There emerged something of a consensus during the “Social Media meets Music” panel at EconSM, that musicians can’t rely on social networks alone for making money: giving the example of the Arctic Monkeys, Courtney Holt, EVP Digital Music and Media at MTV Networks said that though the Arctic Monkeys already had a deal and leveraged their MySpace page, until MTV played their music – record sales were flat. When MTV stopped playing their music, sales dropped. At the same time, he said that MTV no longer remains the only launchpad – the traditional music business has been disrupted and a combination of both Social Media and TV are necessary for bands. A social network is a platform – your IM, Blog, YouTube – can help create a base. Number of friends on MySpace doesn’t guarantee success. This is the year that traditional CD business will fall by 20 percent, and we’ll have to move to a la carte sales of tracks. Rhapsody’s done a good thing tying up with Comcast.
Jimmy Guterman of paidContent.org asked about how the advent of social media tools affects the A&R talent scan function in a record company. Josh Deutsch, CEO, Downtown Records feels that the A&R process is among the least affected. Social media does, however, allow artists for creating their own audience and reach out to fans, and create a situation for labels to discover them and take them to the next level.
Hadi Partovi, president of music social network iLike feels that it’s kinda silly of a band to try only one source for marketing – they’ll try everything. Monetization for music social networks will come from ticket and music sales, which is why iLike has tied up with iTunes and Ticketmaster.
Lisa Napoli, senior reporter with Marketplace, who was moderating the session, asked about means of preventing piracy. Deutsch doesn’t think there’s a way out apart from developing more revenue streams. Advertising is the future. But are we seeing a market correction – are the middlemen being cut off with the evolution of social media? Josh feels that it’s not the same skill-set that allows you to create music that can help you sell it, so the labels are here to stay. There is an opportunity for bands to create a larger market by virtue of viral marketing.