(MSc) Sebinomics

The Ultimate Fan Experience

I posted the following questions in the Music and Marketing group on LinkedIn and a great discussion started: Since physical CD sales are steadily decreasing, what can we do? Sell music only in digital form? Or, give it away for free to promote concerts and merchandizing? – Executives in the music industry have been discussing these questions on and off and it seems that no one has been able to come up with a sustainable business plan that fits all needs. Here a few comments I would like to share with you:

Free Music
“I agree with creating more content for mobile and increasing the number of products available for merchandising. I also think that one or two free tracks in exchange for contact information or another action fro the consumer is worth doing, “ replied Jamison Antoine from Universal Music Group. Bill Murphy, owner of Purple Crayon Direct, an arts-marketing agency in Grand Rapids, Michigan/USA, comments that giving away music for free is a massive mistake, since one establishes a precedent: Once free, always free. Only artists that are wealthy beyond the dreams of avarice can afford to give away products and hope to recoup money via concerts, he states. 
          As discussed in The Starfish and the Spider, the music business is coming back to its original decentralized structure. I’m talking about 1890, where musicians didn’t belong to any label and earned their money by playing live. In my opinion, music has become a commodity and every song can be acquired for free sooner or later. Especially if it is a popular song. Fighting makes the situation worse. Napster was shut down and eMule emerged. Try to shut down BitTorrent and something else will be created.

Remarkable Packaging
“As for CDs, I would suggest that presentation matters a lot,” writes Abbas Alvi, Marketing & Sales Manager at Ooober.com and states the example of Tool’s “10,000 Days” CD, which comes in a unique 3D cover with built-in 3D lenses. Abbas concludes, “I know people who had the complete digital collection of that album but still ordered that CD because it was worth it.” Marcus Turner, President/CEO at Alien8 Entertainment, wrote, “I say develop a highly innovative packaging and fill it with much more content. Basically, the ultimate fan experience.” He continues, “Fans want to know everything about their favorite artist and I’m willing to bet that they’ll pay top dollar for it. But it can’t be packaged in the same boring way.” Sam Katz , Co-owner and Vice President at Geniass Productions suggested adding a DVD and selling it for $10. That’s what many artists have been doing for the past 5 or so years and in my case it worked for a while. Consumers kept buying those physical albums, because of the DVD. Not anymore, though.
          Packaging has to be remarkable, because otherwise there is no need to get a CD twice the price of a digital download. The motto here is Worth Making A Remark About. And thinking about Seth Godin’s Free Prize Inside idea, make the CD packaging fashionable or fun or surprising or delightful or sad. It has to deliver something extra worth seeking out and buying. Since the packaging rarely delivers more of what we were buying in the first place, it has to arouse the feeling of wanting to possess that very CD and wanting to brag about it.

The Business Model
Marco Monfils, Owner-manager at Riverside Talent, sees only a few alternatives for the lost income of physical record/CD sales, 1) sponsor support (as Larry Weintraub wrote in his Brand Sponsored Music article), 2) government support, 3) fan support, 4) personal budget. Godfrey Meyer, Gm3 Productions, says, “You can no longer have just the music, you need a WHOLE picture from software / hardware / websites and then the music is just the reason for people to be there and keep coming back.”
          And that is where the music industry is still struggling finding the right business model for the Internet age. I don’t think there is a “one idea fits all” business model, but thanks to the Web 2.0 bands and labels can get in touch with their followers easily and shape their business model according to their customers wants and needs. They can work something out that makes their fans happy and brings in revenue for sustainable growth. Time will tell, and case studies such as NIN, Hawthorne Heights, and Julia Nunes, show that no matter what genre, the Net Generation is ready to spend money on music, but not necessarily for simple physical or digital music.

Thank you, everyone who participated in the discussion on LinkedIn.

As posted on NeoDMC.com.