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'Indie' Empowerment: New Media Strategies and the Rise Of ‘INDIE’ EMPOWERMENT: NEW MEDIA STRATEGIES AND THE RISE OF THE INDEPENDENT ARTIST by Simone K. Harris A Thesis Submitted to the Faculty of The College of Business in Partial Fulfillment of the Requirements for the Degree of Master of Science Florida Atlantic University Boca Raton, Florida August 2010 Copyright by Simone K. Harris 2010 ii ACKNOWLEDGEMENTS I must take the time to acknowledge Prof. Michael Zager, Committee Chair, as well as my advisors, Prof. Caryn Conley, and Prof. Alejandro Sanchez-Samper for their guidance and suggestions throughout the creation of this paper. I would like to thank international recording artist, Diana King for not only giving me my first taste of the global music business but also for reading and re reading my drafts while giving me insight on new media from an artist’s perspective. I would also like to thank my sister, Dr. Afifa Aza, and my mother, Beverley Harris, for their constant support and encouragement throughout this program. iv ABSTRACT Author: Simone K. Harris Title: Indie Empowerment: New Media Strategies and the Rise of the Independent Artist Institution: Florida Atlantic University Thesis Advisor: Prof. Michael Zager Degree: Master of Science Year: 2010 The use of new media technology which refers to digital, computerized, or networked information and communication technologies such as the Internet, mobile devices, gaming, and social networks, has come to define the music industry today, and it is this technology that has empowered independent artists in such a way that they are now free to pursue heights of success previously only available to major label artists. New media technology has affected the traditional business models of major labels, it has resulted in gross decline in recording costs, given birth to new channels of music marketing, and business models, and has created a new music clientele that requires instant gratification, personalization, and connectivity. In the face of such change, independent artists have been empowered and can access opportunities to distribute music independently, market and promote music effectively to niche markets, secure publishing deals, while building their own community of dedicated fans. v ‘INDIE’ EMPOWERMENT: NEW MEDIA STRATEGIES AND THE RISE OF THE INDEPENDENT ARTIST List of Tables.....………………………………………………………………………… vi List of Definitions.........………………………………………………………………… vii Introduction ........………………………………………………………………………… 1 Industry Overview........……………………………………………………………….... 11 The Nature of the Recording Industry....................………………………………… 12 Universal Music Group (UMG) .......................………………………………… 14 Sony Music Inc.........................……………………………………………….... 15 Warner Music Group (WMG) ..............……..…………………………………. 16 EMI .................…………………………………………………………………. 17 Declining Recording Costs............………………………………………….……… 19 Trends in Music Sales – What do the figures say? ........…………………………… 23 The Shrinking Popularity of Traditional Mass Media and the Changing Face of Marketing ..…………………………………………………. 27 New Business Models ...................………………………………….……………… 33 Digital Retail ...............……………………………………….………………… 33 Subscription Services ..............…………………………….…………………… 36 Advertising Supported Models and Social Networks .............…………………. 37 Patronage .....................…………………………………………….…………… 38 vi Licensing .....................………………………………………….……………… 41 Direct-to-Fans.............……………………………………….…………………. 41 Consumer Behavior .........…………………………………….…………..…………42 A View from the Top: What the Industry Overview Means for the Independent Artist ..................................................................................................... 46 General SWOT Analysis for an Independent Artist..........................................................60 Internal Environment Analysis ...................………………………………………... 61 Strengths....................……………………………………………………………61 Weaknesses................……………………….…………………………………...63 External Environment Analysis...............…………………………………………....65 Opportunities ........................................................................................................65 Threats ...................................................................................................................67 Independent Artist Case Study ..........…………..………………………………………. 69 Analysis of Artist Background and General Information..................................................74 Analysis of Artist Online Presence....................................................................................79 Analysis of Artist New Media Strategy.............................................................................91 Cherine Anderson .......................................................................................................92 Umphrey’s McGee ......................................................................................................94 Michael Sean Harris ............…………………………………………………………98 Problems with Michael’s Strategy...................…………………………………100 Conclusion.......…………………………………………………………………………106 Appendix .........………………………………………………………………………...110 References .......…………………………………………………………………………170 vii LIST OF TABLES Table 1. Matlby Annual Financial Review for 2008.....................................................18 Table 2. Basic Components of a DAW .........................................................................22 Table 3. Major Digital Aggregators (US)......................................................................34 Table 4. Major Online Music Retailers (US) ................................................................35 Table 5. US and Non-US Online Advertising Spending on MySpace and Facebook 2009… .............................................................................................................38 Table 6. Artist Background and General Information...................................................71 Table 7. Artist Online Presence.....................................................................................77 Table 8. New Media Strategy........................................................................................85 viii LIST OF DEFINITIONS Bridge Ratings - is the only provider of media consumer behavior analysis and the impact of new media on traditional radio. comScore - an Internet marketing research company providing marketing data and services to many of the Internet's largest businesses. DAW – a digital audio workstation (DAW) is an electronic system designed to record, edit and play back digital audio. DIY - is a term used to describe the strategy used by bands or solo artists to release their music on self-funded record labels. EBITDA - income before interest and taxes and depreciation and amortization have been subtracted; an indicator of a company's profitability. eMarketer - a business information service that aggregates, filters and organizes data from over 4,000 global sources. EMI – Electrical and Musical Industries Ltd. is the fourth largest recording company in the world. Entertainment Software Association - the trade association of the video game industry in the United States. ix EP - “extended play,” usually a shorter version of a full-length album that could include anywhere from 2 to 10 songs. EPK – electronic press kit. Future of Music Coalition - a national nonprofit organization that works to ensure a diverse musical culture where artists flourish, are compensated fairly for their work, and where fans can find the music they want. IFPI - The International Federation of the Phonographic Industry (IFPI) is the organization that represents the interests of the recording industry. MP3 - a common audio format for consumer audio storage, as well as a standard of digital audio compression for the transfer and playback of music on digital audio players. NAS Recruitment - creates solutions that assist organizations with their recruiting, employment branding and on boarding/retention efforts. Podcast - a series of digital media files (either audio or video) that are released episodically and downloaded through web syndication. RSS feeds – Rich Site Summary or Real simple syndication (RSS) is a relatively new and easy way to distribute content via the Internet. SWOT - a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. x UMG – Universal Music Group. WMG – Warner Music Group. xi INTRODUCTION These are indeed exciting and dynamic times in the global recording industry. Artists, consumers and executives alike have witnessed (and continue to witness) historical shifts in the macro and microeconomic structures of the industry, brought on in large part by numerous technological advancements in areas of music production, distribution, and consumption. These technological shifts have catapulted the musical product into a characteristically digital, and computerized realm where ‘new media,’ “the most current electronic means of mass communicating messages to an audience” (Inculink, 2009) has reduced barriers to entry and has created endless opportunities for independent artists to achieve measurable success. New media does not depend on the traditional means of communication; rather, it includes the use of the Internet, mobile devices, electronic games, RSS feeds, social networks, blogs and podcasting. While traditional media is still utilized, statistical reports on the growth of
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