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Digital saved the radio star: Emerging marketing strategies inpopular music

BEMM701: The Marketing Imagination

Candidate Number: 075113

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'Digital technology has transformed how we buy and listen to music. In doing so it hasradically altered the economic relationship between artists and their audience, and thebusiness world that operates between the two' (FAC, 2009. See appendix A)

Musicians are increasingly using new tools for the dissemination of their music, bucking a

trend made possible by digital recording and distribution technologies. The revolution indownloading and sharing music has led to artists finding new ways to speak to their audience. Marketing techniques used in the promotion and sale of recorded music areundergoing radical change as the experience of music itself is gradually shifting from acoherent whole to a multitude of manners in which artist and audience can make meaningthrough sound. The changing face of the industry over the past twenty years is intimatelytied to the advent of digital lifestyles, this is reflected in a cultural shift from the ownershipof physical media to access to music on demand. The popularity of websites such asSpotify and Last FM are testimony to this adaptation of use over time. The shift leaves theconcept of marketing wide open and throws up many questions regarding the way inwhich some are adopting new techniques for the distribution of music whilst others resortto legalese to claw back losses in revenue caused by file-sharing and piracy.

Digital technology and the increasingly diffuse techniques used to acquire and sharemusic without need for the tangible goods associated with the industry, has led to newpractises for artists struggling to make their voice heard in a myopia of shameless self promotion, social networking and music without monetary value. What is exciting here isthe new patterns of behaviour which arise from the interplay between the artists,consumers and marketeers in the joint creation of new forms of listening to and thinkingabout music. Artists struggling to find their voice in a cacophony of noise are utilisingunique strategies to reach out to their target market; in the process working with new waysof parting the public with their hard earned cash. Use and exchange value have beenaltered by technology. Music is no longer produced for direct consumption but rather for future potential and possibility of further exchange. Meaning is no longer made in theownership of goods and the physical embodiment of artists in the form of the CD or record.Meaning now comes from artists reaching out to consumers and adding value to their products In informal and and engaging ways.

Radiohead (2007) released their album 'In Rainbows' as a digital download using a uniquemodel of remuneration allowing the consumer to choose the amount paid. Because thegroup had recently split from their label EMI, all of the profit went directly to the band. Theband only needed to realise £1.36 or more per download to make the project more

profitable than a traditional CD sale (see appendix B). By offering consumers the choice,the band grew their loyalty amongst existing fans whilst increasing the perceived value of their product. After the impact of the donation model they released the album officially ontraditional formats. It entered the album charts in the UK and US at number one and byOctober 2008 had sold more the three million copies worldwide.

Nine Inch Nails (2008) released their eagerly anticipated new album 'The Slip' as a digitaldownload. The album was completely free on one proviso – a valid email address to whichthe link for the download was sent. The bands lead singer justified the loss of revenuefaced through the lack of physical sales by describing an email address as a hot lead toexploit with promotions, merchandise and further opportunities. The potential profits

realised by the band on the album were dwarfed by the marketing potential of a databaseof fans just a click away, especially with a US tour coming up. With ticket prices to liveshows touring the 'free' album starting at $50, the mark up for the band was far greater

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than for their recorded music. 'The Slip' was reissued in limited edition CD and Vinylformats with numbered artwork, it has since sold out.

Electronic artists such as Trifonic (2008) and Luke's Anger (2010) have taken the idea of involving their audience In the creation process one step further than most. New releasesare available for download on the respective artists website along with the individual multi-

track stems that make up the song. This idiosyncratic approach allows adherents of their music the opportunity to remix and reinterpret the original piece, blurring the boundariesbetween producer and consumer. The opportunity is even provided to upload the remixonto the artist's website for further comment, critique and re-evaluation. This kind of co-creation probably works better in specific genres such as dance and electronica, where alarge proportion of the target market are likely to have an active interest in the productiontechniques used in the production process. The fragmentation of music and theconsumers rebirth as artist marks a radical departure from traditional concepts of recordedworks as finished pieces.

Barriers between artists and their fans are being broken down by various methods centredaround greater access to communication channels involving reciprocal relationships. Manyartists are prolific on a number of music forums and sites such as Myspace and Facebookare eroding some of the myth of musicians as untouchable cultural icons. The interactionand cooperation with fans and “friends” builds a (false?) sense of community, today'smusicians maintain blogs or tweet about their latest gigs live to the world at any hour of any day. Artists are increasingly inhabiting the virtual world, the most extreme example of this trend would be bands like Duran Duran playing virtual gigs in simulated spaces suchas Second Life (BBC News, 2006). This shift in cultural norms shows just how far thedigital domain has pushed the envelope with the move towards simulated yet whollyauthentic experiences in the consumption of music.

Websites such as DiscRevolt (2009) are empowering artists to reclaim some of the digitalplaying field by providing custom products for musicians to reach out to their public innovel ways. The site allows artists to design their own business card which contains acode redeemable against downloads from the artist's website (see appendix C).DiscRevolt provides embedded software in the form of a widget and physical media in theform of a plastic card which can be sold or given away to fans. The added benefit for theartist is the demographic information collected by the software, including email and IPaddresses which can be used as further marketing tools. The site works on many levelsbut particularly for those consumers who crave the need for something tangible, the cardsthemselves are often small runs with limited edition artwork and are rapidly becoming

collectable in their own right.Artists today can produce and distribute their music for free and exist in the aether of atangled web of uncertainty where currency is no longer king, the medium is no longer themessage and the focus of attention should be the zeros and ones that are creating culturalshifts in the marketing of not just the music, but a complex package of brand, identity andpublic image. The old model of rock stars recording an album, signing to a label and thentouring, procreating with their fans along the way has been replaced by technologicallyliterate artists self publishing and co-creating with fans using a myriad of social tools andnetworks. At their disposal is a dazzling array of overt and subliminal tricks and techniquesdesigned to milk every last drop out of an industry in which the majors are flailing for the

first time in history as the DIY ethic of self production and promotion is gradually becomingthe norm.

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References

BBC News. (2006) BBC. [online]. Available from: http://news.bbc.co.uk/1/hi/technology/5253782.stm [Accessed 26 th April 2010].

DiscRevolt. (2009) DiscRevolt. [online]. Available from: http://www.discrevolt.com[Accessed: 13 th April 2010].

Featured Artist Coalition. (2009) FAC. [online]. Available from:http://www.featuredartistscoalition.com [Accessed: 14 th April 2010].

Nine Inch Nails. (2008) NIN. [online]. Available from: http://dl.nin.com/theslip/signup[Accessed: 22 nd April 2010].

Radiohead. (2007) Radiohead. [online]. Available from: http://www.inrainbows.com[Accessed: 22 nd April 2010].

Sanger, L. (2010) Lukesanger. [online]. Available from:http://www.lukesanger.com/download [Accessed: 23 rd April 2010].

Trifon, B. & Trifon, L. (2008) Trifonic. [online]. Available from: http://www.trifonic.com/remix[Accessed: 22 nd April 2010].

Bibliography

Elberse, A. (2010) 'Bye-Bye Bundles: The Unbundling of Music in Digital Channels',Journal of Marketing, Vol. 74 Issue 3, pp 107-123.

Kennedy, J. (2010) 'IFPI Digital Music Report'. [online]. Available from:http://www.ifpi.org/content/library/DMR2010.pdf [Accessed: 13 th April 2010].

Oberholzer-Gee, F. & Strumpf, K. (2007) 'The Effect of File Sharing on Record Sales: AnEmpirical Analysis', Journal of Political Economy, Vol. 115 Issue 1, pp 1–42.

Silverthorne, S. (2004) 'Music Downloads: Pirates – or Customers?'. [online]. Availablefrom: http://hbswk.hbs.edu/item/4206.html [Accessed:14 th April 2010].

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Appendix A

The Featured Artist Coalition includes artists such as Robbie Williams, Annie Lennox andBilly Bragg amongst others. The group campaigns for individual downloaders to be freefrom threat of prosecution whilst targeting those digital domains that use the music of the

represented artists without respect of copyright law.Source: http://www.featuredartistscoalition.com

The Featured Artists Coalition will argue for the future contractual implementation of thefollowing:

1. An agreement by the music industry that artists should receive fair compensation whenever their business partners receive an economic return from the exploitation of the artists’ work.Record and technology companies are signing agreements to deliver music to fans in new ways.Artists are not involved in these negotiations and their interests are likely to be overlooked. Artistsshould receive fair compensation as part of these new deals.

2. All transfers of copyright should be by license rather than by assignment. Artists lose theownership of their copyrights because they are assigned in most agreements to recordcompanies, publishers and others to exploit. In Germany artists can only license rather thanassign these rights by law and thereby they retain ultimate ownership of their own material. Thisprecedent should be followed elsewhere. Any such license should be limited to a maximum 35years, as is the case for recording agreements in the United States.

3. The ‘making available’ right should be monetized on behalf of featured artists and all other performers. Whilst enshrined in law, artists have been obliged to assign this right in recording andother agreements, and this assignment has been generally non-negotiable. In most cases themaking available right has not been monetised and artists need to be fairly compensated for this newinteractive right.

4. Copyright owners to be obliged to follow a ‘use it or lose it’ approach to the copyrights theycontrol. Despite new technology, many copyright owners fail to release recordings to the public. Asa result many artists lose out and fans can only access such material illegally. A ‘use it or lose it’contractual provision should automatically apply so that an artists’ work is always available for legalpurchase by the public, digitally and physically.

5. The rights for performers should be improved to bring them more into line with those grantedto authors (songwriters, lyricists and composers). Author’s rights are much stronger becausetheir rights model was developed 100 years before performers' rights. Some key differences:

• if an artist’s recording is used in a TV advertisement in the UK, the author gets paid (viaPRS) every time it is broadcast but the performers do not

• if an artist’s record is played on free-to-air radio in the US the author gets paid publicperformance income (via ASCAP or BMI) but the performers do not

• if an artist’s recording is used in a feature film, the author but not the performer gets paidpublic performance income every time the film is shown in a UK cinema.

6. A change to copyright law which will end the commercial exploitation of unlicensed musicpurporting to be used in conjunction with ‘critical reviews’ and abusing the UK provisions for ‘fair dealing’. Several companies are producing DVDs in the UK which use artists’ audio visual

footage and place a review at the end of the DVD. By doing this they claim that the DVD is a work of 'critical review' and therefore no permission or payment is required to any of the stakeholders.

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Appendix B

A graphical representation showing among other expenses, the artist royalties andmarketing costs of a standard CD album.Source: http://www.billboard.com

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Appendix C

Examples of different download cards produced by artists to promote digital downloadsfrom their personal websites.Source: http://www.discrevolt.com