2 posts tagged “rhapsody”
Just spent a very interesting two days at San Francisco’s Bandwidth conference.
I’ll just skip to the (many) bits & ideas that rocked my socks. All of this will take much digestion, and maybe it’s the beer talking, but there’s an absolute gold-mine in here. I’ll highlight a different point or two over the next few posts.
The Economics of Abundance or Give All Your Music Away for Free
As you may know, I’ve been intrigued by this proposition lately. At the ‘E-Merging Labels’ discussion (basically a panel about Label 2.0 ), I brought up the idea and was roundly shot down by the speakers:
- IODA’s Marketing Chief
- Real Networks/Rhapsody Indie Music head
- GM of Label Quannum Projects (Blackalicious, Lyrics Born, DJ Shadow)
- Founder of Label/Social Network, Fuzz.com
That was not the end of it the matter, though. At the final panel about “The Future of Music”, the theory raised it’s head again, although it was passed over very quickly. The panelist who raised it?
Pop Culture & Entertainment editor of Wired magazine, Nancy Miller.
The same Wired magazine who’s editor, Chris Anderson, proposed the “Long Tail” theory and is currently finalizing a book, “Free”, on the subject here at hand. And yes, he’s giving it away.
I pressed Nancy at the bar afterward, and her response was basically, you need to sell you. Sounds silly, but it’s really the Russell Simmons model. An extreme example? A locally popular New Orleans band started their own business, branding their product with their name.
CDs? Not a chance.
They’re making (and selling) Hot Sauce.
Ridiculous cross-promotion tactics aside, this raises an interesting question: For a small, unknown label, giving all music away as a "growth-of-market" tactic makes sense. But if you were Rounder (who’s got about 500 Sound Recording copyrights) or even my employer: How do you suddenly tell them that the very thing that brings value to their company, as it stands, is essentially worthless in today’s music economy?
And another thing that just hit me: What does it say that at a conference that is largely attended (and populated) by people who rely on the monetization of digital media, that this idea is largely ignored? HEY! It's MY blog and I can make a stretch once in a while, OK? ;-)
Here's more on the Economics of Free.
Coming up – The Death of Artist “Mystique”, Warner Bros. VP dodges questions about DRM/Scarcity, Celebrity Deathmatch! - Pandora’s Tim Westergren Vs. SoundExchange’s Jon Simpson at the Streaming Rates Panel, The Vinyl Boom: Here to Stay?, Collapsed Copyright, The “Science” of Online Marketing and The DEATH of DRM. Whew!
When I was a brisk pup, all bright eyed and bushy tailed in the music industry, I was introduced to the Co-Op promotion by my mentor. Basically, a label pays a whack of cash to a national chain store (somewhere in the region of $3,000 for a 450 store chain) and that chain puts the designated CD on a listening post, prominent endcap or by the register for a set period of time, maybe 1 month.
Your aim as a label was to sell enough CDs this way to justify the cost, and in the bygone days we were aiming for >$1/unit. For example, if you paid $3,000 for 450 stores for a one-month promotion, you’d need to sell 1.5 units per week in each store to make the whole thing worthwhile.
In 2001, no problem. In 2007, not so much.
As I heard one prominent indie-label head comment “They just don’t make sense anymore. I’ll never pay for another Co-Op again”.
Although Digital Music Services aren’t turning into the panacea they were once predicted to be, it’s interesting to watch their approach in replacing the Co-Op.
None of the DMSs accept $ for placement and only give prominent placement to albums editorially. The cynic in me snarls “Finally, the critics get to have what they’ve always wanted…real say in whether a record, and thus a record label, lives or dies”. ;-)
I can only imagine what the good favor of the Indie Rock editor at iTunes is worth today.
In any case, Rhapsody & eMusic are focusing on two things: Free Music & Brand partnering. eMusic has been especially pro-active on this front, with their emusic toolbar. They offer 1 free track every day to people who’ve downloaded this nifty little app, and from personal experience, it has helped people get to know about Real Music artists, increase downloads and I’m sure it’ll work for Penny too.
Brand partnering is something that Real Music has been active in for many years and although there’s the always subtle “Are we selling out?” question, I firmly believe that this kind of connection is one where artists and labels will ultimately become viable entities again in the future.
With the exception of some extremely bad decisions (affirmative action hip hop luminaries The Roots partnering with a brand of cigarettes for their last tour, for example) there’s a lot to be said for using a brand to bring exposure to your new artist or record.
Rhapsody, for example, are offering free downloads via a partnership with Rolling Stone & Hennessy. A full page in the magazine points readers to this page, where one can download 3 tracks from indie rock artists. The magazine & cognac look hip, the record labels get the music heard and Rhapsody is the middleman.
The catch? As with all of these partnering projects the labels have to sign a waiver agreeing to receive no royalties for the term of the promotion (usually one month). Sound familiar? That’s right, it’s just like paying for a Co-Op in the old days.
Now I hear the old guard bristling at these terms. Give the music away for free for the “exposure”? Ridiculous! Exposure never paid for a label’s overhead or manufacturing costs!
But that’s where I disagree.
I firmly believe you can “give away” 1 million copies of an album and still sell 100,000. You can encourage people to listen, to get to know a band, to build positive associations with a label. They might even like the music. And if they do, they’ll buy.
Or you can keep it all to yourself. But more than ever, you get what you give.
You can learn more about DMS’s brand partnering here (eMusic) and here (Rhapsody)
