At the recent South African Music Awards (SAMA’s) it was interesting to see a crop of new awards under a new category division: Best Selling Mobile Music Download. The awards in this new division included unusual benchmarks like: Best Selling True-Tone, Best Selling Ring-Back Tone and Best Selling Full-Track Download. New awards like these are indicators of how the combination of new technologies and tech savvy consumers are forcing the music industry to adapt to a new world order. The phrase, “disruptive technologies” is being used more and more in the business realm, and with good reason.
The print media industry faced their digital Waterloo back in 2009. Newspapers were either dying or struggling to balance their (free) online offering without killing their printed versions. The digital disruption then spread to the magazine industry, and in the process also disrupted the entire advertising and marketing industries. Currently, the conflict zone is in retail. The seemingly schizophrenic behaviour of a hybrid online/offline customer is not only frustrating retailers, but also further blurring the communication channels. How do you engage a customer that won’t stand still?
This is the question the music industry now has to ask itself. Again.
In 2003, Apple opened the virtual door to its iTunes store and the music industry was forever altered. In the first week over 1 million songs were sold and downloaded. Suddenly, an industry terrified of online piracy had a legitimate place to earn money from the sale of digital music, but what was revolutionary was the fact that music fans could buy a single track instead of the whole album. It was a massive game changer. Today it is common practice (hence the somewhat ironic SAMA award for: Best Selling Full-Track Download), but 10 years ago it was unheard of.
By 2010, iTunes had become the largest music retailer on the planet and today they have 435 million registered users in 119 countries and recently offered its 25 billionth song.
Today the music industry is facing a second disruption, and this time the curve ball is social media. Pop star Katy Perry is the first musician to garner 50 million followers on twitter. Quite an achievement until you realise that her peers and competitors all have similar fan followers on other platforms like Facebook: Rihanna has 85 million Facebook fans while Katy Perry can “only” boast 64 million. The point is that 10 years ago this type of cyberspace fan following did not exist, and it is now completely changing the way in which artists release their new albums.
Beyonce used social media to announce her latest album. In 3 days the album was downloaded, 800 000 times, and went platinum in 2 weeks. Her hubby, Jay Z, struck a deal with Samsung before he launched his album Magna Carta Holy Grail, and sold them 1 million copies via his app, which could be downloaded onto their new phone. In essence, this meant that before the album was even officially launched 4 days later, he already had guaranteed sales of 1 million albums. He later released the video exclusively on Facebook, the first artist ever to do so, and the video received 12 million views in an hour.
The backlash to this has been interesting. Target, the American discount retail chain subsequently refused to stock Beyonce’s album after her surprise social media launch. The decision was understandable. If the album had gone double platinum in the first two weeks, what was the point of marketing the album and using precious retail floor space when the core audience had already purchased it digitally? In addition to the 14 songs on the album, Beyonce’s iTunes offering came with 17 videos and tracks that featured her Jay-Z, rapper Drake and R&B singer Frank Ocean. It’s hard to compete with an instantaneous multi-media offering in a bricks and mortar environment.
A Target spokesperson issued the following media statement, “At Target we focus on offering our guests a wide assortment of physical CDs, and when a new album is available digitally before it is available physically, it impacts demand and sales projections.”
Since Beyonce’s album release, other artists are following suit. Rapper Kid Cudi released his new album, Satellite Flight: The Journey to Mother Moon, also with a simple, surprise tweet. He hinted that something would be hitting the iTunes store at midnight: “Tickets to Copernicus Landing will be available for purchase via iTunes in the next 2 hours… so pack up and stay tuned to this feed for the link.” The album took 48 hours to go gold selling 700,000 units.
So while this is all well and good for the musicians, the associated industries that used to drive these album launches – advertising, marketing and PR, not to mention the bricks and mortar retailers –are understandably not amused. With today’s disruptive technologies you’re never sure who your friend or who foe is. All it takes a click of the mouse to change the game.
By: Dion Chang
Image credit: Ultralinx