A Look Back At Major Label Online Strategies A Decade Ago

from the how-far-we've-come? dept

The excellent MusicAlly blog has a neat look back at a piece written in March of 2001 covering the digital strategies of the major record labels. Some of it is quite amusing in retrospect -- such as how Warner Music's plans were entirely focused on how its newly merged parent, AOL Time Warner, would offer it all sorts of digital opportunities (how'd that work out)?

The company's internet strategy begins and ends with AOL. The thinking here is that AOL, with 24 million subscribers, has a natural customer base for Time Warner's extensive music catalogue, as well as serious Internet expertise in house. Although MBI World Music Report lists Warner Music Group's global market share as equal to BMG's at 11.9 percent (tied for fourth), AOL was working to secure licensing rights from the other music titans.

Combined with Time Warner's cable-modem Road Runner service, AOL also has control of fat pipes in the US. The reason many people didn't use Napster is because it is slow and expensive. With control of broadband, subscription is that much more compelling.

Of course "compelling" in theory is different from "compelling" in execution, and AOL, Time Warner and Warner Music never bothered to come up with anything close to compelling (for years we were amused by the fact that the company even refused to let AOL work together with Road Runner, despite them being the same company!).

As you read through the rest, you just keep seeing names of long-dead sites and projects -- none of which came up with anything compelling. You see plans for "new proprietary digital formats" that rely on RealPlayer (yeah, there's a winner) and other short-sighted concepts. But what you see is really the same old story, and effectively still the same thing we're seeing today. Everyone was focused on recreating the same old retail world, pretending that the digital world is just a replica of the physical world. It's all focused on direct sales of recordings, rather than anything larger. And, of course, all of these plans ran into trouble when backwards-looking execs freaked out about being too open or too free, and so all of the plans were locked down, inconvenient, expensive and useless (if they ever came out at all).

Filed Under: decade, look back, major labels

Major Record Labels Sorta, Maybe Embracing Direct-To-Fan Projects

from the but-it's-more-than-just-the-platform dept

While we definitely knock the major record labels for their legal strategy and occasional business blunders, in the last two years or so, there has actually been some recognition within the record labels that finally they need to focus on giving fans what they want, rather than just suing them and hoping that the old CD business model magically returns to its former highs. There have been hints and glimmers of hope from the major record labels -- though, even those inside the labels who seem to get it will quietly admit that it's sometimes a struggle to get some of this through to "the old guard."

The question, though, is how much of this is real, and how much of it is the old guard putting on a show, picking up on a buzzword and insisting that this time, they've got it. A few years ago, all the talk was about "360 Deals" and how that would get the labels off of the CD revenue IV drip. But, many artists (smartly) balked, seeing such deals not as an industry adapting to change, but one looking to just get a larger piece of the pie -- and doing so without adding much value, and after decades of screwing over the artists. So that hasn't worked out so well for the most part.

It appears that the latest buzzword that the majors are picking up on is this concept of the "direct-to-fan" model. This is a bit of an offshoot of my own mantra of getting creators to connect with fans. And, for more independent artists, a number of platforms and companies have sprung up to help them more easily connect with fans, whether it's MySpace or BandCamp or TopSpin or TuneCore, or whoever else. And, of course, most of those companies also have relationships or deals with the major record labels, but it seems that the majors are realizing that they need to have a real "direct-to-fan" strategy themselves.

Just recently, we saw Warner Music sign a deal with Cisco to use Cisco's EOS platform for direct-to-fan efforts. And, more recently, Universal Music announced that it was working with Echospin to provide direct-to-fan offerings. I have no doubt that EMI and (probably way way way at the end of the line), Sony will get around to making similar announcements.

While I think it's a great thing that the labels are experimenting with smarter models that actually do focus on bringing the musicians closer to the fans and providing a much more compelling offering that goes beyond brochureware, I'm a bit skeptical that they'll really pull it off successfully in the short term. Direct-to-fan offerings is more than a platform. It's an actual business model and marketing strategy and it's unclear if the labels have actually figured that part out yet. Yes, they're adopting platforms and they're taking steps in the right direction -- so let's give them some credit. But until they really understand what fans want and how to better help musicians provide it, setting up a "direct-to-fan" platform won't make a big difference.

Filed Under: direct to fan, major labels
Companies: universal music, warner music group

Did No One At eMusic Think About PR Impact Of Raising Prices At The Same Time Sony Signed?

from the braindead-PR dept

eMusic is a rather successful indie music e-commerce player (reports put it at the 2nd largest music store), that has focused on charging people a subscription that lets them download a limited number of songs each month. It also supported DRM-free MP3 files long before others finally came around. I have many friends who love the convenience that eMusic provides (I tried it, and didn't find enough of the music I liked to stick around) and are willing to pay for the convenience alone. However, it's almost hard to believe that no one on the PR/marketing side of eMusic failed to predict what would happen this week when the company made two announcements: that it had signed its first major label, Sony, and that it was raising prices. The reaction was quick and almost universally negative.

The complaints hit on a number of points, but the two big ones (obviously) are the price increase and the fact that many people signed up with eMusic because of its indie music focus, and related to that: their dislike of major record labels. What's stunning is that eMusic couldn't foresee what a negative reaction this would bring. The company has raised prices in the past, which also created some level of anger -- but people had to know that announcing both the Sony deal and the price raise at the same time, was going to be a PR nightmare. What I can't understand is why they didn't separate out the announcements. They may have felt it was a "pulling the bandaid off quickly" sort of moment, where they could take flak for both announcements at the same time, but they didn't seem to consider the fact that the two issues are completely linked in users' minds. It's not "eMusic had to raise prices" and "eMusic added Sony music." It's become: "eMusic had to raise prices to get Sony Music's catalog into the system."

That makes both eMusic and Sony Music look dreadful -- because here's a major record label, whose music many eMusic subscribers didn't want in the first place, now being seen as having made life worse (and more expensive) for everyone. By connecting the two issues, it seems like both eMusic and Sony Music are getting hit a lot harder than if the announcements had been separated.

Filed Under: major labels, music, subscriptions
Companies: emusic, sony