Trent Reznor, a music pioneer on more than one level, has paved the way for a new music business attitude through forward-thinking marketing concepts to communicate with fans directly and provide them with a reason to consume his music and come to his shows. In 2007, Reznor under the famed band alias, Nine Inch Nails, prior to the release of the album, “Year Zero”, launched an online reality-themed scavenger hunt, intended to engage fans and deliver a unique user experience. In conjunction with this gaming initiative, Reznor dropped USB keys loaded with NIN music at his concert venue’s toilets for fans to pick-up and enjoy for free – and share. At the time, it was not clear whether the music was leaked by fans or by Reznor himself which spurred the RIAA to put up takedown notices, fueling the campaign even further. To make the album’s physical CD release distinctive, Reznor printed CDs that changed colour – a gimmick CD copies would not benefit from – to encourage fans to buy the originals to supplement whatever free digital content they may or may not have already had access to. After this episode, Reznor left his label and went on his own, beginning with the independent release of “Ghosts I – IV”. In this case, the 36-track album was offered to fans in a variety of attractive models, all under a Creative Commons license: first 9 tracks for free, $5 for all tracks plus a 40-page pdf booklet; $10 for 2 CD set plus a 16 page booklet; $75 Deluxe Edition Package (i.e. box set); $300 Ultra Deluxe Limited Edition Package, capped at 2500 units all signed by Reznor himself, which sold out in 30 hours. Collectively, Reznor grossed $1.6 million in the first week from this independent initiative. The album later became a number one seller on Amazon in spite of its attribution license which made the digital sharing of it legal. Reznor’s following album, “The Slip”, was offered entirely for free two months later along with sample tracks from NIN’s opening acts. All you needed to do is punch in your email address. Again, Reznor provided a unique fan experience, along with a visual depiction of the volume of downloads by location on Google Maps and a full tour venue listing and ticketing options. The tour was a huge success.
In September 2008, Billboard Magazine published a list titled, “The 100 Best Ways For Your Music To Get Attention” which caught my attention this month when I received the top 20 from Peter Spellman’s Music Biz Insight newsletter. Note the volume of high profile opportunities in the licensing branch of the music industry as opposed to the more traditional sales and ticketing divisions which would have dominated this list through the 90’s:
1. Placement in a television ad for Apple
2. Performance on Oprah (6.6 million viewership)
3. Placement in a television commercial that runs during a special event with significant viewership (97.5 million viewers for the 2008 Super Bowl, for instance)
4. Song Featured as iTunes “Free Single of the Week”
5. Song covered on American Idol (approx. 27 million viewers)
6. Placement in Activision’s “Guitar Hero” videogame (approx. 10 million unit sales)
7. Song placed during a hit movie’s opening credits
8. Placement in a heavy-rotation television commercial for Nike
9. Performance on Lollapalooza Main Stage
10. Placement in MTV’s “Rock Band” videogame (US sales total 3.4 million units to date)
11. Video on YouTube’s Most-Viewed Videos page for music (approx. 75 million unique visitors)
12. Cover editorial in Rolling Stone
13. Placement in Rockstar Games’ “Grand Theft Auto” (4.7 million unit sales and growing)
14. Placement on HBO’s “Entourage”
15. Video on the YouTube’s home page
16. Placement in ABC’s “Grey’s Anatomy”
17. Any single or video listed in the “Free on iTunes” section
18. Single played on Radio Disney (approx. 36.5 million listeners per week)
Ethan Diamond, the brain behind OddPost, the web mail service acquired by Yahoo! and, more recently, founder of Bandcamp, dispatched a newsletter today announcing the band portal’s new feature-set and recent upgrades. The free publishing platform boasts nifty and relevant tools for artists and band promoters to optimize their online presence and provide an uber-cool experience for fans and new comers. Armed with features such as domain redirection to a unique domain name within the site, fan email capturing on transactions, and IP licensing control (courtesy of Creative Commons) associated with the variety of ways to transmit music files, Bandcamp is set to become a popular choice for the brand conscious and online promotion savvy music community. In addition to Bandcamp’s visual bells and whistles and you-control-your-music ethos, the company focuses on pertinent music file meta-tagging and artist profile-specific search engine optimization for its individual members. Did I mention that it’s free? Bandcamp is really quite simple, down to earth, and rather wonderful.
The record industry, worth approximately $31 billion globally in 2006, is a large slice of the much broader and more than three times larger ‘music industry‘, worth more than $130 billion. With record sales dipping and alternative revenue streams coming into significant play, a broader view of the music business, namely the live, gaming and film/television licensing, and publishing sectors, is warranted for budding professionals. In spite of the bad rep, the record industry remains to be one of the most creatively oriented sectors in media with 20% of its revenues invested in the acquisition and development of new talent. This is a staggering figure for R&D investment in intellectual property. Although this investment is still being recouped from record sales, revenue goldmines are being discovered in other media sectors which are increasingly more prominent than the traditional retail sources. Recorded music has become a key influencer in the mobile industry and a pivotal consumer offering in $100 billion worth of broadband subscriptions in 2006. The live performance sector is growing rapidly and its promising, future effect on music merchandising and sponsorship remains to be seen.
While the record industry appears to be an exclusive club, every artist recording and, in one form or another, publishing music is, in fact, a part of it. As music converges with other media, so does the record industry with other industries. As such, as more and more artists produce and publish great new music, more opportunities arise for monetizing their copyright without the dependency on actual record sales.
YouLicense.com, the online music licensing marketplace, has thrown together a fun application in the spirit of the Christmas Holidays. By selecting the ‘kind’ of Christmas you’re hoping to have this year (e.g. traditional, freezing, drunken etc.), YouLicense automatically compiles an appropriate playlist for your streaming pleasure. Should you wish to make further use of your Christmas playlist, YouLicense provides you with various licensing options for personal and commercial use, as well as full downloads.
The “what kind of Christmas are you hoping for?” playlist is YouLicense’s third playlist theme, preceded by “what’s your weather?” and “what mood are you in?”.
The much-talked-about 360 music deals give labels the traditional percentage of CD and MP3 sales in addition to a cut of ticketing, merchandise, licensing, publishing, and sponsorship opportunities.
In the Web 2.0 Summit, Warner Music Group CEO, Edgar Bronfman, outlined that new artists will have to sign 360 contracts, and that about a third of their signed artists are under such contracts already.
Bronfman expressed that it’s is no longer feasible to pour money into artists when CD sales continue to diminish. Without a stake in the other aspects of an artist’s career, WMG will simply avoid going to market altogether.
TuneCore, the do-it-yourself digital music distribution platform, landed $7 million in a recent round led by Opus Capital. The company offers immediate access into stores like iTunes, and poses serious competition to existing indie distribution companies like CD Baby.
Artists can distribute their albums or individual tracks across a number of digital music stores for under $30, and keep the royalties, a model that has yet to be tried and tested by the major digital distributors on behalf of long tail clients.
CDbaby has been selling CDs online for the last ten years on behaf of approximately 250,000 independent artists, accounting for 4.5 million CDs and $83 million in sales revenues distributed to its clients.
MP3 metadata contains a large amount of searchable information, including the basics of a song: song title, artist name, and album title and artwork. Some artists take the time to include discography and biography details, as well as liner notes, lyrics, images, and anything that allows the digital file to be found, catalogued and, most importantly, relevant and a source of added value to the consumer. The successful distribution of digital files largely depends on the manner in which they are tagged.
“This is a very sad day for Pandora, and for me personally. Today we reduced our staff from 140 to 120 employees. Like virtually every company, Pandora is not immune to the challenges presented by the current economic turmoil. We are trying to react quickly and responsibly to the new environment…
There are tough times ahead for the economy, but our listenership is growing rapidly, the Internet radio royalty rate resolution seems finally near, and the explosion of mobile devices like the iPhone are opening up a world of opportunity for internet radio to expand off the desktop. Moreover, our ad sales are growing so well that, not only did we not make any reductions there, we need to continue to hire more.”
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