Beyoncé’s 2013 Video Album Release and Distribution Strategy

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Table of Contents

Case Summary
Case Discussion
Partnership Between Sony Music’s Label and Columbia Records
The Function of Risk, Time and Cost Within the Beyoncé Distribution Chain
Improvement of Beyoncé’s Distribution Operations
References

Case Summary

The case study presents an overview of Beyoncé’s 2013 video album’s release and distribution operations. The Parkwood Entertainment company, with Beyoncé as its founder and chief executive officer, launched a project of releasing a surprise album that would be initially released via digital means and contain music videos for each song on the album. In close collaboration with record companies Sony Music’s label and Columbia Records, Parkwood planned to present no information about the upcoming album before its release date. The problem raised in the case study is the disruption of the traditional approaches to pre-release promotion, the alteration in the integration of digital and physical album release tactics, and the reliance of advertising goals on the viral nature of social media content.

An implicit problem that arises from the case is related to an artist-led company’s level of authority when making risky decisions in the highly competitive music industry. This fact amplifies the level of concern about the outcomes, including the audience’s perception, revenue-generating scale, physical distributors’ reaction, and the overall technical feasibility of the musical content distribution. The current case study is aimed at analyzing the concerns related to the visual album release and distribution strategy, the partnership between record companies and the artist’s company, and the function of time, cost, and risk. Recommendations for possible improvements are presented based on the considerations of the theoretical framework.

Case Discussion

As the case demonstrates, the ambiguity behind the selected distribution strategy undermined the business planning and forecasting of the project. To argue for or against the correctness of choice, one should analyze the distribution strategy against the background of the music industry. Firstly, the digital release of the album without traditional media pre-release promotion was validated by the tendencies in the industry on the general scale. According to Vonderau (2019), the process of digitalization has significantly transformed the music business during the past decades. Access to singles and albums via specially designed platforms that either sell downloads (as iTunes) or provide streaming by means of subscription (as Spotify) allows users to obtain easier and more enjoyable experience with music. Another argument that serves to demonstrate the validity of the selected distribution strategy is the high rankings of Beyoncé image around 2013. As the case shows, her popularity was on the verge due to the documentary release, appearance on media, and a successful tour (Elberse & Smith, 2014). Also, such tactics allowed for minimizing the risk of leakage because no content was presented in the form of a single.

On the other hand, the selected strategy for album distribution is incorrect due to its inconsistency with the market indicators of that time. As the appendices of the case show, as of 2013, leading record companies in the USA had a much higher market share in physical album distribution than in digital form (Elberse & Smith, 2014). Also, mere reliance on iTunes during the first week of sales was a risky endeavor when viewed from an international perspective. Indeed, as the data on the audience’s digital consumption of music shows, people in different countries have different rates of paying to download music and using music subscriptions (Elberse & Smith, 2014). While the download approach is dominating in the USA, mere iTunes release would not be as effective in other countries. However, if analyzed within the context of Beyoncé’s albums sales, her US-based sales constitute more than half of her worldwide sales, on average. Therefore, despite some risks and concerns, the strategy choice was justified, even though it was not correct from the traditional business perspective.

The music distribution model used by the Parkwood Entertainment for Beyoncé’s visual album is significantly different from the traditional music distribution model. It dismisses all the traditional approaches to promotion and usage of classical media and physical distributors’ services. According to Rechardt (2019), the contemporary active utilization of the internet and social media had contributed to the emergence of a new distribution channel that allows an artist to connect directly with the fans and “bypass the traditional routes” (p. 41). Indeed, the traditional approach necessitates a single release before the album release, which was purposefully omitted by Beyoncé’s company to maintain the surprise connotation of the work. Also, the album was not advertised and was not announced until the actual release time, which is never done under traditional rules. The modern trends in the music industry demonstrate that “Sony Music Entertainment, Universal Music Group, and Warner Music Group transferring all the physical distribution efforts to Direct Shot, a service provider that fulfills orders for the company’s record stores” (Merkl, 2020, p. 13). Otherwise, exclusively digital distribution is prioritized, as it has been launched by Beyoncé.

Since the musical sphere in the digital age has caused a merge of art and industry, the artistic attributes of music, its appeal to the audience predetermine the revenue-generating opportunities and market share increase (Omidi et al., 2019). Therefore, to evaluate innovative release in the context of the evolving music industry, one should analyze the share of the digital album’s sales on the market. Also, since social media plays a pivotal role in the success of a release, it is necessary to evaluate the popularity of the distributed content on various social media platforms. As research shows, “social media followership, dissemination of online music videos, record sales, and popularity” determine the success of distribution efforts in the digital environment (Toma, 2017, p. 6). Thus, the transition of the distribution patterns to the digital dimension triggers the same transitioning of the evaluation approaches.

Despite the increasingly large share of digital content within the music industry, physical album distribution still remains demanded. As the case illustrates, the sales of physical albums of some leading artists in the USA constitute a large and sometimes dominant share in their total sales. For example, in 2013, Justin Timberlake’s album’s sales reached 1,370,000 physical albums and 1,010,000 digital albums (Elberse & Smith, 2014, p. 17). At the same time, JAY-Z’s, Kanye West’s, and Drake’s albums obtained more sales in digital form than in the physical form (Elberse & Smith, 2014). Therefore, the concerns about possible adverse reactions from traditional music retailers are justified because their contribution is influential. In addition, since the Parkwood Entertainment Company was not sure about the success of the album in the digital domain, the failure to generate sufficient revenue from iTunes might have necessitated relying on physical distributors. To address these concerns, the team might establish prior collaborative arrangements with the traditional retailers granting the secrecy of the project. Such an effort will serve as a precaution for the case if the digital release fails.

Partnership Between Sony Music’s Label and Columbia Records

Unlike the traditional release operations where record companies play the lead role in artists’ industry-related decision-making, Beyoncé’s Parkwood Entertainment managed to dictate the rules although it engaged in the partnership with Sony Music’s label and Columbia Records. Despite the numerous risks, they should not have signed off on the launch strategy but might suggest several changes to the initial plan. Since the making of the album took a year and a half, the efforts put into it should have been secured by some arrangements with physical distributors prior to release. Also, some definite promotional plan might have been developed as an alternative plan in case the social media does not respond to the surprise album as it had been expected.

As for the considerations these developments suggest about the role and power of superstars like Beyoncé, it is evident that the shift toward digitalization allows artists to obtain more control and independence (Thomas, 2019). With more rights for intellectual property allocated to the artists who perform within the domains of their own companies, individual performers manage to influence more decisions, although they share responsibilities with all involved stakeholders (Gani, 2019). Thus, record companies tend to lose the intensity of their influence in the changing environment of the evolving music industry.

The Function of Risk, Time and Cost Within the Beyoncé Distribution Chain

The case of Beyoncé’s innovative visual album release is characterized by a multifaceted distribution chain that vastly depends on the proper functioning of risk, time, cost, and such additional parameters as a partnership, confidentiality, and stakeholder involvement. In terms of risk, the project’s innovative nature threatened the predictability of the outcome, since no traditional promotional and distributing actions were initiated. The whole campaign relied on the personal brand of Beyoncé and the anticipated favorable response of the fans in social media (Gomes, n. d.). Since the work on the audios and videos for the album lasted for a year and a half, the time played a significant role. Indeed, the production time was much more significant than the time spent on promotion and release. This consideration is closely related to the cost issue because the large team that worked on the project for these eighteen months was engaged in substantial technological work that the video content demanded. Describe in detail the main considerations of the function of risk, time, and cost within the Beyoncé distribution chain and any other relevant parameters in the design of the international distribution network.

On the international scale, partnerships with worldwide social media platforms and digital music content distributors allowed for implementing the project as it was planned. Under the threat of possible leak of information that is particularly relevant to the modern music industry, the issues of confidentiality and stakeholder engagement were vital (Merkl, 2020). Thus, multiple factors were influential for the outcomes of the innovative release strategy, which only adds a significant level of uncertainty and risk to the project.

Improvement of Beyoncé’s Distribution Operations

The high costs spent on the production of the album that contained 17 videos and 14 audio tracks intertwined with the promotion time constraints imposed by the complete secrecy before the actual release and the unprecedented nature of the project contribute to the uncertainty of the business outcomes. Neither Beyoncé in her earlier carrier nor the music industry of the world, in general, has ever implemented such a risky project. According to Moreau (2013), the theory of disruption can be applied when providing ways for improvement. Since, in the time of technological advancement, digital domains play a decisive role, the utilization of disruptive techniques may accelerate the development and help achieve business goals. However, since Beyoncé relied primarily on the digital world, it might be beneficial to secure the outcomes with arrangements with physical distributors and plan a detailed post-release promotion campaign that would reach beyond social media.

References

Elberse, A., & Smith, S. (2014). Beyoncé. Harvard Business School, 1- 27.

Gani, D. M. W. (2019). Negotiating like a diva: Preserving creative autonomy in the music industry. Wolverhampton Law Journal, 3, 37-47.

Gomes, E. (n. d.). Beyoncé – game changer, brand builder, innovative marketer [Data set]. Web.

Merkl, A. (2020). How technology changed the rhythm of the music industry [Doctoral dissertation]. Louisiana State University.

Moreau, F. (2013). The disruptive nature of digitization: the case of the recorded music industry. International Journal of Arts Management, 15(2), 18-31.

Omidi, A., Arbatani, T. R., Norouzi, E., & Saraji, M. K. (2019). Fostering digital music industry by innovative distribution strategies: The case of Iran. International Journal of Academic Research in Business and Social Sciences, 9(8), 78-93.

Rechardt, R. (2019). Transformation of the music industry: Managing marketing channels in the digital age [Master’s thesis]. The University of VAASA.

Thomas, S. (2019). Mutually beneficial publisher and artist regulated distribution model for the niche music industry. Journal of Creative Industries and Cultural Studies, 3, 32-45.

Toma, C. (2017). How emerging bands find ‘success’ in the contemporary music industry [Master’s thesis]. The University of Huddersfield.

Vonderau, P. (2019). The Spotify effect: Digital distribution and financial growth. Television & New Media, 20(1), 3-19.

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