Why Social Media Needs the Music Industry
The music industry has become increasingly reliant on the social media. Twitter, Facebook and other services such as YouTube with a strong social element have frequently overtaken the press, television and radio as the primary means of promotion
What is perhaps less often reported is how dependent social networks are on music fans for growth. It is not politicians, sports, television or movie stars who dominate the social media leader boards, but representatives of the recording industry. Music and social media just seem to go together.
For instance, 50% of Twitter users follow at least one musician. The top five most followed accounts on Twitter are all musicians. In fact there are only two people in the current top ten most-followed Twitter accounts who are not musicians, one is President Barack Obama, and this is election year, the other is the reality star Kim Kardashian. And the top five trends of last year were all music-related, according to Tatiana Simonian, head of music industry relations for Twitter.
Ms. Simonian was brought from Disney Music Group to the micro-blogging social network last October at about the same time as it launched Twitter music. “It now has more followers than almost any other channel on Twitter,” she said “The media team I’m on is there just to get more dynamic content on Twitter.”
She was talking at the International Music Summit in Ibiza, Spain, last week, an industry event where social media now dominate the business sessions. Their representatives are every bit as keen to address the recording industry as the music business is to listen,
In the fragmented world of music, the summit is the primary industry event for electronic dance music. Recently that has become shortened to “EDM” perhaps, Ms. Simonian suggested, as a result of Twitter users’ need to abbreviate. “The hashtag EDM is now used up to 3,000 times a day,” she said. “It is the fastest growing genre on Twitter.”
It is a segment, however, which has been focused almost entirely on Europe until the last couple of years. Now it is enjoying a surge of popularity in the U.S. The industry’s poster boy for this success is producer and DJ David Guetta.
His main fan page on Facebook is approaching 33m Likes. This puts him just outside the top 10 of this chart, which is almost as dominated by musicians as Twitter’s. But it is not simply the figure for the number of fans who have clicked on a button which impresses his industry, it is what he has done with it. He has developed a series of brand partnerships notably with Coca-Cola’s Burn energy drink and car manufacturer Renault from his native France.
By monetizing his personal brand, quantifiable thanks to social networks, he is showing how a new business model works successfully for the music industry, although there are plenty who dislike his overt commercialism. The point is he is making money after the probably permanent destruction of the industry’s traditional business model.
For decades that model was quite straightforward. Sell records. Everything else was subservient to that goal. Touring, merchandising, radio airplay and everything else could make a loss provided they led to sufficient sales of vinyl and later CDs.
The rise of digital media and file sharing has drastically reduced the importance of recorded music sales to the industry. As a result, what were ancillary activities before are now potentially the most important revenue streams.
Merchandising has moved way beyond the sale of tour t-shirts and now encompasses complete clothing ranges, designer headphones and, in fact, anything that can have a logo put on it. And recorded music frequently exists to promote live performances rather than, as used to be, the other way round.
This explains why another less obvious social network was making an appearance at the International Music Summit. Location-based Foursquare made clear how important music audience was to it about six months ago when it signed a deal with London-based live music listing service Songkick.
Omid Ashtari, Foursquare’s director for business development, explained that, before it got access to Songkick’s database, it was only possible to check into a venue. Given that a different promoter might take over the place each night, that is not an attractive proposition for either artists or fans.
“Now through Foursquare you can not only check into the location, but also into the event,” he said.
“Artists can offer rewards vouchers, perhaps providing discounts on merchandise, ticket upgrades or meet-and-greets. They can also offer ‘swarm specials’ which means you define a threshold and if more than that many people check in, you can do something like a double encore.”
And, of course, these activities provide a foundation for Foursquare’s growth. “I think there’s a an overlap between electronic music and social media savvy people,” he said. (via WSJ)