Carles. "Animal Collective is a Band Created By/For/On the Internet." Hipster Runoff. 13 January 2009. <http://www.hipsterrunoff.com/2009/01/animal-collective-is-a-band-created-byforon-the-internet.html>
In this blog post, satirical/ironic blogger "Carles" produces one of the most-discussed theses on Internet music of 2009. He posits that the band Animal Collective's most recent release, Merriweather Post Pavillion, was successful specifically because it catered to the tastes of it's internet-savvy audience. In doing so, Animal Collective has thereby defined what it means to be an "internet band": how to walk the fine line between mainstream and authentic taste; how to produce internet hype without immediate backlash; how to produce revenue despite a full-album leak. Hipster Runoff also references the importance of online-criticism mediums like Pitchfork and meme-production in determining the success and respectability of a band. Ultimately, he concludes that the success of Animal Collective is not only the result of but also a reflection upon the band's internet following: a "symbiotic relationship" uniquely achieved.
This Hipster Runoff post is important in the way that it was reflected on throughout the blogging community; it was taken with unusual sincerity, and both praised and criticized. The story of Animal Collective's new rise to prominence (Merriweather Post Pavillion is their fifth album) tells the story of the new internet marketing machine. This CD epitomizes a particular kind of marketing and revenue model on the internet. The Hipster Runoff post takes this a step further, as it analyzes how and why the internet-branding of Animal Collective was successful, and the way the branding of Animal Collective simultaneously contributes to a branding of self. Animal Collective and the Hipster Runoff analysis is an example of the way that online music critics, independent bloggers, and their music-savvy audience are responding to a particular kind of online music marketing.
ComScore. “Press Release: For Radiohead Fans, Does “Free” + “Download” = “Freeload”?” 5 November 2007.
This press release details a study of the online sales of Radiohead's "In Rainbows," an album the band released via a pay-what-you-want download model. The statistics obtained demonstrate clearly the presence of a "freeloader market," in which 60-62% of people will download an album for free when confronted with a pay-what-you-want option. The article offers a few different perspectives. Some experts are impressed that 40% of consumers are willing to pay "real money" for something they could get for free. Others question whether this model could be viable for less-established artists. Edward Hunter, a comScore analyst, states that this unique effort is important in that it eliminated a loss of profits due to illegal downloading.
Though these statistics are important, they are more interesting when confronted with data from (countless) other sources, which report that Radiohead's experiment was a likely success. Many different sources report that the profits made by Radiohead on In Rainbows were comparable to what they would have made under normal record-company distribution. Though those opinions and statistics can be found readily, the data regarding freeloaders is more unique to this article, which seems to expose the downside of pay-what-you-want models.
Barboza, David. "Google and Music Labels bet on Downloads in China." The New York Times. 5 April 2009.
This article addresses one of the most recent experiments in new profit models based on digital music: Google's free music search engine in China. Very recently, several of the biggest international record labels partnered with Google and a Chinese company (top100.com) to offer a free music-download service. Because online piracy of music is particularly rampant in China, the success of this model could have lasting implications on policies in the US. The New York Times article offers both critical and supportive opinions on the initiative. Notably, Google will have to struggle to contain the music-downloading to China, employing "legal and technical hurdles."
The partnership of Google with major international music labels represents a new way for record companies to remain profitable without trying to stop free music downloads. This unlimited-download service is supported not through subscription, but by advertisements. Although it is difficult to anticipate the success of such a model, the adoption of this idea certainly reflects a major change in the way that the entertainment industry is approaching its consumers. The willingness of labels (even on this controlled scale) to abandon control over music distribution to this degree is a symptom of their desperation, certainly. However, it is likely also a necessary move towards a new kind of support for music development.
Accenture Media and Entertainment. "The Challenge of Change: Perspectives on the future for Content Providers." Accenture Global Content Study 2008. Accenture: 2008.
This report is the result of a market research firm initiative, in which they surveyed 100 entertainment executives to determine their opinions on the future of revenue models based on digital media. The results of the survey show that the ad-based model is the most popular model for the surveyed executives, as opposed to subscription or iTunes-like services. Though the focus in the report seems to be on forms of entertainment other than music media, it provides a successful context for profit-garnering models in digital entertainment. It also reflects the point of view of those that will ultimately be responsible for shaping the way that media is transferred to the consumer (legally) online.
This report represents yet another perspective on successful provision of internet content (without greater legislation). The importance of advertising on maintaining free content on the internet cannot be understated -- many argue that advertising-based models represent the future of music revenue. Ad-based music models are already being put into place: the music-search engine developed by Google in China, for example. The Accenture report is important, therefore, because it provides data and quotes from industry experts that address the longstanding relationship between advertising and entertainment.
Oberholzer-Gee, Felx; Strumpf, Koleman. “The Effect of File Sharing on Record Sales: An Empirical Analysis.” The Journal of Political Economy, Vol. 115, No. 1 (Feb., 2007), pp. 1-42. < www.unc.edu/~cigar/papers/FileSharing_March2004.pdf>
This journal article is a statistical, quantitative analysis of the effects of file sharing on record sales in the United States. It provides a necessary statistical context against which new music initiatives can be explained in terms of new revenue and marketing model development as a result of the digital-music renaissance. It provides data up to 2007 that measures record-sales (online and in stores) as well as expert estimates of file-sharing usage. Additionally, its authors conclude that file-sharing is not primarily responsible for a decline in record sales, a conclusion that has been used in several policy cases regarding the legality of file-sharing.
This article serves several key purposes. First, it provides an empirical background to support the necessary claim that the music industry is changing as a result of online sharing and the proliferation of digital media. Second, its analysis undermines certain assumptions many RIAA proponents maintain regarding the effect of file-sharing on record sales; for example, it is argued that the availability of the “single” online contributes more to the change in revenue structure than P2P networks. Third, it reports digital-music statistics that are important in any argument regarding the business of music on the internet.
Gladwell, Malcolm. "The Tipping Point." 2000: Little Brown & Co.
Like Chris Anderson's Long Tail, Malcolm Gladwell's concept of a sociological "tipping point" is a useful term in any discussion about marketing on the internet. "The Tipping Point" is a sociological analysis of different types of key consumers: connectors, mavens, and salesmen. Gladwell uses these terms and other definitions of "tipping" and "stickiness" to explain instances of small ideas or materials becomining unexpectedly popular as they reach a "tipping point."
Though Gladwell does not remark explictly on the internet, I believe that his concepts are crucial to the way that the internet spreads information about musicians. Much of my discussion on online marketing and non-industry-regulated profitability is tempered by the understanding of internet marketing efforts as definitionally "grassroots." "The Tipping Point" is an analysis of grassroots marketing efforts, and my hope is that when Gladwell's concepts are lent to examinations of popularity and profitability of independent musicians on the internet, useful trends will be derived. For example, why would Radiohead benefit from a pay-what-you-want model, while an indpendent artist might not? And if an independent artist like Girl Talk does reach a "tipping point" via internet exposure, the ways in which they expand on these internet "grassroots" methods are major contributing factors to success. Gladwell's discussion offers some terminology to explain why.
Dubner, Stephen J. "What's the Future of the Music Industry? A Freakonomics Quorum." Freakonomics Blog, New York Times. 20 September 2007. <http://freakonomics.blogs.nytimes.com/2007/09/20/whats-the-future-of-the-music-industry-a-freakonomics-quorum/>
This 2007 New York Times blog compiles the opinions of five different experts on the music industry. They are asked to reflect on the "future" of music in the context of the digital revolution. One expert is the author of the previously-referenced "Effects of File-Sharing on Record Sales," three are major music executives, and another is the founder of Engadget and a free, online-only music label. Essentially, they all offer disparate perspectives regarding the way in whcih music consumption is changing.
In a paper meant to argue a particular position about the success of new online music distribution methods, any novice or statistical opinion must be tempered by that of the experts. This New York Times column is a unique and valuable compilation of 5 different expert opinions. Largely, everyone seems to agree that the music industry is undergoing substantial change and that the labels must be open to reinvention. One suggestion undrestood by the labels in 2007, it seems, are advertising-supported models. Most interestingly, in their opinions these experts define exactly why the internet has changed the demand for music so thoroughly: it has affected scarcity. This is a crucial basis of understanding for any marketing or revenue model that follows.