CMJ's panels continue to explore the best ways to use new technology to make money. Day Two's "Make It Work and Make It Pay" panel, moderated by Roadrunner Records Senior VP of New Media Jon Satterley, focused on changing ways music is being sold and consumed, and new marketing challenges facing artists in the evolving industry.
Joining Satterley at the front table were Dorothy Hui, VP of Marketing and Sales at tinyOGRE Entertainment; Dalton Sim, Artist Manager at Nettwerk Management; and Kevin King, CEO of MusicHype. Peter Wright, owner and CEO of Virtual Label, was originally scheduled to moderate, but was replaced at the last minute due to illness.
The emergence of Spotify, Rhapsody and other subscription-based streaming music players, panelists stressed, represents a seismic shift. "With record sales, the connection with fans ended at the cash register," said Hui. "Now the idea changes to driving fans to listen to things over and over again and not just once."
So methods of moving and marketing music will evolve as well -- and, according to the panel, the current situation is just the beginning. "Spotify is the curtain-raiser to the real game, when Apple joins the cloud subscription service," said Satterley. And the integration with Facebook has made the format into a potential marketing and taste-making tool. "No marketing in the world trumps peer-to-peer, friends telling friends that they love a band," said Sim.
This new framework, then, will affect both marketing strategies and artist-label deals. Campaigns are now centered on new, exclusive content, engaging fans, and allowing them to feel like they are part of the process. Pledge campaigns - in which an artist gives away an EP or other media as a fundraiser, in order to finance an album or tour -- have become moderately effective for artists with a dedicated fan base. "If you're going to sell something, you need to make it compelling to your fans," said Sim. "Music might only be a part of that. You need to build fans' trust."
Part of that trust can also come from giving away free content, panelists said, as artists sacrifice record sales and attempt to earn revenue through merchandise or other avenues. To better facilitate this sacrifice- and-reward model, many artists now sign 360 deals that combine all aspects of their recording, touring and marketing. "In a subscription-based world, why would businesses invest in just a recording artist?" asked Satterley. "You need to be able to diversify your income and revenue streams."
Ultimately, the panel agreed that artists need to identify the tools that appeal to their fan base, then find creative ways to monetize them. "Consumers will decide how they want to consume music, whether it's streaming, mp3s, vinyl, or touring," said Sim. "Our job is to give them options."