Tag Archives: future of music

Availability is king – Music streaming service as described in Little Brother (published 2007)

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Finally had time to start using my Kindle this Christmas and I decided to break it in by checking out something by Cory Doctorow. Based on a recommendation I received long time ago I have had his first novel “Down and Out in the Magic Kingdom” on top of my Amazon wish list for a very long time.

But unfortunately the book was not available for purchase as the publication date here all of a sudden was January 31, 2013. Is not it typical? When it comes to online content I, as pretty much any consumer, want what I want when I want it – not on January 31 – or any other release date for that matter. “Down and Out in the Magic Kingdom” has been out in Canada since 2003. It should be available for me on my Kindle in 2012.

But luckily, as Cory Doctorow release everything under the Creative Commons license, I was able to download a version for free on the author´s own website. While I was there I also decided to check out his first young adult novel “Little Brother“, which actually was the book I ended up reading this Christmas.

LIttle Brother by Cory Doctorow

Long story short: I really enjoyed reading Little Brother. It made me sort of wish this book would have been available for me when I was a teenager, but it was also a very good read even though I´m no longer a young adult. As a very passionate business analyst for a music streaming service (yup, that´s what I do for a living), I especially found this part of the book to be very amusing (in a good and impressive way considering the fact that this book was written as well as published in 2007):

indienet — all lower case, always — was the thing that made Pigspleen Net into one of the most successful independent ISPs in the world. Back when the major record labels started suing their fans for downloading their music, a lot of the independent labels and their artists were aghast. How can you make money by suing your customers?

Pigspleen’s founder had the answer: she opened up a deal for any act that wanted to work with their fans instead of fighting them. Give Pigspleen a license to distribute your music to its customers and it would give you a share of the subscription fees based on how popular your music was. For an indie artist, the big problem isn’t piracy, it’s obscurity: no one even cares enough about your tunes to steal ‘em.

It worked. Hundreds of independent acts and labels signed up with Pigspleen, and the more music there was, the more fans switched to getting their Internet service from Pigspleen, and the more money there was for the artists. Inside of a year, the ISP had a hundred thousand new customers and now it had a million — more than half the broadband connections in the city.

That was (legally speaking) futuristic back in 2007, but pretty much a reality already in 2008 – although it sort of wasn´t mainstream in Scandinavia before 2010, and music streaming/all you can eat music services is still on an early stage in North America as well as Scandinavia.

The music industry, however, has come a bit further compared to the book industry when it comes to making sure everything is legally available for the end consumer through the same service (“the more music there was, the more fans switched to getting their Internet service from Pigspleen” – a scenario illustrating the importance of musicians being available on music streaming services as well as authors/publishers selling their books on the Kindle store and similar services). Luckily the book industry have writers such as Cory Doctorow – just as the music industry is lucky to have musicians as well as label reps understanding the new music economy.

The end of this “Little Brother-streaming-service” story is that I have already pre-ordered the follow up book “Homeland”, making sure it will be auto-delivered to my Kindle on February 5, 2013. And even though everything is available for free on his website I am definitely planning on purchasing many more books by Cory Doctorow (I´m hereby a fan). This is how the economy of “free” works.

And what can we learn from this? Well, availability definitely is king! And the way I see it, one may say that my first Kindle experience illustrates that in a very good way :-)

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Record labels as value adding content providers

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When in New York last week I had an interesting lunch conversation with an acquaintance that works with online marketing within a totally different business than the music industry. A topic that came up was the existence of record labels (as we know them). One of many questions was why they still exist and if they even have a basis for existence in the new music economy? One argument for why record labels should cease to exist was in relation to how the Internet (now) provides an efficient means of music distribution where a major label investment is not necessary to facilitate the distribution (David, M. 2010: 136).

Photo: CC: Shutrbug72 / Flickr

 

I definitely agree on the fact that the Internet provides an efficient means of music distribution. I also agree on the fact that a lot of bands and artists don’t need to sign with a record label to build a career. I do however still think that record labels has an important role to play in the new music economy. This new role does however not (only) involve hiring a concert booker and implement a 360 deal to their business plan as well as talking about themselves as “music companies” rather than “record labels”. In my opinion the most important role of traditional record labels today is the role of “value adding content providers”. Here’s why:

 

Wikström (2009) argues that the characteristics of the new music economy (high connectivity and little control, music provided as a service and increased amateur creativity) are driven by the digital media technologies (p. 85). These main characteristics are also highlighted in the “Opbrud” report created by the Danish consulting agency Kontrabande (2011). In this report Kontrabande (2011) points out that the development of the digital market for the media industries (film, tv, books, music, games, journalism) is characterized by little control due to fragmentation (unbundling) and individualization of traditional media content, as well as increased amateur creativity and social relevance (sharing within communities). The report also highlights the demand for trustworthy filtering of content. This due to all amateur creativity and information overload for many users (p. 4). Wikström (2009) refers to Negus (1992) when he elaborates on the fact that “the music industry is about ‘developing musical content and personalities’ and to be able to license the use of that content and those personalities to consumers (…)” (p. 17). An important point on user-generated content made by Clay Shirky (2008) is that “much of what gets posted on any given day is in the public but not for the public” (p. 90). The same goes for musical content. As already pointed out the Internet provides an efficient means of music distribution and a major label investment is not necessary to facilitate such distribution (David, M. 2010: 136).  However, more music are produced and available online than what actually reach the consumer. Wikström (2009) refers to Hirsch (1970) and theory on “preselection systems” when describing characteristics of the copyright industries’ marketing challenges. The point is that music listeners only experience a fraction of new music released. What people end up listening to (as in what ends up becoming popular) is what passes trough the gatekeepers filtering system (p. 22). The music consumers’ now need to easily be able to navigate all the music in the Cloud (Wikström, P. 2009: 175).

 

It’s no secret that the music industry has been and still is hit driven. Industry success on a major label level is most often measured by looking at the music charts (who’s number one). Traditionally what has reached the top of the charts and the audience is what music labels have invested a lot of money in (TV-advertising etc). However the increase in music production and songs available online has made it necessary for the music labels to pay for exposure in more outlets in order to keep the audience on a constant level. And as we know, the decrease in CD sales has lead to an additional reduction in income. This way it is without doubt that the traditional way of music marketing and receiving attention for certain artists and musical projects will have a negative impact on profitability. It is therefore crucial for the music companies to lower investments, spend the marketing money more wisely and rely on music fans “to create a good buzz”. (Wikström, P. 2009: 91-92)

 

But as the music companies now has to rely on fans to create a good buzz and with an increasing demand for trustworthy filtering of content, there’s no doubt in my mind that record labels should play their role as “content providers” more serious. As the music industry is about ‘developing musical content and personalities’ as well as making sure that the musical content and those personalities reach consumers, it is highly important that all the music produced are of high quality and that it stands out of the mass creation of “amateur” content. A traditional music label should already have the staff to make sure this happens. I am certain this sounds a bit obvious, but every teenager during the 1990s probably remembers some of the disappointment they sometimes experienced after purchasing an album based on a radio hit. The hit single was good, but the rest of the album wasn’t. In the new music economy consumers no longer have to deal with this type of problems. Today music fans are able to buy access to “all the music in the world” through streaming services such as Spotify, WiMP and Rdio etc. This means that music consumption and eventually revenue streams will be based on what people actually listen to and not on the amount of albums and singles bought in record stores. This speaks out for the importance for record labels to make sure that all the content they represent are of high quality (the filter role of a gatekeeper). Hits are of course still important, but all the music made public by the music company is highly significant. In the new music economy, music companies simply achieve market share based on how much of their entire catalogue music consumers listen to. People still tend to listen to the most popular artists, and that will never change, but it has never been more important to ensure high quality of the entire catalogue. As more music is being produced than ever before (I have been talking about “cultural inflation” for about five years now) and easily distributed online, the music companies mainly needs to make sure that what they release is “better than the rest of what is out there”. The record labels therefore needs to make sure all of their music available in the Cloud is not just in the public, but also for the public. Simply put: Anyone can distribute music online. Not everyone can be on a label. In a world of cultural inflation, this is part of how the filtering of musical content might work.

 

In an interview with the Los Angeles based music blog Rollo & Grady, Seth Godin talks about the music industry in relation to his book “Tribes” (2008): “(…) music labels used to be in the business of grabbing shelf space, on the radio and in the record store. Now, the music industry needs to realign and be in the business of finding and connecting and leading groups of people who want to follow a musician and connect with the other people who want to do the same” (Rollo & Grady, 2009). The way I see it music companies should be about building strong brands and benefit from the artist career as a whole. The best way to build strong brands is definitely by making sure all the music released is of high quality (nobody wants to follow a crappy musician as well as nobody wants to be a crappy musician). This speaks out for the importance of highly skilled A&R people at record labels that not just search for the next number one hit. Today the artist and repertoire employee also needs the ability to lead and guide artists throughout their whole career. Marketing personnel at record labels has for a long time been the strongest argument why someone should sign with record labels. They still are. The marketing power of a record label might be crucial in order to break upcoming acts. However, as the return on investment is harder to reach the more money you spend on exposure in more outlets, the more important it is to make long strategic planning instead of plugging the next big hit or sensational story while paying large sums for exposure in tons of outlets music consumer doesn’t really care about (when was the last time you really noticed and acted upon an online advertisement?). It’s the entire content as a collection that is the most important asset at records labels. The focus therefore needs to be more on all content rather than just hits. At the same time it is crucial to spend marketing money more wisely as well as making sure the fans gets something besides a product wrapped together as a basic album. Today everyone can get their music on iTunes, but not everyone can create something special for their fans – something out of the ordinary. If you want people to recommend your music to others, make sure it is recommendable. The basic rule of content providers is simply that the service is available at little or no cost, to promote their primary business. Content providers are also referred to as “value added services” which on a conceptual level should add value to the standard service offering. In this case the standard service offering is the artist career as a whole, while the music (as in recorded content) of the artist is used to promote the entire business (although it is of course still possible to make money by selling recorded content).

 

A survey recently conducted by ReverbNation shows that 3 out of 4 unsigned artists still want a label deal (Digital Music News 2011). This is also the case with most artists I know, and for the most part this is because 1) artists wants to get acknowledged for their music and 2) they really want to find a home for their music. If an artist really looks up to another artist, he/she/they would in some cases kill to be on the same label or “discovered” by the same A&R as their idols. It is therefore important not to let artists down. After all, they provide the content providers with the actual content and that way function as the most important stakeholder for music companies – Next to the music fans of course. Without fans, music is dead and without good music there will be no fans. That’s why it is crucial to give fans something extra.

 

As any other stakeholder, such as a music journalist, or digital distributor, I would however love to know that whenever music labels release music, it is of high quality, and I would love it if I just knew it instead of having them convince me. I am however not saying that everyone should be on a label to be great (recent history has definitely proved that that’s not how it works). What I am saying is simply that if record labels are supposed to have a reason for existence, it is first and foremost to become a filter of mass production (instead of becoming the mass production). In other words record labels needs to be providers of great musical content (and then some) where they add value to the standard service offering. One thing is the marketing expertise; another thing is the ability to continuously release great musical content on a market where the consumer (and not the marketer) has most of the power and where amateur content strive for the same attention as “music with a marketing budget”.

 

 

Bibliography

 

  • David, M. (2010) Peer to Peer and the Music Industry – The Criminalization of Sharing (First edition). London: Sage
  • Digital Music News (2011). Survey: 3 Out of 4 Unsigned Artists Still Want a Label Deal. Digital Music News (28.03.2010) Online: http://www.digitalmusicnews.com/stories/032511unsigned [Accessed 03.04.2011]
  • Godin, S. (2008). Tribes: We Need You to Lead Us, London: Piatkus
  • Kontrabande (2011). Opbrud – Strømninger og bevægelser i markederne for film, tv, bøger, musik, spil og journalistic 2011. Kontrabande (March 2011).
  • Rollo & Grady (2009). Rollo & Grady Interview // Seth Godin (February 5, 2009). Located: http://www.rollogrady.com/rollo-grady-interview-seth-godin/ [Accessed 20.12.2010]
  • Shirky, C. (2008). Here Comes Everybody – How Change Happens When People Come Together, London: Penguin Books
  • Wikström, P. (2009) The Music Industry: Digital Media And Society Series. Cambridge: Polity Press
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The CD is not dead…

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…Not yet. What is dead is the economy of the CD (also pointed out by Tom Silverman, founder of the New Music Seminar)

In many territories, the CD is doing quite okay and the CD will of course not die before no one manufactures it and/or buys/sells it. It is also important to keep in mind that the CD probably will have a longer life span within certain market segments. Especially amongst the connoisseurs of classical music it is natural to assume the CD will be valued for a longer and more considerable amount of time compared to the “top-40 radio segment” (this is an argument based on personal marketing experience within both market segments).

Another interesting fact is that Norwegian niche labels such as NORCD and Rune Grammofon has increased revenues from the sales of physical products in 2010.

It is however no doubt in my mind that the economy of recorded music consumption is moving towards the cloud (just to make sure you follow: the Internet is the cloud, the cloud is the Internet).

For many years the music industry has looked at the many online music services as “free” promotion tools with “the single purpose” of selling CDs (the sale of units). In the new music economy this has changed. With music streaming services, not only will digital music distribution outrun sales of physical music formats, online music consumption is also able to satisfy the demands of many music fans (Also read Wikström, P. 2009: 91). You can no longer rely on sales of CDs when measuring the success of your business (or artist career for that matter). This is why it is right to say that the economy of the CD is dead.

But as long as there’s a demand for Compact Discs, CDs will be manufactured and sold. And (for some strange reason) I think the CD will be put on life support a bit longer than it might look like. It is simply impossible to rule out the fact that certain people  might want to buy a CD if the product is tempting enough, at least in the immediate future (important rule of the thumb: the majority has never been everyone). I have already used classical music as an example of a market segment that might appreciate the CD format a bit longer compared to other segments, as well as pointed out the fact that certain niche labels are experiencing an increase in revenues from sales of physical formats. It is also worth mentioning that certain niche music zines and genre-based magazines ask for physical formats when doing album reviews (makes it possible to argue that physical formats still have a promotion value). And I guess it would be sort of naïve to rule out the possibility of certain artists wanting to make the(ir) art tangible. I know people who buys vinyl just to hang it on the wall (it is of course limited how many vinyl records you would want hanging around), but this could also easily be nicely wrapped limited edition CD box sets (although I personally think the vinyl will outlive the CD), or other imaginable product bundles.

A good example of a dead music format serving as an art product is this release from 2008 by the Washington DC based band The Cassettes. The package includes one limited edition numbered cassette (!!!), one download card (would be kind of weird to expect people to have cassette players in 2008), one collectible car and one collectible horse:

In my opinion this is a “school example” of great packaging and maybe an even greater marketing idea, but it sure the hell didn’t make the band rich. That doesn’t mean it was a bad idea, as this is the kind of physical product worth buying (it’s MOMA material goddammit).

It is however impossible to ignore the fact that the economy of music consumption and distribution is changing. Recent statement (January 2011) made by Petter Singsaas, Managing Director of Universal Music Norway, claiming the CD will be dead in 5 years,  clearly put things in perspective when it comes to where the music industry is heading. It might take more than 5 years for the CD to disappear (and it might take less), but the expected time frame is kind of unimportant as long as the music industry acknowledges that the CD is worth less compared to music in the cloud.

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Slides from my presentation on Music streaming services and online music consumption – How access to everything is more important than ownership of something

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This is the slides from my presentation on my latest report on music streaming services. This time they are in English (yay!). The presentation also includes some thoughts on future challenges for the music industry in order to monetize/succeed with music streaming services. The data in my presentation is based on my own research which was amongst Norwegian students primarily between the age of 20-29.
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Music streaming services and online music consumption – How access to everything is more important than ownership of something

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New report: How does music streaming services affect online music consumption habits and how can we expect such services to affect consumer behavior in Denmark?

The report takes a closer look on Norwegian music consumption and the usage of Spotfiy and Wimp. It is based on an online survey with 332 respondents conducted amongst students in Norway (96,3% are Norwegian citizens). The survey was carried out in the period from April 18th until June 1, 2010. The respondents are primarily between the age of 20-24 (58,7%) and 25-29 years of age (29.5%) and there’s a 50/50 division between male and female respondents. The population was contacted through their student networks at the University of Oslo, Bergen, Tromsø and Trondheim as well as Hedmark University College.

Illustraion photo: Arnbjørn Marklund

Furthermore the survey has been compared with previous research done by the undersigned and three other students at the IT-University in Copenhagen, Denmark.

Conclusion:

As people still listen to music on “old” formats such as radio and CD, the reports’ analysis shows that there’s no reason to predict radical changes in music consumption and listening habits in the immediate future. It is however without doubt that the CD is valued less in a world of access. The future of music consumption is clearly about providing access to content instead of selling units. With the launch of music streaming services, the overall music consumption will go up and generate more value for the music industry as a whole. In addition music streaming services leads to a decrease in illegal downloads. However, strong brand awareness and size of content is of decisive matter in order to have legal streaming services heavily minimize piracy. Although most people do not want to pay for music online, one may still expect some users of music streaming services to pay for its usage. The survey shows that 21,6% of Norwegian users of music streaming services pay to use it. As the network society values the actual size of content, streaming services need to have everything available in order to be attractive. Music consumers want access to everything including the record labels massive back catalogue – no matter if they already own any of this content on other formats. The size of the music collection is therefore the most important feature to attract users, and will therefore be decisive when it comes to pricing. Other features such as the ability to share playlists, seem to be of rather insignificant matter for the average user. However, as so-called “superusers” value the social sharing of music, such features will be of great importance in order to draw attention to the actual streaming service. Seen from an industry perspective, streaming services might actually seem like the only basis for existence on the consumer market for the established music business. On the other hand it is most likely that revenues from streaming services will not match the old economy of selling units. It is therefore important for the traditional music industry to take serious action in order to consolidate on existing markets, as well as entering into new music markets. One may not expect streaming services to save revenues. Such services do however have the potential to increase value of music in general as the overall music consumption goes up.

Download the whole report for free by clicking this link

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Myspace is (close to) dead

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Thought I should share this with you guys. I am currently writing a report on how music streaming services affect online music consumption habits. In that matter I have done a survey amongst Norwegian students (332 respondents in total). One of the questions in the questionnaire was “Where do you hear about new artists and new releases?”. None of the answers was really surprising, except from the fact that only 12.9% hear about new music on Myspace (same amount as advertising!!!). Even recommendation services like lastFM is more popular with 18,7% people using it. 32.8% check out new music on YouTube and surprisingly as many as 31,0% use Facebook for this purpose (I am surprised since I am yet to be impressed about the music integration on Facebook). Not really relevant for my problem formulation (I am doing research on streaming services like wimp and spotify), but I think this actually proves the fact that Myspace already is half dead and probably (as we know it) will be gone by the end of the year (at least that wouldn’t surprise me a bit). What is a fact though is that bands should really reconsider alternatives to Myspace, because people might as well go somewhere else (actually they already are somewhere else and if not you should just tell them where to go).

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What am I working on now? Oh no, It’s yet another music streaming report.

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Right now I am writing a report on how music streaming services affect online music consumption habits. I have conducted a survey in Norway with 332 respondents (all students). I am about to start with my analysis of the survey, but thought I should keep you guys updated on my project angle (fyi I have removed all references in this post):

Historic perspective on music consumption

During an industry event in the early 90s, the now late record company executive Maurice Oberstein pointed out that the music industry practically was “giving away master tapes”. Oberstein was talking about the sale of CDs in a time when everybody was too busy counting cash to listen to what he had to say. Unfortunately for the record industry Oberstein was right.

The history of popular music is by far a history of developments in media and technology. Radio and the gramophone came into peoples home followed by the record player and the cassette deck. With the cassette tape came the ability of copying music as well as the social sharing of mixtapes and listening to music on the move (the car stereo and later the walkman).

With the introduction of the CD in 1982, music recordings changed from analogue to digital. The invention of the compact disc also underlined how the sale of music really was an issue of format change. The CD combined both portability and high audio quality. With this format change, the consumers of music not only started to buy CDs instead of vinyl records and cassettes; they updated their record collection with digitally remastered CD versions of already owned albums. For years, the recording industry was truly successful with a business model where you record and repeatedly sell music that people want to hear on preferred physical media.

With music being digitized and the emergence of the Internet, digital compression techniques came along. The birth of the MP3 provided a breeding ground for Napster (1999) and peer-to-peer (p2p) networks. For once the format change was not staged by the music industry. Digital compression techniques were simply developed by scientists, government agencies and computer hackers. Sharing music on this new digital format, which was not owned and controlled by the right holders, was obviously considered a crime. And the criminalization of sharing (known as piracy) has, for more than a decade been the biggest challenge for the music industry. However, many consumers and music fans experience illegal filesharing as the liberation of music. With even higher broadband connection and further development of compression techniques, we are now experiencing streaming services becoming more widespread as a substitute to physical formats and maybe also MP3 files.

Illustration photo: Arnbjørn Marklund

How does music streaming services affect online music consumption habits? Comparing Denmark with Norway.

Today, more than 10 years after the first launch of Napster, legal music streaming services are becoming accessible all over the world. However, what’s interesting here is that Denmark up until now has lagged behind with only one commonly known legal service available, TDC Play, which is only available to the people who subscribe to the company’s broadband, cable or mobile services. This stands in great contrast to neighbor country Norway, where streaming services have been available for more than a year (Spotify since October 2008 and Norwegian competitor Wimp since the summer of 2009).

Although Spotify is not yet available in Denmark, this is about to change as Wimp has recently launched in Denmark through Telenor (April 15, 2010). It is also important to mention that the Danish library will launch a music streaming service July 1, 2010. The IT and music industry is also speculating if Apple is about to launch “iTunes in the cloud”. That assumption is based on the Apple acquisition (and closing) of the web based streaming service LaLa. Rumor also has it that Google is planning to launch a music streaming service this fall, while it is realistic to presume that Spotify eventually will launch in Denmark in the very near future.

This overview shows that there is no doubt that the music market has developed into what Jeremy Rifkin (2001) describes as “The World of Access”. It is therefore realistic to assume that the music industry will experience an economic shift where access is more important than ownership. From an online marketing perspective it would therefore be highly relevant to look into how streaming services might affect music consumption habits, and how we can expect it to affect consumer behavior in Denmark.

It is with this market perspective in mind my main research question is:
How does music streaming services affect online music consumption habits and how can we expect such services to affect consumer behavior in Denmark?

Why is this relevant?

My main goal is to be able to point out how streaming services affect music consumption habits, and that way say whether or not such services will be a good thing for the music industry in Denmark (or in general for that matter). The argument against launching streaming services (mostly Spotify) in Denmark has for the most part been based on fear of low royalty payments to right holders (composers). This argument is fronted by KODA, the Danish Performing Rights Society. It is however pointed out by Chief Economist at PRS, the UK equivalent to KODA, Will Page, that it is important to look at legally available streaming services as “legal venues” that drives traffic from “illegal venues” such as Pirate Bay and Mininova. That way it is possible to say that streaming services will rather function as an important step to fight piracy than lead to a devaluation of music and decrease in royalty payments. At the same time the supporters of streaming services are convinced the business model will be economical beneficial in the long run.

Another argument that speaks for streaming services is that there, despite the fact that few of already available services are being used, seems to be a demand for certain music subscription services in Denmark. This might seem a bit confusing as I at the beginning of this report claim that TDC Play is the only commonly known legal service available. In this assertion it is important to outline the expression “commonly known”. There are more services available, in fact there are quite a few, but as previous research shows, TDC Play is the only legal service, which is commonly known. Yet it seems to be far from satisfying for Danish music consumers.

Services in use in Denmark.

The above image shows services which are in use in Denmark today (Octover 2009). The graph is based on previous research done by the undersigned and three other students at ITU (as a research project in Media and Communication). The research showed that 32% are using a subscription service in Denmark. It also shows that 43% of the people using a subscription service download less pirated music after they started using one. The interesting part is however that about 80% of those who do less pirating, either use a service that is not legal or legally available in Denmark (the majory use either Spotify or Grooveshark).

I have now spent the last couple of months diving into how this is different in Norway and  that way say something about how we may expect such services to affect consumer behavior in Denmark (if Spotify launch today, how will consumers act a year from now?)?

…I will make sure to post the final report by the end of the summer.

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Viral marketing of music videos

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MTV first launched August 1 1981, and changed the way music was perceived by industry and consumer. Since then music videos have become both an important marketing tool for the music industry and a common way for people to consume music. Ironically the first music video played on MTV was the 1979 song “Video Killed The Radio Star” by the British group The Buggles. The video aired on September 1 1981 (for one month MTV had not shown any music videos).”Video Killed The Radio Star” celebrates the golden days of radio and tells the story of a singer whose career is cut short by television. Not surprisingly the very same video (and song) has now, several times and in numerous versions, been parodied on YouTube as “Internet Killed The Video Star”.

In 2005 YouTube changed the music industry the same way MTV once changed the way music was met by industry and consumer. TV is no longer the primary source for music videos, as YouTube and its likes more or less have taken over as the most important means for promoting music (videos). The most passed around, and thereby viral, videos online are also mostly professionally produced music videos.

Briefly explained are viral videos clips that have received numerous views and made the trip around the Internet based on peer recommendations and online sharing after posted on video sites like YouTube, Vimeo, Dailymotion and Myspace etc. Seen from an online music video marketing perspective, having a music video “going viral” is considered a success, as it would be equivalent to having a lot of people enjoying your music.

Online music marketers urge to achieve viral successes with music videos. Problem is however that 24 hours of video is uploaded to YouTube every minute. So how does one set out in order to stand out of the overwhelmingly large amount of online video content?

In order to become a viral success it is  vital to stand out of an overwhelmingly large crowd. The fact that it is not enough to post a video on online video sharing sites, and then wait for people to discover it goes without saying (or at least it should). There is indeed a need for a marketing strategy in order to become a success. To illuminate this subject I have written an exam paper on viral marketing of music videos (download link under the video embed). My paper is a case discussion of the marketing of the video of the song “Stoppested” by debuting Danish artist Kristian Luc (see video). The recommended strategy should however be well fit for most artists and music companies (world wide) looking to work out a functional strategy for the marketing of music videos.

Click here to download the paper (it’s all in English)

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Slides for my presentation at Musikparlamentet tonight

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Sorry guys, it’s in Norwegian (guess Danish people will understand).
It is a 15 minute (absolute maximum) presentation on online music listening behaviour seen from a consumer perspective.
I’m looking forward to it, and I am looking forward to be part of the discussion panel after my presentation is done.
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Music Listening Habits in The World of Access

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What does music subscription services (i.e. Napster, Spotify, TDC Play, Grooveshark) mean for music consumption and listening habits?

October-December 2009 I spent quite a lot of time together with 3 other guys researching music listening habits amongst (primarily) students at the IT-University in Copenhagen, Denmark. The report is based on quantitative research with 203 responds. It was an exam paper in “Media & Communication”, a masters level course at ITU.

front picture

With Spotify and its likes, legal music streaming and subscription services are becoming widely available, although Denmark up until now has lagged behind with only one commonly known service available, TDC Play, which is only available to the people who subscribe to the company’s broadband, cable or mobile services.

Today I found a good excuse to publish the report, as it came to my knowledge that KODA in Denmark are informing the public that the Digital Music Report 2010 by IFPI contains unfortunate information. Not cool! But, by reading the news posting by KODA, you may get the impression that there’s a lot of online music subscription services in Denmark – a statement I have to say I do not understand. There might be food on the table, but no one wants to eat it.

Overall findings in the report.

The over all figures in our survey shows rather surprisingly that 32% are using a subscription service, this despite the already before mentioned fact that very few such services are legally available in Denmark. The survey also shows that TDC Play is the only fully legal service Danish consumers seem to use. However, more than 80% use a service that is either not legal or not available in Denmark, meaning the user will either have to fake their IP address or do other technical “tweaks” in order to use the service. This shows that there is a demand from the users to have access to music subscription services. It also shows that TDC Play is far from satisfying for Danish music consumers.

What was even more surprising was that when comparing the two groups (the subscribers and the non-subscribers), there were no significant differences in their responses to how they consume music, how important music is, how much they listen to music on the radio, to CD’s, on the computer, or how much they download illegally. This said, 43% of the people using a subscription service, said that they download illegally less often since having started using a subscription service. These results are confirmed by another survey done in Denmark by Megafon for IFPI and AntiPiratGuppen (2009).

What service do people use?

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Grooveshark is by far the most popular service.  But as this is a music service operating in the grey zone between legal and illegal, with the slogan: “Play any song in the world for free”, I would like to focus on Spotify and TDC Play in this short summary. This because Spotify is not available in Denmark, mostly because the service has yet to make an agreement with Koda. I therefore find it interesting to compare this service to one already established on the Danish market.

Even though Spotify is not available in Denmark, 25 out of 203 respondents use it, and 60% (15) of these are from Denmark. No matter nationality, they all (100%) have listed friends as an important source for new musical findings. This proves that there might be a more social aspect to music subscription services, compared to more traditional music consumption. Spotify users also have a far larger usage of playlists (48%). The discovery of new music on online media is also way higher compared to the already mentioned general picture. 48% of all 25 Spotify users hear of new artists and new releases on blogs, 56% from specialized music websites and 44% from online recommendation services.

Services such as TDC Play and YouSee are surprisingly slightly less popular than Spotify (especially considering the fact that TDC Play launched in April 2008). What is interesting here is that the users of TDC Play and YouSee seem to be more deadlocked in old media habits, while the users of Spotify are more online minded. Spotify users are also slightly more interested in music compared to the users of TDC Play and YouSee, and at the same time the users of Spotify value better sound quality.

It is, however, important to mention that the users of Spotify in Denmark today are innovators as the service has yet to launch. When they (finally) launch, it is natural to assume the total users of Spotify’s will become more like the general picture. It is however striking numbers for TDC Play that more or less the same amount of Danish respondents uses Spotify as TDC Play. Especially when we take into consideration that TDC Play launched more than one and a half year ago. This way it is conspicuously tempting to claim that TDC Play will be ousted by Spotify soon after launch in Denmark, although this of course only is based on speculations.

But one thing is for sure: If we look at this from a consumer perspective, there’s simply no reason to prevent Spotfiy from launching in Denmark. The fact that Spotify has yet to pay out large amount of royalties to artists is another matter, but hey: We all have to start somewhere, either we are artists or entrepreneurs.

Download the full report here

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