Performing artists are increasingly looking to mobile to prop up flagging recorded music revenues. And record labels are increasingly being left out of the loop. Digital offerings such as ringtones and online, full-track downloads have failed to offset “freefalling CD sales,” according to a report released last week by eMarketer. And the downturn will continue, the market research firm predicted, with worldwide spending on recorded music falling 16% from 2006 to 2011.
So some musicians are reaching out to music lovers through their phones in an effort to stoke their fan bases. Kylie Minogue earlier this month launched a mobile social networking site-said to be the first for a major pop act-encouraging fans to connect with each other and share photos as they check out tour dates and other information about the Australian singer. The site also serves as a storefront, hawking EMI-licensed ringtones and mobile wallpapers as well as singles and entire albums.
Cheaper promotion costs
Other artists are using free mobile content to lure fans. Followers of Drop Dead, Gorgeous, a Denver-based post-punk band with Geffen/Suretone Records, can send a text to a short code to receive a 30-second clip of the group’s latest video.
“We were founded two years ago primarily to be a place where basically anyone could create their own mobile service, make their campaigns or promotions mobile,” said Dorrian Porter, CEO of Mozes Inc., the Silicon Valley-based startup that powers the campaign. “As we started looking at (categories of content), music emerged as a natural starting point for the company.”
Mozes teams with both signed talent and independent artists to distribute content and power interactive mobile campaigns. Porter, a lawyer-cum-entrepreneur, said he spotted an opportunity to provide mobile marketing campaigns after the traditional players in the music chain failed to gain traction in wireless.
“A lot of the record labels and a lot of the artists really faced two main problems: It was pretty costly to start their own endeavors, and when they did, they weren’t successful,” explained Porter. “We heard from the labels that they kind of put mobile on the shelf in the last year or two.”
3Guppies, a Seattle-based startup, offers a similar-if less ambitious-technology for celebrities with MySpace pages. The company is pushing a widget that allows users to post files from their phones to pages in real-time and delivers text alerts to fans when pages are updated.
And bands that opt to leave carriers out of the mix entirely got a new mobile tool last week with the Bango Button. Artists can place the icon on their social networking pages, enabling fans to have music clips or photos sent directly to their handsets with just a few clicks.
Moonlife, a San Francisco-based synth/pop music group, is using the tool to deliver both free and premium ringtones and images to fans. And the duo is selling its wares without help from a record label.
New business models
The move mirrors-in concept, if not in scale-efforts by high-profile artists to moonlight as digital music distributors and keep revenues to themselves. Radiohead, a critically acclaimed band out of the United Kingdom, raised eyebrows last month when it distributed its latest CD “In Rainbows” online. Trent Reznor of Nine Inch Nails followed Radiohead’s lead, making his latest work available on the Internet without a label relationship.
Both efforts gave fans the ability to choose a price point. Radiohead listeners could set their own price for the CD-or could choose to pay nothing-while Reznor made a low-quality MP3 available free, charging $5 for the better-sounding counterpart. While results have been mixed-most fans paid nothing for “In Rainbows,” according to a study from comScore Inc.-the moves underscored the quickly-changing landscape under the music industry’s feet.
Unlike smaller artists, neither Reznor nor Radiohead need a record label to promote their offerings. Both acts have established fan bases, and both received substantial attention from the media as they targeted consumers directly. So while technology is providing more channels for artists to forge relationships with fans and distribute content, it may not be the best solution for sophisticated challenges like promoting artists and marketing their music.
For the labels to play a part, though, they’ll have to rethink their place in the value chain.
“I think this shift toward direct-to-consumer models, whether that’s coming directly from the label or from an artist, is an important shift,” Porter predicted. “I’m a big believer that the labels, with the money and the physical distribution that they have, are somehow going to end up O.K. That’s not to say that the labels aren’t going to have to change dramatically over the next five to seven years in terms of the model. . The likelihood is that an artist is going to need experts to navigate and build effective marketing campaigns. That’s still really important.”
