

Affective economics has both positive and negative implications: allowing advertisers to tap the power of collective intelligence and direct it toward their own ends, but at the same time allowing consumers to form their own kind of collective bargaining structure that they can use to challenge corporate decision (Jenkins, 2006a, p. 63). 

With the aim of describing how cultural industries are reacting to the challenge of the new media, this focus' on the recording industry because this sector has been faced with these digitalization and decentralisation processes since the mid-1990s. While digital books need a device that allows an easy reading (such as the e-book) and movies need a broadband connection for distribution, the technologies of the Nineties were already enough to disrupt the way music was distributed and listened before then. 

MUSIC THINK TANK 

Connecting with fans is imperative in today’s music industry. It’s that connection that can give them a reason to buy and support your music. Utilizing social media and having a strong online presence makes connecting with fans much more achievable. Below are some good case studies of bands that found success through an online campaign. I encourage musicians to review these examples and pay attention to the elements that made them successful. Then think about how to implement those strategies into your own marketing plans.

1) Arcade Fire – Interactive Music Video Using Google Street View

Arcade Fire utilized HTML5 to create an interactive music video for “We Used to Wait.”Users are prompted to enter the address of their childhood home at the start of the video. While watching the video, scenes from your old neighborhood are pulled in using Google street view.  The elements of new technology, interactivity, nostalgia, experimentation, and personalization all aided in making this video a huge hit. 

2) Josh Freese – Topspin and Miniature Golf

The one size fits all product days are gone. Having something for the casual fan to the super fan is a great way to be able to sell more and put additional money in your pocket. One way to utilize this method is through Topspin, an online funding platform for artists, musicians, inventors, filmmakers, etc. Josh Freese decided to try out Topspin to help fund an upcoming album. The thing I like about what he did was the creative “product” offerings that fit his personality, including:

• Lunch with him at Cheesecake Factory or PF Chang’s
• A round of miniature golf
• Josh washes your car or does your laundry
• He joins your band for a month
• A private drum lesson
• Take three items out of his closet
• Josh writes a song about you

See the full list of packages and items Josh made available, which ranged from $7-$75,000. Check out Topspin to see how you can use it creatively to fund your next project. Just remember to do something that fits your band’s personality. If you make it the right fit and support it correctly, it can work.

3) Amanda Palmer – Turning the Power of Twitter into $11,000 in 2 Hours

Amanda Palmer is widely known for her social media expertise. Advertising Age said, “Palmer is more sophisticated than almost anyone on the internet — musician, brand or otherwise — when it comes to gathering her audience around her and keeping the conversation going.”

On a boring Friday night, Amanda managed to rake in $11,000 in just two hours. It all started with her tweeting about how she was alone, again, on a Friday night sitting in front of her computer. Others started chiming in and began claiming how “we are all losers.” Dialog continued and grew at a rapid pace. A faux organization was started called, “The Losers of Friday Night on their Computers.” Amanda created the hashtag #LOFNOTC and thousands joined the conversation.

A follower suggested the group create a t-shirt. Amanda quickly decided to run with it. She took a sharpie and made a t-shirt design. A website was thrown up that night with the t-shirts available for $25 a piece. 2 hours later… $11,000.

What can you learn for this example?

• Interact with your followers and don’t just mass broadcast.
• Be personable and share a variety of things with your fans.
• Always be on your toes, ready to act quickly when opportunities arise.

4) Matthew Ebel – Subscription Site for the Super Fan

Boston-based singer Matthew Ebel says 26.3% of his income is from 40 hard core fans. You may recognize his name from articles about his ties to the 1,000 True Fan theory/model. One of the ways Matthew caters to his super fans is through a subscription based website.

The packages range from $5/month to $15/month, as well as annual options.  He offers a wide range of perks are including members-only parties, VIP seating at shows, access to new music as soon as he creates it, new live concert recordings every month, broken apart tracks ready for remixing, behind-the-scene sketches, drafts, and ideas, and many more. View the full list of packages and perks here.

5) The Poison Control Center – Tumblr Tour Blog

The Poison Control Center have an awesome tour blog. The band uses Tumblr, a simple and free blogging platform, to regularly update their fans from the road. After each show they share pictures, videos, and posts about their experiences, even down to thanking the sound guy, door person, bartender, and of course the fans. They do it right by updating frequently, providing a wide variety of content, and always remaining authentic.  

6) Gossip Grows on Trees – Building Your Email List with a Fortune Cookie

Email is one of the best ways to directly reach your fans, but sometimes it can be difficult to grow your subscription list.  Gossip Grows on Trees from North Carolina executed a creative way to gain more email addresses at live shows.

They created a download web page that gave visitors a free music download in exchange for their email. At shows they walked around and handed out custom fortune cookies with the URL of the download page and a short message from the band. This gave the band an opportunity to spark conversation and develop relationships with fans. Plus, a lot more people visited the download page and provided their email address because they were approached in a memorable way.

All of these online music marketing case studies have a common theme of musicians connecting with fans. It isn’t enough to put your music out there and hope people will gravitate towards it. You have to be willing to push it out there and utilizing online mediums is a key element.

THE CREATIVE INDUSTIRES 

One of the biggest social media success stories of the last few years has undoubtedly been the rise to fame of one of the UK music industry’s much-loved exports, One Direction.

The group’s success is also a testament to how, in this digital age, UK record labels have become experts in building fan bases around the world and have embraced social media and placed it at the centre of marketing campaigns to ensure global success.

In 2012 One Direction was the world’s biggest band with an upcoming second album. But generating and satisfying demand from fans around the world is a very real challenge. The boys performed a one-off gig in Madison Square Gardens and turned it into a three-month global adventure called Bring me to 1D that got every One Direction fan and the world’s press buzzing.

Fifty-five 'Go1Den Tickets' promising a “once-in-a-lifetime experience” with the boys in New York were released globally. Each was won in a completely different creative way. The band joined the dots with its constant presence via Facebook, Twitter and the official 1D site, where an interactive Bring Me to 1D map enabled fans to follow what was happening around the world.

Millions of fans took part. Tens of millions engaged.

And the result? One Direction’s site achieved its biggest ever volume of traffic. Facebook likes and Twitter follows doubled and, in the first week of release, Take Me Home, went straight to Number 1 in 32 of the 40 participating countries, flying the flag for British music all over the world.

Genevieve Ampaduh, Head of Digital Marketing at Sony Music, who masterminded One Direction’s social media campaign says: “Social media has changed the face of music marketing forever. The ability for artists to reach out to their potential fans in every corner of the globe in real time is incredibly powerful and cannot be replicated by traditional media.

“Early advocates of an artist have become an extension of the label’s marketing teams and play an invaluable role in breaking artists in their local countries. Empowering super-fans should be a staple of any music marketer’s strategy, as should entertaining fans. Why shouldn’t a marketing campaign be exciting, memorable and fun? It should be. And if it is, fans will stay with you for the journey ahead.”

THE MUSIC INDUSTRY COOKBOOK

There seems to be a divided opinion in the music industry to whether or not it is good to give away music for free.
However, when talking to PR and Marketing professional Gavin Handley from the London based company Resonate Media, he expressed that he personally thought it was a good thing to do, if it was done sparingly and with a specific purpose.


“You can use this concept to collect email addresses, which is very handy. You just need to ascertain what your goal is. Many artists and labels decide to do this just because they can, but you don’t want to end up in a situation where your fan base expects everything you do to be free. Rather, I think you should use the concept sparingly; are you trying to break a new act or are you wanting to collect email addresses, for example. Do it, but just do it with a purpose in mind.”
- Gavin Handley, Resonate Media

They put together a free, bi-annual, compilation that they offer on their Bandcamp page in return for email addresses. The compilation only includes artists from their own roster, and seems to have great promotional value beyond acquiring email addresses.

• It gives music enthusiasts and writers a special reason beyond the music to feature it on their websites as it’s free
• It helps to introduce newly signed artists to a new audience and potentially turning them into fans without the consumer having to take a risk when acquiring the music (since it’s free)
• It can also help promoting back catalogue and help those artists reach a wider audience that might not have heard of the older releases

“We do bi-annual comps through our Bandcamp page, in return for customer email addresses. These are a great way to introduce new artists to our fans and we couldn’t achieve the reach we do with these without digital.”
- Aly Gillani, First Word Records
Bandcamp is a great tool for this exact purpose, and it also enables the label to see real-time statistics with relation to what tracks were streamed or downloaded the most, where the visits to the compilation page came from, what fans have supported it over time and so on.

The Music Business

Many media and music futurists are speculating upon the change within the industry. The introduction and success of social networking along with digital music has transformed and reshaped the way music is marketed to the consumer; shifting from a push to pull strategy. “In media and advertising everything is switching to pull. Push Marketing is on its way out.” There is an imminent difference for the consumer receiving information from a push strategy to a pull strategy. Push example; passive, the marketing campaign is in control of the message being sent out and how it is received by potential customers. Pull example; active, the recipient of the marketing campaign is in control of the message and their decision whether to act or not. “Generally the shift from push to pull has been viewed as a shift in power to the consumer away from advertisers and so is bad news for marketers.”

With the increase of social networking platforms and users, with emphasis to Facebook, social networking has become a major and focal part of music marketing adopting the pull marketing strategy. Pull marketing shifts emphasis and attention onto the customer, the essential attribute is to market in the correct places and know where and who your target audience are. “Get people’s attention by providing value and earn their love by engaging with them. This will naturally lead to increased website traffic and increased sales.”
Consumers are increasingly customizing music platforms to better suit their individual needs. Rather than relying on music companies or a DJ to pre-determine the mix of songs on a CD, an increasing number of music listeners are downloading individual tracks and assembling their own sequence of songs. This process is also being replicated with the creation of playlists through platforms such as iTunes, Spotify and Last FM. Fan-built playlists and mixes are taking over the way people get their music. Playlists are inevitably becoming a pull marketing resource that marketing alliances must embrace, due to their ability to share / be shared via Peer-to-Peer networks. “People are choosing what they want to hear rather than having it pushed on them,” said Dave Kusek
I conclude; as consumers gain access to a greater number of options/platforms and more information about such services, those consumer will become more demanding on resource providers. Requiring services to be made available on consumer terms, when and where they want them, rather than when and where it is convenient for the resource providers to deliver them. In addition, as mentioned above consumers are demanding the ability to configure their own products from resource providers, leading to rapid growth in options and music services. Inevitably, shifting music marketing from push to pull. “As digital music services try out different models and features to try and find the optimum mix and consumer satisfaction.”

PUSH PULL STATEDGY / WIKIPEDIA

The business terms push and pull originated in logistics and supply chain management,but are also widely used in marketing,and is also a term widely used in the hotel distribution business. Wal-Mart is an example of a company that uses the push vs. pull strategy. A push–pull system in business describes the movement of a product or information between two subjects. On markets the consumers usually "pull" the goods or information they demand for their needs, while the offerers or suppliers "push" them toward the consumers. In logistics chains or supply chains the stages are operating normally both in push- and pull-manner. Push production is based on forecast demand and pull production is based on actual or consumed demand. The interface between these stages is called the push–pull boundary or decoupling point. 

Complete Definition 

• PUSH – Node performs order planning for succeeding node. Like stated by Bonney et al. (1999) control information flow is in the same direction of goods flow.
• SEMI PUSH or PUSH-PULL – Succeeding node makes order request for preceding node. Preceding node reacts by replenishing from stock that is rebuilt every fixed period.
• PULL – Succeeding node makes order request for preceding node. Preceding node reacts by producing the order, which involves all internal operations, and replenishes when finished.
• SEMI-PULL or PULL-PUSH – Succeeding node makes order request for preceding node. Preceding node reacts by replenishing from stock that is rebuilt immediately. Note that there are several levels of semi-pull systems as the node can have stock at several layers in the organisation. 

Dotted Music

Rows upon rows of enthusiastic fans dressed from head to toe in Supreme wait patiently on a freezing cold afternoon in central London for controversial hip-hop group Odd Future to arrive. Chants of “wolf gang” break out in the queue stretching several streets as members begin to make their way into the “OF Sweatshop“, a unique one day only pop up store, selling exclusive one off garments which amount to a majority share of the outfit’s income seeing as they, unusually, give all their music away free.

The never seen before marketing technique, or lack of as the case may be, is yet another example of the Los Angeles based collective’s adversity to conformity. The identity of the group is largely credited to the founder, Tyler, The Creator, described as a “sadistic yet compelling performer” by the New York Times. His antics both on and off-stage continue to define the rebellious, alternative leanings that have come to be associated with the young ensemble, including Earl Sweatshirt, Domo Genesis, Mike G, Frank Ocean, Left Brain, Syd, Jasper Dolphin, and Taco Bennett.

The success of the movement started and was cemented online, with more than 20 albums offered free through the group’s website, building a fan loyal fan base in return. OF made money independently since early on, selling homemade merchandise directly to fans, offering lots of limited edition garments and one-off products, all hand designed by founder Tyler, breaking down the barrier between artist, production and consumer. They later combined that approach with their highly successful tours, launching pop-up stores in every city before performing. They meet and greet at the shop, take photographs and sign autographs, giving their fans unparalleled access to the group, a hip-hop movement of which are usually notoriously hard to reach.

Tour merchandise has always been present and popular, but Odd Future redesigned the experience. As opposed to selling cheap generic t-shirts featuring printed logos on a table as you enter the venue, forcing the fan to pay over the odds of course, they turn it into a whole companion experience to the show. Marrying with the culture of “hype” associated with hip-hop, which role model to Tyler and avid OF supporter, Pharrell Williams played a part in creating, they offer merchandise that’s one-of-a-kind, which can’t be bought online, in stores or at other shows, reinventing the phrase “exclusive”.

There has been talk since the groups transition from rebel teenagers to independent entrepreneurs, as to whether the laid back lack of marketing technique is really a hidden part of a much larger plan by a puppet master record label figure to gain a hold on the potential market of youth non-conformity, though manager Christian Clancy reassures fans it’s just exactly that; talk:

“There’s no marketing, it’s exposing it at the right place at the right time. So when you have kids that are completely themselves, you don’t necessarily market because you just take who they are and expose it. Right? So it’s not like a push.” Christian Clancy.

The choice in management often depicts how the group is portrayed and pigeonholed in the music industry, though Clancy’s wealth of experience enables him to break that mould and create an entirely new pigeonhole for his acts. His first major project came as a bit part production job for Interscope records on Eminem‘s “The Marshall Mathers LP“, a legendary album by an artist in similar social standing to that of Odd Future, raunchy bordering on offensive. Clancy’s time spent with Eminem proved invaluable, teaching the production intern the power of the pulling consumers into a brand or product as opposed to forcibly pushing via advertising and marketing.

This technique doesn’t work with every act however, only working well with Eminem and OF on account of both groups’ ability to mimic the “don’t give a damn” rebellious nature of the young consumer. Of course, Odd Future’s hyper-activity on social networking sites is an asset Eminem wasn’t able to make use of at the time.

Their constant use of Twitter, Tumblr and Vine, to name a few, pulls fans in in a way not seen before. The ring leader in particular, Tyler, The Creator, is an addict of social networking, promoting shows as well as merchandise adding personal reviews and opinions different to that offered by the common PR run social media of other artists; pulling consumers in to view advertising as opposed to the other way around, while giving the fan that unrivaled access to the group.

It can’t be denied that Odd Future, whether intentional or not, have implemented the perfect pull from a marketing perspective. Through the obvious recluse of advertising and traditional “push” of consumers toward the brand, fans feel closer and more involved with the group and specific individuals within. Aided in chief by the decision to give away an extensive amount of material for free, OF have been the first to give as much emphasis to clothing and merchandise as the traditional focus of an act: the music. A technique, which appears to be working. 

Music Industry Blog

Jay-Z’s ambitions for TIDAL has triggered a  lot of discussion about how streaming models can evolve.  One focus has been exclusives with a number of references to TIDAL ‘doing a Netflix’ by commissioning exclusives.  Netflix can attribute much of its growth over the last couple of years to its flagship ‘Netflix Originals’ such as ‘House Of Cards’ and ‘Orange Is the New Black’.  It is an appealing model but the Netflix Originals approach cannot so easily be transferred to music.

There are three main types of exclusives:

1.    Service Window: album is released exclusively to a single music service for a fixed period of time e.g. only on TIDAL for 1 month

2.    Tier Window: album is released across one type of music service tier before others e.g. only on paid subscription tiers for 3 months

3.    Service Exclusive: music service acquires exclusive rights to an album so that it will never appear anywhere else unless the service decides to let it

The first two will become increasingly common components of the streaming landscape over the next couple of years.  Daniel Ek and Spotify fought a brave rear guard action against Taylor Swift and Big Machine to ensure the Tier Window model did not carve out a beachhead with ‘1989’ but it is an inevitability.  If free tiers are to have a long term role alongside paid tiers they have to be more clearly differentiated.

TIDAL and Apple look set to become the heavyweight players in the Service Window, duking it out for the biggest releases.  TIDAL will argue it pays out more to rights holders (75% compared to 70%) while Apple will argue that it can directly drive download sales (which is where everyone still makes their real sales revenue).  Apple will have to play that card carefully though as it stands just as much chance of accelerating download cannibalization as it does driving new sales.

When Is A Label A Label?

The really interesting, and potentially most disruptive, exclusive is the Service Exclusive.  This model would start blurring the distinction between what constitutes a music service and what defines a record label.  If, for example, TIDAL was to buy out the rights of the next Beyonce album or sign a deal for the next two Calvin Harris albums TIDAL would effectively become the record label for those releases.

The irony is that this ‘ownership of the masters model’ by streaming services is emerging just as the next generation labels are distancing themselves from it.  A new breed of ‘labels’ such as Kobalt’s AWAL and Cooking Vinyl’s Essential Music are focussing on providing label services without taking ownership of the masters and in turn putting the label and artist relationship on a more equitable agency / client basis.  But there are far more impactful challenges to the Service Exclusive model for music than simply being out of step with where the label model is heading:

• Scarcity: ‘House Of Cards’ is only available on Netflix (and some download to own stores such as iTunes). It is a scarce asset, which is not something that can be said about any piece of recorded music.  As TIDAL found with the near instantaneous Beyonce YouTube leak, music scarcity is ephemeral in the YouTube age.  As long as YouTube is allowed to hide behind its perverse interpretation of ‘Fair Use’ and ‘Safe Harbour’ there will be no music scarcity.  (Of course true scarcity is gone for good, but if that can be made to only mean P2P then the problem is manageable, as it is for TV content).

• Consumer expectations: Consumers have learned to expect their video experiences to be fragmented across different platforms and services, to not find everything in one place.  For music consumers however the understanding is that catalogues are either near-complete or useless.  So if all music services suddenly started having high profile gaps then subscribers would be more likely to unsubscribe entirely than they would be to take up multiple subscriptions.  Ironically the net result could be a return to download sales at the expense of subscriptions.  Talk about going full circle….

• Industry relationships: Netflix started out as a pure licensee, paying TV companies for their shows.  Now it competes with them directly when commissioning new shows.  It has become a frenemy for TV companies and is finding many of its relationships less favourable than before.  And this is in an industry that is built up the frenemy hybrid licensee-licensor model.  The music industry does not behave this way, so any service that took up the Service Exclusive model could reasonably expect itself to find itself developing tense relations with labels.  Which could manifest in those labels giving competitor services preferential treatment for their own exclusives.  Labels have long feared the disintermediation threat posed by the web.  It is unlikely to materialize any time soon but they are not exactly going to encourage retail partners to kick-start the process.

• Appetite for risk: Buying up the rights to the latest release of an established superstar is the easy part, and we already have some precedents though neither were exactly run away successes (Jay-Z’s ‘Magna Carta Holy Grail’ with Samsung and U2’s ‘Songs Of Innocence’ with Apple).  But being a label, at least a good one, isn’t simply about signing proven quantities, it is about taking risks on new emerging talent.  And that doesn’t simply mean having a DIY platform on a streaming service – though that can act as a great talent identification tool.  If streaming services want to start playing at the label game they need to also start nurturing and marketing talent.

• Limited horizons: Stream is still only a small fraction of recorded music revenue.  There are few non-Nordic artists that rely on streaming for the majority of their sales income.  That will change but not for a few years yet.  So a release that only exists on streaming, let along a single streaming service, is only going to deliver on a fraction of its potential.  TIDAL and Apple especially could easily choose to loss-lead and pay over the odds for Service Exclusives to ensure artists aren’t left out of pocket.  But that only fixes part of the problem.  An artist locked into one single streaming service will see his or her brand diminish.  ‘House Of Cards’ may be one of Kevin Spacey’s most assured performances yet only a few tens of millions of people globally have ever seen it.  If it had been on network TV the audience would have been hundreds of millions.  With touring becoming the main way many artists make money the album is the marketing vehicle and if that album is locked behind the pay wall of one single music service the marketing potential is neutered.

Streaming music services will find themselves locked in total war over the coming years and while Apple’s cash reserves will likely make that warfare appear asymmetrical at times, exclusives of some kind or another will be utilised by most of the services.  Just don’t expect them to deliver them Netflix-like success because that’s not going to happen.

  

Marketing Notes

MARKETING 

PARTCIPATIONS.ORG

 New media have changed the relationship between the recording industry and fans. The fact is that networked technologies allow fans to share copyrighted music in peer-to-peer (p2p) networks and Web 2.0 platforms. Major labels and their representatives have reacted mainly with ‘prohibitionist’ strategies. They identified file-sharing as the cause of the recording industry’s crisis and labelled file-sharers as ‘digital pirates’. However the Internet could be a challenge to create new business models. First, e-commerce allows the creation of new markets, and the reduction of the cost of storage and distribution. Second, synergies between producers and consumers could emerge. In fact, fans are not just ‘pirates’, but also promoters and co-creators.  

Cultural scholars argue that the industry should adopt a ‘collaborationist’ approach to create an ‘affective economy’ (Condry, 2004; Jenkins, 2006a; Varnelis, 2008). In an affective economy audiences are not passive consumers, but are active, emotionally engaged and socially networked users who cooperate with producers and musicians in the promotion of media contents. Empirical research has demonstrated that both indie labels and pop artists can benefit from ‘fan labor’ (Beer, 2008; Baym & Burnett, 2009; Yang, 2009). 

New media have changed the way cultural industries produce, distribute and promote cultural goods. Since the mid-nineteenth century cultural production has taken on an industrial model due to the high capital investment required to produce and distribute music, movies, radio and TV programs. Cultural industries are characterized by a high cost of production and a low cost of reproduction. Because of that, Hollywood, the broadcasting system and the recording industry have all invested large sums in the production of a small number of high value cultural goods with the aim of maximizing their audience. However, since audiences use media contents in highly unpredictable ways, producers tend to minimize the damages of the unsuccessful productions by formatting their contents in three main ways: through the ‘star system’ (i.e., associating the name of star writers and performers to the texts), through ‘genres’ (i.e., associating labels to the products such as ‘horror film’ or ‘hip hop album’ to suggest the kind of pleasure that audience can gain from the consumption), and through ‘serials’ (e.g., TV series, hit list albums) (Hesmondhalgh, 2007). 

In the new millennium, the rise of networked digital technologies is enabling a decentralization of the production and distribution of cultural goods (Benkler, 2006). In fact, digital technologies such as recording devices (e.g., the digital camera), digital editing tools (e.g., GarageBand), p2p networks and Web 2.0 applications (e.g., social network sites such as Facebook and Twitter, and content sharing sites such as YouTube) allow people to record, store, copy, edit and distribute media files via the Internet at low cost. On the one hand the Internet is thus a new opportunity for industries to create new markets. But at the same time consumers have access to distribution platforms that are no longer exclusively controlled by cultural industries.

Web 2.0 applications -  free services that create an ‘architecture of participation’ where users share multimedia content and connect with each other. 

Web 2.0 fosters ‘media participatory cultures’ that emerged online (Jenkins, 2006a; Varnelis, 2008).

Affective economics has both positive and negative implications: allowing advertisers to tap the power of collective intelligence and direct it toward their own ends, but at the same time allowing consumers to form their own kind of collective bargaining structure that they can use to challenge corporate decision (Jenkins, 2006a, p. 63). 

With the aim of describing how cultural industries are reacting to the challenge of the new media, this focus' on the recording industry because this sector has been faced with these digitalization and decentralisation processes since the mid-1990s. While digital books need a device that allows an easy reading (such as the e-book) and movies need a broadband connection for distribution, the technologies of the Nineties were already enough to disrupt the way music was distributed and listened before then. 

MUSIC THINK TANK 

Connecting with fans is imperative in today’s music industry. It’s that connection that can give them a reason to buy and support your music. Utilizing social media and having a strong online presence makes connecting with fans much more achievable. Below are some good case studies of bands that found success through an online campaign. I encourage musicians to review these examples and pay attention to the elements that made them successful. Then think about how to implement those strategies into your own marketing plans.

1) Arcade Fire – Interactive Music Video Using Google Street View

Arcade Fire utilized HTML5 to create an interactive music video for “We Used to Wait.”Users are prompted to enter the address of their childhood home at the start of the video. While watching the video, scenes from your old neighborhood are pulled in using Google street view.  The elements of new technology, interactivity, nostalgia, experimentation, and personalization all aided in making this video a huge hit. 

2) Josh Freese – Topspin and Miniature Golf

The one size fits all product days are gone. Having something for the casual fan to the super fan is a great way to be able to sell more and put additional money in your pocket. One way to utilize this method is through Topspin, an online funding platform for artists, musicians, inventors, filmmakers, etc. Josh Freese decided to try out Topspin to help fund an upcoming album. The thing I like about what he did was the creative “product” offerings that fit his personality, including:

• Lunch with him at Cheesecake Factory or PF Chang’s
• A round of miniature golf
• Josh washes your car or does your laundry
• He joins your band for a month
• A private drum lesson
• Take three items out of his closet
• Josh writes a song about you

See the full list of packages and items Josh made available, which ranged from $7-$75,000. Check out Topspin to see how you can use it creatively to fund your next project. Just remember to do something that fits your band’s personality. If you make it the right fit and support it correctly, it can work.

3) Amanda Palmer – Turning the Power of Twitter into $11,000 in 2 Hours

Amanda Palmer is widely known for her social media expertise. Advertising Age said, “Palmer is more sophisticated than almost anyone on the internet — musician, brand or otherwise — when it comes to gathering her audience around her and keeping the conversation going.”

On a boring Friday night, Amanda managed to rake in $11,000 in just two hours. It all started with her tweeting about how she was alone, again, on a Friday night sitting in front of her computer. Others started chiming in and began claiming how “we are all losers.” Dialog continued and grew at a rapid pace. A faux organization was started called, “The Losers of Friday Night on their Computers.” Amanda created the hashtag #LOFNOTC and thousands joined the conversation.

A follower suggested the group create a t-shirt. Amanda quickly decided to run with it. She took a sharpie and made a t-shirt design. A website was thrown up that night with the t-shirts available for $25 a piece. 2 hours later… $11,000.

What can you learn for this example?

• Interact with your followers and don’t just mass broadcast.
• Be personable and share a variety of things with your fans.
• Always be on your toes, ready to act quickly when opportunities arise.

4) Matthew Ebel – Subscription Site for the Super Fan

Boston-based singer Matthew Ebel says 26.3% of his income is from 40 hard core fans. You may recognize his name from articles about his ties to the 1,000 True Fan theory/model. One of the ways Matthew caters to his super fans is through a subscription based website.

The packages range from $5/month to $15/month, as well as annual options.  He offers a wide range of perks are including members-only parties, VIP seating at shows, access to new music as soon as he creates it, new live concert recordings every month, broken apart tracks ready for remixing, behind-the-scene sketches, drafts, and ideas, and many more. View the full list of packages and perks here.

5) The Poison Control Center – Tumblr Tour Blog

The Poison Control Center have an awesome tour blog. The band uses Tumblr, a simple and free blogging platform, to regularly update their fans from the road. After each show they share pictures, videos, and posts about their experiences, even down to thanking the sound guy, door person, bartender, and of course the fans. They do it right by updating frequently, providing a wide variety of content, and always remaining authentic.  

6) Gossip Grows on Trees – Building Your Email List with a Fortune Cookie

Email is one of the best ways to directly reach your fans, but sometimes it can be difficult to grow your subscription list.  Gossip Grows on Trees from North Carolina executed a creative way to gain more email addresses at live shows.

They created a download web page that gave visitors a free music download in exchange for their email. At shows they walked around and handed out custom fortune cookies with the URL of the download page and a short message from the band. This gave the band an opportunity to spark conversation and develop relationships with fans. Plus, a lot more people visited the download page and provided their email address because they were approached in a memorable way.

All of these online music marketing case studies have a common theme of musicians connecting with fans. It isn’t enough to put your music out there and hope people will gravitate towards it. You have to be willing to push it out there and utilizing online mediums is a key element.

THE CREATIVE INDUSTIRES 

One of the biggest social media success stories of the last few years has undoubtedly been the rise to fame of one of the UK music industry’s much-loved exports, One Direction.

The group’s success is also a testament to how, in this digital age, UK record labels have become experts in building fan bases around the world and have embraced social media and placed it at the centre of marketing campaigns to ensure global success.

In 2012 One Direction was the world’s biggest band with an upcoming second album. But generating and satisfying demand from fans around the world is a very real challenge. The boys performed a one-off gig in Madison Square Gardens and turned it into a three-month global adventure called Bring me to 1D that got every One Direction fan and the world’s press buzzing.

Fifty-five 'Go1Den Tickets' promising a “once-in-a-lifetime experience” with the boys in New York were released globally. Each was won in a completely different creative way. The band joined the dots with its constant presence via Facebook, Twitter and the official 1D site, where an interactive Bring Me to 1D map enabled fans to follow what was happening around the world.

Millions of fans took part. Tens of millions engaged.

And the result? One Direction’s site achieved its biggest ever volume of traffic. Facebook likes and Twitter follows doubled and, in the first week of release, Take Me Home, went straight to Number 1 in 32 of the 40 participating countries, flying the flag for British music all over the world.

Genevieve Ampaduh, Head of Digital Marketing at Sony Music, who masterminded One Direction’s social media campaign says: “Social media has changed the face of music marketing forever. The ability for artists to reach out to their potential fans in every corner of the globe in real time is incredibly powerful and cannot be replicated by traditional media.

“Early advocates of an artist have become an extension of the label’s marketing teams and play an invaluable role in breaking artists in their local countries. Empowering super-fans should be a staple of any music marketer’s strategy, as should entertaining fans. Why shouldn’t a marketing campaign be exciting, memorable and fun? It should be. And if it is, fans will stay with you for the journey ahead.”

THE MUSIC INDUSTRY COOKBOOK

There seems to be a divided opinion in the music industry to whether or not it is good to give away music for free.
However, when talking to PR and Marketing professional Gavin Handley from the London based company Resonate Media, he expressed that he personally thought it was a good thing to do, if it was done sparingly and with a specific purpose.


“You can use this concept to collect email addresses, which is very handy. You just need to ascertain what your goal is. Many artists and labels decide to do this just because they can, but you don’t want to end up in a situation where your fan base expects everything you do to be free. Rather, I think you should use the concept sparingly; are you trying to break a new act or are you wanting to collect email addresses, for example. Do it, but just do it with a purpose in mind.”
- Gavin Handley, Resonate Media

They put together a free, bi-annual, compilation that they offer on their Bandcamp page in return for email addresses. The compilation only includes artists from their own roster, and seems to have great promotional value beyond acquiring email addresses.

• It gives music enthusiasts and writers a special reason beyond the music to feature it on their websites as it’s free
• It helps to introduce newly signed artists to a new audience and potentially turning them into fans without the consumer having to take a risk when acquiring the music (since it’s free)
• It can also help promoting back catalogue and help those artists reach a wider audience that might not have heard of the older releases

“We do bi-annual comps through our Bandcamp page, in return for customer email addresses. These are a great way to introduce new artists to our fans and we couldn’t achieve the reach we do with these without digital.”
- Aly Gillani, First Word Records
Bandcamp is a great tool for this exact purpose, and it also enables the label to see real-time statistics with relation to what tracks were streamed or downloaded the most, where the visits to the compilation page came from, what fans have supported it over time and so on.

The Music Business

Many media and music futurists are speculating upon the change within the industry. The introduction and success of social networking along with digital music has transformed and reshaped the way music is marketed to the consumer; shifting from a push to pull strategy. “In media and advertising everything is switching to pull. Push Marketing is on its way out.” There is an imminent difference for the consumer receiving information from a push strategy to a pull strategy. Push example; passive, the marketing campaign is in control of the message being sent out and how it is received by potential customers. Pull example; active, the recipient of the marketing campaign is in control of the message and their decision whether to act or not. “Generally the shift from push to pull has been viewed as a shift in power to the consumer away from advertisers and so is bad news for marketers.”

With the increase of social networking platforms and users, with emphasis to Facebook, social networking has become a major and focal part of music marketing adopting the pull marketing strategy. Pull marketing shifts emphasis and attention onto the customer, the essential attribute is to market in the correct places and know where and who your target audience are. “Get people’s attention by providing value and earn their love by engaging with them. This will naturally lead to increased website traffic and increased sales.”
Consumers are increasingly customizing music platforms to better suit their individual needs. Rather than relying on music companies or a DJ to pre-determine the mix of songs on a CD, an increasing number of music listeners are downloading individual tracks and assembling their own sequence of songs. This process is also being replicated with the creation of playlists through platforms such as iTunes, Spotify and Last FM. Fan-built playlists and mixes are taking over the way people get their music. Playlists are inevitably becoming a pull marketing resource that marketing alliances must embrace, due to their ability to share / be shared via Peer-to-Peer networks. “People are choosing what they want to hear rather than having it pushed on them,” said Dave Kusek
I conclude; as consumers gain access to a greater number of options/platforms and more information about such services, those consumer will become more demanding on resource providers. Requiring services to be made available on consumer terms, when and where they want them, rather than when and where it is convenient for the resource providers to deliver them. In addition, as mentioned above consumers are demanding the ability to configure their own products from resource providers, leading to rapid growth in options and music services. Inevitably, shifting music marketing from push to pull. “As digital music services try out different models and features to try and find the optimum mix and consumer satisfaction.”

PUSH PULL STATEDGY / WIKIPEDIA

The business terms push and pull originated in logistics and supply chain management,but are also widely used in marketing,and is also a term widely used in the hotel distribution business. Wal-Mart is an example of a company that uses the push vs. pull strategy. A push–pull system in business describes the movement of a product or information between two subjects. On markets the consumers usually "pull" the goods or information they demand for their needs, while the offerers or suppliers "push" them toward the consumers. In logistics chains or supply chains the stages are operating normally both in push- and pull-manner. Push production is based on forecast demand and pull production is based on actual or consumed demand. The interface between these stages is called the push–pull boundary or decoupling point. 

Complete Definition 

• PUSH – Node performs order planning for succeeding node. Like stated by Bonney et al. (1999) control information flow is in the same direction of goods flow.
• SEMI PUSH or PUSH-PULL – Succeeding node makes order request for preceding node. Preceding node reacts by replenishing from stock that is rebuilt every fixed period.
• PULL – Succeeding node makes order request for preceding node. Preceding node reacts by producing the order, which involves all internal operations, and replenishes when finished.
• SEMI-PULL or PULL-PUSH – Succeeding node makes order request for preceding node. Preceding node reacts by replenishing from stock that is rebuilt immediately. Note that there are several levels of semi-pull systems as the node can have stock at several layers in the organisation.