MU-403 1 New Technologies Candidate 4410

KANDIDAT 4410

PRØVE MU-403 1 New Technologies

Emnekode MU-403

Vurderingsform Skriftlig eksamen

Starttid 28.11.2016 09:00

Sluttid 28.11.2016 14:00

Sensurfrist 19.12.2016 01:00

PDF opprettet 31.08.2018 09:49

Opprettet av Digital Eksamen

1/5 MU-403 1 New Technologies Candidate 4410

1 Front Page MU-403

Course code: MU‐403 Course name: New Technologies

Date: 28.11.2016 Duration: 5 hour individual written exam

Resources allowed: Closed book examination. Dictionaries are allowed.

GOOD LUCK! ------

Sometimes professors ask for exam answers that can be used for teaching purposes, but in order for this to take place, the university needs your consent. Do you grant the University of Agder permission to use your exam answer for teaching purposes?

Select an alternative:

No

Yes

Riktig. 0 av 0 poeng.

2 Assignment

1) The music industry is said to have gone through a set of changes leading it from high margins and low complexity to low margins and high complexity. Describe some of the technological and economical drivers behind this transformation and discuss what can possibly be done in order to again heighten the margins and lower the complexity.

2) Social media and online services have developed alternative advertising possibilities in the online environment. Describe some of these and use an artist of your choice in order to explain what works best for different musical repertoires and genres.

Fill in your answer here 1)

The music industry was built around the concept of a physical record, and in many ways it still is. Recording and releasing music wasn't cheap or easy. Gatekeepers like the publishers and the labels had control of what music was released, and even more gatekeeprs like the radio stations had control over what was played and became succesfull. The relatively high cost of a record kept the reveune of each sale up, and it was fairly easy to keep track of. As publisher and labels had more control of what was released, it was easier for them to put in claims to collecting for performances societies, and keep track of revenue from physical sales. It was also simpler to keep track of who contributed on each recording, allthough disputes over this has allways existed. All of these factors kept the margins high and the complexity low. By no means can it be considered a perfect system, but it worked, argably, fairly well within the context of copyright laws.

Much and more has been said and written about the changes that have occoured since then. The rise of the internet is by far the largest factor here, and there a lot of factors that has to bo considered. The way music is consumed is one of the most important of these, but other factors like the recording and distribution must also be considered.

DAWS (Digital Audio Work Staions) must be considered both a technological and economical driver for the decreased margin of entry into the music industry. Recording music prefessionally used to be difficult and very

2/5 MU-403 1 New Technologies Candidate 4410 expensive. Workstations like Logic and ProTools changed this. As every new version of these programs are getting more powerful and affordable, it is getting increasingly easy to record professional sounding tracks in the comfort of ones home basement. This music can then be shared online with ease. The gatekeepers of the physical era is almost non existant. Radio and TV still plays a major role in what is successful and not, but the barrier of entry into the industry is much lower. As this trend continues it is perhaps not possible or feasable to reinstate the old gatekeepers, but new ones are popping up. To rise to the cluter in an inreasingly flodded market the precurrated playlist has proven to be important. As people chose not to chose what to listen to, to get on one of these can ensure more exposure and revenue. Taste makers across the internet also plays an increasingly important role in deciding what music is consumed. Aggregators now has a more important part to play as they help pushing the music out through many outlets, and make sure it stands out from the clutter.

On our way to the music industry to day we managed to kill the album formate. The way music is consumed has changed drastically in the online world. Platforms like iTunes still works more or less like a store, but with the possibillity to download single tracks instead of albums the cost, and therefore revenue of each aquisition decreased. The invention of peer to peer rose to prominece with Napster in the late 90's and early 00's, and made waves across the music industry. Streaming services like Spotify, TIDAL and Apple Music in large parts gave control back to the labels. These services are more remenicant of peer to peer technology than online stores, and still mostly singles are being streamed, with precurrated playlists rarely having more than one song per album, and most people just quing different songs they like and adding them to favourite lists. Together all these factors played a part in killing the album formate. This way the revenue per aquisition decreased rapedly. People now only pay per song, and not for the whole album. In online stores where music is downloaded this still kep the margins somewhat up, but in streaming they plummit to an allmost comicly low fee. A song has to be streamed a lot of times to even build up revenue that it's even feasable to pay out to the creator. Compared to the relatively high price per copy of a physical album this fee is almost non existant. With the pro rata system that most streamin services are buildt around, lesser artists are lucky if they get paid anything at all.

A lot of people are critical of this model, and many of them promote a user centric model as opposed to the one that is being used. The argument for this is that the 99 NOK a user pays every month to listen to Kings of Convinience uninterupted should go to them, and not be split up to pay the most playd artist on Spotify, who the user don't even like and much less listen to. Again many are saying that this user centric model still isn't fair, and in some cases not sustainable. It can be incorporated with other models that can fix some of the problems. Some argue that streaming services in the future should have subscriptions on different artists and/or genres. This can make dividing the revenues from the different users easier and more fair. Other models that possibly can work on their own or together with some of the ones that is allready mentioned is among others special subscriptions where the consumer pays a little bit more. Perhaps 149 or 199 NOK instead of 99 NOK to make sure that parts of, or the whole sum goes to the artists he/she listens to. Perhaps this can co-exist with casual listeners and or free users, where revenues from ads and normal subscriptions is divided as before. This is perhaps not a perfect solution as it will lead to increased complexity and several choices for consumers, as opposed to the easy model of today. This can possibly lead to less consumtion as Barry Schwarts argues in "The Paradox of Choice", and it doesn't fit perfectly with the psychographic of todays consumers, who want eveything at the tip of their fingertips, as easy, cheap and fast as possible. To quote a song by Freddy Mercury and Queen. "I want it all, and I want it now!". Still it seems like a better option that what exists today.

With the hack of Sony, and the release of the contract between them and spotify, one fact became increasingly clear. it is very dificult to track where all the money is going. Creators and artists are citizising Spotify for not paying out what they are owed, and Spotify on their side defends them selves by saying that the money is paid to the labels in according to the agreement, and it's the labels' job to distribute it fairly. The lack of tranceperancy makes it dificult to find out where the problem lies. Blockbox money like breakage fees are abound, and not all of the revenues are allocated at all. If a problem can't be located, it is nearly impossible to fix. This goes for the major collecting societies as well. While some are fairly open about the trasaction costs, what is uallocated revenue and what it is used for, far form all of them are. Transperancy is key to to again move the industry towards higher margins and lower complexity.

On the subject of the collecting societies one problem emerges. The allocation of revenues. The decreased difficulty of entering the music industry makes it easier for people to lay claims to the music they have created. A lot of musical property has also been bought and sold over and over again over the last decades, every time this changes or ads rightholders. The job for the collecting societies is then made more difficult, as they often doesn't have a full register of the track, the author(s) and alle the rightholders. Disputes of claim increases the amount of blackbox money, which is unalocatable. To combat this there has been discussions about a full international registry of pieces of music and rightholders for years. This faces a lot of difficulties, as tracking down the righthlders is hard, some people and companies thrive because of the fact that they alone has the information and some rightholders want to stay anonemous. Still an international standard for registering music, and a one stop shop to find rightholders seems to be the only way to go to fix this problem. ISWC and ISRC has been added to a lot of tracks, but far from enough, and they simbly don't hold enough information. Also, whenever rights are bought and sold new information is added on top of this. Many argue that blockchain is the way to go for solving a lot of the problems with allocating revenue directly from the stream. This was discussed at great length at the 2016 Round Table Conferance in Kristiansand. There are positive and

3/5 MU-403 1 New Technologies Candidate 4410 negative features of blockchain when it comes to dividing revenue, but there is no doubt that some of the features of the technology can make it easier to identify tracks and rightholders, which makes the work og collecting societies much easier. Another possibillity that has been tossed around for years is a system comparable to the SWIFTH code that banks use. This makes automatic transactions easier. Other posibillities is music recognition softwares like the ones found in apps like Shazam. Although this will not solve the problem of the rightholders, finding which tracks is being played at all time is easier, users of public background music like restaurants and hairsalones has an easier time reporting what is being played, and it can be incorporated with some of the other solutions to make a system where music is instantly recognised, chencked up against a non stop updating list of rightholders, and the revenue is allocated fairly

2)

The most obvious possibillity in the online enviroment is the use of social media. The band has their own facebook page with around 100.000 likes. Some of these fans, ranging from casual listeners to raging fanboys, even subscribe to the page to get the bands posts higher up in their news feed. Here the band can interact with the fans, share information, promote their music and merch and get fans to participate in competitions. To maximize the effect of social media it is important to be visible on multiple platforms. Services are made to make it easier to control the new feed on multiple platforms like facebook and twitter at the same time from the same site. This makes it easier to post important information on several platforms at the same time, time posts in advance and make sure that you allways have the maximum amount of audience reach. The feedback from fans is instant. This is both positive and negative as negative and harmfull feedback can be prominent, but this is important to make the fans feel included, and to keep open comunication with them.

Several online medias, especially social media, have developed diferent services to give online ads to people who might be interested in your music. Some of these are AdWords for Google and Facebook ads for, you've guessed it, Facebook. These services usually work along the lines of PPC (Pay per click) where you don't neceserely pay every time a person is exposed to the ad, but if the person the clicks the ad to look more closely at the offer. This works wheter or not it is done on purpose, so when a person clicks your ad by mistake while trying to hit the link below that mysteriously shifted a few centimeters towards the bottom of the screen in the last second, you still pay. It will still ensure you active interaction from the consumer in most cases, and not just random exposuers without much effect. Another way to pay for it is CPM (Clicks Per Mille) where you pay per 1000 exposuers to the public.

If a band like Keep of Kalessin would use this for of advertisement they would try to make sure the ad created as much conversion as possible. In contrast to the reach of social media, it is not advisable to strive to reach as many consumers as possible on as many platforms as possible. Simply putting up an ad randomly across the web won't get you far, so it is important that the ad hit your demographic. In this case the band would like to reach a niche audience, as well as trying to get recognition from a wider aray of metalfans. Keywords as common as "metal" would be to wide, and would create a lot of exposuers with very little conversion, so more specific keywords along the lines of "extreme metal", "progressive metal" and "norwegian metal" would make sure that the audience that is targeted allready have some interest in the product that is offered. The ad program then searches databases to find audience which have posted about this type of music in social media, has it listed under their intrests on social media or have consumed this kind of music before. The ad will then be shown on their social media, when they use search engines or when they use services to consume music. it depends on the reach of the ad program. To make sure the ad is as effective as possible the band must keep track of their KPIs (Key Performing Indicators) to make sure the ad has the wanted effect, wheter this is to buy an album, stream a single, promote a concert or get more people to visit the bands web page. If the ad does not performe as expected, key words can be altered, the ad can be changed to easier grab the attention of consumer, and more or less money can be put into the marketing budget of the ad program to get the wanted effect at the lowest price possible. Put some SEO (Search Engine Opimization) and some hygiene factors into the mix to increase effect. At the end of a set period, the marketing team for the band, in this case the lead singer and guitarist of the band and his friend Alex, meet up to review the conversion rate of the ad and the KPIs through Google Analytics, to see if it performed as expected. if the single was not streamed 100.000 times during the week, or not enough new fans joined their online comunity to praise the new alternate picking on the bridge right before the third chorus in the chat room, the expectations must be adjusted, or more meassures must be taken to maximize effect in their next ad campaigne.

When a converion has taken place it opens the possibillity of CRM and re-marketing. This has been used a lot by large corporations in the past to great effect, and is begining to take a hold of the music industry as well. Oscar is a fan of metal, more specifically extreme metal. he has posted about this on facebook a lot of times, and suddenly an ad appears for Keep of Kalessin, a norwegian band he has never herd of before. Their new sigle is out, and the title darws his attention in. He then clicks the link, get to their home page, streams the new track and likes what he hears. A conversion has taken place. He likes what he hears and even buys a t-shirt with their cool logo. Now the ad-program knows that Oscar is a fan, so when the whole album is released it gets re-marketed to him through a new ad that flashes on his computer screen. A few weeks later a video is released on their facebook page for a competition to play the best cover of the first single possible, and post it on the bands web site, off course with especial consideration being given to the one who plays the now

4/5 MU-403 1 New Technologies Candidate 4410 infamous alternate picking bridge to perfection. The price is free tickets and a meet and great with the band for the winner the next time they are in town. Being an aspiering guitarist Oscar records him self palying the track and posts it on their web page. To do this he has to sign up, and write his personal information and email. Now the CRM (Customer Relation Management) has a lot of information on Oscar, and this can be used to send him news letters, and even more targeted ads. The band knows that he is a 23 year old male who lives in Kristiansand. This fits perfectly with their demographic. Off course he doesn't win the competition. Daniel does! After all he has a masters degree in performing . Still, when the next tour is announced, Oscar recives a news letter about the tour schedule, and the ads on his social media platforms now only advertise the concert in Kristiansand. They also have a new t-shirt out in their web shop, and since he was a part of the competition he off course gets a small discount. Oscar is now in the loop, and is sure to use money on Keep of Kalessin in the future.

In the endless stream of information and different possibillities in the online world CRM and re-marketing makes it easier for the consumer to make a choice. Barry Schwarts says that the endless possbillities paralyzes the consumer, and prevents him form making a choice. By narrowing the possibillities, looking at the patterns of intrest and consumation of Oscar, it was possible to give him a recomendation on what to consume next in the foaming sea of metal music. by looking at his location the shows that is closest to him can be marketed, the merch he is most interested in will be what he is recomended, and now other bands that are in the same niche as Keep of Kalessin will get the information that he is a fan. Suddenly a new add pops up on his facebook. Not for the latest Justin Bieber album, but from 1349 and Pagans Mind. Oscar is allways hungry for new music, but does not have the time to go through all that Spotify has to offer to find his new favourite band. The Choice has now been made for him, and the circle of ads start over again. At the same time, Pete who is a 1349 fan now gets recomended Keep Of Kalessin. Both Oscar and Pete are happy that they don't have to search through all the quote unquote "good" music to find exelence, and both 1349 and Keep of Kalessin thrives from their mutually benefitional arrangement.

Forms of direct marketing is also possible through the social media. Not in the traditional form of consumers getting paid for every sale that is made becuse of them, allthough this might be a marketing model of the future, but by campaignes and competitions made by the band. Their latest post on facebook urges everyone to share their new music video, and a link to their web site. If 100 persons like the video they will get disscounts in their web shop. If 50 people make an aquisition on their webpage through their link, they will get free merch. This increases audience interaction and ensures an an entusiastic fanbase and a bank account that is not empty, even when the band is not touring. This works especially well in the metal comunity where fans often are very attached to their bands, and will help promote them at every turn.

To get an even broader audience reach it is a smart idea to use tastemakers. There are people online who blogs about music, whose opinion carries great weight for a lot of consumers. Keep of Kalessin has great interaction with these tastemakers in the metal comunity, and will send them all their new material for free, hoping that they will recommend it to their loyal fanbase. It is important to have interaction with these people between releases as well to build repour, and to keep the relationship fresh. This way they are more likely to view the material in a positive light, and reomend it more wholeheartedly.

Besvart.

5/5