March 5, 2008

There are two sides to music widgets. On one hand, a widget enables an artist to sell directly to the consumer from any website in which the simple bit of HTML code can be dropped. The other side is the free widget, like the kinds found at social networking sites and music blogs. Free widgets allow people to compare likes and dislikes, discover new music and trumpet favorites to friends. Some people think widgets are the saviors of the record industry. Sales are going to explode, they say, because these widgets can be placed anywhere.

I doubt it.

Based on my own observations and conversations with people, I doubt widgets are going to drive the types of sales numbers people are expecting. For promotion and generating awareness, widgets will fare much better. Free streaming is a perfect widget function. Tour dates, news and user recommendations are fine widget fare. But actual sales, that kind that requires the buyer to enter credit card information? Don't hold your breath.

People don't go to MySpace pages, for example, to buy things. MySpace is all about free. Social networking pages are all about free. It's going to be tough to get much B2C music commerce there. Exhibit #1 is CD Baby's sales through its partnership with Snocap. Now, on paper the CD Baby-Snocap partnership looked like a gold mine. Independent artists connect with their fans through their MySpace pages. In theory, a widget in a high-traffic location such as a MySpace page is going to result in a good amount of sales. The artist-to-fan connection was immediate and easy. Well, that was theory.

CD Baby founder Derek Sivers wrote a post about the partnership and the resulting sales: a mere "$12,000 total sales for the 8 months they'd been active," he wrote with disappointment. In contrast, CD Baby's own website generated over $110,000 in MP3 downloads in the first three weeks downloads were available. That came with no announcements, just making the downloads available.

How does a fan get to an artist's CD Baby page? Almost all of my visits to CD Baby have been routed through the artist's website. A few have been the result of a Google search. It could be the case that artists guided consumers to CD Baby and did not do much to announce their music's availability through the Snocap, effectively sabotaging the widget's chance for success. Maybe, but there are two problems with that thinking. First, tracks were not simultaneously available at both CD Baby and Snocap for very long -- if at all. Second, the goal of the widget is to announce itself, to be able to sell music only because it is conspicuously positioned. Widgets shouldn't need a press release or arm waving. They just sit there and do their job.

Consumers tend to have just a few places they like to buy music. I know quite a few people who, for the sake of simplicity, want to use iTunes and only iTunes for music purchases. Some branch out to other stores like eMusic but always come back to iTunes to listen to those tracks. My circle of friends tend to buy a lot of music, but I can't think of one that has purchased a track through a widget. And yes, I've asked.

Business Week's Rachael King wrote about widgets yesterday. Her article focused on the promotional qualities of widgets and did not mention the possibility of using widgets directly to generate sales. Key takeaway: There are plenty of anecdotes about widget successes, but there have been many failures. Though they're cheap to produce, whether or not a widget will succeed is a guessing game.

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Posted by Glenn at 2:20 PM | |