Business Matters: How Adele's Success Undermines Marketing Guru Seth Godin's Predictions
Business Matters: How Adele's Success Undermines Marketing Guru Seth Godin's Predictions

How Adele Put Seth Godin on Blast
-- Seth Godin is a successful self-help marketing guru, but the success of Adele's "21" helps undermine his predictions for the music and book publishing industries.

Godin, an incredibly successful self-help marketing author, predicts an end to hit albums and books (at least the quantity of hits that can sustain an industry). He espouses confidence that all self-published writers have a shot at success. And why shouldn't the self-published author or independent artist have confidence if Godin predicts consumers will no longer be drawn to hits?

Take this excerpt: "The Long Tail creates acres of choice, so much as to make the number of options almost countless. But at the same time, it embraces (in every format) much lower production values. For what Michael Jackson and Sony paid to produce the Thriller album, today's artists can make and market more than 5,000 songs. You just can't justify spending millions of dollars to produce a record in the long tail world."

How strange that Godin would write that last sentence in the year Adele's "21" has sold the most albums - 5.68 million in the U.S. alone - of any album since 2004 (that was iTunes Music Store's first full year, a time when consumers had far less choice). The truth is you CAN justify spending millions of dollars to produce (and market) a record in the long tail world. In fact, a major label with a global presence NEEDS to spend millions on a hit record.

I've written many times about the relative success of hit albums and hit tracks in the long tail era, but here's an update. Through Dec. 25, the top ten albums in the U.S. accounted for 6.13 percent of all album sales, according to Nielsen SoundScan. That's down slightly from 6.23 a year earlier but up considerably from 4.28 percent in 2006. Interpretation: Album buyers are more drawn to a small handful of hits than they were six years ago.

What about hits' unit sales? Let's compare 2011 sales to those of 2010 and five years earlier in 2006. The No. 10 album of 2011 sold far fewer units than the No. 10 album of 2006 (1.15 million versus 1.79 million). But album sales were especially hit-heavy in 2011. Adele's "21" sold 5.68 million units through December 25, far more than the No. 1 album of 2010 (3.35 million) or the No. 1 album of 2006 (3.69 million). And while "21" sold fewer units than Usher's 2004 hit "Confessions," "21" has a much larger share of year-to-date album sales (1.76 percent for "21" versus 1.18 percent for "Confessions"). Interpretation: Not only is "21" a hit in terms of units, it's a monumental hit in terms of market share.

Hits exist in digital music, too. The record-setting 1.74 million digital albums "21" has sold this year account for 1.75 percent of all digital albums sold in the U.S., according to Nielsen SoundScan. Last year's top album, Eminem's "Recovery," accounted for 0.98 percent of digital album sales. Back in 2006, the top digital album represented 0.61 percent of sales. Interpretation: digital album sales have become more hit-focused over the years.

Digital track sales have also become more hit-heavy. The top 10 tracks of 2011 have a 3.07-percent share of all track sales, about even with 2010 (3.03 percent) and up from 2006 (2.52 percent). Same with the top 20, top 100 and top 200. The top track of 2011, Adele's "Rolling in the Deep," accounted for 0.46 percent of all track sales. That's a higher share than achieved by the top track of 2010 (0.37 percent) and 2006 (0.34 percent).

It's worth noting that Adele's "21," has sold 12.2 million single tracks. So that's 12.2 million tracks on top of 1.74 million digital albums and 5.68 million total album units. And that's just in the U.S. One report puts sales of "21" at 16 million in 2011 http://www.bbc.co.uk/newsbeat/16075504. The idea that Sony can't spend a few million dollars supporting this record is really quite absurd.

"21" simply shouldn't exist in Godin's world. The notion that hits can't exist in a digital world certainly fits in with - and furthers -Godin's role as self-help marketing expert and partner with Amazon.com in a new self-publishing business. He's saying too few hits ("experiments at the cutting edge," he calls them) will exist in the digital age to feed a hit-driven industry. And if you can't get a hit, why not set your aims lower and self-publish?

Of course, Godin could point to the record business's struggles as proof that hit-oriented businesses are untenable in the digital age. It's no secret that recorded music sales are down and record labels need to continue to adjust to evolving market conditions. Copyright owners make money from other revenue streams, too. Godin skips over how much the business has changed in the last ten years, however. It's hardly a secret that record labels are smaller, distribution companies have been gutted and licensing and sponsorships now play a greater role.

Traditional business models will indeed be challenged, but here's the bottom line: As this year's U.S. sales figures show, digital consumers have become more drawn to hits. If you're building a business on titles created on "$10 of out of pocket expenses," as is Godin, you're going to fight over the scraps of digital spending.
( The Domino Project)

Pandora's Sponsored Live Hub
-- Pandora has found another way to integrate sponsorships into its webcasting business: a "live concert series hub" that's an online extension of the live concert series it launched in December. All artists that participate in the live music series will be sponsored at the hub, which can be found at www.pandora.com/pandorapresents. Currently sponsored by Budweiser (so get ready to enter your date of birth to access the page), the hub now hosts a performance by the band Dawes in Portland, Oregon.
( Pandora blog)

Others Countries' SOPA-Like Debates
-- As the U.S. public debates the controversial Stop Online Piracy Act, other countries continue to grapple with online piracy, too. And it's not always easy for content owners.

An Italian court's ruling earlier this month will allow Google to continue hosting sites that allegedly violate copyright laws. An Italian media company wanted to force Google and GoDaddy to shut down websites that host pirated soccer game streams. The court declined to issue an injunction since Google removed the infringing content being streamed at its Blogger blog publishing platform. It also declined to issue an injunction for future violations. As Courthouse News notes, the Italian court's ruling is similar to one last month by the Court of Justice of the European Union that said ISPs would be violating privacy protection if they filtered content.

At its European Public Policy Blog, Google said it takes piracy seriously and pointed to efforts it has made to easier for content owners to have infringing content removed from its sites. "Without rightsholder cooperation it is impossible for a platform like Blogger to know whether an item has been uploaded with or without a rightsholder's permission," wrote Marilù Capparelli, Google's Italian Senior Legal Counsel.
(Courthouse News)

Questions? Comments? Let us know: @billboardbiz

Print