Monday, June 20, 2011

Follow The Musicians

Few industries have suffered more at the hands of the digital media revolution than the music business.  Between 2000 and 2010 revenues dropped by 60% from $14 billion to $6 billion as the labels let consumers and other companies control how, where and when music is listened to.  Not long after the Napster "free for all" was reigned in, Apple started dictating the future of the market with a per song pricing  model that forever changed consumer's music buying habits.

As the industry begins to claw back from such an epic collapse, it seems it's the the artists, not the music companies that are leading the way with innovative sales and marketing strategies - properly leveraging the latest media revolution, social.  Examples abound from artists with all sizes of followers.

British rock group Kaiser Chiefs are enlisting their fans as sales agents for their new album, providing them a suite of tools to set up and promote their own online music store and earn sales commissions.  (All parties have to buy the entire album, but can customize it, picking 10 tracks from a selection of 20.)  The Wall Street Journal recently wrote about the program:
After buyers purchase and download the album, they're each assigned a website that doubles as an online store. That comes with digital posters and banner ads that buyers can plaster on their personal blogs or Facebook pages, with the goal of corralling online friends to their sales page. A £1 cut of any ensuing sales drops directly into a personal PayPal account. 
No artist is as firmly in front of the latest media trends than Lady Gaga, who, in collaboration with her technophile manager Tory Carter, is reinventing how music is marketed. A recent story in The New York Times business section referenced her investment, alongside Eric Schmidt, in an online community platform founded by Mr. Carter. Taking meetings with the CEOs of Google, Zynga, Apple and Facebook, they are leaving no chance to new technologies moving too far ahead without the Gaga brand strongly connected.  The article referenced senior Google executives being challenged by the artist's team with  communication strategies they had never seen before. 

For Kaiser Kings, Lady Gaga and thousands of smaller artists, it's about finding new ways to speak and listen to their fans and empower them with tools to interact with each other, building bigger and bigger communities, and ultimately selling more music, merchandise, licensing deals and concert tickets.

If flat-footed and paranoid was the defining characteristic of the music industry's approach to the Web 10 years ago, nimble, adaptive and totally in-sync with social media is their mode today, driven mainly by the artists.

And this approach coincides perfectly with Facebook's growth strategy of getting users to share more and more with each other.  In a fascinating interview with Mark Zuckerberg summarized by Paid Content, he claimed that FB has no intention of getting into the music business, but wants to help music companies and musicians become more social, much like Zynga and Playfish "baked the principles of social design" in to games.
"The corollary of this for music, movies, books and news, he said: “In each of these industries - the media ones are going to be big ones… in the music industry, it’s going to be people who understand music and people; in the movie industry, it’s going to be people who understand movies and people.
The gaming industry has been completely transformed. Social gaming has taken off from scratch.... the biggest companies in the gaming industry are now social games companies.
People listen to music with friends, you read news and discuss it with friends. These industries can be rebuilt from the ground up with social. The opportunities when you make these companies social are a lot bigger than they are (in their current form).”
Strong words, but why not?  Lady Gaga has quickly become one of the biggest artists of all time by following these principles.  For the release of a new single she had fans upload videos of themselves dancing, singing and playing along, while a team of editors baked the new clips into an online film.  Strategies like this have made her #1 on Twitter with 10 million followers, only dwarfed by her 36 million fans on Facebook.

And with tech giants like Google, Amazon and Apple, alongside fast growing start up like Pandora and Spotify, offering new convenient and innovative platforms for consumers to listen to music, there exists a perfect opportunity for the music industry to rebuild from the ground up.