How would you like to pay for that, ma’am?

August 30, 2012

Conventional wisdom has it that when someone wants to buy goods, they go to a retailer, purchase a product at a predetermined price, and then become owner of that product. We don’t often think of different ways for this transaction to take place.

But what if there was another way?

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We’re now a record label!

October 18, 2010

We’ve seen how digital and social media, and specifically earned platforms such as Facebook, YouTube and Twitter, can propel an unsigned artist into the mainstream of music success.

People like Lily Allen (famous after being discovered on MySpace), Justin Bieber (discovered on YouTube in what is debatably the worst example of YouTube’s possibilities), and even Lady Gaga who was discovered on YouTube and MySpace Music, represent a fundamental shift in how we are selecting popular artists and musicians.

Rather than the traditional push method where ‘Record Labels’ would pick and choose artists based on ‘marketability’ and their own industry agendas, we’re seeing a transition to a pull method. We’re self-selecting as an audience, and determining who will fill our iPods and PCs.

When you consider that social media is underpinned by two pillars: content curation and collaboration, it seems a natural platform for music and ‘stars’ to snowball into popular culture. As Andy Warhol once so famously said “”In the future, everyone will be world-famous for 15 minutes.”      …Perhaps the new paradigm of this is “in social media, everyone could be world-famous”

The role of social media and music

We are publishers by our very nature, collaborating with one another as peers to appeal to our inherent need for fame and recognition. With social media, though, we have gained the tools that have the potential to scale our peer-level communications to a truly mass-market. And music is by its nature a social experience, binding people together with common emotions and values.

In what is perhaps the natural iteration of this, Razorfish in the US has stepped into the role of quasi-record label by forming a strategic partnership with an unsigned artist, AM.

David Deal, Vice President of Marketing at Razorfish, explained:

“How does an emerging indie artist in the dysfunctional music industry find an audience anymore?

My employer Razorfish is tackling that challenge through an unusual co-branding relationship with indie musician AM, which sees Razorfish playing the role of quasi-record label, concert promoter, and DJ. And so far we are having a lot of fun while building our brand with a creative and smart musician.

“We’re intrigued by the challenge of helping a promising artist find a national audience given how the traditional recording industry distribution model is broken,” said David Deal, vice president of marketing for Razorfish and the would-be A&R man guiding the agency’s partnership with AM. And if Razorfish or any of its clients can earn cachet through association with an up-and-coming artist, so much the better.”

What interests me is the idea that the traditional recording industry distribution model is broken.

Razorfish US have demonstrated that digital, and specifically social media, can play a critical role in bringing music to a mass audience. But for me, it’s a question of what comes first: the lagging of traditional record labels in their push model, or the growing prominence of the push model by the socially-connected. And further, how do you monetize this?

YouTube and music

Earlier this year, Lady Gaga’s manager, Troy Carter, stated that Lady Gaga “create (s) music videos for YouTube.”

When you look at some of the statistics with video views on YouTube (Bieber’s catalyst video achieved 55 millions views), it does make sense for artists to create their content specifically for social media.

Even Susan Boyle, the unlikely hit sensation of 2009, has demonstrated the value of YouTube in achieving success. Yes, she used the reality TV platform to position herself in-front of a National audience, but it was the ‘cloud’ that really propelled her into success. Her audition video saw more than 100 million views in two weeks. A social movement grew, seeing her favoured to take out the title of ‘Britain’s Got Talent’ winner (she came runner-up).

Yet despite the massive amount of exposure, and social currency, Susan is purportedly still ‘poor’, with sales figures of her records disappointing.

Indeed, the question of revenue remains; how do you leverage the social popularity of a ‘digital artist’ and generate offline record sales. iTunes, and indeed other music-sharing platforms, are surely the key?

A digital advertising agency and sustainable music: the future?

But what if the revenue aspect of music wasn’t up to ‘traditional record sales’ and was instead based on another traditional revenue stream: advertising?

When we’re talking about artists achieving video views in excess of 50 – 100 million views, the opportunity for advertising revenue is very real. We know YouTube and Google have demonstrated the ad potential for high-view videos, and indeed Sony is purported to be a revenue-sharing partner with YouTube.

So, perhaps that’s where digital agencies such as Razorfish can really create a new paradigm in music. No longer do we need to pay for the right to access content (in this case the actual songs of artists such as AM), to achieve success and sustainability for an artist or the industry.

The value Razorfish, and indeed this model, presents to the industry is in its roots – creating content that resonates with a social audience, and generating revenue for their client, which in this case is a musician.

This model could allow artists from around the world to build social networks of fans who share their enthusiasm for independent artists with others through platforms such as Last.fm. But instead of relying on a dwindling group of large music publishers and radio stations building markets for a handful of artists around the world and attempting to generate ‘record sales’ in what is surely a digital world of music consumption, we actually turn it upside down.

This is essentially what the Spotify model could and should be. The Freemium version (a live online streaming platform for music) enables you to listen to playlists of your favourite artists, with advertising in-between songs. The gap in Spotify, however, is that the advertising revenue doesn’t go to the artist.

So, what if we marry this platform, the popularity of peer-based music sharing platforms like Last.fm, with advertising-generating platforms such as YouTube and even Google, to create a new wave of accessible music?

I believe this is what MySpace Music was seeking to do, yet by perhaps failure of its own brand, hasn’t really seen success in its advertising subsidized streaming platform.

And this is, in my opinion, a key opportunity for a digital agency such as Razorfish; it’s our job to always remember that we must focus on content and sharing. Facilitating brands, ideas and messaging – or in this case, music – into digital environments where the community and artist can form a true symbiotic relationship, based on accessibility, sustained by partners and advertising revenue-sharing.

And as a side note, I for one (as a Razorfish employee) am excited about the opportunity to work with up and coming Australian artists based on the pioneering by our US partner. If you’re keen, you can email me 😉

So, what do you think?


Social Media Monetization and Revenue by Laurel Papworth

September 29, 2008

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On Friday at Web Directions South 08, social networks expert Laurel Papworth gave a fantastic presentation on the Monetization of Social Media.

In her words: “This article is about the various social media monetization strategies and the powerpoint presentation (embedded) shows some case studies and examples, including social network size, the revenue streams, valuations and profits.”

Check it out here.