Yesterday I was coordinating the press preview for Scion’s new exhibit at their Culver City gallery: “Insiders, Outsiders & the Middle” curated by Giant Robot. Space Invader is one of the featured artists. As I watched the artists set up their work and transform the gallery before my eyes, I had the opportunity to chat with Space Invader about one of his pieces. The photo below was taken with my Blackberry Curve, so it’s not the best, but it will do….

So while this is a piece of art, there is very literally a hidden message. This is actually a QR Code/Data Matrix , which is the next generation of barcodes. I believe that QR Code and Data Matrix are 2 versions of the same technology and that the former was developed by a Japanese company and the latter by an American one. They work in the same way but just look a little different. We are all familiar with the black and white vertical lines of a barcode which designate a series of numbers. Well the QR Code, which is already very common in Japan (of course the US is technologically lagging), actually contains real data – words, hyperlinks, contact info, numbers etc. You can scan it with your reader-equipped cell phone and a message will pop up on your screen, or even a hyperlink.

So there might be a poster for a movie with a QR Code included – you wave your phone at it and it opens up a video trailer on your phone. No lie, this is actually real!

So back to Space Invader. The piece above has a message encoded in it. He demonstrated with his iPhone, on to which he had downloaded an app that can read QR Codes. He pointed his phone at the piece as if to take a picture and the text popped up on his screen “This is an invasion.” Nice! I tried to take a pic of the result but as you can see below, I couldn’t get the best photo with my cameraphone.

Additionally there is a 40% tolerance for error, so Space Invader can actually tweak the appearance of the code a little bit to include his signature space invader icon (or parts of it, check the bottom left corner), and the code will still be readable and produce the same message.

So expect to see a whole new level of street art popping up courtesy of Mr. Invader and once this technology is prevalent in the US there will be plenty of unique ways to market with it.
For more info on QR codes, check out:
http://en.wikipedia.org/wiki/QR_Code
http://en.wikipedia.org/wiki/Datamatrix

Generate your own!
http://www.i-nigma.com/personal/Create.asp

Ever since iTunes instigated the $0.99 per song model, it has been hotly debated. Some folks think $0.99 is too expensive for a song; others think it is not expensive enough. Still more think that there shouldn’t just be one standard price for tracks; that labels and artists should have more flexibility in pricing so that hot, new items can be priced higher than catalog material, following the pattern in brick and mortar stores. As part of this overall debate, there seems to be emerging what I think is a disturbing trend of wanting the new standard per-track price to be in the region of just $0.25.

I was prompted to write this specific post by what I read in a recent email newsletter from Bob Davis of Soul Patrol. He referred to some comments from Nettwerk Management CEO Terry McBride suggesting that the sweet spot for selling digital tracks is $0.25 and that this is what labels should be selling them for in order to create a ‘tipping point’ for digital music sales. Davis suggested that he felt the same way based on sales of his Virtual Album project where he varied the pricing of the album and found that approx $0.20 was the most popular per-track price.

I definitely agree with the overall concept of having variable pricing available as a digital retail model – the more options for artists, labels and consumers, the better. But I just can’t get my head around the overall goal of making music so ridiculously cheap. Call me old-fashioned but music in digital format has already been greatly devalued in the eyes of the consumer so why perpetuate this devaluation by suggesting that a song is only worth $0.25? Shouldn’t we be doing more to add value, not decrease it?

I think free and cheap music has its place for promotional and marketing value but when people then have their interest piqued enough to actually make a purchase, I think they should be shelling out more than $0.25 per song, or $2 per album (as McBride suggests).

Davis says “smart Indy artists & labels who adopt [variable pricing] as a core strategy, will be successful in not only making money, but more importantly will be able to identify and connect with their “true fans” and therefore be able create their own marketplace that will sustain their career/business for many years.” I followed up with him via email and he further explained his position:

The price of a song should be whatever the market will bear. The cheaper the song, the more people will become customers. It’s simple economics 101.

Consider the following examples:
If 100 people buy at $1.00/song, then you make $100.00

However it’s better for the career of the artist, if they sell 200
copies at $0.50/song, because now they have 200 fans.

Even better if they sell 400 copies at $0.25/song, because now they have
400 fans.

See it’s really the total number of fans (people who actually make a purchase) that is important to the artist long term career prospects, not the short term revenue.

The identification and obtaining the permission of fans to contact them directly in the future is what should be the primary goal of all indy artists on the internet. Identifying them and obtaining their permission to contact them directly in the future becomes the single most important online asset of the indy artist, because that is how you build your
consumer base for the future.

In my example, I now would have 400 people (as opposed to 100 people), who are my fans, that I can engage directly in economic activity, that because they are my fans (ie; they have actually brought something from me at least one time), I can probably sell them other things (concert tickets, merchandise, etc) in the future.

If you extrapolate a little, then if I have 10,000 people who are willing to spend at least $10.00/year with me, then I can have a minimum annual income of $100,000/year. Now I don’t have to have a “day job”…

Bob’s logic makes some sense on the surface but I think it lacks real practicality, especially for indies. I’m curious as to where Bob thinks the average indie artist can find 10 000 paying fans per year. From my experience, pricing is not the challenge for indies, gaining visibility is, and certainly the kind of visibility that could attract 10 000 customers. I don’t think that the $0.99 track price is the barrier to entry for consumers. Many indies can’t even attract enough attention when they give their music away. It’s more that they don’t necessarily have the resources for the marketing needed to attract a large number of fans. I think 10 000 paying fans per year is quite a steep goal for the average indie. And I’d argue that if those people are truly your fans, they would be willing to pay more than a few cents for your music. Once the emotional connection is there, if you are producing good music, people will pay for it. And I feel that should be the goal – to produce music good enough that people want to buy it – not to make your music available for bargain basement prices. Of course, as Bob states, indies need to develop that direct relationship with their fans, but there are other ways to connect with potential fans and get them on your mailing list without devaluing your product. This model might be able to work for majors who can make up for the low price with volume of sales but for indies I don’t think it’s viable.

Additionally the $10 per year that Bob’s plan requires each of the 10 000 to spend, means at $.25 per song, each one of those 10 000 needs to buy 40 songs every year! Not all 10 000 will want to buy the same 40 songs so the artist then has to produce way more than 40 songs every year of retail quality – again that could be a tall order. But then I guess if you’re only charging $.25 per song, they don’t have to be that great eh? Do we really want music to become fast food? Cheap, hastily consumed, and an entirely forgettable experience?

I’d also argue that just because I forked out $0.25 for a song, that hardly qualifies me as a fan and isn’t an indication that I’m that invested in you as an artist. However, get me to buy your whole album for $10 and maybe I’m someone who would then be willing to part with more cash to go see a show or make some additional purchase because I clearly have a real interest in your music.

Kevin Kelly recently suggested you only need “1000 true fans” to make the same living that Bob suggests – approx $100 000/year. Kelly’s concept is that you just need 1000 fans who’ll spend $100 in the course of a year. I’m not sure which model is better and would be interested to hear from musicians and labels who have direct experience to relate but it seems that this would be more feasible – a smaller number of people who have a strong connection to your music.

VARIABLE PRICING AS A PROMOTIONAL TOOL

I would suggest using variable pricing as a promotional tool, but not as a way to lower the benchmark for music. Reel listeners in with a limited time cheap download or something similar but the ultimate goal should be to develop the emotional connection and turn that buyer into a real fan – someone who thinks your music is actually worth paying for. i.e Use cheap pricing in a similar way as free promotional downloads – to create demand, stay visible, attract an audience – but the ultimate goal is to get fans to fork out $8 – $10 or so for a whole album, not $2. Lil Wayne gave away albums worth of free music in order to develop anticipation for Tha Carter III which is being sold for approx $10, not $2, and moved       1 000 000 units in its first week.

Labels and indies should absolutely experiment with variable pricing and see how their individual market and fans react in order to make the best informed decisions. The more choices for artists and consumers, the better. But I worry that lowering the bar to such a level will adversely affect the quality of music being produced, and the amount that consumers are willing to pay for music-related products.

MUSIC AS A LOSS LEADER

In a recent blog post on what seems to be a likely Amazon-Myspace deal, Lucas Gonze points out that for places like Amazon, digital music is a loss leader because the margins aren’t really that profitable.

“I’m skeptical that downloads will ever be a non-trivial revenue source for Myspace. The margins are too low.

Amazon itself doesn’t make anything on them; it makes money on downloads by using them to attract shoppers, and then upselling products with a real margin. For example, a user will click into Amazon to buy a download, see a recommendation for an MP3 player, and buy the MP3 player.

So if Amazon has a hard time making money on music priced a little below iTunes standard pricing, how can downloads priced at a fraction of the cost be profitable for indie labels and musicians?

Applying the concept of loss leaders that Lucas mentions here, it logically requires that the download is then just the gateway to other products that the musician will be selling for more money – concert tickets perhaps? Merchandise? These are probably the most common supplemental sales, but the fact of the matter is that the digital song is the most viable sale – possibly the cheapest and easiest to manufacture and distribute. The cost is unaffected by geography, unlike concert tickets where an artist has to physically be somewhere and must pay for his/her travel expenses and that of the band. So I’m not seeing how cheap downloads as a loss leader would really work for the individual artist or small label. I can see cutting the cost of a particular track or album in order to provide the gateway to buy other albums at a higher cost but I just don’t see how a viable business for indies can be made from cut-price downloads.

This morning I just read an article by Kavit Haria on InnerRhythm.org discussing a similar topic. Kavit takes a similar view to Bob: “it is no longer about how much people should pay for your music; it is about getting your music into the hands of as many people as possible.” While this may be true – the monetization has to come from somewhere and again, the struggle for indies IS getting it to as many people as possibleand I don’t think price in itself is the barrier.

I’d like to see some further exploration of other realistic revenue streams, or “upsells” that indie artists can pursue, especially if they plan on taking the tactic of making their music sales a loss leader. Feedback is always welcome. As always I’d love to hear from bands and labels who may be experimenting with these ideas and have real-life experiences to share.

So this is proof that the internet can work for some artists, but the common denominator in these, and other examples, is that it didn’t happen overnight. We’re talking months and years of consistent action and online networking in order to create the critical mass of online buzz needed to garner real attention. As I emphasised in my post on common Myths and Mistakes in Online Music Marketing, a digital strategy has to have a short and long term – it’s not a fast-track to instant success and I think this is where a lot of artists go wrong. This applies offline as well, but you have to be in it for the long haul and have a plan that makes best use of the tools available.

So it made me very happy to see what Lucas Gonze has been working on with his own music. He has created a dedicated page for a song “Frog In The Well” which adds a tremendous amount of context and value. There’s video as well as audio files, blog posts, sheet music, and background info. This is smart from several points of view and I’d love to see more artists doing this:

1) Additional SEO-able content for your site

2) With the addition of comments, you can create community around one song and further engage your audience.

3) Adding all this value for one song adds an additional emotional appeal to your music. Not only can fans see the amount of care and attention that has been invested on the part of the artist but it broadens their experience of the song and their emotional attachment to it.

4) By using a Creative Commons license and encouraging derivations, the life of the song is extended.

These are just some of the benefits of this type of song – enhancement and I look forward to see what Lucas and other artists will continue to do with this type of experiment.

If you are an artist and are doing something similar, or implement a similar method to Lucas, feel free to drop me a line.

Lucas has also taken this concept a step further and published on his blog a manifesto for the song page which includes ideas for structured implementation of this concept. I highly recommend reading this

On Monday June 30^th I attended the Urban Alternative Music panel here in Los Angeles, put on by The Recording Academy Los Angeles Chapter, at The Standard hotel downtown. A who’s who of the LA urban music scene was in attendance. Everyone from artists Leon Ware and Lina, to publicists, promoters, local artists, as well as reps from major labels and publishers, were in the room.

The moderator was David Mitchell of Urban Network Magazine. The panelists were:

Vikter Duplaix – GRAMMY-nominated recording artist and DJ

Dexter Story – Talent buyer/concert promoter, Temple Bar, Zanzibar, Little temple

Steve McKeever – Founder, Hidden Beach Recordings

Garth Trinidad – DJ – KCRW, music supervisor, event promoter

Sy Smith – Recording artist, musician

The panel was in part a debate on the Urban Alternative Performance category of the GRAMMYs, and in part a recruiting initiative for the Recording Academy to gain more members, that would better represent the audience of this category. This category is defined by the Academy as follows: “For newly recorded urban/alternative performances with vocals. This category is intended for artists who have been influenced by a cross section of urban music- from R&B, Rap and Jazz, to Rock and Spoken Word – and whose music is generally that which is outside of mainstream trends.”

The panel started out with a discussion on “what is the definition of urban alternative music?” which was a continuing theme throughout the evening. Honestly I felt this aspect was a little fruitless. Anyone who is truly a music lover pretty much ignores categories. And have you ever heard an artist say “I love it when people put me in a box and define my music for me”? So here you have a group of artists and artist-friendly people, discussing the thing they hate – categories – in a panel put on by one of the industry’s chief proponents of categories! So that part of the discussion was a little circular and unproductive as for the most part people discussed how restrictive it is for artists to have to define themselves a certain way etc. Nothing new there. Clearly in the context of the GRAMMYs, categories are necessary, and since this category has already been defined as described above, why talk circles around it? Why not start out accepting the fact that the category has been defined in the way it has, and move on from there?

One theme of the debate centered on issues of independence vs. mainstream. There seemed to be a strong feeling that Urban Alternative was almost synonymous with underground music. An audience member from J Records even suggested that radio spins, or lack thereof should be a determining factor when considering who should be included, arguing that someone like India Arie gets major commercial radio play and therefore can no longer be considered alternative. The other side of that coin is that, even though a group like Gnarls Barkley gets major airplay, their sound is still different, i.e “alternative” compared to other mainstream acts. Another issue that was brought up was, should an icon like Prince even be considered or should he be passed over to make way for more unknown acts?

Personally I think this is mixing and matching two different issues. This category developed from a need to recognize artists such as India Arie, Van Hunt, Me’shell Ndegeocello et al, who undeniably have a place in “urban” music, but shouldn’t necessarily be compared to, or forced to compete with the Beyonce’s, Ashanti’s etc because their style of music is clearly very different. As Sy succinctly said it “It’s just not appropriate.” The creation of separate categories for independent music seems to me, to be a different issue. At the same time, Duplaix said he would love to see his name in a category next to Prince, suggesting that any artist musically appropriate for the category should be allowed to compete on an equal playing field. To me it should be about the quality of the performance and song, not the level of recognition an artist may or may not have.

The “Urban Alternative” category in particular seems more troublesome, and more open for debate than others because of that pesky word “alternative”. You can’t be alternative if there’s not an overarching trend to be differentiated from. In contrast, most of the other GRAMMY categories are neatly and finitely determined and defined, but this one is by definition relative to whatever is considered “mainstream.” So in theory this category has change and evolution built right into it – as long as it’s urban, but different than what’s going on in mainstream, then it’s alternative.

As the discussion kept coming back to genre labels and how artists dislike them, it struck me as fruitless to keep making the argument that labels in music are bad. As Sy pointed out, the labels and categories basically exist for the people trying to make money off the music (i.e. advertisers) and those trying to figure out whose listening (i.e. more advertisers). Musicians generally don’t care to label themselves and most average consumers don’t feel the need to label their tastes too rigidly. We listen to what listen to because we like it, and enjoy it for what it is, not because of the label some corporation has given it. Most casual radio listeners probably don’t even realize that their tastes have been formatted and packaged. They wouldn’t even know what Urban AC music is, even if it’s the “format” of their favorite station. On the level of experience and enjoyment of music – labels are unnecessary.

However we have to understand that the labels become necessary if you want to enter into the mainstream machinery, because that’s how it’s currently set up. BUT let’s all realize that if your music is good enough, it will transcend ALL labels. Hence why someone like Erykah Badu can be considered ‘mainstream’ or ‘pop’ because she is commercially successful and a household name. At this point it doesn’t matter how you ‘format’ her music – she’s past that. It’s unnecessary because she’s just Erykah now, and we know what that means. We no longer need to try and describe her as R&B, neo-soul or urban alternative.

There was a lot of talk on the panel about the label “neo-soul” and how a lot of artists now basically consider it a derogatory term because it has become a stereotype of itself. Even Kedar Massenberg, who coined the term, now despises it, according to an anecdote told by Vikter Duplaix. But even this label was born of necessity from a marketing standpoint to throw light on the work of a certain type of artist and to highlight how it was different than other music around at that time.

We all – consumers, fans, advertisers, promoters etc – need to be evolved enough to know that the label is just a way of describing; it’s just a convenient function of language that should make it easier for us to communicate about music. Let’s not get too attached to the label or definition itself to the point of obscuring the music. Make the labels work for you, but don’t let them limit you.

A final interesting point I’d like to highlight was made by Vikter Duplaix. He talked about how, as an up-and-coming artist, hearing your music on the radio alongside the likes of an Usher or a similar product of the ‘mainstream machine’, actually gives you the opportunity to hear your music in a different context and to learn to improve it. There’s a reason why Usher’s records sound great in a club or on the radio, and alternative/indie musicians can learn something technically from that and apply it to their own music to make it sound even better. This put the underlying “indie Vs. mainstream” dichotomy in a new light. We need to stop generalizing “mainstream” in general as Bad. Wouldn’t it be great for us as music fans for a Sy Smith or a Vikter Duplaix to be so popular that they would be considered mainstream? By limiting our definitions and clinging on to any particular label too tightly, whether that be “independent”, “neo-soul”, “underground”, “alternative” or whatever, we do the music and the artists a disservice. Let them grow as they wish and support them as long as you enjoy their music. For Sy, who enjoys her anonymity perhaps that will mean she will be considered “underground” but will make a healthy living from her music. For Vikter, who wants to win GRAMMYs and have the world at large know who he is – let’s support him for as long as he makes great music, even when he’s considered mainstream along with Usher, and not necessarily ‘urban alternative.’

The panel was entertaining because of the great personalities involved and there was some good information shared. But I think that the starting point of trying to define “urban alternative music” put the flow of discussion in a disadvantaged place. I would have liked to have seen more of a focus on positive and progressive elements – how to support and develop the careers of artists involved, for example. Or a more productive discussion on how to make the necessary evil of ‘labels’ and ‘categories’ work for you as an artist, and not against you. Also, the sub-title of the panel was “A Global Movement” but there was no discussion of this aspect at all.

]]> http://elemental-consulting.com/blog/urban-alternative-music-panel/feed/ 4 http://elemental-consulting.com/blog/lucas-gonze-on-the-politics-of-embedding/ http://elemental-consulting.com/blog/lucas-gonze-on-the-politics-of-embedding/#comments Fri, 30 May 2008 22:53:48 +0000 elemental http://digitalmarketing.elemental-consulting.com/?p=26 I touched on the issue of major labels not allowing the embedding of their content, in a previous post “9 Myths and Mistakes in Online Music Marketing“. It’s my position that this is a Bad Move on the part of the majors, or any corporation that tries to do this. It is contrary to the nature of the viral sites they upload content to, such as YouTube, to try and prevent the obvious taking place. Why must they take tools designed for sharing and viral perpetuation and try and bend and warp them to their will? If you don’t want to play nice, just get out of the sandbox instead of trying to own the sandbox for yourself. No one likes a bully.

Lucas Gonze presents a much more eloquent and well-balanced view of this issue in this blog post, “the business impact of requesting to disable embedding of music videos in label channels on YouTube.” He believes, and I’m sure he’s correct, that such moves are an attempt to gain leverage over portals like YouTube to assist them in negotiating revenue deals and also control of distribution. While Lucas doesn’t like to bash the labels for the sake of it, and is sympathetic to the “constraints” under which they work, I am not so compassionate.

The more I hear about labels trying to negotiate their own cuts etc with the Myspaces, YouTubes etc of the world, the more irritated I become because I believe that the consequences of this are never good for the indies or for music consumers and fans. They are in fact creating what Lucas describes in a previous post as the anti-internet: “Imagine a web in which every relationship had to be negotiated by hand. It would be the opposite of the internet.” Now where’s the fun in that? I’m sure it makes great business sense for them to try and do this – systematically cut themselves in on any successful business model/distribution channel that anyone creates – but I am basically philosophically opposed to what I see as dressing bullying up as business, when the impact will most likely be at others’ expense -whether its fans, or artists outside of their system.

I’m not anti-copyright or anything along those lines. I believe music should be paid for unless the artist/rights-holder says otherwise. But the majors are seemingly trying to fight against the whole evolution of web 2.0 which is characterized by user-preference, customization, collaboration and a plethora of distribution points. The labels are trying to control every point of distribution which would seem to be a losing battle, when distribution is in the hands of the masses. They cannot, by force of will, force the internet to regress to 1.0 where content was closer to being fixed, immutable and controlled by one or two parties. Hasn’t the death of DRM taught them anything? Wasn’t that an almighty waste of resources? The embedding battle seems like a similar fiasco in the making….