The following is an excerpt of the talk show programme titled 'INSIDE THE MUSIC BIZ' co-hosted by Thaddeus "Teddy" Laidley every Wednesday at 3:30 to 4:00pm. The programme is aired on HOT 102 FM during "THE HOT MIX", with Richie B 2:00 to 5:00 PM. 'INSIDE THE MUSIC BIZ' is aimed at offering insights into the music business for aspiring artistes and industry personnel
This week we continue the discussion on marketing the artist, but this time the marketing plan will not be analyzed as a static instrument, instead it will be pictured as the blueprint to navigating this vibrant and dynamic industry, driven by technological advances and the digitization of music.
Trends in global music sales
- More than 500 online music services available in over 40 countries at the end of 2008
- Portable player (iPods, Zune, etc) sales grew 15% in 2007 to 140 million
- Record companies’ digital music sales are estimated to have increased 53% in 2007 reaching 1.7 billion legally downloaded tracks
- Social networking sites exploded in popularity and advertising-supported models such as imeem emerged as a potential revenue stream for record labels. In 2007 and 2008 major record labels signed agreements with imeem, youtube, kyte, myspace music, etc in exchange for a percentage of ad revenue
- There were 220 million ring tone purchases in 2007 resulting in sales of $567 million.
Based on these global trends, the shift to digital has redistributed importance up, down and across the traditional marketing plan, creating new areas of priority and in some instances allowing for a significant reduction in your marketing budget.
From the outline provided last week, I have selected four key areas of the marketing plan that have taken on new life based on changes in the way consumers interact with music. Of course, the Jamaican (and by extension the Caribbean) market has its limitations in applying some of these elements and so care should be taken to combine new strategies with those that have proven efficient in local markets. What is important is that anyone creating a marketing plan for an artist must approach these areas with not only creative ideas but innovative ones.
It’s more difficult to identify the target market of a new artist. Without a sales track record you have to make some assumptions about the artist. Try examining market characteristics that relate to other artists who may be perceived as similar or who would appeal to a similar market.
Get to know your clientele using niche-marketing strategies instead of trying to push your music on everyone all at once. (A niche market is group of consumers that all share a very specific need or want.) Major labels as well as independents are now pumping money into building direct artist-fan relationships to be able to identify specific interests and needs so they will be better able to market current and future products.
An aspect of successful marketing involves knowing how to communicate with your market. It is not enough to know where they are and how to find them, but you must also have an understanding of how to reach them with your message. Ask yourself, how does your target market discovers, access, purchase and/or download music and consider some direct marketing strategies that can establish and build a direct relationship between you and your customers. Today's best positioned companies in entertainment such as Live Nation and Myspace Music have direct contact with their music fans and are currently exploiting recommendation technology and new marketing technology to deliver new and exciting products to their customers when and where they want it.
Your objectives will also change because of technological advancements in the area of marketing. An artist can now think in terms of both objectives as it relates to physical product, building awareness about the artist and also establishing a strong general digital presence whether it is through mobile channels or web-based channels. Based on the trends above, you should never limit your artist’s objectives to live performances, and/or CD sales. For example, the financial statement of US based, Atlantic Records reported that for its last quarter it had more downloads than sales of physical CDS. They are now referred to as a download company so its objectives will now have to encompass in large part, heightened presence on the web.
STRATEGIES TO REACH OBJECTIVES
In a static marketing plan, strategies would have been limited to format channels including traditional radio, TV and print media. But today, much more innovative channels exist which constitutes - guerilla, word-of-mouth or grassroots marketing.
- email newsletters
- fan pages
- street teams
- presence on social networking sites and websites
- podcasts and webcasts
- streamed audio and video
- internet radio
Today's artistic consumer demands more from all artists with a presence on the internet and so it is important to use these mediums to create a rich, interactive destination that proves the value of your product.
MARKETING MIX PRODUCT
Differentiation is more important today for an artist than ever before. With over 1500 indie labels in the US alone and the big 4s having 80% control of the market, an artist must stand out from the pack with their music in order to get a record deal and to be considered marketable.
Price in the music industry has been pretty much standardized based on a comparable pricing strategy where market leaders have created a market expectation price, for example. US 99 cents for a single download. The recent removal of Digital Rights Management (DRM) control from all 10 million tracks in the iTunes musical catalogue coupled with their new-tiered pricing structure, (69 cents, 99 cents and $1.29) will possibly create new standards in prices.
PLACEMENT (DISTRIBUTION STRATEGIES)
In the Caribbean this is a question of finding an appropriate balance between traditional brick-and-mortar strategies and the click-and-mortar strategy (Combination of traditional (brick and mortar and online establishments). Major labels have always distributed records to small record shops as well as large ones such as the Virgin Mega Store. But these mega companies, Wal-Mart, Target, Best Buy and Circuit City have started to limit the available shelf space for CD’s, which limits the variety of music they can carry. Independents now don’t have to try to sign agreements with these companies to get worldwide distribution of their music – they can utilize aggregators for online distribution of music, such as The Orchard, IODA, IRIS, and TuneCore. These entities distribute music to every major digital music retailer including iTunes, Amazon, and Rhapsody. You can also choose to sell your music on your own via Snocap or CD Baby.
Consumer advertising today is no longer defined by PULL strategies - where a new product is heavily advertised before its general distribution, to create a pent up demand which draws customers into retail stores when it is made available. To achieve this demand an effective mix of these components and tools are important.
a. Press releases
b. News stories
c. Feature stories
d. Magazine covers
e. TV appearances
f. Direct mail
3. Radio Promotion
a. Satellite radio
b. Internet radio
c. Terrestrial (traditional) radio
4. Retail Promotion
a. In-store events
b. POP or Point of purchase materials
c. Listening stations (set up in stores for customers to get a taste of your music)
d. Print advertising
5. Music Videos
This is still an important promotional tool. The rise of Youtube, Kyte, Auditude and other online video outlets has led to an increase in a more edgy and alternative video called the viral video.
6. Internet marketing
The avenues are too numerous to list - Music Nation, Reverbnation, Kyte, Purevolume, Imeem, Myspace, Myspace Music, Bebo, Facebook(fan page), iLike, Last.FM, Taxi (Publishing), Sonic Bids(bookings), Topspin, Pandora, Indieclick, Auditude, MOG, Music.com
1. GATHER & ANALYZE INFORMATION about you (your product/company/service), the competition, customers, and all industry players. Be sure to research Internet marketing techniques. This information will help you to identify your target market.
2. VERBALIZE YOUR MAIN CHALLENGES
Your plan should answer, “How do I address these challenges?” Think in terms of your existing opportunities and what you want to achieve.
3. DEVELOP YOUR OBJECTIVES
Objectives address the big picture, therefore think in quantifiable/measurable terms when developing your objectives – grow X% by Y date, launch A by B date. And make them realistic and achievable.
4. CREATE STRATEGIES
These are the things you do to achieve your objectives and can include things like launching a prolonged campaign to include advertising, and online promotions.
5. CHOOSE MARKETING PROGRAMS (TACTICS)
These programs bring your strategies to life. Be as creative as ever.
Try to establish beneficial business relationships, and choose a marketing mix that directly appeals to your target group.
Research and contribution done by: Simone Harris BSc., MBA, MSMBA
Director of Business Development at Hoot Wisdom Recordings LLC (FAU)
Full-time Florida Atlantic University graduate student (Music Business)
Teddy Laidley is an entertainment consultant with years of experience with touring musicians and event production. Email him with your comments suggestions, and questions at:
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