New Approaches to Music Marketing

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Table of Contents

Introduction
Online music marketing
The challenge to music industry players
Music mixes
Peer-to-peer networks
Issues of marketing music
Conclusion
References

Introduction

There is a whole new revolution taking place silently; – from days when music lovers hung on to gramophones and proudly displayed their collection of LP records, we have reached an age when personal computers are being converted to digital jukeboxes that can hold thousands of songs and every music lover is given the power to access music from all over the world. While this transition sounds a delightful one, the music industry is finding it increasingly difficult to adapt to the evolutionary changes in the way music is being streamed, stored, listened and propagated, creating problems for the marketing of music as well. The advent of MP3 formatting of music files has reduced the dependence of music lovers on tapes, vinyl records, and compact discs. The internet has infinitely altered the music landscape and ushered in new dimensions to the way music is being broadcast. There is access to a much wider selection of music and this, in turn, has created what can be called the music marketer’s challenge – selling digitalized music to a global market.

Online music marketing

For maximization of sales and reach, music should cater to an audience spread across the globe. The target audience is out there spread all over the planet. Once the target audience is spotted, the four P’s of the marketing mix namely the product, price, place, and promotion should be reinforced along with a shift towards the four C’s of online music marketing:

customer solution, customer cost, convenience, and communication. Secondly, the fact that digital music needs to be marketed in a different way than traditional music needs to be considered.

The advent of mp3 formatting and the internet can provide higher profit margins to music companies if only they can tap the market using worldwide distribution technology. Distribution through the internet is far less expensive than physical distribution at music stores mainly because, bands don’t need to have contracts with record companies. Further internet record labels typically offer royalties of 50%, compared to the 12%-15% typically offered by the major labels (Strauss, 2002, page 1). The internet is a distribution channel and is very strong on the delivery front rather than one payment. But this is bound to change in time with advances in software integration technology. While record labels act as an intermediary between buyers and sellers of music, the internet opens the door to a platform in which buyers and sellers can directly trade their stuff (Strauss, 2002, page 1).

The advent of CDs made it easy for mainstream listeners to easily rearrange the tracks of their albums. However, it was digital distribution and the Internet that finally released songs from the album format and opened up the concept of dematerialized music through digital distribution and the Internet. Recent success stories of mix taping are evident in Salon.com, the Washington Post, the Utne Reader, and The Guardian among other publications (Drew, 2005). On the web, sites such as Art of the Mix, Tiny Mix Tapes, and Mixtaper.com there is access to several Mp3 files promoting mix taping. Starbucks and its Hear Music subsidiary sell music compilations at their coffeehouses and on the Internet, advertised with the tagline, “Think of them as mixed tapes from a friend.” Sterne Jonathan (2006) observes that it is the nature of digital music that is allowing the dematerialization and regrouping of music during marketing. More affordable equipment for music production and reception is at the same time creating opportunities for new players in the music industry and challenging the dominance of old players (Bemis, 2004). In this chaotic environment, both old and new music industry players are trying to position themselves and reassert their dominance through music compilations (Drew, 2005).

Digital music is mostly about MP3 file sharing. Today, as a result of digital distribution and affordable recording technology, there are now more and more sources of music. It has been found that in 2002 when file-sharing was at its peak, over 33,000 new albums were released by major and independent labels according to Soundscan, a 5.4% increase over 2001. And this number does not include the thousands of independent records not registered by Soundscan (Christman; Nelson, 2003). Thus, it is true to say that the digitization of music has created a huge surplus. Over the past several years, music fans have had access to free or inexpensive music from several sources. Free and legal music downloads can be accessed at hundreds of band sites and MP3 weblogs. Hundreds of thousands of songs are available at a dollar apiece at music downloading services. Such services have marketed music by seeking out consumers. The stock music download cards alongside phone calling cards at stores like Target and Rite Aid and offering free downloads with Big Macs, Whoppers, Pepsis, Heinekens, and Slurpee cups. CDs are also sold cheaply at your local sales. Thus some of the strategies used by the music industry seem to be effective targeting and competitive pricing.

The challenge to music industry players

In this global digital environment, the challenge to music industry players is twofold. First, with so much music available, big record companies need to hold on to existing listeners and also come up with ways of reaggregating music that will regularize sales and lend them some competitive edge in the crowded music marketplace. A little-noted milestone of music marketing in early 2004 was that major labels started releasing singles online along with the first release of the song on the radio, lots of time before the album is released (Nelson, 2003). The single song release demonstrated that the music industry was under a crisis in the context of album sales and that music labels were determined to beat file sharing by any means. But early single releases also have their disadvantages. They can impact album sales negatively and sufficient profits cannot be generated on sales of singles. Hence, some artists have defied the trend by restricting the availability of their music at downloading services to “album only” format (Pareles, 1989).

The album download method is not very popular as more than half of the tracks downloaded from these services are purchased individually from the albums from which they originate. Therefore there is a need for music companies to find innovative ways of packaging music that will generate revenue streams at greater than 99 cents a track while also accommodating the wide-ranging tastes and shortening attention spans of consumers (Drew, 2005). One solution to this problem is through music compilations. Music retailers both online and offline see opportunities in reaggregating music in the form of series releases such as “Now that’s what I call music”. Music compilations are further encouraged by threats of file sharing and increased competition which push labels to strike new licensing arrangements. These licensing arrangements expand the possibilities for compilations and allow new parties to join the music business. These new vendors include music downloading sites, retail stores, satellite radio companies, magazine publishers, and many other parties (Drew, 2005).

Traditionally Marketing music used to be a matter of creating the music and then trying to push the music towards the consumers through live shows, posters, reviews, interviews, and autograph sessions, and so on. Now, in the digital age, the consumer is the “king” according to marketing guru Philip Kotler and he needs to be pulled by the music and enticed into buying the music. Music needs to be more consumer-oriented. Hence the 4P’s of the traditional marketing mix needs to be redefined in the digital context. The product should be consumer-oriented, the place should be convenience-oriented, the price should be cost-effective, and promotion should be consumer-driven. This is the dictum to be followed in online marketing. For ideal music marketing on the internet, there should first of all be an individual web page where there are on-demand video and audio samples, references, and photos (Fox, 2004). A brief biography along with the lyrics of the songs would be of added value. For this site to function well, attention should be paid to the following areas:

Availability of reliable and affordable hosting that includes streaming audio and video.
Design and copy (text) that convinces the potential customer to book
Secured credit card processing to take deposits and payments
High search engine rankings for key search terms

For all these requisites, one should align the website with a booking search engine. Internet music promotion through search engines lets the consumers find the music. This also solves the problem of searching for the target audience. A booking search engine has thousands of listings of musicians all in one place. By using the music marketing search engine, there is bound to be maximum reach with minimal effort. There is also an economic advantage in using the music marketing search engine. There are a lot of expenses involved in setting up an individual website to sell music: domain name registration, hosting, eCommerce merchant account, web design, and copywriting, and search engine optimization. On the other hand, when the musician registers with a music booking search engine, there is no other expenditure apart from the registration fee. Internet booking search engines are the modern music marketer’s major asset.

Music mixes

Though the music industry is usually associated with a common network of producers, distributors, and retailers, with the advent of digital music, one finds more companies are becoming involved in the music industry and engaging in selling music, particularly mixes. Such mixes are often sold cheaply or given away as promotional vehicles for the companies’ main lines of products. The history of such branded mixes can be traced back to that of programmed music, which began with Muzak’s notoriously bland, symphonic arrangements of popular tunes (Drew, 2005). Muzak, during a post-war, behaviorist period in time, tried to produce some smooth relaxing remixed music that would silently encourage listeners to shop or work.

In1997, Victoria’s Secret, a lingerie company packaged and sold tapes of the store’s musical programs. With more vigorous music licensing by record companies, this kind of packaging and commodification of branded mixes has boomed over the past decade. One of the companies that lead in selling branded mixes is Rock River Communications, which packages mix CDs for a long list of merchandisers including Pottery Barn, Restoration Hardware, Williams-Sonoma, and Volkswagen. These mixes aim at complementing the lifestyle dictated by the products of the company. For example, Volkswagen’s Street Music goes for an eclectic, modern vibe, with bands like Hooverphonic and Spiritualized. These branded mixes are synergized with the companies’ larger marketing campaigns: Trio’s “Da Da Da” and Nick Drake’s “Pink Moon,” both on Volkswagen’s Street Mix, have also both appeared in Volkswagen TV commercials (Drew, 2005).

The branded mix is more of a promotional model than a moneymaking one. Here the music is used to promote the company name. In so doing the music is also marketed effectively. Proctor & Gamble’s Cover Girl brand recently formed its music label along with the collaboration of Atlantic Records and stocked stores like Sam Goody and Media Play with its CD titled “Hear the Love”. The CD is targeted at Cover Girl’s young, female customers and has music by artists such as The Corrs, the Donnas, Brandy, and Queen Latifah (Drew, 2005). A purer illustration of branded mixes as promotional tools is the rising number of CDs packaged with magazines. Magazines such as Blender and Spin have often offered samplers of indie bands. Rolling Stone recently included a CD for the first time to promote its “Top 500 Albums” issue. But more niche-oriented, “alternative” magazines now offer promo mixes as well. For instance, the Southern culture magazine Oxford American and Brooklyn’s The Believer have accompanied their music issues with complementary samplers (Drew, 2005).

These promo mixes seem to suggest that pop music is likely to move towards a sponsorship model of support. As music critic Ann Powers notes, “There’s a kind of theory floating around that one-day music will not even be sold. What will be sold will be burgers, backpacks… stores will just sell stuff, and the music will be given away for free” (“Pop for Sale”) (Fox, 2004). Yet this sponsorship model is likely to court controversy: in the UK, where packaging CDs with magazines and newspapers is a longstanding practice and are known as “covermounts”. There is severe opposition to this practice of giving such music. However the practice has grown among retailers and artists’ agents. “The message you get from a newspaper is music is free. It devalues all of our artists’ catalogs,” says John Glover of the Music Managers Forum (Drew, 2005). Some record companies have stopped giving their music for such purposes. But some people do continue this practice noting that at least legal samplers of music yield licensing fees, compared to the music being freely downloaded. Moreover, some artists, eager for exposure in a crowded music market, are only too happy to appear on such sampler collections.

Peer-to-peer networks

Marketing music on the internet can be extremely difficult as there are peer-to-peer networks such as Napster, Kazaa which allow younger fans who are technically savvy to share their music with people across the planet for free. Online offerings from the five major international music distribution companies that account for 85%-90% of the music market worldwide have not been very successful in attracting customers. To make the music more affordable for the consumer, music companies are now switching over to selling track-based music through third-party Internet platforms such as MP3.com, Best Buy Co, and Tower Records instead of having them pay a monthly subscription fee for downloads. In this regard, one should note the tremendous success of iTunes, the innovative music store of Apple. Currently, iTunes is available only for Apple McIntosh computer users. Consumers can download any amount of music at all times, for just 99 cents a track. As this business model has proved to be successful, many more music companies are trying to adopt the same.

Another class of commercial mixes is pitched more based on the personal appeal of its celebrity sources. Apple’s iTunes added its “celebrity playlist” function in October of 2003 and, as of early 2005, over 150 celebrities had contributed playlists (each of which can be purchased with one click). It is becoming practically essential for up-and-coming musicians and bands to post their mixes on iTunes, though more established musicians, as well as other celebrities, put in appearances. While the song choices of these celebrities are interesting, the notes that accompany them are far more appealing. Folk-rocker John Mayer tells us of Dido’s “White Flag”: “The lyrics in this song are amazing. They help me understand how a woman thinks and feels better than anything I’ve heard in years. That kind of ‘wounded but still standing there’ thing. It kills me.” And Sheryl Crow effuses about Elton John’s “Someone Saved My Life Tonight”: “No matter how old I get, that song still astounds me. That song, for me, just spoke volumes about thinking about life, about vulnerability.” The therapeutic discourse in these testimonies aims to invest the music with an authenticity that gets beyond advertising patter. However, it cannot change the commodity status of music.

Inspired by the success of iTunes and several downloading websites on the internet, these owners of the websites have tried to improvise by adding more content aimed at bringing users back to the site repetitively. Among the most popular such features are those that purport to create a “community” among users. In April of 2004, with the release of iTunes 4.5, Apple unveiled its style of marketing music. It released a user-oriented mix function, called iMix. Here, users can also rate each other’s mixes on a 1-5-star scale, and top-rated mixes are highlighted on the iMix main page and artists’ pages. And, the listeners can purchase songs from any mix or purchase the entire mix with one click. As of February 2005, with iMix up and running for almost a year, its register shows about 230,000 total mixes and 850,000 total votes. This is also a new approach to marketing music.

When a listener submits an iMix at iTunes, he is asked to refer a friend. This allows more people to know about iMix. iMix is the legal version of Napster and combines subscription streaming and pay-per-song downloading, highlights “community” features even more than iTunes, and tries to mimic the peer-to-peer connectivity of the original Napster in a profitable environment. At iMix, one can also browse other subscribers’ collections and see what they are listening to. And one can easily send playlists to other users and stream or purchase the lists they send; Services like iTunes make hundreds of thousands of tunes available for cheap and easy downloading, and their mixing features offer legal, for-profit options for compiling and exchanging music. This trend in music distribution has several troubling implications. Specifically, commercial mixes commodify music and then, they have the potential to restrict the range of musical choices available for mixing.

Issues of marketing music

One of the major issues in marketing music in the modern digital age is the issue of copyright. The major formats of most music products incorporate some variety of digital rights management that restricts the copying and transfer of music; none of them traffics in the more open format of MP3s. The anti-piracy efforts of music industry lobbyists center on MP3 file sharing over the Internet. However, while the widespread sharing of music files threatens to undermine profits in the record industry, the Internet also offers considerable opportunities. Through online distribution, record companies have the opportunity to decrease their costs for inventory, manufacturing, and distribution as well as artist development (Fox, 2004). Potentially, the Internet can increase both demand for and consumption of music, mostly because it is easier, quicker, and more flexible for consumers to find and acquire the music they want as well as to discover new music and artists (Altinkemer and Bandyopadhyay, 2000). Ever since the major record labels started to license their music to legitimate services such as Apple’s iTunes Music Store, the online music market has started to take off. By 2008, Forrester Research estimates, online music will amount to 30% of the total sales of recorded music in Western Europe, and 33% in the US (Bernoff, 2003).

The challenge now is for record companies and providers of online music services to find ways to compete effectively with free but unauthorized P2P networks and market themselves in the new, service-based environment. When viewing online music as a service, a central issue is an intangibility, which means such products cannot be physically touched and are hard to define (Featherman and Wells, 2004). Products with a high degree of intangibility tend to be high in so-called experience attributes and credence attributes (Styven, 2007). Experience attributes allow a product to be evaluated only after purchase or during consumption. Credence attributes cannot be fully evaluated, even after purchase and consumption, which could be due to the customer’s lack of knowledge or skill (Styven, 2007). Information products such as digital music are high in experience attributes because consumers must experience these products to be able to evaluate their quality (Shapiro and Varian, 1998). In addition, music also carries a lot of credence qualities. The physical intangibility that goes hand in hand with experience and credence attributes makes such products abstract and thus difficult for the average consumer to grasp and understand (Hoffman and Bateson, 1997).

When customers have trouble defining and visualizing the product before purchase, it is not only physically intangible but also mentally so (Styven, 2007). Digitization of products leads to an increased abstraction, which according to Featherman and Wells may cause adverse reactions and beliefs that the content is artificial and not authentic. A good example is a decrease in exchange value that has resulted from digitization and online distribution of music, as people do not want to pay as much for a product (song download) they perceive to be of less value than the physical form (e.g. CD single or album). In addition, considering the proliferation of P2P networks and the firm belief of many participants that there is nothing legally or morally wrong with sharing and downloading music in such networks, the exchange value of music files is often close to zero. A commonly used argument is that downloading from unauthorized file-sharing services is not equal to stealing music because the original file is not used up or changed when a file is downloaded. Due to the inability to evaluate an intangible product before purchase, consumers experience more uncertainty than before buying tangible products (Styven, 2007)). This uncertainty also means the risk perceived by the consumer increases. For example, the customer cannot be certain of whether the sound quality of the audio file is acceptable, whether there is a risk of breakdown during the downloading process so that the file is not downloaded in its entirety, or whether transaction routines for payment for the file are safeguarded from intrusion.

To create value and compensate for intangibility, online music services utilize tangible cues in the form of pictures, physical symbols, and facts. Music videos are also a tactic used to sell music in this regard. Images of album covers and artists are shown in connection to the songs, with the website also usually providing facts about the album along with a list of all available music by the particular artist. Some services, such as iTunes, Audio Lunchbox, and Magnatune, offer the possibility of downloading and printing out album covers. Many of the services provide editorial content that adds some further tangibility. For example, Sony Connect and iTunes have artist biographies and album notes, while Real Music Store and RealRhapsody provide staff picks, artist biographies, and album reviews. Napster has an online magazine with articles on artists and music styles and even a crossword.

Conclusion

In general, marketing music in the digital age has been revolutionized. The format of music that is being listened to is different today and hence there are differences in marketing as well. While the internet seems to be the base for selling music these days, it must also be said that music in CD form is also popular. There are problems in these new approaches to marketing music as well. However, with perseverance, it is possible to overcome these obstacles to marketing digital music worldwide.

References

Altinkemer, Kemal and Subajyoti Bandyopadhyay (2000). Bundling and Distribution of Digitized Music over the Internet. Journal of Organizational Computing and Electronic Commerce. Volume 10, Issue 3 (2000): 209-24.

Bemis, Alec Hanley (2004). A Small New Future. L.A. Weekly. 2004.

Bernoff, Josh. From Discs to Downloads. Cambridge: Forrester Research, 2003. Berry, Leonard L. and Neeli Bendapudi. “Clueing in Customers.” Harvard Business Review 81.2 (2003): 100-06.

Christman, Ed (2003). Average Sale of Albums Dropped in ’02 as Labels Released More, Sold Less. Billboard, 2003: 9.

Drew, Rob (2005). Mixed blessings: the commercial mix and the future of music aggregation. Popular Music and Society. 2005.

Featherman, Mauricio S. and John D. Wells. “The Intangibility of E-Services: Effects on Artificiality, Perceived Risk, and Adoption.” 37th Hawaii International Conference on System Sciences. Hawaii, 2004.

Fox, Mark (2004). E-Commerce Business Models for the Music Industry. Popular Music and Society 27.2 (2004): 201-20.

Hoffman, K.Douglas and John E. G. Bateson. Essentials of Services Marketing. Fort Worth, TX: The Dryden Press, 1997.

Nelson, Chris (2003). Counting CD Sales Isn’t an Exact Science. The New York Times. 2003: C8.

Pareles, Jon (1989). Homemade Tapes Can Be the Life or Death of the Party. The New York Times. 1989: H24.

Shapiro, Carl and Hal R. Varian. Information Rules: A Strategic Guide to the Network Economy. Boston, MA: Harvard Business School, 1998.

Sterne, Jonathan (2006). The MP3 as Cultural Artifact. New Media and Society Volume 8, No. 5, 825-842.

Strauss, Neil (2002). Record Label’s Answer to Napster Still has Artists Feeling Bypassed. New York Times. Web.

Styven, Maria (2007). The Intangibility of Music in the Internet Age. Popular Music and Society. Volume: 30. Issue: 1. 2007. Page Number: 53+.

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