Digital saved the radio star: Emerging marketing strategies in popular music BEMM701: The Marketing Imagination Candidate

Number: 075113

'Digital technology has transformed how we buy and listen to music. In doing so it has radically altered the economic relationship between artists and their audience, and the business 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 in downloading 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 are undergoing radical change as the experience of music itself is gradually shifting from a coherent whole to a multitude of manners in which artist and audience can make meaning through sound. The changing face of the industry over the past twenty years is intimately tied to the advent of digital lifestyles, this is reflected in a cultural shift from the ownership of physical media to access to music on demand. The popularity of websites such as Spotify and Last FM are testimony to this adaptation of use over time. The shift leaves the concept of marketing wide open and throws up many questions regarding the way in which some are adopting new techniques for the distribution of music whilst others resort to legalese to claw back losses in revenue caused by file-sharing and piracy. Digital technology and the increasingly diffuse techniques used to acquire and share music without need for the tangible goods associated with the industry, has led to new practises 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 is the 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 thinking about music. Artists struggling to find their voice in a cacophony of noise are utilising unique strategies to reach out to their target market; in the process working with new ways of parting the public with their hard earned cash. Use and exchange value have been altered 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 the ownership 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 unique model of remuneration allowing the consumer to choose the amount paid. Because the group had recently split from their label EMI, all of the profit went directly to the band. The band 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 on traditional formats. It entered the album charts in the UK and US at number one and by October 2008 had sold more the three million copies worldwide. Nine Inch Nails (2008) released their eagerly anticipated new album 'The Slip' as a digital download. The album was completely free on one proviso a valid email address to which the link for the download was sent. The bands lead singer justified the loss of revenue faced through the lack of physical sales by describing an email address as a hot lead to exploit with promotions, merchandise and further opportunities. The potential profits realised by the band on the album were dwarfed by the marketing potential of a database of fans just a click away, especially with a US tour coming up. With ticket prices to live shows touring the 'free' album starting at $50, the mark up for the band was far greater

than for their recorded music. 'The Slip' was reissued in limited edition CD and Vinyl formats 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 releases are available for download on the respective artists website along with the individual multitrack 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 boundaries between producer and consumer. The opportunity is even provided to upload the remix onto the artist's website for further comment, critique and re-evaluation. This kind of cocreation probably works better in specific genres such as dance and electronica, where a large proportion of the target market are likely to have an active interest in the production techniques used in the production process. The fragmentation of music and the consumers rebirth as artist marks a radical departure from traditional concepts of recorded works as finished pieces. Barriers between artists and their fans are being broken down by various methods centred around greater access to communication channels involving reciprocal relationships. Many artists are prolific on a number of music forums and sites such as Myspace and Facebook are eroding some of the myth of musicians as untouchable cultural icons. The interaction and cooperation with fans and friends builds a (false?) sense of community, today's musicians 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 such as Second Life (BBC News, 2006). This shift in cultural norms shows just how far the digital domain has pushed the envelope with the move towards simulated yet wholly authentic experiences in the consumption of music. Websites such as DiscRevolt (2009) are empowering artists to reclaim some of the digital playing field by providing custom products for musicians to reach out to their public in novel ways. The site allows artists to design their own business card which contains a code 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 the form of a plastic card which can be sold or given away to fans. The added benefit for the artist is the demographic information collected by the software, including email and IP addresses which can be used as further marketing tools. The site works on many levels but particularly for those consumers who crave the need for something tangible, the cards themselves 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 a tangled web of uncertainty where currency is no longer king, the medium is no longer the message and the focus of attention should be the zeros and ones that are creating cultural shifts in the marketing of not just the music, but a complex package of brand, identity and public image. The old model of rock stars recording an album, signing to a label and then touring, procreating with their fans along the way has been replaced by technologically literate artists self publishing and co-creating with fans using a myriad of social tools and networks. At their disposal is a dazzling array of overt and subliminal tricks and techniques designed 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 becoming the norm.

References BBC News. (2006) BBC. [online]. Available from: http://news.bbc.co.uk/1/hi/technology/5253782.stm [Accessed 26th April 2010]. DiscRevolt. (2009) DiscRevolt. [online]. Available from: http://www.discrevolt.com [Accessed: 13th April 2010]. Featured Artist Coalition. (2009) FAC. [online]. Available from: http://www.featuredartistscoalition.com [Accessed: 14th April 2010]. Nine Inch Nails. (2008) NIN. [online]. Available from: http://dl.nin.com/theslip/signup [Accessed: 22nd April 2010]. Radiohead. (2007) Radiohead. [online]. Available from: http://www.inrainbows.com [Accessed: 22nd April 2010]. Sanger, L. (2010) Lukesanger. [online]. Available from: http://www.lukesanger.com/download [Accessed: 23rd April 2010]. Trifon, B. & Trifon, L. (2008) Trifonic. [online]. Available from: http://www.trifonic.com/remix [Accessed: 22nd 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: 13th April 2010]. Oberholzer-Gee, F. & Strumpf, K. (2007) 'The Effect of File Sharing on Record Sales: An Empirical Analysis', Journal of Political Economy, Vol. 115 Issue 1, pp 142. Silverthorne, S. (2004) 'Music Downloads: Pirates or Customers?'. [online]. Available from: http://hbswk.hbs.edu/item/4206.html [Accessed:14th April 2010].

Appendix A The Featured Artist Coalition includes artists such as Robbie Williams, Annie Lennox and Billy Bragg amongst others. The group campaigns for individual downloaders to be free from 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 the following: 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. Artists should receive fair compensation as part of these new deals. All transfers of copyright should be by license rather than by assignment. Artists lose the ownership of their copyrights because they are assigned in most agreements to record companies, publishers and others to exploit. In Germany artists can only license rather than assign these rights by law and thereby they retain ultimate ownership of their own material. This precedent should be followed elsewhere. Any such license should be limited to a maximum 35 years, as is the case for recording agreements in the United States. 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 and other agreements, and this assignment has been generally non-negotiable. In most cases the making available right has not been monetised and artists need to be fairly compensated for this new interactive right. Copyright owners to be obliged to follow a use it or lose it approach to the copyrights they control. Despite new technology, many copyright owners fail to release recordings to the public. As a 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 legal purchase by the public, digitally and physically. The rights for performers should be improved to bring them more into line with those granted to authors (songwriters, lyricists and composers). Authors rights are much stronger because their rights model was developed 100 years before performers' rights. Some key differences: if an artists recording is used in a TV advertisement in the UK, the author gets paid (via PRS) every time it is broadcast but the performers do not if an artists record is played on free-to-air radio in the US the author gets paid public performance income (via ASCAP or BMI) but the performers do not if an artists recording is used in a feature film, the author but not the performer gets paid public performance income every time the film is shown in a UK cinema. A change to copyright law which will end the commercial exploitation of unlicensed music purporting 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 and marketing costs of a standard CD album. Source: http://www.billboard.com

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