Topic: Five New Ways Music Labels Can Capitalize On the Digital Revolution
The dynamics of the music and entertainment industry have now been challenged immensely throughout the last decade. Internet radio, subscription music sharing service and social media are essentially edging out traditional radio and music record purchases but on another hand, these digital platforms can be used to market shows and tours in a contemporary way. These new tools offer artists, producers and others new ways to improve profits.
Here are five new ways music labels can capitalize on the digital revolution.
1. Labels must concentrate on releasing the music they produce to the mass public as quickly and easily as possible.
When consumers have immediate access to music, the addictive facet of it becomes easy. Producers ought to be open to signing handles emerging social mediums to produce a safer solution to distribute their music for profit. Subsequent deals can offer a monetary increase for the label, artist and distribution site. Major international digital music services like iTunes, Spotify and Deezer, which may have attracted 58 countries, more than double the estimate in the beginning of 2011, have previously exhibited the value of music. If labels capitalize on other media, the possibilities of contribution to underneath line are seemingly endless.
According to the IFPI''s 2012 Digital Music Report, digital music revenues are up eight per cent to $5.2 billion. This is a positive trend for an industry that has been so decimated by mass sharing technologies. Digital copies are becoming the conventional in these busy times, and converting to a completely digital distribution platform can substantially decrease the label''s expenditures. A decrease in spending means a rise in profits.
2. Most listening occurs while traveling, and so the ease of access for consumers on the move is vital.
The introduction of smartphones, tablets and advanced technology in cars has turned into a major influence on what consumers find and listen to music, and will become increasingly important as time rolls on. Automotive companies, for example, are starting to comply with the Apple "takeover" by offering vehicles with Apple integration technology, but Apple is not the only real company to make partnerships in this aspect. Pandora Media Inc. has already made 23 agreements with automakers and aftermarket suppliers to include their service in their respective products. Other subscription style music companies like Spotify and Mog may also produce a deal as lucrative as this.
3. Utilizing subscription or rental business models rather than purchase model is a smart solution to combat music pirating and monitor the listening habits of consumers.
Spotify has begun using this concept, closely mirroring the way in which Netflix operates. Netflix made video rental easy by offering both streaming and hard copy rental. The trend has substantially shifted the idea of consumers purchasing DVDs, to consumers cheaply renting a DVD and returning it at the conclusion of their desired use. With the introduction of smart televisions and cloud based streaming possibilities, the necessity to produce hard copies of movies and music will undoubtedly be a forgotten memory. Netflix also monitors what each specific movie a consumer views, and makes suggestions based on those viewing habits. After analyzing the listening habits of consumers, these subscription music companies can suggest listening options directly targeted to each individual.
4. The technology integrated with subscription-based music sharing companies can determine personalized best playlist pitching companies ?that could take public radio''s throne as the number one choice for music discovery.
Music labels may fear that their music mightn''t be discovered if individuals are no more listening to mainstream radio, but subscription-based music sharing and social media are changing the way in which consumers stumble upon the newest tracks. As mentioned earlier, subscription-based music sharing companies have the ability to track and monitor each choice a consumer makes, which makes the possibility for directly targeting the consumers with music they''re more apt to enjoy. This capability can make a far more preferred approach to music discovery that could dismantle the necessity for public radio music stations.
Music sharing companies partnering with Facebook enable the social media giant to publish the listening habits of one''s "friends," which encourages sharing and discovery of new or forgotten music. This method of music discovery can be hugely effective because of consumers''high rate of time allocated to Facebook and other popular social medias.
5. Concert and event promotion through dominant websites like Facebook have increased awareness and interest for those two companies. Cross marketing efforts with music producers and entertainment promoters can increase ticket sales, creating a more profitable tour.
Live Nation Entertainment has an amazing advantage because 2010 merger with Ticketmaster, which expanded the company''s foothold in the music industry as a result of massive influx of online ticket sales. Ticketmaster is now including links with Facebook that allows consumers to see if their Facebook friends have obtained tickets to the event, and even allows them to see where they''ll be sitting. AEG Live Launched their new ticketing website, but time will tell if they''ll adapt similar models and ideas.
The producers and promoters must continue steadily to partner with social medias to encourage the spread of concert awareness within friend groups. The top US promotion service for Spotify ?from direct interaction with consumers. Experiencing that direct interaction can create a consumer to consciously or subconsciously produce a loyalty to that particular brand, which results in repeat purchases. This method can easily become a fast, cheap and effective way of communication between sales forces and consumers.
Artists, labels and promoters have to appreciate the changing dynamic of the industry, and the incredible strides it''s made over the past decade, and even way more within the past few years. This is only the beginning, and time can only just tell what the future will bring, but for the time being, music producers must create their social media market to stop any likelihood of failing in years to com