October 2, 2008 Consumer or Music Lover: You Decide
Before Kevin Roberts became the CEO of Saatchi & Saatchi he told them, “We’re not going to be in the advertising business anymore, we’re going to reframe that, we’re going to be in the ideas business.”
When Trent Reznor developed and adapted a new model to deliver Ghosts I-IV to his audience he reframed what it meant to be in the music business. Understanding that free was inescapable and multipliable formats were inevitable, he established six points of participation for fans. By catering to the resurgence of vinyl and allowing interaction with multi-track files he went on to challenge market abundance with scarcity by increasing the level of personalization and authenticity. Thus making the purchase, Better Than Free for his core fans.
Roberts goes onto say, “We’re all looking to get to the future first and it’s going to come from you. It’s not going to come from the engineers or the merchant bankers.” To paraphrase, we’re all looking to get to the future first in the music industry and it’s not going to come from the major labels, the lawyers, or the managers. It’s going to come from you, the creative individuals. Through strategic, creative insight and foresight there is still room to succeed in the music industry today.
Continuing his path of innovation, Reznor is now offering special incentives for participating in his market research survey. This brings to light Roberts later comment that “EMI and Sony BMG know more about the CD market than anybody in the world, but who cares, because there isn’t one anymore.” In an adapt or die market, Trent’s freedom allows him to ask for his fans advice. Depending on the success of the survey this information could advocate the justification of future special projects previously unheard of. Gaining a deeper level of understanding of what his fans want and how they interact with the music he creates will garner the further insight and foresight needed to travel uncharted territory.
In Malcolm Gladwell’s article The Ketchup Conundrum he speaks of Howard Moskowitz who holds a doctorate from Harvard in psychophysics. Moskowitz, most notably known for revolutionizing spaghetti sauce, brought forth the understanding of multiple varieties rather than searching for the platonic or perfect dish. Previously working with Pepsi, Howard understood that there was no perfect Pepsi, only perfect Pepsi’s. Paraphrasing Gladwell, “Standard practice in the music industry would have been to convene a focus group and ask music lovers what they wanted. But Moskowitz does not believe that consumers-even music lovers-know what they desire if what they desire does not yet exist.”
What Howard Moskowitz and Trent Reznor have in common is their understanding of the need for multiple varieties as well as the notion that a fan can’t desire what does not yet exist. With the Major Labels recent introduction of pre-loaded SanDisk microSD cards, it makes you wonder, between Trent Reznor and The Major Labels…
Who is surveying the music consumer and who is surveying the music lover?
Kyle Bylin is an intern with 50 Entertainment and is a guest contributor at Hypebot.
Reader Comments (6)
...and why isn't anyone using the proven micro-targeting methods that currently drive the US 2008 Presidential campaigns? GOP has their Voter Vault, Dems have Blue State Digital, and the music industry is STILL wasting their time on top-down answers from executives from a dinosaur era.
If I were in charge of a budget large enough, and running a company whose future depends on the information, I would be doing nothing but detailed, multi-level demographic research for the rest of 2008.
The IFPI Digital Music Report 2008 was beautiful eye candy, but their data was based of tiny sample populations and then displayed into an outdated, age-based framework. We've been in the age of narrowcasting for over a decade and the music biz is still doing their reports in a 1980s format. The digital behavior of an indie rock fan is signifigantly different from a hip hop fan and that's just two out of several hundred existing niche communities.
At the same time, I know firsthand that this is a difficult concept to get -- the incredible value of data and metrics is NOT immediately obvious to people. I'm constantly advising new labels/artists to set themselves up for a data stream, even at the expense of a revenue stream early on.
You raise a good point on the micro-targeting methods, but this is new information to me, could you elaborate on them? Unfortunately you are right, the top down answers still rule a majority of what happens in the industry. I read through last year’s report, looks like I have some catching up to do.
Content is still king, but the data to back it up with rules everything else. Thanks for the comment Justin.
My two favorite magazines both did features on micro-targeting recently: Fast Company and MIT Technology Review. The MIT article was focused on the social networking and online operation behind the Obama 2008 campaign, and focused on Blue State Digital. Fast Company did a series of profiles -- all too short, really -- of several of the firms providing their services to political campaigns, like the GOP's Voter Vault in Alexandria, VA.
Micro-targeting is an extremely aggressive and precise application of data-mining. In the case of the firms in Fast Company, they're drilling down to find correlations between consumer behavior and political behavior -- as you already know/suspect, that's a pretty fertile angle for making predictions. The "micro-targeting" name just means campaigns can target specific households instead of general geographic areas. Instead of data by state and county, they've got access to databases that give a house-by-house breakdown of economic status, purchase history, voting history, criminal history, etc.
In terms of politics, it's the ultimate expression of consumer culture devouring informed democracy -- you just determine what people want to hear and how to pitch their customized message to them.
In terms of music business, though, I think this is an important tool for saving marketing $ and getting a better sense of what your fans want and WHO THEY ARE.
Fast Company = All Politics is Micro
The Obama article requires registration, but here's a shorter blurb about the "neighbor-to-neighbor" campaign they've been using with great success:
MIT Tech Review
And finally here's a handy Wiki page on microtargeting.
My basic point is that there's a certain blindness/arrogance behind only collecting data from the point of sale. You need to know your customers in a much more integral way, and you need to listen to them, instead of buying ad time to tell them what they think. Odds are small labels and online upstarts will master this skill first, have great success leveraging that edge, and then get bought out by the majors, who can afford to be dinosaurs because they're worth billions.
Sure data can be leveraged but at what point - before you get to the stage of running for president, I should hope - does this become viable?
You're much better off leveraging your niches and playing the numbers game. I mean if you don't have the scale or resources to gather and crunch that kind of data, then you should commit your resources to developing niche propositions, and seeing what flies.
Two very smart guys here, lovin' your posts on the 'bot Kyle.
^^I'd say it becomes viable the second you can 1) collect it, 2) understand it, and 3) take logical action based upon it. In otherwords, it becomes an advantage as soon as you can use it to your advantage. That's more a matter of personal smarts than operational scale.
Perhaps I'm mis-understanding your question?
I'm going to have to agree with Justin on this one. (Thanks for filling me in on Micro-Targeting..)
Data is like contacts too in the way that you collect them, understand them, and take relevent actions towards them. When do contacts become valuable to us? Of couse, the second we never though we'd need them. The same goes with data. It's value lies in how it can be leveraged toward infromed actions. Whether you chose to ignore it or read between the lines, your still instilling yourself with added confidence.
Matt-Thanks for the props on my Hypebot posts, I'm glad you liked them.
A side note** Why does it pop up with a screen that says, "The server twitter.com at Twitter API requires a username and password." if I go to your blog. Thought I'd bring it to your attention in case you were unaware.