Blog Post

@EconSM: Musicians Can’t Rely On Social Networks Alone For Making Money

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 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.

3 Responses to “@EconSM: Musicians Can’t Rely On Social Networks Alone For Making Money”

  1. Im really interested in all this.

    How exactly can musicians continue to make money through this social media phenomenon?

    How are relationships changing?

    For what reasons?

    Anyone remember this being like the Grateful dead's way of thinking?


  2. With all due respect, Josh Deutsch is flat wrong. Social Media plays a large roll in the modern A&R process.

    1. Social media allows bands to build a following online and build buzz for concerts. With a larger online presence, the attendance at the concert is likely to increase. A larger attendance will reflect better on a band when an A&R rep is in the crowd.

    2. The platform allows a band or label to test new material before they release it on an album and get feedback from the fans.

    3. Private Investors with start to buy bands up and treat it as a portfolio, while using Social Media to distribute the platform. As digital moves into more homes, physical media will slowly disappear.

    Why look back in fear? When you can look forward and prosper?

    As we move farther into the digital age, consumer feedback is going to play a larger and larger roll in the way we consume and distribute content. Digital media is a tool, which the labels must embrace and not fear. Either you will get it, and change the direction of the ship. Or you will falter and die. The choice is simple, and the choice is yours to make.

    Labels are not here to stay. They are an over weight ship that is slowly sinking. Either they change or be bought out by Fortune 500 Entertainment companies with new business models. These new ventures will declare that the album is dead and move back to a singles format.

    Subscription, forget about it. It’s a step backwards and in the wrong direction. Consumers want to consume media when they want and on the platform they want. If you do not remove DRM, the consumer will continue to steal the music and put it on all the platforms they want. Consumers want ownership, not rental.