1. Mark Pendolino COM 538 – Digital Media Theories Marketing Music Today: The Effect of New Media on the Marketing and Promotion of Musical Artists

2. 2 Agenda State of the Recording Industry Marketing Techniques & Trends Looking Ahead Summary

3. Mark Pendolino COM 538 – Digital Media Theories State of the Recording Industry

4. 4 Recording industry in state of flux –Sales down 13% in past two years Expected to decline 5 to 8% in 2003 –Pursuit of copyright infringements hindered growth Failed to embrace technology Seeking to recoup losses

5. 5 State of the Recording Industry Figures from the Recording Industry Association of America, www.riaa.com Notes: The RIAA has increased individual unit prices by an average of $1 each year since 1998 Units shipped have dropped over 100 million Units unaccounted for make up 25-30% of total units shipped

6. 6 State of the Recording Industry File sharing blamed for losses –Illegal CD copying –Napster, Kazaa, et. Al. Some believe file sharing will help sales –Jupiter Report Recent survey: 34% of file swappers say they spend more on music now than before file sharing –Concept involves word of mouth / hype

7. 7 State of the Recording Industry Industry also facing competition –Further choices for consumer’s entertainment dollar DVD sales up 57% this year –Increasing number of independent record labels “Indie” labels more prevalent Sales in direct competition with major labels –Not affiliated with RIAA (Sub Pop, Matador, Integy) –Artists bypassing record labels Going straight to Web

8. 8 Discovery Sale World Wide Web Marketing Techniques & Trends Web bypasses traditional channel in artist discovery Artists Record Companies Distributors Retailers Listeners Radio (Advertisers) Sale Discovery From Music Marketing in the Age of Electronic Delivery, Whittle, 1998

9. 9 State of the Recording Industry Labels beginning to embrace technology –Firms adapting online services and relinquishing “controlled” distribution channels Universal Vivendi purchased Napster Sony and Universal sold “Pressplay” to Roxio Deals with iTunes –Investing in marketing and new marketing technology

10. Mark Pendolino COM 538 – Digital Media Theories Marketing Techniques & Trends

11. 11 Marketing Techniques & Trends Investing in the artist and technology –Wind-Up Records Partnered with RealNetworks, Amazon.com, and Tower Records to offer exclusive streaming tracks Flood Internet with “Bogus” files –Online Labels CD Baby Online record store that sells CDs by independent musicians Promotion for “unsigned” acts –Jack Johnson

12. 12 Marketing Techniques & Trends Major labels partnering with online services –Online services help to promote new artists and increase sales AOL (Artist Discovery Network) MSN Yahoo! Launch –Collaborative filtering through Internet radio

13. 13 Marketing Techniques & Trends New media methods –Creating hype Offering full album free Changing set lists on Internet Initial release of songs –Offering more for consumer Free paraphernalia when buying online –T-shirts, stickers, DVDs –Playing on other mediums Videogames Retail stores

14. 14 Marketing Techniques & Trends Product pairing –Combining artist with consumer product Sting and Jaguar Missy Elliot and GAP Run risk of losing credibility Multi-medium convergence –Rachel Farris and Coke lid campaign

15. Mark Pendolino COM 538 – Digital Media Theories Looking Ahead

16. 16 Looking Ahead Online marketing and promotion tools combined with traditional –Multi-pronged campaigns From MusicDish Industry E-Journal’s survey question of most effective method of marketing music. http://musicdish.com

17. 17 Looking Ahead Emerging marketing methods –FlashmobFlashmob Text-messaging groups Hot in Europe –Further medium divergence events –Live webcasts –Collaborative filtering Guides

18. 18 Looking Ahead Buying music online –Traditional retail outlets will shrink –Industry will restructure Give up distribution control Focus on marketing and promotion technologies Focus on content and artist development

19. 19 Looking Ahead Targeted market research a priority –Labels traditionally not good at targeted marketing –Data mining and consumer research will increase –Consumer becomes empowered

20. 20 Looking Ahead Music formats will change –CDs will phase out –MP3s or other standardized file format become main product Renders standard packaging obsolete –Album length, cases, physical product Artists may focus primarily on singles Purchasing outlets hold “filling” stations or kiosks Portability

21. Mark Pendolino COM 538 – Digital Media Theories Summary

22. 22 Summary Recording industry will recover New media technology has increased exposure to new artists New media technology provides extra tool for marketing and promotion Music packaging formats will evolve and consumer will have more choice, more freedom

23. Mark Pendolino COM 538 – Digital Media Theories Questions