(This is a week and a half late and is being posted after a busy week and a hiatus from blogging. More posts about the conference to come.)

Of the few panels I saw at the Leadership Music Digital Conference in Nashville last week, the "Marketing to Millennials" gave the most food for thought.

Hal Hassel from Echo had some very good takes on how to approach millennials. When he was asked if millennials will still spend on music, he said "absolutely" and stressed two ingredients: quality and authenticity. "It has to feel pretty genuine," he told the audience.

Dorrian Porter of Mozes spoke of the need to build a relationship. "The biggest challenge is to market today, monetize later."

"You need to use tools that millennials use," Hassel added later. "Social networking is not just a fad."

Not to dismiss the fine guests, but the most compelling part of the panel was the Mozes-powered text messages displayed on a widescreen behind the panelists.

A text appeared asking what millennials had broke using these web tools. "Taylor Swift" said a response. (I should point out the context of the word "break" in this case. In most industry circles, and especially in Nashville, an artist doesn't break until mainstream success is attained. Half a million is a start, but platinum is a better measuring stick. In some circles 100,000 album sales and a tour of large clubs counts as breaking. Not here.)

I couldn't help but jump in. "Swift had radio," I wrote, and continued to ask if anybody had broke using just millennial tools. Not an iPod commercial. Not with the help of the Disney media machine. Not Big Machine Record's radio promotion budget. Just Web 2.0.

Someone texted "Ingrid Michaelson." Nope. A "Grey's Anatomy" sync is mass media, and her label, while her own, is distributed by Sony BMG-owned RED.

Colbie Caillet? She had a big MySpace crowd before signing, but she wouldn't be a hit without Universal Republic. Carrie Underwood? She had "American Idol," the most mass of all media.

Obvious examples like Radiohead and Nine Inch Nails are rare exceptions to the rule. They already had the ears of both fans and the media, had sold millions of albums and had become strong draws on the live circuit. In a sense, though, both artists broke for a second time. The resulting publicity surrounding their choice of sale and distribution of self-released albums allowed them to find a few new fans. The twist here is the bands' impacts would not have been the same without the help of the mainstream press.

The bottom line is that mass media matters, and mass media is the source of much of the Web 2.0 chatter that is mistakenly assumed to be operating outside of the reaches of corporate America's influence. A millennial may hear about an artist through viral marketing, or get a song sent via IM, or have a link emailed from a friend, but mass media gets the ball rolling for much of the music discovery that exists in mainstream America. It may feel more genuine, but the impetus for it all was the good ol' marketing department conference call.

I'll go one step further: Labels that successfully operate in stealth are beating the millennials at their own game by hiding the source of the marketing message. If kids are turned off by overt gestures, make the gestures covert.

A purchase of Feist's The Reminder may feel more genuine (as in grass roots) because of its use in an Apple commercial, but that was a mass medium spreading a multi-million-dollar corporate marketing message organized by a top ad agency. At the end of the day, there's not that much difference between an Apple commercial and the old MTV. It may feel different, it may be a different gatekeeper, but it's still music discovery that arose through the efforts of labels and publishers.

Posted by Glenn at 11:13 AM | Link
|Conferences||Marketing|

BusinessWeek.com has an article on brick-and-mortar retail's adjustment to falling CD sales. New York City's Other Music is a centerpiece of the article.

Filter through the requisite industry statistics and analyst quotes and you get to a few interesting things. First, the article claims its download store now account for a quarter of all Other Music sales. Second, Other Music hopes to have sponsors underwrite the in-store performances it records and streams from its website.

On a side note, the article comes with a slideshow of Other Music strategies for merchandising and selling music. Slide #7 shows the store's handwritten reviews that line its shelves. This has to be the most underused, overlooked weapon in physical retail. I'm such a sucker for a handwritten review. It's the closest you can get to a recommendation from an employee.

Posted by Glenn at 6:45 PM | Link
|Marketing||Online Stores/Services|

A reader sent me a link to Online Fandom. It's the blog of Nancy Baym, Associate Professor in Communication Studies at the University of Kansas. She included a link to a PDF document of a Powerpoint presentation about online communities and fandom.

For people in music, this is a blog worth checking out. For labels and managers, this is a good resource and source of inspiration for thinking about your artists' relationship with fans.

Posted by Glenn at 5:48 PM | Link
|Marketing|

The Times Online's Dan Sabbagh has an interesting take on today's record business. He contrasts the unique efforts of pop artist Shayan Italia, whose new video amassed 190,000 plays in the first 24 hours in was on YouTube, with the more traditional story of Duffy, a singer signed to Universal Music Group. Italia has, with the help of investors' £500,000 (sold in £12,000 blocks), achieved a only a modicum of success but did it without the help of a record label. Duffy, who went to UMG from Rough Trade, has achieved great success with her new album, Rockferry, in a far more traditional manner and with very few YouTube views and little online fanfare.

Rockferry shifted 180,000 CDs in its first week, worth rather more than 190,000 views on YouTube, without the help of a television programme talent contest or any internet nonsense. In fact, the album was marketed conventionally to entice the mainstream buyer.

Nevertheless, despite these simple facts, people get very excited about the death of the record company and about finding clever ways to ward off its demise. But it is easy to get distracted: these companies are really creative businesses, allying marketing muscle with nothing more complicated than good music.

Spending too much time banging on about a new business model while failing to discover new acts, hiring management with little credibility in the industry or simply not bidding for talent when necessary are sure ways to fail, as Guy Hands may find out if he is not careful.

After all, people who buy or steal music do not care about how the music business should reinvent itself. What they want to do is listen to songs they like.

He has a point. Most people -- not all but most -- do not care a great deal about how the business needs new models. They want music and will not get involved with policy issues and the nuts and bolts of business. And the drive for new models and different ways to monetize catalogs cannot take away from music companies' entire reason for being: to find and develop (and quickly drop some) new artists.

Sabbagh shares my view on the death of the record label, as in it's not going to happen. But then again, he writes media analysis. Were he a tech journalist I'm sure our opinions would differ.

"For all his talent," writes Sabbagh of Italia, "the big break is yet to come and there is not yet any return for the investors who are taking part in an exercise that is supposed to prove that the great rock'n'roll swindle is dead."

One more thing...Duffy's album sold 180,000 in its first week...in a country with one-third the population of the U.S. This country's top seller last week was an Alan Jackson new release with sales of only 119,000. Sheesh.

Posted by Glenn at 6:52 PM | Link
|Marketing||Universal Music Group|

I thought this article at AdAge.com would show how indie musicians are finding money in advertising. After all, its title is "Indie Act Seeks Backup Brand." Sync licensing can go a long way in making up for slowing music sales and the overall challenge of being on an indie, so it makes for a good topic these days. The article showed me two things: The revenue can be pretty good, and people shouldn't confuse "business indie" and "music indie" in business articles.

A "business indie" is an artist on an independent label (or no label at all). A "music indie" is an artist that has an indie sound or fits in the indie lifestyle. There are tons of indie artists on major or major-owned labels. The problem with this article is that AdAge.com gave example after example of artists with relationships with major labels and mentioned only two true indie artists, Band of Horses and The Walkmen.

Any piece on music licensing should start with Apple commercials. A few were mentioned, but they're not indie. Sara Bareilles is on Epic. Feist is on Interscope-owned Cherry Tree Records. Yael Naim is on Atlantic. You may have read about how an Apple commercial pushed Yael Naim's into iTunes' Top 10 even though she didn't have an album out. I figured it was some kind of indie success story, the sort of thing people expect in the age of the dying major label and a more level playing field. Nope, just another major label artist using a superior marketing department to get cherished advertising placement. When people say major labels are going to die, they are seriously discounting these abilities.

Let's go back even further to the iPod commercials of yore (this page lists songs in all iPod commercials). Jet (major label), U2 (major label), Eminem (major label), Propellerheads (major label), Daft Punk (major label) etc etc. There are a few indies on the list, such as Ozomotli and Cut Chemist, and some major-owned indies (Caesars on EMI-owned Astralwerks, Wolfmother on Modular with a distribution deal with Interscope) but Apple advertising has not been nearly as indie as people think. It may sometimes sound indie, but it's rarely independent of the majors.

Side note: Brendan Benson, not mentioned in the article, has a song in a new iTouch commercial. That was released on indie label V2, and a song from his 2002 Startime International album Lapalco was in a VW commercial a while back.

On the plus side, the article does throw out some numbers. Songs by Feist and Bareilles, for example, each got only $80,000 from Apple for global master and sync rights (the overall benefits certainly made up for the low number).

Posted by Glenn at 2:33 PM | Link
|Marketing|

In general, I'm pretty tired of talent searches. There are so many of them. It's as if "American Idol" has spawned dozens -- if not hundreds -- of unimpressive and practically unseen copycats.

Though I wasn't aware of the "Crash The Super Bowl" promotion before I saw Kina Grannis's commercial during the first quarter, I'm intrigued by the joining of Interscope Records with Doritos that culminated in a very expensive ($5 million) Super Bowl ad. (The commercial also quietly tagged iTunes at the end. An EP with songs by the three finalists is already on sale at iTunes and Wal-Mart.com.) This article from yesterday's Boston Globe has information on the contest.

The singer-songwriter instantly got a fair amount of attention. Grannis received about 5,000 hits on her MySpace page between the second quarter and the end of the third quarter (at which point she was over 15,000 for the day). She was one of three finalists in the contest. As the winner, Grannis will receive $10,000 and a record deal with Interscope.

Will it work? "We have absolutely no idea," Interscope's Ted Mico told the Globe. "No one has ever done anything like this. We’ve had all kinds of online talent contests but nothing has even been done on this scale."

Will we see more promotions like this? Absolutely. Labels are increasingly using the Internet to scout talent, and they are piggy-backing on the advertising budgets of consumer product behemoths like, as in this case, Frito-Lay. If somebody else picks up the tab, a label can remove much of the risk and gain an incredible amount of awareness.

Posted by Glenn at 8:25 PM | Link
|Marketing||Universal Music Group|

Matt Rosoff's Digital Noise blog has a post on a Fast Company article on Duncan Watts (now with Yahoo!, on sabbatical from Columbia University) that touches upon the cumulative advantage (I've posted about that a few times). In a nutshell, Watts says companies are wasting their money trying to reach trendsetters and that highly connected people aren't crucial to a viral message spreading. In the age of social media and user recommendations, that's more true than ever. It's a good article for fans of "The Tipping Point" and "Freakonomics" (Gladwell is quoted, and Levitt is mentioned).

In the context of the music industry, labels and managers spend a great deal of time and money courting trendsetters (journalists, club goers, bloggers, insiders, all-purpose scenesters) in hopes that the word will spread. For a dollars and cents point of view, viral campaigns certainly have their advantages over the typical means of influence.

Posted by Glenn at 3:47 PM | Link
|Marketing|

I chuckled when I read Jim Fusilli's article on EMI at the Wall Street Journal. Here's the passage that really stood out:

"As for the rest of its new strategy, a major corporation should be able to, as EMI puts it, 'monetize' the value of the artists' work by finding additional sources of revenue. And given that EMI is home to such brands as Astralwerks, Blue Note, Capitol and Capitol Nashville, Virgin and various EMI-named brands, it must have some redundancy in sales and marketing. The silo mentality encourages the segregation of consumers, and I'd contend that there are jazz artists on Blue Note who would appeal to Virgin's rock base and that Astralwerks has several electronica artists who might find an audience among modern jazz fans."

First of all, yeah, EMI does have some redundancies in sales and marketing. Communication between labels isn't all that bad (though I'm sure it can be). The overlap is mostly at its distributors (e.g., EMD, Caroline). And, yes, labels tend to be very aware of and will try to exploit any crossover potential.

Second, the silo mentality is strongest outside of a music company. In my experience, the distinct silos are at the retail level. Brick-and-mortar stores have separate sections for different genres. Same with digital stores. (Placing albums into different categories, I'll argue, makes it easier for consumers to locate music. They reduce search costs.) Each section can have its own supervisor. For a label, that means there are different point people for pop, jazz and electronic. Not only that, but where an album is stocked will impact sales. For example, an artist like LCD Soundsystem could be considered both rock and dance, but it will fare far better if it is filed under rock.

Third, there are silos in the media as well. If a label has a jazz-influenced electronic album and wants to market it to both the jazz and electronic crowds, it may require hiring two different publicists (unless they can do it in-house) to get press at two different types of publications. Publicists tend to be very specialized and have different sets of relationships. Marketing programs or promotions tend to be good for one genre at a time as well.

Silos, indeed...but EMI won't be able to do much about them.

Posted by Glenn at 5:22 AM | Link
|Marketing|

• Missy Elliot's Doritos campaign looks like the future of hip hop: A multi-platform campaign (including an exclusive track) created by Goodby, Silverstein & Partners and managed by Violator Management. In June, Warner Music Group created a joint venture with Violator called the Brand Asset Group. Hip hop may still have some pop culture influence -- less than a few years ago, I believe -- but sales are falling faster than pop, rock and country. Touring isn't much of an option, so corporate advertisers are looking very attractive. This kind of campaign is the best way to extract value from artists. (Billboard.biz)

• Wal-Mart's download store may have cheap MP3s, but it's still an inconvenient way to get music onto an iPod. (The Macalope)

• U.K. venture capital firm Ingenious Media is backing albums by heritage artists like UB40, Peter Gabriel and Travis. The firm has raised $79 million in part by attracting investors with tax benefits. U.K. tax law allows the fund not to pay taxes on any profits. Ingenious receives an annual fee for managing the fund plus 20% of any profits. (Wall Street Journal)

• Just as NBA star Ron Artest did when he was suspended, NFL star Adam "Pacman" Jones is promoting an upcoming release on his record label. National Street League will release Posterboyz's album on Tuesday. Posterboyz consists of Jones and producer Spoaty. (NewsChannel5.com)

• Oops. The headline of this Forbes article says, "Sony BMG Spent $240M Lobbying in 2007." The correct number, $240,000, is given in the body of the article. (Forbes.com)

Posted by Glenn at 12:49 PM | Link
|Marketing||Wal Mart||Warner Music Group|

• Album sales dropped 3% last week and were 14% lower than the same week last year. For the year, album sales are down 14%. Last week's #1 album was a debut, UGK's Underground Kingz (Jive). With sales of 160,000 units, it was the only album to break the 100,000 mark. Digital track sales were flat last week and were 45% higher than the same week last year. For the year, digital track sales are up 48%.

• Everyone is always looking for a sign that the Beatles' catalog will be released digitally, and we're getting warmer. John Lennon's solo catalog -- sixteen albums -- is now available at iTunes. (Sydney Morning Herald)

• A year-long EMI marketing project will be handled by Saatchi & Saatchi. Well, music is marketing. (AdWeek.com)

• Sirius Satellite Radio inked a deal with Sonos that will allow subscribers to stream Sirius at home through Sonos' home music systems. A 30-day trial will cost subscribers an additional $2.99. Only 80 Sirius channels are available, and the home streaming service will be available only to U.S. subscribers. (Hollywood Reporter)

• Here's an idea: An underage music festival held in the London. The Underage Festival was open for people aged 14 to 19 and hosted 37 bands on four stages. "Corporate sponsors have been quick to embrace the trend, and all the hard parts — staging, logistics, security — have been arranged and paid for by the likes of MySpace, Converse and BBC's Radio1. Seizing the moment, UK indie music company Mute Records has also launched a label, Irregulars, pitching new, young talent at a new, young market, with (event organizer Sam) Killcoyne on board as a talent-spotter." (Time)

• Hal Hassel is moving from CMT.com to VP, Consumer Marketing at echomusic. (Music Row)

• Music bloggers, here's a topic for conversation: Spoon's Ga Ga Ga (Merge) came out the same week as Interpol's Our Love To Admire (Capitol). Currently Spoon sits at #68 and has sales of 100,000 in five weeks. Interpol is at #85 -- and dropping -- and has sold 129,000. Spoon is on an indie, Interpol is on a major. If nothing else, this makes for a good addition to the "indie or major?" debate.

• Jeff Leeds has an article on very overlooked marketing tools: Mobile phones and text messaging. It's not the sexiest medium in the world, but there's money to be made by artists, promoters and artists. (New York Times)

Posted by Glenn at 9:46 AM | Link
|EMI||Live Music||Marketing||iTunes|

• Universal Music Group will offer DRM-free downloads through a select group of online retailers -- but not iTunes. From August 21 through January 2008, UMG will sell "thousands" of albums and tracks without copy protection at Rhapsody, Best Buy, Wal-Mart, PureTracks and the upcoming Amazon.com download store. In addition, UMG will sell the downloads direct to consumer at some artist and label sites, and use Google AdWords to drive purchases at gBox. (Billboard.biz)

• Listen to a WYNC interview with with QSR editor Sherri Daye Scott about how fast food chains are using music in their marketing efforts. (Podcast at QSR Magazine)

• Video sharing website Veoh has filed a preemptive lawsuit against Universal Music Group. The company has asked a judge to prevent UMG from suing it for copyright infringement. (paidContent)

• Yet another article on the resurgence of vinyl. At least this one has a video segment and a really great quote. From Criminal Records' Eric Levin, "Vinyl is just out of control. It's like somebody pushed the cool button again." Indie retailers are selling more vinyl because of a few reasons. First, it's a tangible product that sounds better than downloads. Second, whatever chain stores are left sell little or no vinyl. I've got to wonder, though, that if vinyl sales keep going up if a chain like Best Buy will start stocking vinyl and carrying turntables. If vinyl becomes too successful, it will look like too attractive a market not to enter. (Chicago Tribune)

• Digital Music Group Inc. reported a loss of $1.1 million on revenues of $3.2 million for Q2 2007. The company attributed almost $330,000 of the loss to expenses related to its merger with digital distributor The Orchard. The merger will be completed in Q4. Last year's loss was $589,000. (Sacramento Business Journal)

Posted by Glenn at 8:46 AM | Link
|DRM||Digital Distribution||Marketing||Universal Music Group|

• Universal Music Group has invested in Loud.com, a hip hop-slanted portal and networking site. (paidContent)

• GodTube.com is a new, Christian-oriented video site now in beta. (Billboard.biz)

• Music Row points out that country album sales are down 29.3% this year, a hit album by Taylor Swift notwithstanding. (After Carrie Underwood and Rascal Flatts had such a huge year, a drop was inevitable.) The end of the year, though, will have some big names: Kenny Chesney on September 11, Rascal Flatts on September 25, Brooks & Dunn on October 2 and Carrie Underwood on October 23, plus unconfirmed rumors of a Keith Urban greatest hits package. (Music Row)

• At the Marketing to Men 18-34 conference in New York, the big topic was branded entertainment, i.e., music with a ton of product placement. (Billboard.biz)

• Judging from the information in Rob Mitchum's article on concert first aid stations, indie rock shows are far safer than metal shows. Only one Pitchfork Festival attendee required transport to a hospital, while a mid-July Ozzfest concert saw "two people with stab wounds, numerous people with dislocated shoulders, facial trauma, sutured up a lot of faces, that kind of stuff, especially from mosh pits." Because of the age of attendees, classical music concerts actually have the highest mortality rate. The winner for highest rate of medical tent visits goes to gospel/Christian events. (Chicago Tribune)

• From 2003 to 2006, the percent of U.S. camera phone users who emailed/transmitted photos wireless dropped 22 points. Is there a parallel with over-the-air music? "People will download music OTA while it is a novelty then they will sideload all their MP3s to their music phone (sideloading is primary way to get music on a music phone). Just like people expect a camera on their phone they will expect an MP3 player, but the carrier will not see any revenue from the use of this feature." (Ad-Supported Music Central)

• Univision is facing another bribery lawsuit, this one brought by Los Angeles-based Platino Records. A previous lawsuit alleging the bribing of radio stations was brought by a former VP for Univision's Fonovisa Records. The company's equity partners are interested in selling some non-core assets, such as the music division, to help pay off debt. (Los Angeles Times)

• Long Gone John has put his label, Sympathy for the Record Industry, up for sale. John Reis (Swami Records) has put in a bid of 30 very expensive llamas. (LA Weekly)

• Localism works in music retail. In Fort Lauderdale, Radio-Active Records is within five miles of Borders, Target, Circuit City, Barnes & Noble and Best Buy, and yet it is growing. "Our biggest strategy is community involvement. It's why Virgin [Megastore] couldn't survive down here: They don't pay attention to what music locals are interested in. I go to the clubs, I see what people are dancing to, and I order that stuff in the store." (Broward Palm Beach)

Posted by Glenn at 8:06 AM | Link
|Brick-And-Mortor Retail||Marketing||Mobile Music||Universal Music Group|

• Terra Firm again extended its bid for EMI. It has just over a quarter of shareholders on board. (Wall Street Journal)

• The Recording Industry Association of Japan (RIAJ) released sales figures for the first half of 2007. CD sales were down 15% and the value of the sales were down only 7%. No data was released for digital download or mobile sales. (RIAJ, via Digital Music News)

• This week, Apple will start selling Spanish language iTunes gift cards. The prepaid download cards will first be sold in Best Buy and Target, then Wal-Mart and Safeway. (Brandweek)

• The U.K. Office of Fair Trading has cleared Universal Music Group's purchase of Sanctuary Group. (Billboard.biz)

• Jim DeRogatis on the demise of the print magazine Punk Planet. (Chicago Sun-Times)

• Newsweek interviewed Alexandra A. Seno, chairman of Decca Label Group, the classical division of Universal Music Group. The talk centered around how Decca has found success in the digital arena. Said Seno, "Universal Music’s classical labels have had a great deal of success using digital because it presents a new way for us to present classical music and the younger generation of artists." (Newsweek)

Posted by Glenn at 7:30 AM | Link
|EMI||Marketing||iTunes|

As I expected, there's practically no press on Stars' In Our Bedroom After The War. The band and its label, Arts & Crafts, decided to beat piracy to the punch and release the album to digital stores as soon as it was finished. In Our Bedroom has been out one week. The CD won't be available at the end of September.

As of yesterday, there were a total of 381 blog posts about In Our Bedroom After the War (see IceRocket stats and trend). I browsed a bunch of them and saw some (fairly enthusiastic) blog reviews that will be read by a handful of people at most. Where are the gatekeepers? The trendsetters? The tastemakers?

I will use the lack of media attention as Exhibit A in my argument against the popular opinion that bands can painlessly shift from an album-to-album release cycle to a digital-enabled strategy of more frequent and shorter releases (I'll call it "more of less"). If labels are ever going to be mostly marketing entities and become less attached to the album format, as many analysts and pundits suggest, there needs to be a way to market all those releases. Yes, digital distribution allows more frequent releases. Yes, the album is diminishing in popularity. No, it's not that simple. Not yet. There are three main reasons.

First, pretty much everybody sees the album as the start of a new cycle for an artist. Mid-stream releases -- singles or EPs -- don't attract much attention. Consumers have been conditioned to think those are just extra calories to keep fans from getting too hungry between albums. Likewise, bands have been conditioned to release the filler between the main albums. An EP release is rarely a heralded event.

A digital pre-release, as we can see, does not attract much attention unless prodded by the actions of the label, its marketing team and its publicists. You may not want to believe it, but yes, consumers do need that much prodding to buy a new release. (Even when a consumers thinks he/she has "stubmled" upon a new album, it happened because of a coordinated marketing effort.) Come October people are going to be adding In Our Bedroom to their year-end Top 10 list, but they could be doing that right now.

(In an article today, The Times Online's Pete Paphides wrote about The Mercury Prize and acknowledged that "there’s something about the album that still appeals." The nominees' songs do not have the same impact individually, he wrote. When the listener takes a "leap of faith" the album format's "cumulative effect" can be appreciated.)

Second, labels -- and much of the entire mini-industry built upon promoting new releases -- is not built for anything less than an album. As of today, it's not economically feasible to give a big push to a four-song EP, for example, unless it's a loss-leading development strategy. More releases equals more publicists equals greater expenses. For a single or ringtone to be the subject of a marketing campaign, a third-party corporate sponsor would almost definitely have to be involved.

Music promotion is all about timing. The song needs to hit radio/TV commercials/the Internet just as the album comes out, or just as the band is on the road, or just as those magazine covers are getting a lot of eyeballs. An album needs to be on sale while awareness is high. Promotions need to be timed just right. When the timing is off, everything can too easily fall apart.

Third, retailers and the media can become fatigued from too much of an artist. Some retailers like a good amount of time between releases. They base their expected demand on the success of previous releases, and they know not all consumers will pay attention to releases if they aren't properly spaced and properly promoted. (What is a good amount of time between releases? I'd say albums need more than one year between them, and EPs should come no closer than four months to another release.) Press tends to come when the CD is released and when the band is on the road, not when the digital album is released. (Good luck getting an artist to do a round of interviews every time a new track makes its way to online stores...not that the press would pay so much attention.) And critics tend to ignore singles and EPs, two "lesser" forms of art in the eyes of album-listening, album-ranking music writers.

When those three problems are fixed, when new technologies are developed to better "push" music (as opposed to the traditional "pull" required by consumers) and/or when vertically integreted business models allow for different release strategies to succeed, artists will be able to release less music more often. It will be possible eventually. Not for a few years, I'd guess, but technologies will change, the industry will change and people will eventually get used to a new way of doing things.

Posted by Glenn at 11:57 AM | Link
|Marketing|

The timing is ironic. Just as musicians and fans around the globe get ready for this weekend's Live Earth concerts, Prince announced plans to bundle his new CD in the U.K. with copies of Mail on Sunday. The likely result will be hundreds of thousands of additional newspapers printed solely so people can get Prince's CD.

Let's do the math. The Mail on Sunday had a circulation of 2,253,000 in March of 2007. According to The Mail, it sold 2,570,000 newspapers that were bundled with a CD of Mike Oldfrield's Tubular Bells in April. (Other music-related promotions had similar increases in papers sold.) That's an increase of 317,000 newspapers. I'm going to assume -- safely I think -- that demand for Prince's CD will drive up the number of papers sold to at least the same level.

Conservation it ain't. The typical Sunday newspaper makes the old, controversial CD longbox look like a business card. Given the concerns over consumer products' effect on the environment, maybe a better alternative would be to give away a free download at the Mail's website.

The title of Prince's upcoming album, by the way? Planet Earth.

Posted by Glenn at 9:59 AM | Link
|Marketing|

AdWeek has an article on Capitol Music Group's decision to work five of its acts at virtual world There.com. (If you read the article at Billboard.biz, this one is much better.) The Beastie Boys, Korn, Mims, Yellowcard and Lily Allen will participate in concerts at a site that attracted only 177,000 visitors last month.

"The record label is setting up a nightclub on There.com that lets fans listen to music from its artists and even meet them during performances. While most brands claim their goal in virtual worlds is only to learn from the 3-D interactive environments, CMG hopes to sell music through kiosks in the nightclub that link to e-commerce outlets.

'It's an opportunity to see if this is a really good opportunity for merchandise to be sold,' said Syd Schwartz, svp of digital strategy at CMG. 'Like anywhere on the Web, you have to make it one click away. If you have the Beastie Boys in chat, why wouldn't you have it one click away.'"

Capitol actually has a shot at its goal of selling music at these nightclub kiosks because of its decision to sell DRM-free digital downloads. Not even in the make believe world do consumers want protected Windows Media files. Route it through consumers' There.com billing info and there's an even better shot.

My, how things have changed. Just a few years ago, labels were seeking out active music fans in the places they visited and the publications they read. Now they're going after virtual communities and people who prefer pajamas and laptops over live music.

Posted by Glenn at 9:04 AM | Link
|Marketing|

• The House Small Business Committee Chairwoman doesn't want to get involved in the webcaster royalties issues. At a hearing yesterday she said, "I really don't think Congress would be the best type of vehicle to resolve this type of issue. July 15 is just around the corner, and I hope the two parties can come together and resolve this issue." She hinted that webcasters and SoundExchange could change the definition of a small webcaster, which would allow larger companies to pay lower rates. (BusinessWeek.com)

• As the U.K. division of Sony BMG announces it will not be part of the global plan for the upcoming Prince album comes news that Prince is planning to use the album as a free giveaway with copies of a The Mail on Sunday newspapers. As one would expect, music retailers are incensed. Price also plans to bundle a digital copy of the album with each ticket sold for an upcoming series of London concerts. In May, The Mail on Sunday drew the ire of Mike Oldfield when The Mail gave away copies of his classic album Tubular Bells (The Guardian)

• Much ado about nothing? Retuers has an article about music executives who are fretting that the iPhone will "too much clout to Apple Inc. in shaping the future of the fledgling mobile music market." Once again, maybe I'm missing something but the iPhone is an iPod with a phone attached. It sideloads music just as an iPod sideloads music. I agree with Groove Mobile CEO Adam Sexton: "I don't think the iPhone is going to be the game changer that people are predicting." It will change the mobile phone game, but until it introduces a drastically new way to purchase and experience music, it won't change the mobile music game. (Reuters)

• MySpace Music and Snocap have combined to co-sponsor a tent at this summer's Warped Tour. If those kids have either a credit card or a PayPal account, that will turn out to be a great promotion for Snocap. (Snocap)

• Just how few decent music DVDs are being released these days? A year ago, there was only one music DVD in the top 20 that had been out for 100 weeks or more. Last week, there were six releases in the top 20 that had been out for over 100 weeks.

• Jupiter analyst Mark Mulligan offers analysis of the BBC's online broadcast's from the annual Glastonbury music festival. "The online content include information on acts, photos of performances etc. All of which were great discovery tools. I personally ended up buying a dozen or so tracks from acts I’d seen for the first time. And now the BBC has updated the site to provide video and audio highlights." (Mark Mulligan's blog)

• In this review of Ash's Twilight of the Innocents, The Guardian is still talking about the death of the album. Dorian Lynskey hits the bullseye when pointing out that that the band, which has disavowed the album format for good, never was an album kind of band to begin with. "But whatever the logic (let's assume the resultant publicity was just a happy side-effect), Ash are prime candidates for this experiment. Like Slade, Madness or the Sugababes, they excel at sprints, not marathons. If you could only own one Ash album, it would have to be their impeccable singles collection, Intergalactic Sonic Sevens." (The Guardian)

Posted by Glenn at 7:12 AM | Link
|Apple||Marketing||MySpace||Snocap||Webcasting|

Good thing there's no longer such thing as selling out, because bands and labels are getting cozy with consumer product corporations. Yesterday I ran across three items that drove home that point. New business models and new types of promotion are in full bloom in 2007. Starting with the most interesting...

• Levi's Jeans has founded a label called Levity with the help of a music marketing company. (The entity is aimed at Australia and New Zealand, but the Internet allows the rest of us to listen in.) The first band to come from the relationship is New Zealand rock band Cut Off Your Hands. Levi's paid for the recording and of the new EP -- which was produced by former Suede guitarist Bernard Butler -- and gets to sponge off the band's indie cool in its promotional efforts. In return, Cut Off Your Hands gets a great deal of exposure and gets to keep its masters as well as some merchandise. Bonus: The band sounds pretty good. (Boudist, via Information Leafblower. More reading at 3D World Online.)

• Interscope Records is working with Drinks Americas Holdings Ltd. to launch branded drinks -- with and without alcohol -- tied to Interscope artists. (Drinks Business Review, via Idolator)

• UK pop ground Girls Aloud and its label, Universal Music Group's Polydor Records, have a broad branding deal with electronics giant Samsung. The group will do things such as endorse Samsung products and make appearances at Samsung events. In return, Girls Aloud get a heap of attention and a few perks. Samsung will make the group's music available at its Fun Club website. (Billboard.biz)

Posted by Glenn at 9:21 AM | Link
|Marketing|

• Tower Records founder Russ Solomon is readying R5 Records in Sacramento for a soft launch in the next few weeks. "There are things that need to be tried. And since I was preaching against a wall the last two years that what Tower was doing and what the industry was doing was misdirected and wrong, I owe it to myself and to the business to do it my way." (Sacramento Bee)

• Digital sales in India are higher than physical sales, a first in the world according to the article. Soundbuzz predicts that by 2009 Indian consumers will purchase nine times more mobile music (in terms of revenue) than any other format. (Deccan Herald)

• Here's an article about EMI's and Sanctuary's difficulties selling British music in America. Seems this article would have had better timing before KT Tunstall, Lily Allen and Corrine Baily Rae, but whatever. Here are some good stats from the article: U.K. artists accounted for 8.2% of U.S. album sales in 2006, up from 7.6% in 2004. That figure was 32% in 1986 and less than 1% in 1999. (International Herald Tribune)

• A profile on Integral, a UK company that offers marketing and financial assistance to independent labels and rights holders. (The Independent)

• Hollywood is getting more frustrated with YouTube and its continued level of infringing material. "Clearly, this is not a resource constraint," said one executive. "This is a function of will." (News.com)

Posted by Glenn at 7:28 AM | Link
|Brick-And-Mortor Retail||Digital Music||EMI||Marketing||YouTube|

• Album sales were flat last week and were down 11% year-over-year. For the year, album sales are down 16%. Digital track sales dropped 2% last week and were 38% higher year-over-year. For the year, sales of digital tracks are up 50%.

• It's a momentous event of sorts, I suppose: The first artist signed to Justin Timberlake's Tennman Records is YouTube star Esmee Denters. Now comes the hard part: Getting people to pay for it. (Billboard.com)

• Microsoft's new Ignition marketing program is a good use of the company's division. The program's first band, Warp Records' Maximo Park, will get pushed across the Zune Marketplace, the Xbox Live marketplace and the MSN.com portal -- that's 30 million regular users. (Reuters)

• A music analyst for Gracenote has started a website called Music Appraisals that, yes, appraises music and music memorabilia. (East Bay Express)

• Mexican indie label Noiselab and music download site Beon.com have created an MP3 store. Look for the "Beon MP3" tab on the right side of the middle section of the home page. (Billboard.biz)

Posted by Glenn at 7:31 AM | Link
|A&R||Marketing||Online Stores/Services|

When I read "Viral Marketing for the Real World" at HBS's Working Knowledge (link via Kottke.org), I realized it was immediately applicable to music and media. Duncan J. Watts (professor of sociology at Columbia University) and Jonah Peretti (founding partner of the Huffington Post, BuzzFeed and ContagiousMedia.org) want businesses to think about combining new media tools (viral marketing) with traditional old media. They call it "big-seed marketing."

Traditional viral marketing starts with a small "seed" that necessitates a reproduction rate (R, the rate at which people pass along the virus) that is relatively high (R>1, say the authors). Big-seed marketing starts with a bigger seed and can be successful with a much smaller reproduction rate (R<1). Here are examples given in the article:

"For example, a campaign called Tom’s Petition—an appeal for gun control launched in 2004 by StoptheNRA and the Brady Campaign—exhibited a reproduction rate of 0.58, meaning that ForwardTrack more than doubled the size of the initial 22,582-member seed. Stimulated by the success of Tom’s Petition, Procter & Gamble subsequently incorporated ForwardTrack into a viral campaign to promote Tide Coldwater as an energy-efficient alternative to regular detergents. This campaign registered a much lower reproduction rate of 0.041 but was initiated with such a large seed—over 900,000—that it still reached some 40,000 more individuals than it would have without the forwarding capability. And a campaign run by Oxygen Network, in which Oxygen agreed to donate $1 for every participant (up to $25,000) to Hurricane Katrina relief, exhibited the highest reproduction rate we have seen to date—0.769—reaching an additional 23,544 participants beyond the initial seed of 7,064."

The authors point to a key point to big seeds: "Success does not depend on influentials or on any other special individuals." That's a great strategy for labels, since many are hell bent on winning over influentials at the expense of reaching run-of-the-mill consumers (they may not be trendy, but their dollars are just as green). Big-seed marketing may seem to fly in the face of the attractiveness of Internet viral marketing -- lower costs, smaller scale, a word-of-mouth aspect that feels more genuine -- but labels have plenty of big seeds to start with. And while they should be looking for greater numbers of moderate sucesses, labels will still need online tactics that think beyond the mid-level hit.

Posted by Glenn at 1:11 PM | Link
|Marketing|

• Warner Music has sued social networking site imeem for copyright infringement. According to the lawsuit, "Imeem itself directly engages in much of the infringing conduct by duplicating, adapting, distributing and performing plaintiff's works through Imeem's own servers." Indeed. Take a look at the top songs at imeem and count the number that have the proper license for on-demand streaming (somewhere around zero I would imagine). (Wall Street Journal)

• The UK Parliament Committee has called for an extension on copyrights on sound recordings from 70 years from the existing 50 years. (BBC News)

• The Los Angeles Times' Jon Healey was a good article on the sometimes perplexing variation of CD price points. A theme of the article echoes some of my recent arguments about differences in price elasticities, that "there are two price thresholds: one for fans and one for the merely curious." (Los Angeles Times)

• Motorola has inked a partnership with Napster to provide subscription services to the handset manufacturer. The Motorola ROKR and Z6m will be the first phones able to download and play tracks from the $14.95-per-month Napster To Go service. Motorola buyers will be offered the first month at no charge. (PC Pro)

• Great marketing: Blue Note will sponsor an air-conditioned jazz tent at this summer's Bonnaroo Music Festival. Blue Note artists such as Ravi Coltrane and Stefon Harris will perform. (AP)

Posted by Glenn at 11:22 AM | Link
|Legal||Marketing||Mobile Music||Music 2.0||Napster||Warner Music Group|

• In an interview with Billboard, Paul McCartney said the deal to put the Beatles' catalog online is "virtually settled." The teaser article has no other details. The full interview will be in the May 19th issue of Billboard. (Billboard.com)

• Dimensional Associates, the private equity fund that owns eMusic and The Orchard, sold its music publishing division. (Billboard.biz)

• Talent search promotions are a dime a dozen these days. Here's another: Capitol Nashville is teaming up with Yahoo!'s Bix for an online audio and video karaoke contest called "The Road To Nashville." (AngryCountry.com)

• Silent Majority Group has joined Warner Music Group's Independent Label Group. SMG was founded by Creed manager Jeff Hanson (Press release)

• The Knitting Factory announced digital initiatives for its two venues. Knitting Factory Digital Services will provide to labels the ability to record live audio and video and distribute the content through content partners such as Rhapsody, AOL Music, Revver and Last.fm. (Press release)

• A very good article on the music retail scene in Columbia, South Carolina. The five ways stores are staying relevant: Used CDs, vinyl, catalog, accessories and customer service. (Free Times)

Posted by Glenn at 10:09 AM | Link
|Brick-And-Mortor Retail||Digital Distribution||Marketing||Publishing|

• Digital Music News reported the names of some Warner Music execs who have or will leave their posts: Nikke Slight, Atlantic SVP of New Media, and Robin Bechtel, head of new media at Warner Bros. Records. Those departures have led to the entry of Jack Isquith, formerly with AOL Music. Isquith will report directly to Warner Bros. chief executive Tom Whalley. (Digital Music News)

• PassAlong Networks announced version 2.0 of freedomMP3. The new version adds track-based rules that allow rightsholders to predetermine how many times the song can be moved off a PC. (Press release)

• EMI Music UK announced a strategic partnership with TLC Marketing to launch a download royalty card that will be used in third-party promotions. TLC has brand partnerships with Samsung, First Direct and British Gas. The promotion will allow consumers to download songs from an EMI owned and branded website. (Creative Match)

• With every concert ticket purchased online, Ticketmaster is giving away a free, ten-song digital sampler. Between Memorial Day and Labor Day, each ticket purchased will get one free download at iTunes. (Press release)

• A report by eMarketer finds that the music industry as a whole is "healthy" and "growth in many other areas will more than make up for the shortfall" in falling CD sales. Growth in music publishing and live music will help the industry grow at an average annual rate of 2.8% through 2011. (Press release)

• Guitar Center announced its Q1 2007 results. Net sales increased 13.5% to $534.5 million and earnings rose to $17.2 million. The company opened 12 new stores during the quarter, one being the result of an acquisition of the former Victor's House of Music in Paramus, New Jersey. (Press release)

Posted by Glenn at 11:41 AM | Link
|DRM||EMI||Marketing||Warner Music Group||iTunes|

• Billboard's Ed Christman reported today that Warner Music Group is planning to lay off 400 employees. The restructure includes staggered layoffs and additional hires in digital areas. (Billboard.biz)

• According to the Financial Times, EMI has interest from three private equity groups: Fortress, Cerberus and the previously mentioned One Equity. All three are expected to make presentations to EMI's board of directors this week. EMI will reportedly open its books to all three and will give them until May 23, the day it announces its annual results, to make full offers. (The Age)

• Billboard is reporting that "at least six" indie labels plan either to pull their catalogs from eMusic or offer only back catalog through the music download service. "I hope they can make it a better value proposition for the labels," said one unnamed label head. "But if they don't, we are planning on pulling out." eMusic offers subscriptions of varying quantity and price. Though popular, the low subscription prices means labels get less per song that they would from sales other download stores. A recent price hike by eMusic appeared to be a move to appease some disgruntled labels. (Billboard)

• Warner Music Group is launching a production unit called Den of Thieves that will create content for video platforms such as television, DVD and mobile. (Variety)

• The Tennessean's Nicole Keiper has a good article on high-tech music marketing -- and I don't think it's good just because I'm quoted frequently. Keiper talked to Nashville musician Jeremy Lister and the manger of Ben Folds -- also of Nashville -- about their experience performing in the virtual reality world of Second Life. MySpace, too, is a topic, as is music-oriented MySpace clone Virb. (The Tennessean)

• An old Tower Records location that former Tower owner Russ Solomon is using to open a new retail site will be called R5 Records-Video and is slated to open in June. (Sacramento Bee)

Posted by Glenn at 9:20 AM | Link
|Brick-And-Mortor Retail||EMI||Marketing||eMusic|

• Here's a fun thread: "Do labels ever sign an artist just to shelve them?" Much of the thread is about whether or not Geffen screwed over Rock City Angels to protect Guns N' Roses. (Fun fact: Johnny Depp was in the band briefly.) On one hand you had a scruffy, bluesy rock band that arrived during the Guns N' Roses era. On the other hand you had a band not good enough to threaten Guns N' Roses -- and that's not just hindsight talking. (Read thread at The Velvet Rope)

• Veteran music critic Robert Christgau is doing just fine post-Village Voice. He was named contributing editor at Rolling Stone and as already mentioned is now a music critic for NPR's All Things Considered. His "Consumer Guide" archives will become editorial content at the Rhapsody online music store. (Via Idolator)

• Another day, another article about superstar artists going the independent route, another day of Terry McBride saying it's "the future" without explaining how artists because superstars without major labels. Nice creativity: Hall & Oates tackled their marketing budget problem by getting an exclusive deal with Trans World. (Read article at the Daily News. Thanks Frank.)

Posted by Glenn at 4:37 PM | Link
|Brick-And-Mortor Retail||Marketing||Music Criticism/Writing|

As mentioned here earlier today, EMI's Alain Levy gave a keynote speech to the London Business School at a conference called "Compelling Content: A Driver for Change." Levy's speech mentioned "the cosumer" 49 times. (Read the entire speech after the jump.) Yes, the RIAA and IFPI sue consumers, but EMI is focused on how it reaches and interacts with consumers.

After reading this, it's clear to me that Levy & Company understand the changes afoot. They have understood for years. But here's the thing: It came off like a campaign speech. There are a lot of generalities, and a good deal of self-promotiion. But, it's short on worthwhile details. Everybody knows the industry has changed. Everybody knows it's a new ballgame. Everybody knows the general path to take. Which direction to head. But nobody knows what vehicle will get them where they want to go. After reading the speech, I'm no more sure than I was yesterday that EMI has climbed into the right vehicle.

One aspect of the speech I did like: Levy has not wavered from the belief that EMI will continue to be a viable media company. He dismissed the idea that its position will be harmed by a wave of self-made stars. "We are now 18 months into the surge in user generated content, and a technology base that eases distribution of music," he said. " And how many self made stars have we actually seen? Hardly any." I couldn't have said it better myself. For every Clap Your Hands Say Yeah there are 20,000 bands that are barely better off than they would have been in the age of photocopied 'zines.

A few quotes:

• "Power is shifting everywhere from manufacturers, content providers and retailers to consumers. In the age of empowerment the consumer is king."
• "Less formally packaged content, and more people getting involved in the creation process - does that mean the demise of the media company? I don’t think so. There will always be demand for compelling content, whatever its source."
• "The new digital consumer has impacted every area of our creative process – they have changed the way we source, present and market our content in every way."
• "Over 10% of music revenue worldwide is now in the digital format and we predict digital will account for around 25% of EMI’s revenue by 2010."
• "We know from research that consumers today are overwhelmed. I challenge you to spend a day on YouTube or MySpace and find a relatively unknown band that you really like – it’s difficult to sort through."

Continue reading "EMI Says "Consumer Is King," Describes Vision Of Future" »