Daft Punk's 'Random Access Memories': Strong Numbers Show Pre-Release Streaming Just Might Help Sales

Daft Punk

This story on Daft Punk's successful pre-release streaming strategy is from the new issue of Billboard (cover date June 1, 2013)  also features a cover story on the Billboard Music Awards' runaway success (ratings up 28%!); a report on U.S. digital music sales now outnumbering physical sales; Questions Answered with Translation CEO Steve Stoute; analysis of Prince and Kobalt royalties deal; a profile on Southern California's tech start-up boom; and much more. Pick up this issue of Billboard HERE; or become a subscriber HERE.

This week, Daft Punk is poised to hit No. 1 on the Billboard 200 with Random Access Memories, becoming the latest poster child for a digital marketing tactic once thought of as risky but is now starting to crop up with the regularity of a techno beat -- making entire albums available for free streaming for a limited time prior to release.

A Timeline of Daft Punk's Marketing Masterpiece

When the electro duo made its album available to stream on iTunes a week prior to its release on May 21, the act joined a parade of 35 other artists who have taken advantage of Apple’s promotional program since it began in August 2011 with the Red Hot Chili Peppers’ I’m With You. Daft Punk’s set is expected to sell 300,000 copies, the second-largest debut this year following Justin Timberlake’s The 20/20 Experience, which also was made available for free streaming on iTunes a week prior to its March 15 release.

The enthusiasm with which many labels have embraced free streaming of full albums prior to release is in stark contrast to the prevailing industry stance just a few years ago.

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“This used to be viewed as very experimental and risky,” Epitaph VP of digital strategy Jason Feinberg says. “But it’s become a recognized marketing tool. Now we stream every single record before street date, and we’re certain this has a positive sales and marketing effect.”

While it’s nearly impossible to isolate and quantify how each marketing effort contributes to an album’s success, there are indications that prerelease streaming is actually good for business.

“They really have an impact on sales,” Feinberg says. “We often see a two-times to five-times bump in pre-orders during these campaigns.”

Daft Punk's 'Random Access Memories' Set for No. 1, 300,000-plus Debut

Not everyone embraces prerelease streaming. Universal Music Group, for example, wanted Apple to pay for the streams, according to executives who declined to be named because the discussions were confidential. Apple balked, arguing that the promotional value and opportunity for pre-orders more than compensated for the streaming, according to an executive familiar with the conversations. UMG declined to comment.

But most other labels are keen to raise album awareness through the right outlets. Among the more popular outlets for prerelease streaming are iTunes, YouTube, Spotify and editorial websites like NPR stations, Pitchfork and Billboard. Pandora joined the fray on May 21 with the launch of its Pandora Premieres station, featuring John Fogerty’s Wrote a Song for Everyone and Laura Marling’s Once I Was an Eagle, available for on-demand streaming in an ongoing promotion supported by T-Mobile. “The list of artists wanting to participate in this program is not short,” Pandora co-founder/chief strategy officer Tim Westergren says.

Perhaps the most coveted outlet is iTunes, which has featured prerelease streams prominently on its storefronts. Albums that have participated include David Bowie’s The Next Day, Jason Aldean’s Night Train, Jack White’s Blunderbuss, Carrie Underwood’s Blown Away and the Shins’ Port of Morrow.

“That space on iTunes’ front page is very valuable,” Nielsen senior VP of analytics David Bakula says. “It’s akin to the way albums were promoted in the past with placements in printed retail circulars.”

Instead of paying co-marketing fees for circular placement, labels now agree to exclusives in streaming arrangements. In exchange, the site hosting the stream gets unique content that can drive traffic and transactions.

Bakula says that artists who do streaming “get a good amount of exposure. It does draw consumers.”