The music business has had particular trouble adjusting to the realities of the digital age, so I set out to develop a model that fully integrates all of these realities in order to help out artists and labels. Not only is it valuable for the music business, but for many other fields, especially those touched by new opportunities and difficulties arising from the web.
Click any of the links throughout this summary to jump right into the related section of my thesis. The designer, Ryan Van Etten, did an awesome job at creating a great platform for the thesis’ content.
The research revealed that convenience is one of the most important factors for music consumption. Due to the fact that the music industry has lost control over the distribution of their content, this desire for convenience has resulted in piracy. Meanwhile, consumers are replacing traditional media with new media with the percentage of respondents who have never bought a physical CD increasing per generation. People have different expectations as to what price is reasonable for different products. An important trend being that people enjoy consumption that feels like free, which has made that which is easily copied cheaper and that which can’t be copied more expensive. Although consumers like ‘free’, even consumers that frequently pirate music often regularly spend money on music.
As a solution to these challenges, the author recommends that artists and labels starts integrating the concept of the ecosysteminto their communication strategy. The ecosystem is an active fanbase which is interconnected through non-linear communication. This means producing a ‘story worth telling’ to turn the internet’s non-linear communication and loss of control over distribution into an opportunity to get discovered. The second step is retaining the attention by connecting with listeners and connecting them to each other like the host of a party would with guests. Turning the ecosystem into a fun party helps energize the fanbase and amplifies the aforementioned ‘story worth telling’. Marketing opportunities come from listening to the ecosystem and releasing the products they want, as opposed to the classic approach of pushing the product that you want them to buy. Internet-enabled concepts such as pre-ordering and digital releases allow labels and artists to offer the ecosystem abundant choice to play into all the different expectations regarding price and product characteristics. This most likely will involve a mix of (feels like) free and publishing products or services that are better than free.
Why do we need a “next Myspace” anyway? At the last edition of SF MusicTech, I heard a great quote which I’m not sure who to attribute to (sorry), but someone stated that the music industry is trying to find “new ways to do old things, while it should be finding new ways to do new things”. The rise of the internet has meant a fragmentation and loss of control over the music landscape. MySpace was a stronghold for online music for a while, until that landscape got further fragmented too. The closest we will ever get to a “next MySpace” will be either a music network or a social network that manages to gather, organise and integrate the fragments in spectacular fashion. That, however, is still radically different, since it only unites the decentralized. Meanwhile further fragmentation is unpreventable.
I go through huge amounts of links and information each day when it comes to the music business, but this is by far the coolest and funniest way of getting your music discovered I’ve seen in a very long time. (OK Go, eat your heart out)
The idea of The Ugly Dance is very simple. You go to the site, upload your picture and you can choose all kinds of maniacal ways of dancing. Here’s me dancing like nobody’s watching:
It’s a project by Swedish band Fulkultur and appears to have been around for about half a year now. Obviously, this type of thing spreads. Getting your music heard by a lot of people (and what a catchy song it is). When I wanted to create a second dancer (to send to a friend), I got the following message:
A very reasonable thing to ask… and since I was in such a great mood and figured the donation would not be much effort anyway, I went ahead and gave them some money, even though I think clicking the Donate Nothing button would still allow you to create more dancers (can anyone verify this?).
These videos are the result of the ECOSYSTEM at work!
Perfect example of using something viral to getting your music discovered, but also creating a movement which is easy to join, because it’s obvious what you have to do to participate (also read Derek Sivers’ post about this). Not sure if they’re making any money out of it directly (from the donations), as it might take quite some bandwith to keep this site online, but at least indirectly, by creating an ecosystem and giving them what they want (new music, live shows, merchandise, signed albums, perhaps an Ugly Dance at your own party?).
I listen to a lot of music and I come across songs probably unintentionally borrowing elements from each other every now and then. One of the most obvious examples I’ve run into lately is the case of i Square vs Calvin Harris though.
First there was Calvin Harris‘ I’m Not Alone, who composed a catchy tune with a melody that just really stuck! Maybe a little too much…
And then there was i Square’s Hey Sexy Lady.
How does this keep happening? Nobody involved at any point said: “hey, you know what, you know why you suddenly felt so inspired with that melody? It’s because you heard it when Calvin Harris’ track was playing somewhere.” Oh, and Magnetic Man’s I Need Air also sounds quite similar.
Or maybe they licensed it. I don’t know. Terribly uncreative though.
Another recent scandal is the Usher vs The Simpsons / Homer Simpson situation by the way.
When I first heard deadmau5‘ work 3 or 4 years ago, I was immediately excited. Here was a guy doing something new, developing a sound that was completely his own. Even though he was only known by perhaps a few dozen people per country, it was obvious that this guy was going to be influential and blow up.
He has pulled it off in a spectacular way (awesome branding) and when I finally started following him on Facebook, I was thrilled with his level of engagement with his fanbase, or ecosystem (remember?).
In the beginning of December, this interesting development took place, where deadmau5′ marketing team decided they should get involved in communicating to his fans.
Apparently deadmau5 didn’t like the fact that his management was disturbing the trust and rapport he had built up with the ecosystem, because those status updates were followed by deadmau5′s:
Then he checked the backend of his Facebook page…
Excellent choice, in my opinion. This is the best thing he could do to earn back the trust of the ecosystem, because you really don’t want to get on the bad side of the ecosystem. The ecosystem can reject you, the ecosystem can move on, the ecosystem doesn’t need YOU in order to survive.
And the cool thing is, he wasn’t thinking about marketing or self-preservation or strategy in the process of making his choices. It’s just him, genuinely. And I guess the status update he posted 1 minute later shows just that:
Lesson learned: keep it personal and have fun in the process!
Oh, and I do not recommend everyone to get into a fight with their management, because you can get fired from your label, but maybe you’re better off without that particular label anyway.
This case-study is about Shpongle, a much respected group of musicians, in a very specific niche: psychedelic chill-out, but attracting many fans of other genres too and is generally categorized as ‘electronica’.
A while before they released their latest album ‘Ineffable Mysteries From Shpongleland’, it leaked onto filesharing networks and fans of Shpongle started discussing the new album on the internet forum of Shpongle’s record label, Twisted Music. Obviously, Simon Posford, the main person behind Shpongle and owner of the Twisted Music label, was very unhappy about this and lashed out:
“So some fucker has released the album on the internet already…. thanks a lot, whoever it was… Maybe twisted will still recoup, maybe not… all i know is that we are teetering on bankruptcy, and are seeking deals elsewhere…. the 12 loyal fans on this forum are not enough to sustain a record label…. How much do you think Twisted has in the bank account? Have a guess? More than $10,000 ? More than $20,000 ? Well it is actually less than $1,000….. Raj and i haven’t even been paid our advance for this album…. All the artists on twisted are seeking deals with other labels now… We can’t pay a label manager, and we can’t pay the artists…. always putting our hope in ‘just ONE more release’…. “We’ll be ok if the DVD sells”….“Surely the Shpongle CD will sell, right?”
This sucks, for Twisted, for myself and Raj who have spent 3 years working on the album…. Just as i started looking around and posting on this forum again, i remembered why i shouldn’t bother…. I’m outta here… Soon to be followed by Younger Brother [another project by Simon Posford] and probably Twisted…
He got understandably emotional, but misdirected his anger towards perhaps the most dedicated fans: those who really cannot wait until the release and decided to preview it. After all, Shpongle hadn’t released an album in four years and their following is quite fanatical about their music. Later in the same forum topic, he adds some more thoughts which are also relevant to this case study:
“It’s all very well to speculate, but i can tell you as a fact, we made more money before file sharing… we could survive… now not so…. and i think you will find it the same all over the music business… the argument that “file sharing is promotion” is probably valid…. in fact, i agree…in a way it serves a similar purpose to radio…. but the argument that “file sharing is promotion and therefore you will sell more CDs” is clearly absolute bollocks, otherwise the music industry would be booming right now!
Also i’m sorry that “And if it weren’t for the internet, I would have given up on music entirely”…. for me, the internet makes me want to give up music wink But i guess i’m from a different generation…. I started making some of the trance that probably fills your 100Gigs hard drive before i’d even heard of the internet… and i didn’t need the internet to find a deep love of music… the rush of buying a new vinyl, of collecting every release/picture disc by my favourite artists…. discovering new music i liked, all underground, no radio-plugged mix CDs or whatever… ALL without the internet!”
Later on in the topic, which currently carries over 600 replies, fans started to suggest ideas to Simon. They encouraged each other to buy more merchandise, replace old t-shirts or hoodies, buy an extra album to give to a friend and they came up with ideas to help out Simon Posford, Shpongle, and Twisted Music.
And it seems Simon has also learned from the fact that you indeed will not sell more CD’s even when filesharing is good promotion, as he noted. Being a fan myself, I was very delighted to receive a newsletter, one year after the leak, which featured some interesting new business models and experiments. It does a few things very well and I’ll highlight this bit by bit. The opening paragraph is as follows:
“Dear Twisted fans,
The new Prometheus album has been doing very well on Beatport with 4 of his tracks reaching the Top10 of the electronica charts. If you haven’t got your copy yet then Benji and Twisted would be happy if you could get onto Beatport and purchase at least the electronica tracks. We’d love to see him get to Number 1!
Ott is beginning his 6 date tour of the USA starting tonight! You can see and buy tickets to all his tour dates at the bottom of this newsletter. You can also join his Facebook Fan Page here.
We’ve also got two new tracks of Younger Brother and Shpongle available as a free download, keep reading to find out how to get hold of them.”
What a dramatic change of tone, compared to the rants on the forum. This is how you connect with fans! First of all, it acknowledges fan support in terms of chart positions and makes a polite request (as opposed to lashing out or guilt-tripping fans, like on the forum). Also, it tries to unite the fans and give them a purpose; a mission. People love accomplishments, individually or in groups, if only for the little dopamine rewards our brains release.
They then give the fans more information and ways to connect with one of the labels artist’s and finally reward fans with free music. That’s a great way to open a newsletter.
As for the free tracks, the newsletter featured two images with links to the place to download the song. Once on the page, the page showed a download button, which when clicked, becomes a box in which people must enter their email address (as seen on the left). So actually, they can see which email addresses support which artists, but also, when people choose to use one of the share buttons, they help Twisted Music get more email addresses than just the ones they already had for the newsletter.
Younger Brother’s page was a little more complex (see screenshot on the right), with more information, but basically boils down to the same thing.
The newsletter then continues with another exciting way of dealing with the reality created by the internet, which is crowd-funding:
“Many of you have already pledged on the Younger Brother album ‘Vaccine’ . We’re working with pledge to raise money and to set up the best possible foundation to promote and release the record next year.
We’re calling on the loyal and faithful to help. In exchange we’re offering loads of interesting things from studio time with the band to limited artwork and access to rehearsals.”
Again, a great way to involve fans and offer them something exciting. It basically offers them a reason to do it for themselves, instead of telling them to please buy a CD because the label needs it (see forum post). Some of the ‘items’ on the list for people that pledge: signed CD (£15), new album and entire back catalogue (£25), coming to one of their rehearsals (£40), studio workshop (£300), being in one of their videos (£150), a unique personal remix of your favourite track of the album (£600), and much more.
The newsletter closes with more standard stuff, such as tour dates and the like.
The strategy here is simple, yet complex. First of all, the label releases some very unique, high-quality music, which has given them a fanatical and evangelical following (Seth Godin would call this a tribe). Secondly, this following, together with the label, has turned into an ecosystem; when things were not going well, the ecosystem started figuring out ways in which it could survive as a whole. Thirdly, Simon Posford started paying close attention to his tribe and started catering directly to their needs. When reduced to a communication and business strategy, it becomes the formula of CwF (Connecting with Fans) and giving fans a RtB (Reason to Buy).
Giving away free songs is a good example of connecting with fans by rewarding them. The clearest reasons to buy in this mailing are the mission to get one of the label’s artists to number 1, as well as all the rewards for pledging money for the new album.
It is important to note that this should not be done to generate profit, but should genuinely be done to please the fans and to give them what they want. I thoroughly believe that if you betray your fans’ trust, you will lose them and your (potential) income.
Just as the video game industry has continually adapted and reinvented itself in the last few decades – arcades to consoles to mobile to online to apps to ad-supported and so on – the music industry must learn to quickly spot new consumer trends and behaviors, and then adapt the technology and business models to turn those trends into new revenue streams.
Consumers like to be social while they are entertained. This was always true to a degree, but now even the solo-music device (the portable player) has been flipped to become the most social device (thank you, iPhone apps).
Consumers expect to personalize everything. We always saw it in mix tapes and remixes, but that was the domain of hardcore music lovers. Now, personalization is just an expected standard feature.
Consumers don’t simply want to socialize, they want to compete. Socializing isn’t simply about talking to each other and sharing, it’s about showing who is king of the hill.
My thoughts: YES! Exactly.
The huge advantage games have over music, is that games are designed to be interactive (since games were invented), while music has lost much of its interactivity since the invention of recording technologies. While the gaming industry has always had its eyes on interactivity, the music biz completely forgot about this, which brought out a very awkward situation when it was forced upon the music biz (eg. suing fans, going bankrupt, stifling innovation).
I think the best business model is an INTERACTIVE business model. This doesn’t mean that the music itself has to be interactive, but the experience of the music, the music-fan, the artist-fan, the label-fan, and the fan-fan relationship should be as interactive as possible. This interactivity is much easier to monetize and much more rewarding for fans to engage in (and also for the artists).
Some examples: Music to fan, fan to music interactivity: a service that easily lets people make a mixtape of their favourite songs. Free to stream and share, and very cheap to download for high quality audio. Eg. 1 or 2 dollars per half hour / 7 songs. The service automatically detects intro’s, outro’s, bpm’s and keys and decides how best to merge them, if people don’t like it, they can edit it themselves via an interface such as the MixMeister one. This is not really viable for a label (not the core business), but a great idea to license one’s music to if such a service was developed.
But as a label you could also just create a site where people can buy an album in the original version, or play with the a capella’s and (extra) instrumentals, to personalize it in their own way and then buy that version. If you create something awesome, you inspire others to want to create as well, so give them a hand
Something I noticed after making this write-up, the blog’s author company does a great job at providing this music-fan interactivity too. Go check MXP4 out!
Artist-fan interactivity: wow, so many business models can be tied to this one! First of all, one should always be connecting with fans, because you can monetize the relationship. Attach freemium models and you’re getting somewhere. Example: give away your album for free, sell a high quality digital copy for cheap, sell a traditional CD with cool booklet for double, sell it with an autograph for 50% more… want a special greeting from the band’s favourite member on YouTube (see the Old Spice channel for examples)? Buy 2 CD’s! Or whatever (play around with the formula’s to see what works best for you). Endless opportunities.
Label-fan interactivity: many many possibilities here. For instance, invite people to actively participate in the development of new artists… Every label can have its own ‘X-Factor’ type of stuff. Get that sponsored, get income. Get people actively involved, and committed to getting their favourite artist signed (or new album developed and released) and they’ll do the promotion for you and probably spend money on some premium product too (or you can give it away if you’re really impressed by the job they’re doing as promoters).
Fan-fan interactivity: create a tribe, as Seth Godin would put it. When Die Antwoord suddenly blew up, everyone was going to their website to check out the album, because they could stream it there, but it was not yet for sale. The missed opportunity there: they had all those people sharing the same enthusiasm and passion at the same time, but they were left unconnected. What you could do for an online album release party: make a stream of the album that is set to start at a certain time. The stream is static, but you let users chat with one another. To chat, they have to use Facebook Connect or Twitter to log in (making it easier to connect with one another). If fans are connected, they will stimulate each other’s passion.
Of course you could also make some badge system, as a label, where you give people badges for attending x shows by label artists, buying x stuff from the website, getting x new active members to the community, etc etc. The badges can then be cashed in for a guest list spot (let them bring a friend, to create a new fan) or for % off, on the merchandise.
Plus you can keep leaderboards and do some very special things for the biggest fans!
Man, the music biz could be so awesome right now. It is time to WAKE UP!
Last week I read about Die Antwoord on the Birthday Party Berlin blog. The first time I watched their video, I was immediately convinced I had witnessed something I needed to share, to spread. Apparently I wasn’t the only one… One week later and the blogosphere is blowing up with posts about Die Antwoord.
In one day, they have doubled their Facebook fans from 5.000 to 10.000 and it seems like they’re still picking up steam, with blogs like Boing Boing, Dlisted and Mad Decent writing about them. Why is that? It is very simple. Die Antwoord is unique. They offer something fresh, in a remarkable way… In the digital age, where we can share all the music we want, being remarkable is THE most important characteristic for a band, group, musician, producer, etc. You have to be worth talking about.
So what did they do? Not much. They created a unique concept (or maybe this is just an extension of their personalities), uploaded their songs to YouTube, do a lot of performing and try to get people to spread the word. That’s probably why they give away music at live shows: “First 100 zeflings thru the door get a free hand-drawn full-length $O$ album (16 tracks) burned by die fokken rap-rave meesters NINJA en YO-LANDI.”
That’s it! Do something remarkable, connect with the fans and give them a reason to buy. Their album is due soon on Magnetron Music and I expect it to sell quite well for a debut, but of course it will be downloaded for free much more often… The “reason to buy” for now is going to be their live performances until they’ve built a considerable fanbase and they can start applying freemium on a bigger scale.
So who else are doing this? In The Netherlands we have an act which is quite similar, which also generated a lot of buzz when they first came to the scene; De Jeugd van Tegenwoordig. They’re actually label mates of Die Antwoord, just like a bunch of other great acts.
Another act that the music industry can learn from in my eyes, is MENEO, although MENEO is a bit less reachable for fans. Same goes for belladonnakillz.
Anyway, to conclude this post… I suggest you head over to the website of Die Antwoord and listen to their album. You can stream it in its entirety on there.