Online Marketing: Hey Music Business – Learn How to Market Online Already!
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Written By Noah Mallin | August 19, 2008 | Share This
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Ah the record business. For a group of people who thrive on being hip, they just don’t get the Internet. Now the typical music mogul will say that they get it just fine, mostly in the rear. The Internet is where people go to steal money from them. Instead of whining like little babies perhaps they should look at their own sales and revenue figures. Even better they should try to apply some of the marketing lessons from search and social media.
According to the Record Industry Association of America’s own figures, more people than ever before are downloading singles and albums as well as ringtones and other items on the Internet. The online segment that in 2005 accounted for less than 10% of industry revenue counted for 23% in 2007.
Yes, but revenue is down overall they might say. True dat, but can this really be laid at the feet of file sharers, Muxtape, and CD burning? There are two things happening: First, a whole generation has grown up without reverence for the album format. They like a song, they download the song. The shift to single tracks from albums is actually a return to the record landscape that predominated until the late 1960s when the album began to dominate. The margin on albums is higher than on single tracks so the labels would prefer a return to the old days.
Second, the record industry itself has given more and more exclusive albums to big box retailers like Wal-Mart who look at recorded music as a loss leader. With Wal-Mart record companies have to twist themselves into pretzels to get into a coveted slot away from the music section of the store and in front of the waddling masses who are looking for new lawnchairs. Wal-Mart deeply discounts recorded music and in turn pays record companies lower prices wholesale than anyone else. Wal-Mart is also the number one retailer of music in the country. When the number one retailer of your product doesn’t really care for it and squeezes every last dime, your margins are gonna look a lot slimmer.
If You Love Somebody Set Them Free
The music biz missed the boat on Napster and MP3 file sharing a long time ago. The success of Apple’s iTunes store is a reminder of what could have been if forward thinking had prevailed over ass covering. Still there is some compelling proof that making music available for free actually helps legit sales. The recent poster child for this is Radiohead. Their latest album In Rainbows was available first as a legit pay-what-you-please download before coming out in conventional formats at the beginning of this year. The result has been a gold record that opened up at number one on Billboards Top 200 album chart. Could it be that quality free music finds buyers who appreciate the enhanced sound quality and other goodies that come with a legit version of an album?
Extracting royalties from online radio and sites like Pandora, hassling Muxtape, and suing your own fans for downloading songs illegally is marketing through the looking glass. Why not give a free packet of anthrax out with every new CD just to cement the contempt?
Getting new music on the tight playlists of traditional radio takes money. Probably a lot more money than would be lost by waiving royalty payments from online sites, especially considering the fact that offline radio pays no royalties at all. How else are you going to break the new artists who are the most profitable ones to have a hit record with? Pandora and LastFM and Muxtape are all great exposure tools. Great marketing is seldom free but it does pay dividends over time.
Pump Up the Volume
How does an industry used to selling albums with big fat margins get back to making more dinero from individual songs? How about pushing more of them out and spending some marketing money wisely online for a better result. A case in point is singer M.I.A. Her latest album has been out for more than a year now and got great reviews but didn’t make much of a dent on mainstream music buyers. Cut to the trailer and television ads for new movie Pineapple Express which uses her song “Paper Planes”. Her album leapt from 62 to 45 on Billboard’s Top 200 chart in one week, and the song just hit number 5 on the Hot 100 after just 4 weeks on the chart.
So what if I had seen the trailer and wondered, “Hey, who’s doing that cool song?” Or even “Where can I get that song and perhaps the accompanying album legitimately?” Googling “Pineapple Express Song” gives us plenty of answers leading right to M.I.A. organically but exactly zero of the first six results leads you to an official point of purchase. The seventh result, which leads you to Amazon is promising – it’s the official soundtrack to Pineapple Express. Which is great if you’re looking for the new Huey Lewis song because M.I.A. ain’t on it.
How about some search ads guys! Give your potential customers a hint and they’ll happily follow. Spending a little more on search or even a well optimized official label download store could very well pay for itself – better than a print ad ever will. You want to make more money? Bring yourselves more volume.
Tell Me Something Good
The record industry was caught flat-footed once again with advent of social media and the rise of MySpace and YouTube. Not using the power of YouTube to spread videos around is just plain stupid. Many major labels don’t allow blogs to embed YouTube videos (including M.I.A.’s.) The copyright mania in this case leads to backwards marketing - videos are just ads for the music. It’s dumb, stop it. You’re spending the dough to make the video, let the fans do the work of getting it out there. MySpace has been more of a benign neglect situation but could you imagine if it had been started or owned by EMI or Universal Music? The music biz hasn’t even scratched the surface of what it could be doing with social media.
The lesson for everyone is not to be defensive when the Internet evolves a new way of doing things. There will be times when the old modes of doing business just don’t apply anymore. The music business (not just the labels but the biz as a whole) needs to stop fighting the inevitable and figure out how to get in front of it. The music biz is putting itself out of business.
Topics: Advertising: Offline, Advertising: Online, Blogging, ECommerce, Google, Legal Issues, Music, MySpace, Online Video, SEM: Paid Search, Social Media |
[…] Previously on SearchViews, I castigated the music industry for its shortsighted response to music downloading and online music sharing in general. The film industry has been luckier in part because film files are comparatively massive and harder to share easily and in part by benefiting from seeing the experience of their music industry colleagues struggle with a consumer that doesn’t want the formats they keep pushing. […]