DEFINING AND MEASURING VALUE IN THE CONTEXT OF WEB 2.0: AN ARTIST PERSPECTIVE OF “EFFECTIVE” PROMOTION FOR NEW MUSIC TODAY. By Jeremy W P Haigh MA Music Industry Management Dissertation LTPP44N, January 2013 London Metropolitan Business School Word Count: 18,000 Acknowledgements: I would like to thank London Metropolitan Business School and the senior lecturers: Richard Salmon, Peter Dyson, Milan Todorovic and Gareth Thompson for their insight and guidance. This research would also not have been possible without the help of ACA Music and Radiomonitor. 2 Contents Abstract …………………………………………………………………………………..... 3 Introduction ……………………………………………………………………………….. 4 Literature Review – Music Industry Overview ……………….……………………… 6 The Media: Background History and Theory …………………………………... 6 The Digital Revolution ……………………………………………………………. 8 Music Industry Recording Sector: “The Majors” ……………………………….. 9 Copyright Law in the Digital Age ………………………………………………… 10 Digital Developments in Consumption: Ownership & Access ………………... 12 Digital Developments in Marketing: Reaching for The Long Tail ……………. 13 Literature Review - Area of Business/Management Theory……………………… 14 Digital Marketing Strategy with Web 2.0 ……………………………………….. 14 Social Media Case Study of Lady Gaga ……………………………………….. 16 Social Media Framework of Measurement …………………………………….. 17 Social & Networking Value with Web 2.0 ………………………………………. 20 Consumer Research Today: Radio Is King …………………………………….. 21 Cultural Currency and The BBC ………………………………………………… 22 Conceptual Development ………………………………………………………………. 24 Research Methodology …………………………………………………………………. 27 Case Study ………………………….…………………………………………….. 28 Artist Questionnaire ………………………………………………………………. 29 Questionnaire Design ……………………………………………………. 30 Questionnaire Data: Processing, Collection & Analysis ……………… 34 Findings & Analysis ……………………………………………………………………… 35 A Radio Case Study of Sam and The Womp ………………………………….. 35 Artist Questionnaire: Marketing & Promoting New Music in the UK ………… 41 Multiple Promotional Methods …………………………………………... 44 Web 2.0 Platforms ……………………………………………………….. 47 Benchmarking Digital Currency ………………………………………… 49 Conclusions & Recommendations ……………………………………………………. 57 References ………………………………………………………………………………… 60 Bibliography ………………………………………………………………………………. 63 Appendices ………………………………………………………………………………... 67 3 Abstract This paper explores the history and theory of media communication, with the developments in technology leading to the digital revolution. In discussing the Internet as a promotion and marketing tool for new music today, the notion of Web 2.0 is highlighted in particular. This is explained in the context of digital currency, where value may be represented by time, attention, action and advocacy, through the networking effects of a global, digital economy. However, in order to define what value is and how it might be measured, this research identifies a set of key performance indicators for the music industry. Fundamentally, it not only distinguishes between different online and offline promotional methods, it also reveals specific Web 2.0 platforms used by the music community. By creating a set of benchmarks for these platforms through a combination of metrics, artists can better understand how results might be measured and quantified. Through a questionnaire survey, social media and online video was found to increase appreciation and awareness of an artist. This is contrasted directly with the dominance of national radio broadcasting as a major influencer and driver of record sales, using a case study approach. 4 Chapter 1: Introduction New technologies and changing consumer behaviour has drastically reshaped the music industry. This technological advancement lies in the opportunity to speak directly with consumers through a range of Web 2.0 social media networks and distribution platforms. Consequently, the barrier between content and the medium through which this content is accessed has become increasingly blurred. Artists can, for example, use online services to distribute their music independently via mainstream music retailers, registering songs with collecting societies in order to receive royalties from sales, broadcasts and streaming services. Limitless potential now exists to market directly to fans/consumers through social networking platforms. Hence, de-institutionalized communication networks continue to reconfigure relationships through the Internet, which, in theory, levels the playing field: artists can be creators, producers and marketers. Traditionally, the ability to reach “the masses” required access to gatekeepers, with whole divisions within major record companies focused on these tasks. However, Web 2.0 destabilises this mass media model, which, according to Küng is: ‘the distribution of an identical message to many recipients’ (Küng, 2008, p.96). Furthermore, Leonhard and Kusek (2005, p.38) consider that the fundamental change between the relationship of consumers and music is not the need to own a product (by being a passive consumer), but to freely access content as a user of large information networks. Hence, music is accessible now more than ever before, but this depth affects consumer’s perceptions of how music is valued. The ease with which digital music can be copied and shared online has undoubtedly shaped a new “digital economy,” which has challenged the content industries and the policies and laws that seek to protect them. This embedded digital culture may have arguably contributed to falling revenue streams offline for the recording industry, but has consequently created opportunities for independent artists to capitalise in other areas instead – or so it would seem. The difficulty for independent artists, however, is to compete against the relatively small number of mainstream artists (often signed with major recording labels) who receive mass marketing through cross-channel promotion (e.g. radio, television, film, newspaper, internet etc). Additionally, the saturation of new music available online makes it increasingly difficult to stand out. Although the promise of Web 2.0 alludes to artist reaching niche or narrowcast audiences online, national radio’s broad appeal offline remains a key influencer of popular music taste today. 5 Thus, two main debates emerge from existing research, which form the underlying assumptions for this deductive research: 1. BBC Radio 1 & 2 is the dominant marketing channel for promoting new music to a mass audience, due to cultural and historic record industry relationships. This arguably drives mainstream chart activity, based on record sales/radio success, and vice versa. 2. Web 2.0 is an open, democratizing system, offering unlimited potential to increase audiences through the interconnectedness of social media. Success, however, is relative and hard to measure. Social media is a somewhat recent mainstream phenomenon. As a result, little research has been conducted on how independent artists view and experience such rapid developments online, possibly owing to the ongoing music industry’s “digital piracy” campaign that has dominated headlines (and research) for the past ten years. However, Collins and Young (2010) have made an attempt at capturing artist perspectives (as opposed to music consumers) regarding the promise of Web 2.0. Hence, the overall aim of this research is to contribute further to the debate by exploring the use of Web 2.0 technology by artists as a promotional channel, in contrast to the more traditional institutions (the radio industry). This research acknowledges that there is a lack of evidence to support the notion that artists can be commercially successful without traditional radio promotion, despite the “promise” of Web 2.0. Therefore, the objectives of this study are to highlight the dominance of BBC Radio 1 through empirical evidence; and, in light of this, develop a greater understanding of why artists are continuing to focus their efforts online through an examination of digital currency. The following chapters will allow readers to gain further insights into the phenomenon of music promotion. To explore this in detail, Chapter 2 will outline the current context of the music industry. Chapter 3 will explore Web 2.0 technology and the concept of digital currency through a digital marketing framework and communications model, accompanied with a case study example, supported by secondary research. This chapter will also look at previous studies that relate to Web 2.0 and radio broadcasting promotion for the music industry. Chapter 4 details the conceptual development, based on the literature reviewed in Chapters 2 and 3. Chapter 5 consists of the research methodology, which describes the research process and objectives. Chapter 6 presents the empirical findings and analysis and Chapter 7 draws the study to a conclusion. 6 Chapter 2: Literature Review 1 – Industry Sector Overview Firstly, this chapter explores how the global media industry has developed over time, with the impact of technological advancement and the effects of being globally connected through mass media. The digital revolution is also considered from a record industry perspective, and how the challenge of adapting to a digital landscape has greatly tested the application of copyright law. Consequently, digital economics are considered and how changes in consumption have driven new business models (and commercial interests). The chapter concludes with an introduction to digital marketing and The Long Tail Theory. THE MEDIA: BACKGROUND HISTORY & THEORY