Planning For Success in a Fragmented Market

     Since this blog is still very new, and I have only sent out the links a couple of times, I am surprised at having received direct messages on Twitter with questions related to the topics I have covered. First of all, thank you for reading, and for your interest! A few of these messages were written asking me to further describe "hyper-fragmentation" and a handful of questions were in reference to proper ways of researching exactly what territories the writers should be putting their media into. I will try my best to address both of these areas and will include plenty of links for those of you who are truly interested in doing a bit of research, planning, and ultimately executing a plan that will work best for your project or product.

     First, let's discuss hyper-fragmentation in the media market, the basics of what this is, and how you can use this information to your benefit when planning promotion. Imagine you and everyone in your town/city has ten dollars budgeted for personal entertainment per week and imagine there are only four things to choose from to spend that money on. Let's say these are a movie theatre, a new album, a game arcade, and a live show. The choices are fairly limited and the companies offering these services or products can bet on a fairly steady, and predictable, income. Now fast-forward many years and you still have the same ten dollars for entertainment but the choices of how to spend that money have increased exponentially over that time.

     Now there are many companies offering even more services and products like personal video game consoles, individual games, separate controllers, movies available PPV/On Demand/online-rental /home delivery/Red Box, etc. This is in addition to the growing number of music services streaming, selling and embedding everything down to the artist bio, the bands individually doing the same and hosting live concerts online (with associated ticketing), plus the growing number of apps and platform games, and the like. You can see now that each of these industries like movies, music, games, and concerts have all fragmented and the incomes of these companies have been reduced as they now fight for your equally-fragmented entertainment dollar(s). Dig? Moving on...

     How can we use this information to develop a product that will compete in today's marketplace and have a chance of bringing in a return? For one, realize that regardless of the industry you are directly involved in you too will also have to "fragment" and dive into other sectors like mobile/social applications, embeddable stores, social media, games, videos, SEO, etc. To put it plainly, regardless of the "sector" of the industry you find yourself in you must adapt to other sectors to offer your customer or fan a total package. This package should be as interactive as possible and create a "feedback loop" so that those customers or fans can always find new information, as well as hidden and/or exclusive products, as they bounce between your website, your mobile application, social media, Qrickit landing pages, games, etc. You now have a media experience and not just a video, game, a single, or a mixtape for sale.

     Now, for the next question… Which territories (countries, areas) are best for you to release and promote your product in so that you too can have your very own "Rex Manning Day" you ask? This is the fun part, now you get to use some of the information found above, along with the links I'm going to provide below, to do some research! Think globally, there is no excuse for an entertainment product that is not found absolutely everywhere and in every form imaginable. Japan has been completely reinventing the way mobile interactivity and commerce is done, China is an important market, and you can't use Facebook to promote and sell music there so do your homework. The UK, Germany, Ireland, Russia, these are all important markets that should not be ignored.

     Find your niche, use tools like Claritas and Quantcast to find out who you are looking to sell to, and then find out where they hang out. Avoid paying for advertisements that put your product in unfriendly brand positions or using ad services that position your ad near totally dissimilar products from the one you are offering. Be competitive and make sure that if you are selling, say… beats or instrumentals that your advertisement is on a page where beats and instrumentals are sold and the other ads around yours are related, not a washing machine or a stereo.

Effectively Managing Your Online Distribution Plan

     One in five questions I receive working as an entertainment business consultant revolves around distribution of media and more specifically regarding timetables for releases and their promotion. This is completely understandable when you take everything into consideration and this is often a long conversation but we will sum up quickly.

     With so many different types of "stores" available to license holders online and the equal or greater number of  "digital distributors" who are happy to take a fee per single, album, ringtone, and the like, it can be a confusing time for an independent artist or manager who is also working to finalize the product, marketing materials and distribution channels. Each of these "stores" has their own ways and costs of doing business. Most frustrating, each of them also have their own schedules for uploading an artists media once received and often it is up to the artist to "keep an eye out" for its availability once loaded to the platform. Add to this the number of "apps" that are now expected to be integrated into social and mobile experiences that carry their own contracts, fees, and self-serving upload schedule and the time management for releases can be head spinning if not managed very carefully with an emphasis on relevant information.

     Indeed many, many advertising dollars have been completely wasted due to promoting a product as available when fans cannot find it in their favorite stores due to a hasty decision to rely on a quick service that promises quick turnaround for itunes (and the rest of the world in 5-6 weeks). This could be a real bummer if your largest fan bases are outside the United States, and due to the many micro-niche artists out there and the multitude of above-mentioned services this is the case more often than not. Some of the "worst-case scenarios” I have seen involve artists on tour promoting inactive links and unavailable product due to a "set-it-and-forget-it" mentality with their fancy new blanket distribution site online.

     So here are a few quick things to keep in mind to keep both your spending and value-chain effective. First, have a solid pre-release promotion strategy. The project must be managed in a way that sets everything out by time and territory. Which territories are the most important, i.e. where are your fans located? Do your homework and figure out the services you will need to utilize for those territories and contact the rights societies, publishers, and distributors. Try and license your material piece by piece, place by place and then think about blanketing the rest of the world with a quick and easy service. Once this is done choose an online distributor that will allow you to choose a pre-release date and plan spending accordingly (have things in order first). This way you can be extremely specific about when the release will be available and all other efforts like press releases, appearances, touring, etc. can run concurrently towards the same goal, efficiency. This also allows for better measurement of your efforts and makes it easier to attain greater goals with new material rather than contacting press about a song that came out 2 months ago.

     

Damn the Man, or Save Your Empire?

    I think most of us can stop arguing and agree that over the last 10-15 years the major players in the music game have missed the bus and done their best to try and blame the loss of revenue on all but themselves. Mostly consumers and piracy have been the blamed; clearly this is not the case. Those of us who have been paying attention know that the decline of music revenue is also due to many other factors including the hyper-fragmentation of the entertainment market and greed; let us not forget that consumers were pirating music long before the Internet with just a bit of scotch tape and rolled up paper to fill the holes in cassettes. There are hundreds of micro-niche television channels, many new consoles for video games, thousands of sites to stream or preview music and of course all of the different ways consumers can find media in vending boxes outside convenient stores. Even embedded on their Myspace or Facebook and ready to go PPV. That's a lot of ways to break up a consumer's extra dollar and these are just the tops of the list.

     So now with all of these new channels for media to travel "direct-to-fan", and the "majors" in the music business still crying out in confusion from their glass houses inducing shaking knees in the multitudes of the unwashed masses, how does a modern musician or manager confidently decide what will best fit their value-chain to actually make some money from their craft/product/service? Should they "damn the man" and refuse digital distribution and streaming options by only allowing a preview on their website and attempting to go "street gold" selling 50,000 copies out of the trunk on tour? Perhaps only fulfill online hardcopy product directly from Amazon? Perhaps modern musicians and management would do best to simply embrace all of the different services that are available in an attempt to "save the empire."

     We all have our favorite products, stores, and services. Rarely straying from these unless there is great savings in hard economic times and there is a need to drift from normal goods, occasionally wind is caught of a great product or service from a trusted friend and a new brand relationship is born. Why would media be any different? Should we assume then that there are those who prefer digital to hardcopy product, stream vs. own and that these consumers rarely deviate from their comfort zone? Of course we should, so the questions really become where should the product be offered, will one service or distribution outlet take revenue away from another, and should we care?

     If fans get your content how they want, when they want it and they chose your product out of all of this hyper-fragmentation should you sweat the penny? If they are happy, buying/streaming/downloading, or otherwise "sharing" the content with "friends" who are in love with "likes" and thereby inducing even more buying/streaming/downloading then I say damn the man and save your empire. In other words, if there is a dollar on the ground, pick it up. Realize that there are fans who don't buy songs but do buy T-shirts and after they listen to the song on Spotify everyday they will be at your concert wearing your T-shirt, maybe they will buy another one. Move your most popular song to a piece of online real estate where you can collect some advertising royalty and license it by territory, offer it on obscure ringtone sites in Romania and Finland. Diversify or die.

     For those of you who are reading this and saying to yourself, “I thought the Black Keys said streams aren't worth anything" I say to you again diversify or die, and if there is a dollar on the ground pick it up. Even the Black Keys started out somewhere and until you get to where they are now through stupendous viral activity I suggest not sweating the penny and catching your future fans wherever they may be fragmented. Of course, I would like to offer a bit of professional "backup" on the matter and direct you to a couple of amazing articles by David Touve, Assistant Professor of Business Administration and Strategy and Entrepreneurship at Washington and Lee University. In these articles Professor Touve does the math to break down royalty generation for streams and radio plays per listener in the USA and UK as well as itunes downloads vs. Spotify streams A bit of outside perspective on the articles can be found here in a Billboard article covering the pieces written by the professor.hyper-fragmentation