Effectiveness of Sample Based Marketing in Digital Music

June 22, 2009

A new report commissioned by Inderscience Publishers has been released evaluating the Music Industry on sample based marketing initiatives that are currently available (1).

What is sample based marketing? Essentially, an artist/label/ 3rd party reseller will give away a digital sample of music in an effort to entice the listener to download (and buy) the full product – the album.

There are 2 common sample strategies utilised over the internet:

  1. Provide a 30 second sample of a song at a low quality bit rate – See iTunes service

  2. Provide a WHOLE song at a high quality bit rate – see bands such as Radiohead, Paul Simon

The Inderscience study found that effective digital music sample strategies should:

“involve high-quality, long samples of the music being marketed… This makes it more likely that the consumer listening to a sample will buy the full product, whether that’s a CD or a track download”.

ie. higher the quality and longer the sample ==> higher album sales

This post studies why high-quality long samples of music makes listeners more likley to buy ‘the full product’ or album.

Gated Communities

Reason #1 – the Audience: Have a look at the types of ppl who visit websites that provide sample downloads.

Generally, websites that provide such samples are run by either the artist, label or 3rd party resellers – ie, websites that look only to exploit music commercially.

Most visitors to such sites will NOT be inclined to leech the music they want to sample. Why bother clicking through websites (which may contain large databases of samples) to download a single  1min sample when a they could simply leech the entire song or even the entire album via a torrent search?

My argument is that people who are interested in listening to sample music are NOT inclined to pirate the relevant whole song/album.

Available Online for Free

One argument against providing full length songs as samples on websites is that it says its OK to download music for free – as if it grants some type of licence to pirates to go about their (questionable) business of file sharing. There’s a problem with this argument – there is no licence:  a pirate will pirate whenever he/she chooses.

One free High Quality full length song on a commercial website does not, in effect, give free licence pirate the whole album. In reality, all albums and full length songs are inevitably available online for free – whether officially released or not! Pirates require neither permission nor access.

Why Bother with sample based marketing on the internet? These sites cater to, and are habitated by, the ‘other half’ – ie fans who are prepaired to purchase digital music. These people visit such sites to really ‘try before they buy’ – ie. to determine whether the sampled listening experience equates the cost of purchase.

So, if the sampled listening experience is increased, the probability of purchase increases.

To increase the probability of a purchase, the artist/label/3rd party reseller must increase the sampled listening experience. How to do this – make the listening experience longer and therefore more effective.

A 30 second sample at a horrible bit rate does not increase the customer’s listening experience . All it does is provide the general hook/melody of a song.

Relying on a hook to sell an album is a well known tactic in the music industry. But surely providing the hook at high quality (and for a longer time) provides a greater experience to generate potential sales.

1. Inderscience Publishers. “Free Music, Sampled: Longer, Higher Quality Free Music Samples Engage More Listeners, Study Finds.” ScienceDaily 1 June 2009. 3 June 2009 <http://www.sciencedaily.com­ /releases/2009/06/090601102017.htm>.

A new report commissioned by Inderscience Publishers evaluates the Music Industries poisition on sample based marketing. That is, get a taste of the album for free, the listener will be more inclined to buy it outright (instead of leeching it over the web).

There are 2 common sample music strategies utilised over the internet:

  1. Provide a 30 second sample of a song at a low quality bit rate – See iTunes service

  2. Provide a WHOLE song at a high quality bit rate – see bands such as Radiohead, Paul Simon

So what is the best way method of sample marketing? The Inderscience study found the following:

An effective digital music free sample strategy should involve high-quality, long samples of the music being marketed, the researchers conclude. This makes it more likely that the consumer listening to a sample will buy the full product, whether that’s a CD or a track download, rather than being a free-rider.

In this post, I want to go further into why a long HQ sample makes listeners more likley to buy ‘the full product’ or album.

Gated Communities

A further reason why long samples provide for increased album sales can be seen by understanding the audience of the website.

The long samples will be provided on commercial websites either run by the artist, label or 3rd party reseller.

I argue that most visitors to such sites will NOT be inclined to leech the music they want to sample. Why bother clicking through websites (which may contain large databases of samples) to download a sample when a simple torrent search can get you the entire album – in much less time.

That is, people who are interested in listening to samples are NOT inclinded to pirate the relevant album.

On the flip side – a pirate will pirate whenever he/she chooses. One free HQ song on a commercial website will not provide free license to pirate the whole album. In reality, like it or not, there is no licence – all albums and full length songs are inevitably available for download over the internet – whether officially released or not! Pirates require neither permission nor access.

So what is the point of sample music marketing over the internet? These sites cater to, and are habitated by, the ‘other half’ – ie fans who are prepaired to purchase digital music. These people visit such sites to really ‘try before they buy’ – ie. To determine whether the sampled listening experience equates the cost of purchase.

So, if the sampled listening experience is increased, the probability of purchase increases.

This equation provides that to increase the probability of a purchase, the artist/label/3rd party reseller must firstly increase the sampled listening experience. How to do this – make the listening experience long and effective.

A 30 second sample at a horrible bit rate does not increase the listening experience to a customer. All it does is provide the general hook/melody of a song.Sure relying on a hook to sell an album is a well known tactic in the music industry. But surely providing the hook at high quality (and for a longer time) provides a greater experience.

Inderscience Publishers. “Free Music, Sampled: Longer, Higher Quality Free Music Samples Engage More Listeners, Study Finds.” ScienceDaily 1 June 2009. 3 June 2009 <http://www.sciencedaily.com­ /releases/2009/06/090601102017.htm>.


Decline of the Album – How the Digital Single Affects an Artist’s Image

May 14, 2009

Many industry commentators are arguing that the Album is dead. If you have been following the internet murmurs on this subject, you might have already thrown away all your empty CD racks and started to look sentimentally upon your old CDs as remnants of a now bygone era.

I do not think that the album is dead. But I do believe that the album no longer has the influence in the market to determine an artists image, genre, direction or cause – otherwise known as the Band’s statement. This is because of the individualising nature of the digital world.

The Power of One

We live in a world of individual files and data packets. There is no room for families or groups in a digital world. Every piece of data, every file is on its own out there in the digital ether.  These rules are the same for any song released on any album. 

We all digitally interact with songs, not the album as a whole. Even if you buy or download an album from the web, your iTunes Windows Media Player, or whatever separates each track from another based on various tags – artist, genre, date, rating, mood, etc. These songs get shuffled through our iPods and stand alone in a playlist or a random shuffle.

This was never the case in the 90s – everything revolved around the album. Songs were never separated or had their own personality. The theme, image, direction and genre of a band were dictated by how each song interacted with each other within the album. The album as a whole was the Band’s Statement. This is no longer the case.

In our digital world, songs get mixed and sorted within playlists, random shuffles and streams and the identity of the an album fades out of the market’s consciousness. End result – each individual song becomes the Band’s statement as listeners may not realise the context of the song within a whole album.

The concept of Band statements and image is not new. A&R guys like to see bands that represent one cause, one genre or one theme. They are easy to promote as the band’s market is easy to define.

Fans understand what that particular band is about and know why they want to listen to them. For example, people crank a Rage Against the Machine CD to cater to their aggressive or rebellious persona. People only listen to Barry White to…..get laid?? These artists have a constant theme and feed their market segments with what they want and nothing else.

Dazed and Confused

I believe that such artists will do well in a digital world as fans do not like to be confused.

Bands that release one rock track, then one RnB track then one Classical track will definitely confuse the listener as they will be unable to define the Band’s statement. If a listener is confused as to the statement of a Band, they are less likely to connect with the music as they are unable to understand it. Such bands may lose many potential fans as the central point of reference (ie. the album) has faded away.

The Album used to help fans understand the Band’s statement as all songs could be heard together to form one piece of art. Without the albums dominance in the digital world, bands will struggle to get their overall image to the market if their music is stylistically diverse.

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Mo Wiggle fo yo Dizzle – Why I support the new Wiggles’ online business model

May 4, 2009

I’m a big fan of the new online business model developed by the Wiggles at www.wiggletime.com

Parents over the world, however, are not.

The WiggleTime website, which includes the once free Wiggles Fan Club, charges users an fee of $85-$120 per year for entry. Free registration is possible but access to content is strictly limited.

WiggleTime provides a 3 tiered revenue model in which to exploit their members. Members pay either $120, $80 or nothing, depending on how much content they/their children require.

The Premium Package

Many music industry commentators argue that this tiered approach is definitely the way in which artists can succeed in a digital world. For the classic examples, refer to the various Nine Inch Nails and Radiohead initiatives.

For a more fresh and current discussion, lets look at Arcade Fire and Prince:

Arcade Fire

Arcade Fire have released their new DVD “Miroir Noir”on their website, but on a tiered pricing strategy. That is, you pay slightly more for bigger sizes/resolutions of the DVD content. In addition, the band has offered limited premium versions of the DVD at a much higher price. This approach allows Arcade Fire are able to generate revenue from:

  1. Poor School kids with little to no pocket money (they buy the cheapest/lowest resolution version)
  2. Interested music fans that have a bit of disposable income to throw around to find out what all the Arcade Fire fuss is about (they may buy the medium to high resolution version)
  3. The Die hard fans that buy the premium package for bragging rights

At the time of this blog, the Premium Package is sold out.

Prince

Prince now releases his music for free over his website and has recently launched what’s known as the Prince Opus. The crazy cat in the purple suit has released a premium purple photographic anthology of…something….which includes a purple iPod loaded with exclusive content – for a measly US$21,000!!!!

Disposable Parents

The Wiggle’s biggest fans aint the kids, its their die hard parents. I might be wrong, but all a 2 year old wants to see on either a TV or computer screen is that Dinosaur thing doing her thang, not a limited edition Purple Wiggle Opus.

Parents spend ridiculously on their children. Check out Ed Hardy for Kids, Hugo Boss for Kids – wtf!? Kids don’t necessarily care about whether their nightgown is Armani or not. The only ones who do are parents with large disposable incomes.

By providing a $120 subscription option, the Wiggles, give these parents the opportunity to spend big on their kids – an opportunity that was not available on the old free site.

STOP WiggleTime

The problem with WiggleTime is that a lot of its content was previously provided free. By forcing users to pay for such content definitely damages the Wiggles brand, and generates much bad publicity.

The old content should have been provided  free of charge. The potential lost revenue could be offset by tiered subscription packages in which parents have the opportunity to purchase premium content, toys, concert tickets, VIP show passes etc etc at high prices.

In today’s online world, its about keeping people wanting more. Not restricting them to less.

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Making Martyrs – The RIAA’s strategy of suing college kids will backfire

April 27, 2009

The Underdog

Australians love their underdogs. Its our culture. People all over the world rally for our Davids over Goliath. So what happens when the market sees huge multinational entertainment corporations quenching their thirst for blood and money from the jugular of a teenage college student (who happens to be sharing his favourite music over campus intranets)? Consumer dissatisfaction and ultimately retaliation.

The latest in a string of similar cases is RIAA v Joel Tenenbaum. A quick google search exmplifies the wide held support for this college kid, not to mention the great publicity of his pro-bono Harvard Law Professor attorney. End result – all this negative publicity toward the RIAA further tarnishes the labels and their ‘just’ crusade against file sharers.

Martyrdom

What if the RIAA manages to suck the kid dry?? It doesn’t matter.

If a guilty verdict is found, Tenenbaum will become a martyr.

The RIAA’s success in this case may strike fear into the market to prevent further file sharing. But success may also foster even further hatred toward its just cause, whether that cause be right or wrong.

Just as Shawn Fanning before him, the market will remember this kid and his courageous stance against the multinational corporations. They may ultimately rejoice in sticking it to Goliath by undermining his rule even further.

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5 reasons why its Pointless suing The PirateBay

April 21, 2009
  1. Jurisdiction: So the PirateBay gets sued in Sweden – Whats to stop them setting up their servers in the States such as the Principality of Sealand where no copyright laws exist?
  2. One out of Many: There are so many torrent tracker sites on the net – just do a basic google search and start hitting those download buttons. There’s still 99 bottles of beer on the wall!
  3. Alienating the Market: By criminalising and punishing the markets favourite music services (and forcing them to use inefficient and costly ‘legal’ services instead) this Case only strengthens the consumers hatred toward the Music Industry.
  4. Underdogs: Everyone barracks for the underdog. In this Case, the underdog appears to be The PirateBay.  3-4 nerdy looking dudes Vs multinational corporates. Who do you think the consumers are sympathetic toward? In an interesting marketing tactic, Australian music labels are attempting to lose their ‘Goliath’ image by releasing (for free) a short doco on the impact file sharing has on its major artists.  It will be interesting to see whether they can turn the tables.
  5. If u cant beat em, join em: Enough already. This litigious approach to curbing online piracy is not working. Its a Stupid Cycle. When you stop one company or one technology – a multitude of new and improved ones pop up. You cant stop progress. Why not leverage off of these technologies and develop new ways to distribute music over the net?

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Thoughts on IPRED: Digital Evolution and the Swedish Solution

April 20, 2009

There’s alot of press these days about the latest legal attempts to stifle the sharing of mp3s over p2p file sharing networks that are facilitated by sites such at the PirateBay. The music industry’s spoils under these latest conquests  may be short lived due to Moore’s Law and the theory of digital evolution.

Moore’s Law

Moore’s Law is a concept that describes a long-term trend in the history of computing hardware. Simply put:

Since the invention of the integrated circuit in 1958, the number of transistors that can be placed inexpensively on an integrated circuit has increased exponentially, doubling approximately every two years.

File:Transistor Count and Moore's Law - 2008.svgThis law not only works for transistors, but all technology, including RAM, pixels and so forth.

So why bring it up in a discussion of music and the prohibition of filesharing? I think Moore’s Law is analogous to the concept of digital evolution. Just as Darwin fondled those finches to formulate his theory of evolution for all organisms, Mr Moore’s observations on hardware may point to the evolution of all digital technologies in general. Let me explain:

In a competitive technologies market, each software developer or hardware manufacturer is out there to claim the top spot – even if this means holding the top spot only for a number of days until a rival usurps its position. It sounds cliché, but its survival of the fastest/smallest/most efficient out there – a manufacturer/developer must keep evolving their widget 1.0′s (I hate that term) into widget2.0′s and beyond.  Today’s global market is the perfect competitive environment that fosters the digital evolution of widgets so that they may double in their ‘strength’ every two years.

Point #1: Technology, whether hardware or software, evolves at a freakn fast rate.

The Law

Lets forget about Mr Moore for a second and take a look at legal process: the slow drudgery of legislative change means that it takes a freakn long time to spot and curtail disruptive technologies that negatively impact existing industries.

Once a disruptive technology plays havoc in the market, the legal cogs of change start churning and doin’ their thang – private interest groups lobby their political contacts → government funded consultation groups investigate → drafters draft amendments to (copyright) legislation based on the recommendations of the consultation groups → the minister in charge engages the parliamentary process (too detailed to get into here) → royal ascent by the Governor General.

Point #2: The law takes a freakn long time to change and adapt.

The Stupid Cycle

flow2

Legislation cannot keep up with the constant digital evolution of file sharing technologies.  See the previous disruptive technologies of first Napster, then Kazaa, Gnuttella, Limewire etc etc. Its all cyclical. Each time the Music Industry ‘plugs’ a hole in its copyright, the piranhas of the p2p world discover a new way in. This new hole is then plugged, leaving the piranhas to find a new way through.

The Music Industry seem to be in favour of this reactive policy that keeps them following the leader. Maybe a few George W. style pre-emptive measures may yield better long term results.

Point #3: – filesharing technologies will adapt and evolve to outsmart legislative change.

The Swedish Solution

Only last month have we seen the latest installment of this cycle in Sweden. The music industry has lobbied the Swedish government to enact its IPRED legislation.

http://blogs.thetimes.co.za/stompies/files/2009/02/predator.jpg

The IPRED legislation requires Swedish ISPs to reveal the identities of filesharers. So far this seems to have been a success for the Swedish music industry as, only after 1 day of its enactment, Swedish use of torrent sites have dropped 30%.  It also seems that total Swedish use of the internet has dropped 33% since its introduction. Further, a recent article by the Swedish newspaper The Local states that LEGAL downloading of music is up 100%!

I guess this means -

score1

BUT (here comes the stupid cycle) – the PirateBay has developed its new technology – IPREDATOR. This software allows users to establish a VPN in which they may share and download files – outside of the ambit of IPRED.

So does this make it:

score21

Seems technology has evolved in a matter of days to out-smart legislation.

In other Swedish events, the Courts held the founders and investor of the PirateBay to be guilty of copyright breaches. Does this mean its game over for the PirateBay in Sweden? Time will tell  as the decision has been appealed by the defendants – the final verdict may take many more months. One possible repercussion of the decision is that users may go on a downloading binge over the site before the before the PirateBay site gets pulled down (as seen in the month prior to the closure of the Napster service).

On a global scale, with so many torrent sites to choose from, the criminalisation of filesharing in one country cannot be the best way to deal with music piracy. And what happens when the Music Industry’s Arch Enemy 1.0 evolves into Arch Enemy 2.0 ? (think Darknets and the like). The stupid cycle is set to continue.

Arch Enemy 2.0

Far from letting the IPRED legislation dampen its spirits, the PirateBay has developed a new revenue stream that suckles from its new foe.

http://www.ananova.com/images/web/256902.jpg

To access the VPNs provided by the PirateBay’s IPREDATOR software, customers must pay a subscription fee. As copycat legislation may soon pop up all over the globe, it could be said that thousands and thousands (if not millions) of file sharers may sign up to IPREDATOR and similar technologies to circumvent such legislation.

IPRED vs The PirateBay – Who won?

Oddly enough, I see ThePirateBay and p2p software developers as the winners here. The introduction of IPREDATOR (Arch Enemy 2.0) has lead to the development of new revenue streams for the p2p industry. No longer do companies need to rely on cheap pr0n advertising as their primary source of revenue – the subscription fees payable on using its VPN software may turn out to be  significant cash cows for the industry. From current reports, the popularity of IPREDATOR is astounding. There’s a lot of demand and (therefore) money here and it seems The PirateBay is the only party able to see and exploit its potential.

The idea of subscription based business models for music distribution is not new – see Gerd Leonhard’s articles for further divinations on this. I am an advocate of this model simply because of the existence of the Stupid Cycle. I consider the huge popularity of IPREDATOR to be a significant indicator of what the market demands – subscription based services that provide subscribers access all the mp3s they require. By focusing on criminalising p2p, instead of leveraging from its popularity, the Music Industry is missing out on a substantial subscription based music market. If the industry starts turning its back on its IPRED policy and move towards the way of the IPREDATOR, who knows, they may find a vast revenue pool from which to scull from.

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Why I Blog

April 17, 2009

I recently had an interview with one of the Australian record labels. During the interview, I was asked, as per protocol, to name a couple of bad things about my previous employment in a law firm.

“Incongruous passions”, I answered.

I immediatley recognised the expression on my interviewer’s face that follwed my two word answer – the same look that my ‘brothers’ gave me when I rocked up to my CD launch in a suit and tie, fresh from writing some urgent legal advice for some client – Complete Wanker.

To soothe my image, I explained myself a little further.

is there any soul out there

What I didnt like at my previous employer was not the work, structure or managerial style. It was that no one thought like me, talked like me or enjoyed my pursuits. Dont get me wrong, my work mates and I had many a night getting plastered and talking random shit. Always great fun. But in the end, they didnt share my passsion, or lacked passion, themselves.

My interviewer lent forward toward me in her chair. “Passion?”, she asked.

Who I am, what I believe, the future, the past all revolve around one thing – music. I much prefer to describe myself as a heavy metal/flamenco guitarist than an IP/IT lawyer despite what my business card advertises.

heavy-metal-poster1

Today, the who I am, what I believe, the future, the past is dramatically changing. Why? Technology. Music is now at the mercy of the transistor. So, to understand myself, I must now understand the transistor’s affect on my incongruent passion.

monk

There is something inside me that seeks to find out where music is going with technology (or is it the other way around?). Doesnt matter whether it relates to music performance, production, promotion or how technology keeps sending shockwaves through the music industry – I’ve got to understand it.

There is much to be gained from understanding the relationship between music, technology and its digital world. So, that is why this blog exists – to hopefully increase our understanding of this digital relationship and its impact upon us all.

I hope you will enjoy this journey with me.

Metal up your ass.

Ishan

e: ishan82 at gmail . com

t: @ishy_pop

eddie_satan

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