Mariah Carey Showing How The New Music Business Model Works For Megastars

from the reasons-to-buy-on-a-massive-scale dept

Mon, Nov 16th 2009 9:37am — Mike Masnick

A couple people sent in this rather interesting story from the Times Online about how Mariah Carey is reinventing the music business model. Well, that's basically what the article suggests. What's more accurate is that she's more or less scaled up the "connecting with fans" and "reasons to buy" to mega-superstar levels. She's working closely with various brands to help fund the business model. She's selling other product lines such as makeup. But, she's also come up with some unique "reasons to buy." For example, she got the magazine Elle to produce an entire issue dedicated to her -- but the only way to get it is to buy her new CD. In other words, she's giving people a reason to buy the CD. And... even better, she (or, her people) sold the ads that are in the magazine and gets to keep all of that money. It's the superstar blend of recognizing that content and advertising have really become the same thing.

She's also connecting with fans more and more using the internet -- even with such a huge following. So, for example, her people are carefully "leaking" her schedule and appearances to very targeted groups of fans online, so when she shows up places, there's a good number of fans, who feel special, rather than tremendous mobs.

And, no, of course this isn't the model for everyone. None of these models are -- but they all follow the same framework. She's working hard to come up with reasons for people to buy stuff, all of which is made more valuable by her music and her celebrity. And she points out that the record label execs should have embraced the internet ages ago:

"A lot of big powerful music-industry executives made a giant mistake," she says. "They gave the music business away on the internet. If they had just sat back and said, 'Maybe let's figure this internet thing out, it could be something cool,' we could have found a way to distribute music online on our own terms, not somebody else's. Prince had already shown them the way. He was so far ahead of the curve, putting out his own records on the web. Everyone else was stupid."

Indeed. While Prince eventually stumbled, his early efforts were incredibly instructive for the industry, but every time folks like us mentioned them, we were told it could only work for Prince and that it was a terrible model. Except it worked -- and, to be honest, every model we see these days is really a more modern reflection of what Prince started doing years ago.

But, once again, despite the naysayers, we're seeing that this basic economic concept of using the infinite goods of music and celebrity to sell scarce goods can work no matter how big or small the artist may be.

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Filed Under: business models, mariah carey, music

46 Comments

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Anonymous Coward, 16 Nov 2009 @ 9:57am

But if more megastars start doing these kinds of things on their own, what will happen to the poor music industry?

The RIAA has lost an incredible amount of profit thanks to piracy and the internet. If these megastars start showing soon-to-be-megastars that they can make more money without the RIAA then where will the music end up?

I'll tell you. Six feet under. Thanks alot, piracy, the internet and Mariah Carey. Thanks for nothing.
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- Greg, 16 Nov 2009 @ 10:05am
  
  Re:
  Careful now, everybody. Don't feed the trolls. :)
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  - DH's love child, 16 Nov 2009 @ 10:08am
    
    Re: Re:
    I think it should have looked like this:
    
    But if more megastars start doing these kinds of things on their own, what will happen to the poor music industry?
    
    The RIAA has lost an incredible amount of profit thanks to piracy and the internet. If these megastars start showing soon-to-be-megastars that they can make more money without the RIAA then where will the music end up?
    
    I'll tell you. Six feet under. Thanks alot, piracy, the internet and Mariah Carey. Thanks for nothing.
    
    You're welcome for the fix...
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    - DH's love child, 16 Nov 2009 @ 10:09am
      
      Re: Re: Re:
      oops.. there was supposed to be a sarcasm /scarasm around that...
      [ link to this | view in chronology ]
  - Hephaestus (profile), 17 Nov 2009 @ 10:39am
    
    Re: Re:
    I think he just forgot the sarcasm tag
    [ link to this | view in chronology ]
    - Anonymous Coward, 17 Nov 2009 @ 11:03am
      
      Re: Re: Re:
      I actually weave my sarcasm into the comment itself. The tag exists on a molecular level in each of the individual letters. I am an artist, which is kind of like being a scientist.
      
      You know what I ain't? A lawyer. Lawyers need sarcasm tags.
      [ link to this | view in chronology ]
- deadzone (profile), 16 Nov 2009 @ 10:09am
  
  Re:
  Good lord you are clueless!! (Unless you are being sarcastically funny... then Haha you got me!)
  
  Regardless, I think this just demonstrates the point again that the RIAA is going to become irrelevant and die unless they figure out how to change and embrace technology and come up with a new business model. It's a pretty easy message to read: We don't need the middleman anymore.
  [ link to this | view in chronology ]
  - Anonymous Coward, 16 Nov 2009 @ 10:15am
    
    Re: Re:
    I did get you! You know who doesn't get it?
    
    The recording industry.
    [ link to this | view in chronology ]
  - chris (profile), 16 Nov 2009 @ 11:09am
    
    Re: Re:
    http://imagechan.com/images/3ab3c8e9529a4ef08e7cf02a44d8b38d.gif
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- Anonymous Coward, 16 Nov 2009 @ 10:13am
  
  Re:
  Simon Cowell? Is that you?
  [ link to this | view in chronology ]
- KevinJ (profile), 16 Nov 2009 @ 10:17am
  
  Re:
  "The RIAA has lost an incredible amount of profit thanks to piracy and the internet. If these megastars start showing soon-to-be-megastars that they can make more money without the RIAA then where will the music end up?
  
  I'll tell you. Six feet under. Thanks alot, piracy, the internet and Mariah Carey. Thanks for nothing."
  
  The members of the RIAA have had years to adapt to the changing market place. Instead of experimenting with new business models they have been pursuing strategies that just serve to piss off their customers. And even without the RIAA, music will still be made and still find it's way to fans as it has for thousands of years. For now, let's just let the RIAA learn one of the basic laws of nature: adapt or die.
  [ link to this | view in chronology ]
- Anonymous Coward, 16 Nov 2009 @ 10:24am
  
  Re:
  So you want:
  
  A) A communist approach to protecting existing, recording industry jobs.
  
  rather than,
  
  B) To see capitalist, creative destruction create new jobs as the music market grows.
  [ link to this | view in chronology ]
  - Anonymous Coward, 16 Nov 2009 @ 10:35am
    
    Re: Re:
    I've made a huge mistake. B! I want B! I love creative destruction. I change my answer. Is it too late?
    
    Only for the recording indusrty. Burn!
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- Anonymous Coward, 16 Nov 2009 @ 11:13am
  
  Re:
  Well, I would think the Music Industry would be doing great. The people making shiny plastic discs on the other hand might have some problems.
  [ link to this | view in chronology ]
MarksAngel (profile), 16 Nov 2009 @ 10:06am

If the RIAA was smart they would sell all their rights back to the artists and family members of deceased artists, they could make a ton of money and go out on top....to bad they aren't that smart...
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- Hephaestus (profile), 17 Nov 2009 @ 11:28am
  
  Re:
  RIAA is an association set up by the labels, they dont own the copyrights to the songs, the labels do. They just represent the labels.
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MarksAngel (profile), 16 Nov 2009 @ 10:08am

Of course I could be wrong about how everything works too....lol
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Anonymous Coward, 16 Nov 2009 @ 10:09am

Just like Chris Matthews, I am starting to get a thrill up my leg at the thought of buying some Mariah Carey swag.
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RD, 16 Nov 2009 @ 10:30am

Dear Obvious Shill
"But if more megastars start doing these kinds of things on their own, what will happen to the poor music industry?

The RIAA has lost an incredible amount of profit thanks to piracy and the internet. If these megastars start showing soon-to-be-megastars that they can make more money without the RIAA then where will the music end up?

I'll tell you. Six feet under."

The MUSIC industry will be just fine, and indeed, its flourishing better than ever.

The RECORDING industry, which is actually what your thinly-veiled attempt at shilling the doom of is referring to, is already dead. Everyone but the recording industry knows and acknowledges this.

Also, if "piracy" (I use quotes because its not a valid term for what you are referring to) is such a huge, vast, critical problem, why then is it only the RECORDING industry that is having problems? No one can seem to answer this. Movies are doing fine, in fact, they are doing more than ever. Video games are doing EVEN BETTER, with the recent Modern Warfare selling over $300 million IN ONE SINGLE DAY. And this is in a down economy. Why is it only the RIAA that is suffering? Maybe its not "piracy", maybe the impact of "piracy" has been blown way, way out of proportion. Maybe its the lack of innovation, the suing of the customer base, and the utter disregard for what the consumer wants, that is hurting the RECORDING industry.
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Anonymous Coward, 16 Nov 2009 @ 10:32am

Done.
"Regardless, I think this just demonstrates the point again that the RIAA is going to become irrelevant and die unless they figure out how to change and embrace technology and come up with a new business model. It's a pretty easy message to read: We don't need the middleman anymore."

Yea, I think we all agree, the RIAA is irrelevant. It's dead.
Someone should update the wiki page.
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- Hephaestus (profile), 17 Nov 2009 @ 11:38am
  
  Re: Done.
  "Yea, I think we all agree, the RIAA is irrelevant. It's dead. Someone should update the wiki page."
  
  LOL .... here is the link RIAA wikipedia page
  [ link to this | view in chronology ]
Anonymous Coward, 16 Nov 2009 @ 10:38am

Sadly, Mariah's new album is getting horrible reviews (and the release was pushed a couple of times to try to fix it). In essence, she needs the other stuff to make up for what is lost not selling records. She is actually getting more press for her movie role than she is for her music. That says a whole bunch right there.
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Anonymous Coward, 16 Nov 2009 @ 10:58am

yeah Mariah you go girl! now all you have to do is start making some good music..
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Michael Long, 16 Nov 2009 @ 11:20am

Stuff I don't want.
Unfortunately, all of these models seem to be based on selling me stuff I don't want (a closet full of t-shirts and magazines and posters) in order to pay for the stuff I do want: music, movies, books, software.

So why is it again that I can't pay directly for the content I want, and skip all of the other junk? Especially since most of it is destined for the nearest landfill?

Seems to me that you're continually promoting the generation of waste (scarcities) just at the point in time where we could freeing ourselves from it entirely.
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- Anonymous Coward, 16 Nov 2009 @ 11:33am
  
  Re: Stuff I don't want.
  ... you have to buy the junk because people have learned how to steal the other stuff, so we are suppose to support the shoplifters! As Trent Reznor said "Steal my music", and everyone is doing so.
  
  It's going to be a true shock when people stop buying junk and the people realize the music business is in fact in crisis because music has been devalued in the public eye to the point where nobody pays for it ever.
  [ link to this | view in chronology ]
  - Anonymous Coward, 16 Nov 2009 @ 11:50am
    
    Re: Re: Stuff I don't want.
    Just like before! Everything old is new again. Culture sure is funny.
    
    I look forward to the day when no one ever pays for any kind of art. Well, copies of the art.
    
    And music was being devalued in the eyes of the public since the days of radio. Before then too. Long before then.
    
    You have a strange historical view of artistic human expression.
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  - Mike Masnick (profile), 16 Nov 2009 @ 11:58am
    
    Re: Re: Stuff I don't want.
    It's going to be a true shock when people stop buying junk and the people realize the music business is in fact in crisis because music has been devalued in the public eye to the point where nobody pays for it ever.
    
    So, I'm curious: how do you fix things? Honestly. You keep saying these new models are awful, but it's a fact that the old models aren't working anymore.
    
    So, tell us, how do you fix things?
    [ link to this | view in chronology ]
    - Anonymous Coward, 16 Nov 2009 @ 3:29pm
      
      Re: Re: Re: Stuff I don't want.
      How do you fix things? Stop pandering to thieves. Stop looking at piracy and going "good kids!".
      
      BTW, I call it stealing because one of the "leaders" of this revolution (trent reznor) called it stealing. He more than anyone should know, right?
      
      The old models are working fine, especially when you look at services like Itunes. There is no telling how much better it would work if there was less theft.
      
      So, go on and explain again how it isn't theft. I always love that sermon.
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      - Anonymous Coward, 16 Nov 2009 @ 4:07pm
        
        Re: Re: Re: Re: Stuff I don't want.
        Hahaha! You don't understand how culture works! Hahaha! It's like you're murdering knowledge! Hahaha! You're a murderer!
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      - Anonymous Coward, 16 Nov 2009 @ 4:09pm
        
        Re: Re: Re: Re: Stuff I don't want.
        You're the worst troll on techdirt. I mean, come on, up your game a little man.
        
        You're rolling with the big dogs now! I mean, trolling. With the big cogs. Not dogs, that's silly. You're trolling with the big cogs now. Yeah!
        [ link to this | view in chronology ]
        
        Anonymous Coward, 16 Nov 2009 @ 4:14pm
        
        Re: Re: Re: Re: Re: Stuff I don't want.
        seriously, your mommy is calling.
        [ link to this | view in chronology ]
        
        Anonymous Coward, 16 Nov 2009 @ 4:20pm
        
        Re: Re: Re: Re: Re: Re: Stuff I don't want.
        I rest my case. I can't believe you get paid for this. Unbelievable.
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      - nasch (profile), 17 Nov 2009 @ 8:19am
        
        Re: Re: Re: Re: Stuff I don't want.
        How do you fix things? Stop pandering to thieves. Stop looking at piracy and going "good kids!".
        
        So your solution to the record labels' problems is to... keep doing what they've been doing?
        [ link to this | view in chronology ]
- Mike Masnick (profile), 16 Nov 2009 @ 11:57am
  
  Re: Stuff I don't want.
  Unfortunately, all of these models seem to be based on selling me stuff I don't want (a closet full of t-shirts and magazines and posters) in order to pay for the stuff I do want: music, movies, books, software.
  
  So don't buy the stuff you don't want. No problem.
  
  And many of the models we discuss do involve selling you the music (concerts), movies (tickets), books (books) and software (services). So I'm not sure why you imply otherwise.
  
  So why is it again that I can't pay directly for the content I want, and skip all of the other junk? Especially since most of it is destined for the nearest landfill?
  
  You can pay for it. If you want. No one's stopping you. We're just saying that, alone, is not sustainable.
  
  Seems to me that you're continually promoting the generation of waste (scarcities) just at the point in time where we could freeing ourselves from it entirely.
  
  No. You are confusing "scarcities" with "tangible" goods, when we have often said that the best scarcities are intangible ones like access, attention and reputation.
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RD, 16 Nov 2009 @ 12:39pm

Mike mike...
"So, I'm curious: how do you fix things? Honestly. You keep saying these new models are awful, but it's a fact that the old models aren't working anymore.

So, tell us, how do you fix things?"

Mike, mike, mike....you should know by now, these naysaying shills ARE NOT INTERESTED in "fixing things." All they want to do is whine like little children about "piracy" and ANYTHING other than what their problems are, and have things just go back to "The good old days" like they were. Anything else, anything less, is someone ELSES fault ("piracy", the consumer, congress not passing stronger pro-copyright laws) rather than their own short sightedness and desire to not have to change, innovate, or answer to ANYONE about the failures of their business model.
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- Anonymous Coward, 16 Nov 2009 @ 1:02pm
  
  Re: Mike mike...
  I also love how those "good old days" aren't back in the 1950s when the single reined supreme but the 1990s, when CD sales were skyrocketing.
  
  And then it was over. One could make a case for the "good new days" that are ahead but then I don't work for the recording industry.
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- Anonymous Coward, 16 Nov 2009 @ 4:15pm
  
  Re: Mike mike...
  The naysayers do want to "fix things", it's just that we don't agree with you as to what is broken. Stealing is the real issue, the rest is all sucking up to thieves.
  [ link to this | view in chronology ]
  - Anonymous Coward, 16 Nov 2009 @ 4:23pm
    
    Re: Re: Mike mike...
    Hahaha! You're so funny! Hahaha! Like a broken record! Hahaha! Like the recording industry is like a broken record! Hahaha!
    
    Seriously, try harder.
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  - nasch (profile), 17 Nov 2009 @ 8:21am
    
    Re: Re: Mike mike...
    The naysayers do want to "fix things", it's just that we don't agree with you as to what is broken. Stealing is the real issue, the rest is all sucking up to thieves.
    
    And how do you propose to fix that?
    
    *not holding breath*
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Comboman (profile), 16 Nov 2009 @ 1:36pm

Old School RtB
This article about Carey giving away magazines with her CDs reminds me of the Good Old Days when you bought an LP and it came with gorgeous cover art, copious liner notes and often little extra's like folded-up mini-posters. Fast forward to today where you don't even get a plastic CD jewel case anymore, you get a cardboard sleeve (is it really to be "environmentally friendly" or is it just to reduce costs).
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MSRMusic, 16 Nov 2009 @ 1:45pm

Mariah Carey Showing How The New Music Business Model
I love Mariah Carey as an artist. I think she has an incredible voice.

A lot of record company are not selling a lot of records probably because of the internet, but the buzz and speed of the internet is helping record company make a lot of money from their artists who perform live shows. They are still making money from ticket sells and merchandise but add to that ringtones, videos sold on itunes, reality shows, speaking engagements, etc.

Mariah is smart to use technology and her star status to her advantage. Everything changes even marketing strategies.

www.ChrisBuckMSR.com
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- Anonymous Coward, 16 Nov 2009 @ 6:18pm
  
  Re: Mariah Carey Showing How The New Music Business Model
  She has wisely chosen a business model that doesn't involve music, because what she is putting out these days is instantly forgettable. She is a brand, no different from a Diddy / p diddy / puff daddy / sean john / whatever. They don't even both trying to make the music any good, they just pass another lincoln log of music spew and sell some more image.
  
  It's almost sad to see such a great talent wasted.
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pocante, 16 Nov 2009 @ 4:29pm

today
Even though I understand the industry is going down, I still never EVER pirate music. In order for the system, or what's left of it, to survive we need to be putting capital into it. People who steal music do not get this. It doesn't matter if you're a poor college student, you have to pay for goods you receive or else you mess up the order in which you receive those goods.

While the industry lacked the innovative models needed to adapt to the internet age, consumers should also take responsibility for the demise of the music industry as we know it.
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- Anonymous Coward, 16 Nov 2009 @ 4:33pm
  
  Re: today
  Seriously, music is going anywhere. It's evolving. That's what art does. It's what art has always done and will continue to do.
  
  And P2P usage is slowly dropping in favour of steaming music services.
  
  Look at it evolve!
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samantha, 19 Dec 2009 @ 11:01pm

luv ur songs
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