Wednesday, May 19, 2010

Fixing the Music Industry, One Viral Video at a Time

If the late 90’s and early 2000’s were about scandalously clad underage girls becoming pop sensations, the second decade of the new millennium is most certainly starting with youthful boys belting out shrill tenor chords on YouTube.

It’s about to be common knowledge that Canadian born Justin Beiber has the top selling US record for the week of May 9th – the same week that other, and certainly more “adult” sounding artists pitched their wares through more traditional channels. Add to that the fact that the number of Beiber’s units sold is abysmally low. It’s just another nail in the coffin of an industry that is currently seeing the downside to rejecting progress.

Beiber’s meteoric rise to fame
is another, and for marketers old, YouTube story. You know it just as well as I do – talented kid thinks it would be cool to put his videos up on YouTube, does so, and is plucked from a normal childhood by a bevy of talent scouts, agents, and record labels who come late to the game after seeing huge numbers of video views.

Greyson Michael Chance is the latest in a long line of child artists to be snapped up by Hollywood – moving from a YouTube viral phenom to guest of the Ellen show in three days. Wikipedia hasn’t even decided if he’s article worthy.

The impact of social technologies works both ways.

Consumer behaviors are changing by the hour. Music industry executives are left confused, disoriented, and unsure of the future. To the modern marketer for a large brand, it’s just another day at the office.

A source at Universal Music Group told me this today:

“If we don’t start selling more [physical] records soon, all the major retailers will pull out. If Best Buy pulls out, target will pull out, and Wal-mart would have already been out. There won’t be any more product on the shelf unless you are Lady Gaga. I don’t see that we are making up for it digitally. So Beiber is #1 with a tiny amount of records sold. Where are all the people buying digital albums? Where is the revenue? And what kind of message does this send to emerging artists trying to break into the business? If our industry as a whole won’t come off of our high horse of pricing [physical] albums at $13.99 to match or best digital prices, consumers won't see records on the shelves anymore.

If they aren’t buying it at Best Buy and they aren’t buying it at Target where are they buying it? The answer is they aren’t. They are streaming it on sites like YouTube and Facebook. Music has become so fluid you can literally listen to it anywhere you want. It’s not confined to a car or iPod. The music industry has to figure out a way for them to pay for it without paying for it. The artists have to be sold in a different way.”

The need for the music industry to reinvent itself has never been more pressing (assuming you care about music). I'll ask the question and let you tell the rest of the story:

If you could give one piece of marketing advice to a top music industry executive, what would it be?

Nick Kinports (follow him on Twitter @ADMAVEN) has worked in the interactive technology world for over 9 years, and helps the Fortune 100 identify unmet consumer needs, create ideas to fill those needs, and bring them into market. He currently works at Maddock Douglas.
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