I just came across a blog post which compared the music industry to the gaming industry and made some very valid points. A short excerpt:
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!
Thoughts? Feel free to comment, or hit me up on Twitter.
More? Read my paper on the best practices of the online promotion of new musical content (don’t worry, it’s free).
