How DM could save the music industry
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The music industry has spent the last ten years trying to slow the irrevocable decline in physical music sales by getting to grips with a new digital reality. It is now turning to direct marketing channels to secure its future.
Record companies and music retailers have clambered to find ways to eke out revenue from alternate sources causing a paradigm shift in the industry.
Monies from live music events have been picked up some of the slack for artists and record companies, while retailers such as HMV have sought to diversify into selling mobile phones and, most recently, clothes.
Of course, the elephant in the room is the thorny issue of illegal digital downloads, said to account for upwards of 75% of all music downloads.
Record companies and artists first sought to counter this by force, launching lawsuits against file-sharing sites, most famously in the case of Metallica vs Napster.
When all damnation achieved was a further explosion in illegal downloading, the industry shifted gear and tried to keep up with prevailing consumer attitudes by developing and charging for their own downloads service.
To some success too, but illegal downloading has created a culture whereby consumers expect to receive free music anytime and any place and means.
There is evidence that the industry has recognised this and adopted the quite adage “if you can’t beat them, join them, but make sure you get potentially lucrative data in return”.
The other day I arrived at the website of superstar DJ Fatboy Slim. The site offered a free summer mix by said superstar DJ.
I eagerly clicked on the link to be presented not with a request for payment but a request for my email address.
It was an exchange that on-balance I was prepared to accept. I get free music, Mr Slim and his management get an email address allowing them to engage with a potentially willing future purchaser of FatBoy merchandise.
Direct marketing such as this helps the music industry create relationships with consumers that expect music to be free. Commercial and cultural realities are only likely to increase these kinds of approaches in the future.
Readers' comments (1)
Martin Tibbetts | Tue, 31 Aug 2010 9:01 pm
You write as though this is something new! Labels have been collecting and using data for decades, think the cards to Leamington Spa in every CD you used to buy. The concept of the free download is neither new, nor increasingly particularly relevant, and in my opinion its primary purpose is not data collection.
Several years ago it was a great marketing tool, few bands did it and it was a novel idea. But over the last half decade it has become so common that it is now almost ineffectual for all but the largest artist. Why? Because when everybody does it, it ceases to be special. I work in music marketing, for an indie label and also freelance for other acts and believe me when I say that an offer of a free track is very rarely taken up unless an act is already successful. And there is the rub, these days you literally cannot give it away!
The primary reason for offering free music is not to counteract illegal downloading, or to collect data. It is, in a time when radio play is increasingly hard to get, a means of getting your music heard. And when consumers stop taking up the offer people move on to other means of achieving this.
Free downloads are rarely tracks that will be singles, and often are tracks that would otherwise not be released (such as the Fatboy Slim summer mix). They exist to convince you that the band is worth exploring more. You say that the label are happy to exchange a track for data, and they are, but its not to try and sell merchandise. For already successful acts the labels have no rights to merch or indeed live income, though with newly structured deals having come in it is often the case for newer developing acts, and for the mega acts signing 360 deals for millions. The data labels collect is generally used for further marketing - viral campaigns for the band in the main, and for informing people of other acts on the label.
With the free download becoming increasingly redundant, major and indie labels are looking at other ways of getting the music heard. Many bands stream their new albums in full on sites such as myspace in the weeks prior to release, and do so with no data collection attached. Others are tying in album sales or tracks with other merchandise such as designer t-shirts or bundling with concert tickets. And others still use people such as myself to distribute snippet sampler CDs, or full albums to tastemakers in areas such as music education and clubland.
The day the labels accept illegal downloading will be the day hell freezes over. And I agree with them. Talent is valuable and people need to be educated that paying for the best music that artists produce is a must. Get them on the hook with a freebie track or listen, but the expectation remains that they buy the record as a result.
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