Download which factors leading to decreasing sales in the music industry can

BUDAPEST BUSINESS SCHOOL
FACULTY OF INTERNATIONAL MANAGEMENT AND BUSINESS
INTERNATIONAL BUSINESS ECONOMICS COURSE
SPECIALISING IN INTERNATIONAL ENTERPRISES
AVANS HOGESCHOOL INTERNATIONAL BUSINESS SCHOOL BREDA
BUSINESS ADMINISTRATION COURSE
WHICH FACTORS LEADING TO DECREASING
SALES IN THE MUSIC INDUSTRY CAN BE
INFLUENCED BY ONLINE MARKETING TOOLS?
Prepared by: Kata Fohl
TABLE OF CONTENTS
Executive Summary ..................................................................................................... 2
Introduction................................................................................................................ 4
Part 1: Research.......................................................................................................... 5
1.1 Rationale........................................................................................................ 5
1.2 Situational Analysis.......................................................................................... 6
1.3 Theoretical Background ...................................................................................12
1.4 Conceptual Model ...........................................................................................15
1.5 Research Design.............................................................................................18
1.6 Research Results ............................................................................................21
1.7 Conclusion and Recommendations ....................................................................24
Part 2: Practical Work .................................................................................................27
Part 3: Additional Theoretical Background ......................................................................33
3.1 Marketing and Arts .........................................................................................33
3.2 Computer-mediated Communication, Hypermedia and Interactivity .......................33
3.3 Shift in Today’s Marketing Communications Model...............................................34
3.4 Integrated Marketing Communications and Online Marketing ................................36
3.5 The Importance of Direct and Online Marketing...................................................37
3.6 Benefits of Direct and Online Marketing .............................................................38
3.7 Online Marketing as the Fastest Growing Form of Direct Marketing ........................39
3.8 Ways of Conducting Online Marketing................................................................40
3.9 The Future of Online Marketing – The Concept of Web 3.0 ....................................46
Bibliography ..............................................................................................................49
Appendices ................................................................................................................52
Appendix 1: Questionnaire ....................................................................................52
Appendix 2: Analysis of the Questionnaire Results ....................................................54
Appendix 3: Analysis of the Sell-A-Band Website and the Concept Behind It .................58
Appendix 4: Sell-A-Band Interviews........................................................................61
Appendix 5: Analysis of Facebook Marketing Activity .................................................64
1
EXECUTIVE SUMMARY
This report examines the problem of copyright infringement through illegal downloads
on today’s music market and intends to discover methods with which this phenomenon could
be rolled back or alternative solutions to support economically harmed artists could be more
well-known. For this reason, a research constituted by the distribution of a questionnaire,
the analysis of a website, in-depth interviews with experts and targeted online promotional
activities was conducted during my five-month internship at Monkey Music, an independent
Austrian music label dealing with the thorough marketing of artists.
As the first step of this research, the problem of illegal downloading was identified and
examined in detail. Recent economic data about the music industry was collected, on the
basis of which a conceptual model was set up. In this model, five variables having an
influence on the problem of copyright infringement and decreasing music sales were
identified, namely: technology advancement, Internet usage, economic rationality and
prices, regulation, and culture. Since it was found that the first four variables could not be
influenced in the frame of the research, further attention was paid only to culture. In
connection with this factor, two hypotheses were set: illegal downloaders might change their
behavior if they were better educated about the harmful effects of copyright infringement,
and the number of live performance visitors could be increased with the help of targeted
online promotion.
These hypotheses were tested with various research methods with an unfortunately
low internal and external validity due to the anonymity of online data collection. As one part
of the research, a questionnaire examining Internet usage and downloading behavior,
providing information about the illegality of file-sharing and testing the respondents’
willingness to change was distributed. The results of this questionnaire showed that the
initial hypothesis of influencing infringers’ behavior by informing them about its illegality and
harmful effects might be wrong: pure information is unlikely to change this behavior, and
probably more radical steps are required. Another part of the research was the analysis of
the Sell-A-Band website, a platform for donating money to musicians online. Together with
the interviews made with three music industry experts, this analysis showed that online
donation is not popular and not well-known enough, partly due to the fact that it is weakly
promoted. According to the results of the research, when supporting a music group, people
prefer attending live concerts or buying merchandise products to donating money to them.
This preference for live performances was further indicated by the third part of the research,
when live concerts of a music group marketed by Monkey Music were promoted with small
contests in social media. Although users’ responsiveness appeared relatively low to these
contests at the end of which they could win free concert tickets, these online marketing
activities had an inevitably positive effect on the popularity of Monkey Music, and bearing in
mind the fact that they did not require any financial resources, they were worth the effort.
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They also indicated that the hypothesis about increasing number of live concert visitors and
users’ responsiveness to online marketing might be correct.
Based on the results of this complex research and the professional experience and
knowledge gained at the company during the internship, the following recommendations
were made:
• Instead of selling CDs and encouraging illegal downloaders to buy CDs, today’s record
labels and music companies should turn away from this traditional form of distributing
music. Record labels should offer exclusive packages in the form of a CD together with
an extra DVD about a live concert, with a poster about the band, or with a coupon for
special online downloads or merchandise products. It is possible that more CDs would
be purchased on today’s music market, if a higher value was attached to them.
• Based on this above described concept of exclusivity and on the experience gained at
Monkey Music, the production and promotion of traditional vinyl records could be
advantageous in the future. Since CDs in themselves have become obsolete and
uninteresting in the competition against other data carriers, the music industry may
experience the return of vinyl records. Based on the sales statistics of Monkey Music
for example, traditional records combined with modern technology can have a
relatively great consumer base.
• As for Sell-A-Band, although the website is not convenient for its original aim
(exploring new talents is nearly impossible, since financial targets are rarely reached),
it might be useful at a later stage of an artist’s career and should be applied when a
sufficient fan base is already provided. For financing smaller projects, video shootings
or the recording of a new album Sell-A-Band can be a helpful tool, if enough attention
is drawn to the website.
• Organizing simple, trendy and interactive online contests on a regular basis to
advertise live events might significantly help artists and music companies. Although
the research indicated that music consumers’ behavior and perceptions about illegal
file sharing can barely be influenced, online marketing tools might have advantageous
effects on another segment of consumer culture: live concerts can be effectively
promoted with their help. That is why increasing attention should be paid to online
communications and to maintaining a closer relationship with fans through the Web.
This report contains a detailed description of the above mentioned research steps and
results, and provides additional information about the practical work performed at Monkey
Music and a strong theoretical background about online marketing. Although the problem
examined in it is definitely too complex to be solved with the help of this research, this
report can still provide useful information and a few interesting facts about today’s music
industry.
3
INTRODUCTION
This report concentrates on the effects of the high proportion of illegal downloads in
today’s music industry and examines the extent to which infringers’ behavior might be
changed and to which their attitude towards alternative methods of supporting artists can be
influenced. For this reason, a part of the research described in this report is constituted by
online marketing activities on Facebook, one of the most popular social media websites
nowadays. Besides that, this research was conducted with the aim of gathering information
and gaining an overall insight into the functioning of the music industry as well, that is why
the distribution and analysis of a questionnaire, the monitoring of the Sell-A-Band website,
and personal interviews with music professionals about the possibilities of online donations
in today’s industry also constituted a great part of the research.
During the research, the five-month internship done at Monkey Music, an independent
Austrian music label proved to be of great help. To test whether visitors of live concerts are
responsive to targeted online promotion, small contests to win free tickets for the concert of
Bauchklang, a music group managed by Monkey Music were organized on Facebook.
Simultaneously, these contests had the aim of increasing the popularity of Monkey Music as
well. The company assisted in the organization of these lotteries, and also provided
professional help and knowledge in the analysis of the Sell-A-Band website, a platform for
online donations to music groups. The distribution of the questionnaire was also facilitated
by Monkey Music, through the company’s extended network of music lovers and business
partners; however, the greatest and most important input to this research proved to be the
practical work done during my internship. Thanks to the fact that my everyday tasks
performed at Monkey Music were very diverse ranging from administration and inventory
control until promotion, management and event organization, I gained a professional insight
into the functioning of today’s music industry and a strong basis of practical experience and
professional knowledge in this field.
This report contains the detailed description of the above mentioned research methods
and a great amount of theoretical information as well. In Part 1: Research, firstly the
problem of illegal downloading is discussed and demonstrated with the practical analysis of
the present state of the music industry. A small theoretical background about the functioning
of this industry is also provided, followed by the description of the model based on which the
research was conducted. Part 1 is closed by the description of this research, the analysis of
its results, and the recommendations of the researcher based on them. Part 2: Practical
Work contains a brief description of the tasks which I performed at the company during my
internship. Part 3: Additional Theoretical Background contains extensive theoretical
information on online marketing, which constituted a part of the research activities. Finally,
the Appendices are constituted by detailed analyses of the research results and the
interviews made about Sell-A-Band.
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PART 1: RESEARCH
1.1 Rationale
The aim of my research in the field of arts promotion and online marketing is to
examine the economic effects of the wide-spread usage of online channels on artists,
especially musicians and all other members of the music industry. Recently, music industry
players have been faced with the problem of losing a substantial amount of their income
because of the easy access to their products which is provided by the Internet. As a frequent
visitor of concerts and a dedicated music lover, I consider myself involved in this situation. I
chose this topic because I find the relationship between arts and business interesting, and I
agree with Hans Abbing’s words related to this. Hans Abbing, artist and economist, lecturer
at the Erasmus University in Rotterdam says: “The economy of the arts is exceptional.
Although the arts operate successfully in the marketplace, their natural affinity is with giftgiving, rather than with commercial exchange. People believe that artists are selflessly
dedicated to art, that price does not reflect quality and that the arts are free” (Hans Abbing
1).
My objective with the help of this research is to reach a desired situation, the definition
of which I formulated as “fair economic treatment of artists and their works.” Fair economic
treatment can be defined as an ideal situation in which artists receive a sufficient amount of
remuneration in return for the efforts and costs they dedicated to their works. This situation
would resemble the purchase and sale of usual consumer goods, involving producers on the
one side selling their artistic products at a price that includes their profit margin as well,
while customers on the other side would pay that price and enjoy the benefits that the given
piece of art provides. Thus the assumption mentioned above regarding the gift-giving affinity
of arts would be replaced by a commercial point of view, and all market players of the music
industry would partake in their deserved benefit of sales of copyrighted music.
This way, my research will concentrate on the problem of illegal file sharing on the
Internet and the application of this medium in favor of the arts, by introducing new ways of
online arts promotion at Monkey Music. Illegal file sharing is an important term in this case,
and can be defined as the downloading and uploading of copyrighted materials from a peerto-peer network (“What makes some downloading illegal and some legal?”). Other
definitions, such as that in line with the Canadian regulation for example, state that
downloading of these materials is legal, and only uploading activity should be in the central
focus of lawsuits (“When Is Downloading Music on the Internet Illegal?”). In my view, most
of those consumers who use peer-to-peer softwares for file sharing are already aware of the
fact that peer-to-peer programs defined as “a convenient way to share public domain music,
audio, images, documents, and software programs over the Internet” have recently
changed, and besides public domain materials, the proportion of copyrighted materials is
increasing continuously (“P2P file sharing: Know the risks”). Users of peer-to-peer programs
deliberately download given softwares which allow them to connect to computers of other
5
users (peers) online and download their files (“Filesharing”). That is why I prefer the first
definition of illegal file sharing, and consider downloading of copyrighted materials just as
illegal as the uploading of those. In line with this definition, downloading is only legal when
the person from whom the files are received has a permission from the copyright owner to
further distribute the given material.
In order to change this present situation, in which Internet can rather be considered as
an enemy of artists, the objective of my research is to discover different means of online
marketing which can be used to increase the income of music industry players.
Consequently, my research question can be formulated as: what factors leading to
decreasing sales in the music industry can be influenced by online marketing tools?
1.2 Situational Analysis
The Problem – Decreasing Sales in the Music Industry; Examples from Britain and
the US
In these days, many voices in the music industry claim that Internet piracy has
reduced sales of legitimate CDs and that illegal downloads have become a substitute for
legal CD purchases (Peitz and Waelbroeck 71-79). Since the launch of Napster, the first
widely adopted file sharing service in 1999, the sources of unauthorized music to download
for free from the Internet have proliferated. According to Professor Stan J. Liebowitz, “when
a downloaded copy is a good substitute for a purchased original, there is little reason for the
listener to purchase the copyrighted work unless the continued use of a copy provides some
disutility due to, say, the possibility of being punished for violating the law or the guilt from
not supporting one’s favorite artists. This substitution effect can only work to reduce the
effective demand in the market facing the seller of sound recordings, and can only harm the
financial position of the sound recording companies” (Liebowitz 15). Thus economic effects
of this phenomenon on artists are inevitably negative, resulting in lack of remuneration for
their works.
Indeed, since the end of the 1990s, the trade value of music sales in the UK, for
example, has fallen by 25% (“The Impact of Illegal Downloading” 1). According to an article
published in the Guardian in May 2009, at least 7 million people used illegal downloads in
Britain, costing the economy billions of pounds and thousands of jobs. Shared content on
one network was worth about £12 billion a year according to the research commissioned by
the Strategic Advisory Board for Intellectual Property. In the article discussed, David Lammy,
minister for intellectual property, says: “illegal downloading robs our economy of millions of
pounds every year and seriously damages business and innovation throughout the UK.”
While creative industries provide about 8% of British GDP, as early as in 2004, digital
copying of their products already resulted in the estimated loss of 4,000 jobs.
6
Number of paid vs illegal free
music downloads (millions)
Paid downloads
Illegal free music
downloads
0
200
400
600
800 1000
Source: “Cost to British Economy of Free Downloads is Revealed”
Interestingly, according to the estimations of the International Federation of the
Phonographic Industry there were 890 million illegal free music downloads through filesharing in the UK in 2007 compared with 140 million paid downloads. This puts unauthorized
access at a ratio of six to one, before offline sharing like disk burning is even considered.
This ratio is likely to increase, since the SABIP report indicates that music downloading had
“become part and parcel of the social fabric of our society despite its illegal status”. It
claimed that 70% of those aged 15 to 24 did not feel guilty about downloading music for
free from the Internet and 61% of the age group did not feel they should have to pay for the
music they listen to, according to a survey (“Cost to British Economy of Free Downloads is
Revealed”).
A survey conducted in the US in 2007 came to similar conclusions. This study claims
that the US economy lost 8.7 billion USD annually due to piracy and is based on the
assumption that around 20 billion illegal downloads took place worldwide during one year,
and 66% of the downloaded content was US recorded music. Besides these figures, it is
assumed that one fifth of these downloaded songs would have been purchased in a legal way
if piracy did not exist.
From these figures, it was concluded that 49,337 jobs had been lost due to piracy, of
which 18,649 belonged directly to the sound recording industry and 30,688 accounted for
other US industries. Considering concrete monetary loss, 1.87 billion USD was claimed to be
lost by US workers in annual earnings. Of this, 771 million USD would have been earned by
workers in the sound recording industry or in downstream retail industries, while 1.11 billion
USD would have been the remuneration of workers in other US industries.
Consequently, US federal, state and local governments were found to lose a minimum
of 293 million USD in tax revenues per year (“New Study: Illegal File Sharing Costs the US
$8.7 Billion Annually”). Such enormous figures, even if they are not perfectly accurate,
indicate that the problem of illegal file sharing deserves greater attention worldwide.
7
Other Sectors and Market Players Involved in this Issue
As it is mentioned above, it is the sum of creative industries which are economically
hurt by illegal file sharing. This issue affects not only the music industry, but also those
market players which provide videos, movies, games, books and different pieces of art to
the public. As it is depicted on the graphs below, the value of both the European music and
video and movies and entertainment markets has decreased for five years, and growth
figures, indicated with the blue line and scaled in negative terms on the right side of the
graphs, have been continuously negative.
According to reports of Datamonitor issued in June 2009, in Europe both the music and
video and the movies and entertainment segments' revenues have considerably decreased
since 2004, and this tendency is likely to continue in the future. The ease of switching for
consumers, due to wide spread illegal file sharing, creates a buyer's market and puts
suppliers at a disadvantage (“Movies & Entertainment in Europe” 9-13). Similarly, e-books,
which can be read for free on the Internet represent a potential threat for publishers,
making the publishing industry also involved in this issue (Greco 38).
Concentrating on the music industry, it can be stated that all members of the channel
between the musician and the final end user are hurt by illegal file sharing. Starting with the
artist creating a piece of art with commercial value, other market players such as sound
engineers and recording studios are involved and interested in the future success of that
given piece of art. After them, companies dealing with the publishing of music labels and
managers responsible for the promotion of artists are also concerned about sales figures.
Finally, music stores offering the records of musicians for sale and organizers of live
performances are also interested in selling the highest possible amount of CDs and concert
tickets. Looking at the problem this way indicates that many players have to face the fact
that the music market is dominated by inequality, where demand is well satisfied, but
suppliers are not rewarded for their performance and their costs can be covered only with
more and more difficulties.
8
Besides channel members suffering from the negative effects of illegal file sharing,
there are parties involved in this issue who support and try to protect these players.
Governments in association with specialized organizations such as the Music Publishers'
Association, World Intellectual Property Organization and local copyright offices try to fight
this problem and work on a stricter and more effective regulation on intellectual property
rights (“What is WIPO?”). As an important step, the Digital Millennium Copyright Act was
signed into law by US President Bill Clinton in 1998, which implemented and strengthened
the effects of two World Intellectual Property Organization treaties, namely the Copyright
Treaty and the Performances and Phonograms Treaty (“The Digital Millennium Copyright Act
of 1998”). One decade later, in February 2009, the Legal Affairs Committee of the European
Parliament agreed on the extension of copyright term for music recordings from 50 years to
95 years from the first publication of the given song (“Music copyright to be extended to 95
years”). Such steps among many others also indicate the importance of this issue, and can
be considered good initiatives; however, so far they alone have not been able to reverse the
negative growth figures in the music industry.
Reports Written about this Issue
During the past few years, many studies were written which examined the relationship
between illegal file sharing and decreasing music sales and most of them suggested that
online channels influenced sales in the music industry negatively. A few of these studies are
briefly introduced in this section. The first is The Effect of Napster on Recorded Music Sales:
Evidence from the Consumer Expenditure Survey written by Seung‐Hyun Hong, Stanford
University, USA in 2004. This study quantifies the changes in household expenditure on
recorded music in the USA and blames Napster for 33% of the decline in spending on music
in 2000. In the same year, David Blackburn of Harvard University, USA, published his paper
Online Privacy & Recorded Music Sales, in which he concluded that file sharing reduces sales
for well‐known artists relative to unknown artists, and such an impact becomes increasingly
negative as popularity grows. Based on industry data from the IFPI World Report in 2003,
Peitz & Waelbroeck (USA) analyzed 16 countries in their empirical study The Effect of
Internet Piracy on Music Sales, and found that music downloading could have been
responsible for a 20% decrease in global music sales between 1998 and 2002. Rochelandet
and Le Guel from France investigated the behavior on peer-to-peer networks of more than
2,500 households, of which 74% stated that they had downloaded via peer-to-peer. In P2P
Music Sharing Networks: Why Legal Fight Against Copiers May Be Inefficient they concluded
that “copying behavior is negatively correlated with the willingness to pay for an original
when a copy is available”. In 2006, Alejandro Zentner used 15,000 responses to a consumer
mail survey in seven European countries, and suggested that peer-to-peer usage reduced
the probability of buying music by 30%. In his study Measuring the Effect of Music
Downloads on Music Purchases, he also estimated that music sales without illegal downloads
would have been 8% higher in 2002.
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Professor Stan J. Liebowitz (University of Texas at Dallas, USA) discussed this issue in
several papers. In 2006, File‐sharing: Creative Destruction or Just Plain Destruction?
contained an evaluation of the impact of other factors on decreasing album sales, such as
competition from DVD, format replacement cycles, prices and so on, but file‐sharing was still
cited as the key factor. In the same year he wrote the study How to Best Ensure
Remuneration for Creators in the Market for Music? Copyright and its Alternatives jointly
with Richard Watt (University of Canterbury), in which he covered the economic theory of
copyright as a remuneration and incentive for creativity, and analyzed the associated
literature, especially with regard to the effects of copying music on the legitimate market. He
concluded that most of the studies previously written in this field had found “some degree of
negative relationship between file‐sharing and sales of sound recordings.”
Two studies were published by Jupiter Research (UK) about music industry losses and
future opportunities in 2007 and 2009. The study Music Industry Losses based on a
consumer survey with 1,000 UK respondents concluded that online music piracy was likely to
cost the UK music industry 1.6 billion GBP between 2001 and 2012; and in 2007, online
music piracy resulted in 159.2 million GBP of foregone spend. The Analysis of the European
Online Music Market Development and Assessment of Future Opportunities was based on
face to face interviews with 5,000 people from five different European countries, which
resulted in the conclusion that “the markets with the highest incidence of music peer‐to‐peer
are also those with weakest per capita music spending.”
Although this list of relevant studies is far not complete, there is only one more paper
that is mentioned in this section. Interestingly, Ups & Downs – Economic and Cultural Effects
of File Sharing on Music, Film and Games, a study commissioned by the Dutch Ministries of
Education, Culture and Science, Economic Affairs and Justice in 2009, also established the
link between the fall in sales and downloading, but claimed this was offset by improved
consumer welfare. Based on this point of view, consumers end up with a net benefit due to
the fact that they can acquire more music at low or even zero cost (“The Impact of Illegal
Downloading” 2-8). However, this consumer welfare does not help the supply side of the
market, which continues suffering from the negative effects of illegal file sharing.
Falsifications
Organizations supporting music sharing are constantly attacking the statistics on which
artists’ claims are based. According to for example peer-to-peer file sharing software
producers, it is obvious that the music industry loses some money due to Internet music file
sharing, but finding the exact amount lost due to music downloading is not a simple task.
Indeed, a few studies can be found which indicate no adverse effect of file sharing on music
sales.
Probably the most well-known among these papers is the study of Oberhulzer &
Strumpf from 2004. The Effect of File Sharing on Record Sales stated that “downloads have
an effect on sales which is statistically indistinguishable from zero”. Similarly, Tatsuo Tanaka
10
(Keio University, Japan) came to the same conclusion in the paper Does File-sharing Reduce
Music CD Sales in 2004, stating that little evidence had been found which could show that
file sharing reduces music CD sales in Japan. Finally, in 2009, the BI Norwegian School of
Management prepared a study called Consumer Culture in Times of Crisis, and conducted a
telephone survey of almost 2,000 individuals. This research indicated that file sharers were
more likely to have used paid download sites, 75 times compared to seven times of free
sites (“The Impact of Illegal Downloading” 1).
Besides illegal file sharing, other frequently mentioned reasons for declining sales are
poor macroeconomic conditions, mismanagement and bad business decisions, growing
competition from other forms of entertainment such as video games and DVDs, and the fact
that the number of new releases greatly exceeds the number of releases that are played on
the radio (Oberhulzer and Strumpf 24). In other words, only an extremely small percentage
of music gets airplay today, and thus reaches the consumers effectively. This way,
consumers are simply not being exposed to the same amount of new music they were years
ago (“Illegal Music Downloading: Look at the Facts”).
Based on this, it is important to point out that illegal file sharing is not the only
variable influencing music sales. Although the relationship between file sharing and
decreasing sales is probably a cause and effect relation, thus more than simple statistical
correlation, the other possible causes mentioned above should still not be overlooked.
The studies listed above led to similar results in their field and were supported with
clear evidence. However, when conducting research about an issue like this, doubts can
occur about the honesty of respondents and the representative nature of the sample. Since
most of the studies were based on face to face interviews, telephone surveys and mail
questionnaires, there is a high probability that some respondents had forged their answers
and had given false responses about their downloading habits because of the fear of being
punished afterwards. That is why these studies and statistics can probably never lead to
perfectly true results, however, it can still be stated on a simple logical basis that the
possibility of free downloading attracts rational consumers and makes them choose free
music files instead of expensive CDs.
New Business Models and Distribution Channels to Tackle the Problem
As it is described in the Digital Music Report 2009 of the International Federation of
Phonographic Industry (IFPI), in order to tackle the problem of decreasing sales on its own,
the music industry has recently transformed its business models and is now offering
consumers an increasing range of new services with leading technology partners. The
industry has shifted its approach from one based only on unit sales of music to “monetizing”
access to music across a multitude of channels and platforms (“IFPI Digital Music Report
2009” 4).
As a new means of music distribution, the digital music business internationally saw a
sixth year of expansion in 2008, growing by an estimated 25% to 3.7 billion USD in trade
11
value. Digital platforms in 2008 accounted for already 20% of music sales, up from 15% in
2007. After that, in 2009, more than one quarter of record companies’ revenues came from
digital channels, accounting for an estimated 4.2 billion USD globally. Recorded music is at
the forefront of the online and mobile revolution, generating more revenue in percentage
terms through digital platforms than the newspaper, magazine and film industries combined.
Parallel with this, a new generation of music subscription services, social networking
sites and new licensing channels is emerging. These were led in 2008 by services like Nokia
Comes With Music, MySpace Music and a raft of partnerships with Internet Service Providers,
such as TDC in Denmark, Neuf Cegetel in France, TeliaSonera in Sweden, Terra in Brazil and
Sky in the UK. With the help of these, consumers can acquire tracks and albums in ways
inconceivable a few years ago – from download stores, streaming sites, subscription
services, free-to-user sites, bundled with their broadband or a mobile phone headset.
Despite these achievements, the digital music business still faces many barriers to its
growth, which include the lack of marketing by services in some countries, problems with
publishing rights, consumer reluctance to make online payments and the complex challenge
of creating services that are user-friendly to different consumer groups. As a few means to
solve these problems, Thomas Hesse; president, Global Digital Business, US Sales &
Corporate Strategy, Sony; mentions an attractive user interface, a strong value proposition
and a clear marketing message (“IFPI Digital Music Report 2010” 5). Besides introducing
new channels to access music, Digital Music Report 2009 also shows how the digital age is
expanding the role of music companies in developing and marketing artists, and it outlines
the progress being made internationally in getting Internet Service Providers to cooperate to
curb mass-scale copyright infringement on their networks.
1.3 Theoretical Background
This section is a brief introduction of the music business and how arts promotion fits
into it, while the second subject covers the theoretical aspects of online marketing in detail
in Part 3.
Arts Promotion in the Music Industry
Professor Dr. Peter Tschmuck, faculty member of the Institute of Culture Management
and Culture Studies at the University of Music and Performing Arts Vienna, lecturer, and
author of the book Creativity and Innovation in the Music Industry, gave a clear overview of
the actual state of the music industry on one of his lectures in Vienna (“Copyright, Contracts
and Music Production”). In his presentation, he introduces the functioning of the music
industry as a whole with the help of the following flow chart (Peter Tschmuck 4). Based on
this chart, according to Dr. Tschmuck, the music industry is based on a main value-added
network and several support structures which help the successful and profitable functioning
of the main network. My research will take place within the support structures; however,
12
proper knowledge of the main value-added network is also essential in this case.
The Main Value-Added Network
The main value-added network starts with artists and repertoire (often referred to as
A&R), which often constitutes a separate division of a record label company that
concentrates on discovering new talents and overseeing the recording process and the
progress made by a given artist. This division works in close cooperation with the marketing
department of a record label, and could be considered very powerful in the past, when A&R
executives had significant influence on listeners’ tastes and preferences. Nowadays, with the
emergence of digital music distribution, the maintenance of A&R’s influential role is
questionable (“Artists and repertoire”).
Pieces of a selected artist’s repertoire have to be made public in order to enter the
phase of music production. Consequently, if an artist decides not to publish a song, and keep
it for his/her own use, that given song does not represent a part of the value-added
network, and is out of consideration for the further steps. Once a published song entered the
music production phase, it is recorded and becomes available for the public. This recorded
song may then be distributed online or in mobile ways and can also be performed live during
concerts in front of an audience.
This main value-added network described above shows how a song is born in one
individual's mind and is made officially available for a considerable public at the end. This
network based on pure artistic value can hardly be successful and profitable for all of its
members without any support structures. The functioning of the network has to be organized
and controlled, rights and obligations of parties have to be clearly defined, and once a song
is recorded, it has to be introduced to the public in a way which arouses interest. Support
structures are responsible for these tasks, among which online means probably have a
constantly increasing importance.
13
Support Structures
Artist management deals with the organization and control of the value flow through
the main network. Managers of artists are responsible for adequate planning and timing,
they take part in networking and lobbying, and organize proper financing as well. They share
a mutual interest with the artists they manage, since they usually receive a certain
percentage fee of the artists' revenues, thus they are motivated to organize as many
successful live performances and album releases as possible. This way, managers guide the
artists through this value-added network by providing everyday help and using a wide
personal network, while property rights systems help artists in a more formal way. These
systems serve the protection of artists by granting them exclusive rights to copy, distribute
or adapt a given piece of art (“Copyright”). This form of protection of the rights of
performers,
producers
and
broadcasters
contributes
to
the
cultural
and
economic
development of nations. As defined by the World Intellectual Property Organization, the
purpose of copyright can be viewed as twofold: “to encourage a dynamic creative culture,
while returning value to creators so that they can lead a dignified economic existence, and to
provide widespread, affordable access to content for the public” (“Copyright and Related
Rights”).
Once artists' rights are protected, the given piece of art should be distributed and
promoted successfully, which then benefits all members of the network. Phonograms are
fixations of sounds and performances on a data medium, such as tape, CD or DVD. These
phonograms are the tangible end product of an artist's performance, offered for sale to the
public. Distribution of these phonograms happens through retail merchandise, furthermore,
music merchandisers also design and distribute products that aim at popularizing a given
artist or group of artists, such as T-shirts, posters, and all kinds of accessories (‘Music
Merchandising and Management”).
Finally, arts promotion, in this case in the form of online and multimedia promotion
plays an important role in supporting artists, by using various advertising techniques. This
support structure focuses on arousing public interest, generating sales, attracting visitors of
live performances, and communicating actualities and new releases, so that the public stays
informed and committed to a given artist. With the wide spread of the Internet, online
promotion nowadays has a potential greater than ever before, and direct marketing of music
becomes possible.
Recent Trends and Theories
Dr. Tschmuck also emphasizes the paradigm shift in today’s music industry, and makes
several statements in connection with the changes taking place. He states that traditional
production, distribution and reception routines are broken, and a new era of digital sales
more important than record sales begins. This theory is supported by the tendency of
decreasing record sales and a growing interest in digital distribution, described in the
14
Situational Analysis above. Keeping this in mind, it is reasonable to concentrate on live
performances and heavily promote these events, since Dr. Tschmuck identifies the liveperforming sector as a boom segment nowadays. Finally, the professor also states that
music recipients do not stay passive anymore, but start to participate in both the production
and the distribution of music with the help of web 2.0 applications, which again emphasizes
the continuously increasing importance of online channels in the music industry. Bearing
these recent trends in mind, online promotion tools appear to be of great potential value in
the communication between music lovers and artists.
1.4 Conceptual Model
In order to conduct a meaningful research about illegal file sharing, independent
variables which lead to the current problem need to be defined first. This conceptual model
considers illegal file sharing as the dependent variable and concentrates on the following
independent variables, which were identified with the help of the situational analysis:
Technology advancement
Technology is one of the basic elements of the current problem. The ever increasing
number of illegally uploaded and downloaded records has its basis in the fact that
technology enables users to commit illegal file sharing actions. Until an easy access is
provided to peer-to-peer file sharing programs, users’ tendency to use these programs is
likely to grow in the future. Continuous technological development resulting in higher
download speed and greater storage space further facilitates illegal file sharing (“Illegal filesharing could cost £215 billion by 2015”). Obviously, until such technology was not given,
the problem of illegal file sharing did not exist. With the introduction of Napster, the first file
sharing service, the basic technology was created, which is likely to further exist and
improve in the future, since creators of file sharing programs have commercial interest in
developing and marketing their products; and a guaranteed demand for these products on
the market is obvious. From the point of view of this research, technology advancement is
considered as a variable which cannot be influenced and is expected to be present during
and after the research as well.
Wide-spread usage of Internet
Internet usage can be considered a container variable, since many aspects such as
user behavior, income, education, other leisure activities etc. have an effect on it. Besides
that, this is again a variable that serves as a basis of illegal file sharing. Obviously, one
without an Internet connection is not capable of sharing files illegally online and has zero
chance to commit this crime, compared to an Internet user with a functioning connection.
Once a user goes online, he is provided with the possibility of illegal file sharing. Given that
the number of Internet users is continuously increasing, the number of records shared
15
illegally will probably also rise, which leads to the assumption that there is a positive
correlation between Internet usage and illegal file sharing (“World Internet Usage and
Population Stats”). It is not a cause and effect relationship, since Internet usage does not
necessarily lead to illegal file sharing; however correlation between the two variables exists.
Similarly to technological advancement, this variable cannot be influenced by any means
during this research, and in fact, it should not be affected. Although technology and Internet
provide the basis of illegal file sharing activities, they also make the use of online promotion
tools possible, thus can be considered advantageous for the purpose of this research.
Regulatory problems
There is a lack of effective regulation in the field of intellectual property rights. As a
container variable, regulation is again strongly connected to governmental issues, Internet
Service Providers, courts, financial resources etc., which may limit or increase its
effectiveness. In its present form, regulation on punishment of illegal file sharers is weak
and appears to exist in theory only. Very few cases are dealt with by the court in this field
and the end result of these cases is only rarely published in the media. This way, users of file
sharing programs do not fear the consequences of their illegal activity, since regulation is
unclear and seemingly ineffective. Filtering technology to tackle the problem of file sharing is
not used widely, and Internet Service Providers do not support the idea of cooperation in
taking
action
against
infringers
either,
although
governments
would
suggest
that
(“Government Response to a Consultation on legislative options to address illicit Peer-toPeer (P2P) file-sharing”). Unfortunately, these disadvantageous regulatory circumstances
cannot be influenced within the frame of the present research.
Economic rationality and prices
Rationality in consumption inevitably leads to people downloading music illegally for
free, if other variables are not considered. According to Professor Liebowitz, if a free
substitute in the same quality exists for a given piece of music offered for sale, rational
consumers tend to prefer the free piece to the other which has a price. If we take into
account that the price of music CDs is increasing from time to time, similarly to any
consumer good, the gap between the actual price and zero (a free copy) will be greater as
well. This is likely to cause a further increase in the number of rational consumers choosing
free access to music. Despite of the fact that major music industry players like Universal
Music Group discovered the problem of this increasing gap and are trying to cut prices now,
this strategic step is too late and is not likely to change users’ music consumption behavior
anymore (“Years late, Universal cuts CD prices to combat poor sales”). Obviously, rationality
cannot be changed in this case, and prices are likely to stay relatively high as well, given the
production costs and the fact that all members of the music industry chain are expecting a
share of the profit on the CD that is sold.
16
Culture
Finally, the fact that users of peer-to-peer programs do not consider illegal file sharing
as a crime also constitutes a part of the conceptual model, and is referred to as culture here
(“Cost to British Economy of Free Downloads is Revealed”). Culture can definitely be
considered a container variable, since not feeling guilty about an illegal activity can be
dependent on family background, age, education, IQ etc. People are likely to consider illegal
file sharing a normal everyday activity, in which they are not hindered by regulation or
detailed education on the negative effects of their activity. As a part of this research,
people’s perception about illegal file sharing and their values and habits concerning
supporting artists may be influenced with online marketing tools.
To sum up, if the question “why illegal file sharing exists and became so wide-spread”
is put, the answers, and consequently the variables in the conceptual model, are:
1. Technology advancement makes it possible.
2. Wide-spread Internet usage keeps it alive and makes it even more common.
3. Regulation cannot fight it effectively, thus infringers have no fear of punishment.
4. Economic rationality and high CD prices make users prefer free (although illegal)
substitutes.
5. Culture appears to accept and tolerate this illegal behavior of file sharers, causing
no twinge of conscience of infringers.
When these variables are depicted on a conceptual model, the graph is the following:
Technology advancement
Internet usage
Illegal file
sharing
Economic rationality
Regulation
Artists’ income
Culture
Live boom segment
17
This conceptual model depicts how each of the five variables affects wide-spread illegal
file sharing. Furthermore, technology advancement stimulates Internet usage by providing
ever improving possibilities of browsing the world wide web, while Internet users’
expectations continuously encourage technology providers to develop their products and
services, for example by increasing bandwidth. Such a mutual relation is present between
regulation and culture as well: weak regulation suggests that a common overall culture will
further tolerate illegal file sharing behavior. When this cultural attitude becomes commonly
known, regulatory bodies are trying to fight it with new and improved means, which again
will have an effect on people’s culture. As a result, two pairs of independent variables in this
model are likely to affect and stimulate each other continuously.
When looking at the dependent variable in this case, illegal file sharing leads to a
significant decrease in music sales, hurting many industry players. As a result, instead of CD
sales, live performances constitute a boom segment on today’s music market. This key role
of live performances can be approached from the point of view of music business and can be
viewed as a substitute for CD sales, while this live boom segment is affected by one of the
independent variables, namely culture, as well. Taking into account the ever increasing
number of music festivals and various events for which tickets are successfully sold for rising
prices every year, there are reasons to believe that attending live performances constitutes a
great part of people’s culture nowadays.
The research will concentrate on the highlighted items, namely the problem of
decreasing sales (artists’ income), and the solution of this problem by influencing people’s
cultural attitude to illegal file sharing and by supporting live performances with online
promotion, represented by broken lines in the model above.
The model can be translated into two action hypotheses:
a) If people are confronted with targeted and intensive online promotion, users can be
responsive and interactive, and the number of live concert visitors is likely to
increase.
b) If users are better educated about the illegality of their behavior and the possibility of
supporting artists in alternative ways, they are likely to change this behavior and let
artists benefit from their activities.
1.5 Research Proposal
To test whether the above listed two hypotheses are correct, a research will be
conducted, which, in line with the concept of parsimoniousness, will only deal with the
highlighted items of the conceptual model. Since technology, Internet usage, economic
rationality and regulation can be considered exogenous variables in this model which cannot
be influenced in the given context, it will be the users’ cultural attitude towards illegal
downloading and their concert visiting habits which the research will concentrate on. These
two factors will be targeted by online promotion tools and researched with the help of a
18
questionnaire, interviews and observation.
Questionnaire
Firstly, with the help of a questionnaire it will be tested if users’ cultural attitude
towards illegal downloading can be influenced. People will be provided information about the
illegality of their file sharing behavior and about the damage they cause. Facts and figures
will be introduced in the questionnaire, and the respondents’ knowledge and attitude
towards these information will be examined. Besides collecting general information and
providing objective facts, the questionnaire will also concentrate on alternative ways of
supporting artists. Users’ willingness to support their favorite artists this way will be
researched with the help of the questionnaire. This way, infringers’ feelings can perhaps be
influenced, by making them realize how they are acting against their favorite artists, and
how they could help them instead.
Analysis of the Sell-A-Band Website
Secondly, another important part of the research will be the analysis of the Sell-A-Band
website (www.sellaband.com), a platform for music lovers with the possibility of making
online donations and supporting their favorite artists this way. PayPal donations are a free
and easy way of collecting payments from the visitors of a website, which builds on the more
and more wide-spread method of online payment making. When offering a payment on SellA-Band, users can directly transfer money to the given artist by simply clicking on a button
on the website (“Donations”). Such donations are likely to be made, based on the fact that
the usage of electronic payment methods and credit cards is becoming more and more
common (“Credit Card Market: Economic Benefits and Industry Trends”). Once donations
appear on the artists’ personal page on this website, significant conclusions could be drawn
about the effectiveness of this fundraising method. In addition to pure observatory research,
a few interviews will also be made about this idea, and pros and cons will be summed up
based on them.
Online Marketing Activities on Facebook
Thirdly, in addition to simply publishing live show dates and locations on websites, live
performances will be promoted with small lotteries on Facebook as a part of the research.
Carefully monitoring users’ reaction and the number of people who take part in these
contests will clearly indicate if this kind of promotion proves effective. Bearing in mind the
fact (highlighted by Dr. Tschmuck) that users’ activity on online platform is increasing,
participation in these contests with the aim of winning two tickets at the end can be
expected to be high. The word-of-mouth effect of such online promotion is likely to benefit
the artist and does not require any time-consuming efforts. Besides that, no significant
financial resources are required for these promotion tools. The cost of online promotion
methods can practically be zero, since only an opportunity cost has to be taken into
19
consideration, if we consider the time spent on online marketing activities, such as writing
blogs and posting news on community sites.
Internal and External Validity
As for the internal and external validity of this research, there are reasons to believe
that both will be low. The problem of such an online research is that the sample population
cannot be known perfectly, thus it cannot be stated that the research results are true for the
sample. For example, if a donation appears on a given artist’s account on the Sell A Band
website, the researcher will never know the identity of the one who donated and his/her
motivation behind the activity, which obviously lowers the internal validity of the research.
Furthermore, the research will also have a low internal validity due to the fact that the
respondents’ willingness to change their attitude towards illegal downloading will be tested
with a questionnaire. They will receive information on the illegality and harmfulness of their
behavior; however, the researcher will never know the motivational background of the
respondents and will never be certain about the effect of the questionnaire. External validity
will be even lower, since the research will concentrate only on a few artists, in a given
country and in a given music genre, thus attracting a limited number of listeners. It cannot
be stated that the same research carried out in a different country, with different artists and
different fans would lead to the same results.
External validity is highly dependent on how representative the researched population
is. In this case, theoretical population considers all Internet users, all of which have the
opportunity to visit a given artist’s website or a community web page. Naturally, it is not
feasible to do a research in this population that is why the number of people researched
should be reduced to an empirical population. Empirical population in this case consists of all
those users who visit the given website which is part of the research. Their number can be
known from website statistics, but their identity is represented only by the IP address of
their computer, which does not contain any personal information. From this empirical
population, a sample population will be selected; however, the number and identity of people
is not defined by the researcher in this case. Sample population will consist of the users who
donate to an artist or take part in community website activities, leave comments on blogs
etc. There are reasons to believe that this population will be small and not representative of
the empirical and theoretical ones.
Operationalization and Measurability
The problem of operationalization and measurability is clearly a weak point of this
research and is a possible source of errors. Culture as a container variable cannot be
measured in itself and users’ behavior and feelings cannot be perfectly understood by online
marketing tools. Systematic errors, such as overweight of a gender or age group can also
occur during the research. Furthermore, measurement effect is significant in this case, and
results in the fact that the researcher may never know if the increased number of CDs sold
20
or of visitors of a website or of a live performance is the result of successful online
promotion, or of some other factors. Only in case no other circumstances are changed can
we be sure that people were influenced by online promotion, and even then it would be only
a small number of people who took part in the research and whose behavior was changed.
However, since we cannot guarantee such a perfectly constant environment, the end results
of the research cannot be evaluated perfectly. It is only the feedback of users, e.g.
comments on web forums, that can serve as a benchmark and can show if the company’s
online actions are effective or not.
Research Design
An empirical-analytical research will be set up, concentrating on culture as a container
variable, but not going into details with that. The research will be designed as follows:
T1
T2
(time)
O1
O2
(experimental group)
X
(action)
O4
O3
(control group)
T1 and T2 stand for two concrete moments in time, when results will be measured. O1
and O2 will be a control group, in this case a given music group, which will be examined at
the beginning and at the end of the research. Live performance ticket sales and community
website participation activity will be measured, and the results at T1 and T2 will be
compared. In between, X actions will take place, such as posting news on community
websites, inviting people to take part on various contests and other online promotion tools.
Development and changes will be monitored in O3 and O4, a control group, in this case in
another music group as well. No action will take place in this group, allowing it to function as
a basis for comparison. Although the existence of a control group will not serve as a proof,
since the experimental and the control group will not be equal, there are reasons to believe
that the initial hypotheses of the researcher will be properly tested, and valuable conclusions
can be drawn at the end of the research. 1.6 Research Results
Questionnaire
The questionnaire (in Appendix 1) which was filled out by 160 people between the age
of 17 and 65 from more than 20 different countries had fulfilled its aim and led to
meaningful results (for a detailed analysis, see Appendix 2). Although the group of 20-24
year-old European Internet users was slightly overrepresented, the overall demographics of
respondents
was
diverse
and
representative,
containing
students,
employed
and
unemployed people with varying levels of income. Taking the demographic data of
respondents into account, it could be observed that Western-European Internet users with a
higher income and of an elder age group preferred buying CDs and showed more willingness
21
to pay for their online music and film downloads. In general, this group of respondents
stated to download films and music from official websites of labels/music groups and from
webshops on a two-weekly basis or even more rarely. When respondents were asked to
choose between buying CDs or downloading music from the Internet, this group contained
more people who preferred CDs and they were generally price-sensitive, claiming that they
would purchase more CDs if prices were lower. In contrast to this group, younger Internet
users (mostly students or working students) with a lower income preferred illegal free
downloads with the help of various file sharing programmes, stated to download music and
films on a daily or weekly basis and showed no or low interest in purchasing CDs, even if
prices were decreased. Nearly half of the respondents shared the above described
characteristics of these users.
When respondents were confronted with the illegality of file sharing, a clear majority
was aware of the fact that the up- and sometimes downloading of copyrighted material is
unlawful. Surprisingly, this majority decreased significantly, when respondents were asked if
they agreed with this view: nearly 49% of people, especially younger illegal downloaders,
were against the idea of viewing up- and downloading as a crime. This shows that people are
well aware of the illegality of this behavior, however, they do not see it as a problem, and a
majority (74%) of them is not afraid of the possible consequences (e.g. penalties), proving
that regulation on this issue is ineffective and is not taken seriously.
When talking about artists and their support, only 64% of the respondents said that
they considered illegal downloading harmful for the artists, and an even smaller majority
(51%) stated that they knew and accepted the negative effects of illegal file sharing on the
overall economy. The need for more intensive and influencing communication of these
negative consequences came clear from the results of the questionnaire, since a relatively
low proportion of respondents had considered illegal downloading from the point of view of
artists so far, in contrast to the pure unlawfulness of this behavior (of which a clear majority
had already been aware).
Unfortunately, the questionnaire showed that people’s opinion about illegal file
sharing is not easily changeable, since 82.7% of the respondents said they would continue
using illegal file sharing softwares even after becoming familiar with the negative economic
consequences and the harmfulness of their behavior. This shows that the initial hypothesis
about changing downloaders’ behavior cannot be that easily proved and informing infringers
about the unlawfulness of their behavior does not have enough influence on them.
Finally, when respondents were asked about the alternative ways of supporting artists,
most people chose visiting live concerts and purchasing merchandise, which was in line with
Dr. Tschmuck’s view about the live boom segment, while online donations were known and
preferred by only a surprisingly small minority of respondents.
22
Analysis of the Sell-A-Band Website and Interviews
The relative unpopularity of online donations in the music industry was supported by
the results of the analysis of the Sell-A-Band website (see Appendix 3) and the interviews
made on this topic (see Appendix 4). The three interviewees were a record label manager
with 4 years professional experience (A), a journalist specialized in music (B) and a music
promoter with 15 years professional experience (C). While A did not view Sell-A-Band as a
real supporting opportunity and criticized its overall concept from more points of view, B and
C generally applauded the idea. C had already used the website for donating money to some
of his favorite artists, and helped two of them achieve their financial goals; however, he was
not satisfied with the “after sales service” provided by the website. Besides C claiming that
Sell-A-Band is not proactive and up-to-date enough, all three respondents agreed on one
main weakness of the website and its concept: the complete lack of promotion and
communication to users. This idea was supported by the results of the website analysis as
well; although the concept of Sell-A-Band is well-created and exceptional, fitting into today’s
online activities, it is not well-known enough and is not viewed as a real alternative in the
present-day music industry.
Probably due to the fact that it is weakly promoted in various online media and was
advertised only once in television during the last four years (which is a clear sign of
unacceptably weak marketing efforts), Sell-A-Band is known by a relatively small group of
users who mean a considerable support to an extremely small percentage of artists
registered on the website: only 1.34% of more than 4,300 registered bands has reached
their financial target with the help of donators until 13 November 2010. This surprisingly
small proportion of successful projects provides a reason to believe that Sell-A-Band in its
present form cannot serve as a real alternative of raising funds for musicians. Unfortunately,
there are only a few success stories, like that of Hind, a Dutch pop artist for example, who
managed to collect a significant amount of donations in a very short period of time, thanks
to the intensive promotion of the possibility of using Sell-A-Band and to the integration of
this tool in the artist’s overall marketing communications. Bearing this example in mind, it
can be concluded that motivating music consumers to support their favorite artists online is
difficult but not impossible: with increased, proactive communication and promotion from
both Sell-A-Band’s and the artists’ side, Sell-A-Band can be carefully integrated into the
artists’ overall marketing concept and serve as an important supporting tool. However, in its
present form, Sell-A-Band is in serious need of well-targeted promotion on online platforms
dedicated to music.
Facebook Marketing Activity
Supporting musicians by attending live concerts proved to be a much more popular
method (based on the results of the questionnaire and the analysis of online marketing
activity on Facebook), even if people do not necessarily view concerts as a means of helping
23
their favorite artists. The small contests organized on Facebook with the aim of giving away
a few Bauchklang concert tickets for free indicated that users have an interest in these
concerts and they are willing to devote a few minutes of their time for such lotteries if they
can win tickets for a live event (see Appendix 5). Disadvantageous from the point of view of
this research, while advantageous for Monkey Music, both Bauchklang and its control group,
Ginga (another music group marketed by the company) gave full house concerts in Austrian
clubs during the research, that is why the effect of marketing activities on Facebook could
not be clearly measured with the help of visitors’ statistics. However, these small online
contests had a clearly measurable effect besides attracting live concert visitors: they helped
increasing the popularity of Monkey Music by recruiting fans for the Facebook page of the
company and thereby guaranteeing a growing public which can be reached with posts and
messages on the online community website in the future.
As it can be seen in Appendix 5, the number of Facebook users who like the page of
Monkey Music (and this way can be contacted by the company) grew at an increased pace
during the small contests, and the company gained nearly twice as many fans than the
control group Ginga (172 to 89) during the research. The number of people taking part in
these small contests and thus becoming a new fan of the page of Monkey Music was
surprisingly low, compared to the total number of visitors of concerts (between 500 and 900
people) or to the number of Bauchklang fans who were aware of these games (more than
7000 people). However, it must not be forgotten that the promoted events were relatively
small club concerts in different parts of Austria, which obviously limits the possible number
of players, since many of them live in other countries of simply far away from the given
event venue. That is why, bearing in mind that the publishing and controlling of these
lotteries did not require more than 10 minutes each time a new post had to be written, the
effect of this online promotion can be seen as advantageous and is worth the effort.
1.7 Conclusions and Recommendations
To conclude the results of the questionnaire, it can be stated that illegal downloading in
contrast to purchasing CDs is likely to be the dominant behavior of young Internet users
nowadays and in the future as well. This consumer behavior can be hardly influenced or
changed, since this major group of music lovers is not interested in purchasing music in
traditional ways and thereby respecting and supporting artists in harmony with the copyright
law. Although there are reasons to believe that offering music for sale in the form of CDs is
not profitable anymore, or will be less and less profitable in the future, there is a general
growing interest in live concerts and other alternative ways of supporting artists. Those
young consumers who prefer illegal downloading showed a greater enthusiasm about live
events and purchasing merchandise in their answers on the questionnaire, which further
emphasizes the importance of these alternatives. In line with the theory of live concerts
being the boom segment of today’s music industry, the same can be concluded on the basis
24
of the analysis of online marketing activities on Facebook. Users showed an interest in the
small contests published on the online community page, and new contacts of the company
could be relatively easily collected with the help of these lotteries, which indicates that the
further integration of such online marketing tools into the company’s promotion activities
should be applauded. Besides these, it is worth considering Sell-A-Band as a supporting tool
as well; however, there are reasons to believe that its popularity will never reach that of live
concerts and merchandise, and it will provide only marginal help to the registered artists.
Bearing the initial hypotheses in mind, it can be stated that the first one proved to be
correct to an extent: users of Facebook were respondent to the small contests at the end of
which they had the chance to win free concert tickets. Although the number of players was
low, these users showed a growing interest in visiting concerts and took part in the lotteries
interactively. Since the concerts examined during the research were all very successful, it
cannot be stated explicitly that the lotteries led to an increase in the number of concert
visitors; however, there are reasons to believe that such small contests have the potential to
influence the number of concert visitors in a positive way. The second hypothesis could not
be proven with this research: the questionnaire showed that people’s opinion about
copyright infringement is not easily changeable, since 82.7% of the respondents said they
would continue using illegal file sharing softwares even after becoming familiar with the
harmfulness of their behavior. This shows that informing infringers about the unlawfulness of
their behavior does not have enough influence on them and probably more powerful
communication and regulatory measures are needed to fight this problem.
Based on the above described results of the research and the conclusions drawn, the
following recommendations are made in this report:
•
Instead of selling CDs and encouraging illegal downloaders to buy CDs, record labels
should turn away from this traditional form of distributing music. Although the negative
effects of illegal downloading should be intensively communicated, consumers should be
confronted with more valuable alternatives on the market, which would be worth
stopping illegal file sharing. For example, instead of producing simple CDs, record label
companies should offer exclusive packages in the form of a CD together with an extra
live concert DVD, with a poster about the band, or with a coupon for exclusive
downloads or merchandise products. It is possible that more CDs would be purchased, if
a higher value was attached to them.
•
Based on this above described concept of exclusivity and on the experience gained at
Monkey Music, the production and promotion of traditional vinyl records could be
advantageous in the future. Since CDs in themselves have become obsolete and
uninteresting in the competition against other data carriers such as mp3 players, iPods,
iPhones etc., the music industry may experience the return of vinyl records, however,
this time as part of an exclusive collection, as a fashionable ornament, or a part of home
decoration. Based on the sales statistics of Monkey Music for example, traditional
records combined with modern technology (e.g. a coupon attached to the vinyl record
25
with which the album is downloadable in good quality from a given website) can have a
relatively great consumer base (mostly the “true” fans of the given band), if the record
is well promoted and has an attractive cover.
•
As for Sell-A-Band, although the website is not convenient for its original aim (exploring
new talents is nearly impossible, since financial targets are rarely reached), it might be
useful in a later stage of an artist’s career, when a sufficient fan base is already
provided. For financing smaller projects, video shootings or the recording of a new
album, Sell-A-Band can be a helpful tool if enough attention is drawn to the website.
Hind’s example should be followed: first gaining popularity and recruiting a huge number
of fans with marketing tools and through traditional and online media, and then
regularly informing this already existing and stable fan base about the possibilities and
advantages provided by Sell-A-Band.
•
Organizing simple, trendy and interactive online contests on a regular basis to advertise
live events might significantly help artists and music companies. Although the research
indicated that music consumers’ behavior and perceptions about illegal file sharing can
barely be influenced, online marketing tools might have advantageous effects on
another segment of consumer culture: live concerts can be effectively promoted with
their help. Based on the experience gained at Monkey Music, online marketing tools in
the music industry have not completely elbowed traditional media (radio, television,
printed media) out of the market yet, however, increasing attention should be paid to
online communications and maintaining a closer relationship with fans through the Web.
On this basis, music industry players should not rely exclusively on online marketing
tools; however, they should carefully integrate them into their marketing activities and
devote more time for maintaining online relationships.
26
PART 2: PRACTICAL WORK
Introduction of the Company
Monkey Music, Gröbchen & Partner OG is an Austrian music label, publishing house and
communication agency, which was established in 2000 and has grown into a competitive and
well-known market player in its field since then. The founders of the company had all worked
in the music business and had gained significant experience in A&R (artist & repertoire)
consulting, production and promotion for Universal Music, Warner, BMG Germany etc., but
decided to start their own business ten years ago, with the aim of providing a more creative
way of enjoying music for dedicated music lovers. Since then, Monkey Music has cooperated
with companies like Procter & Gamble, BMW and various film and advertisement producers
by offering them creative solutions and music for their promotional materials, and besides
that, it has become the label and promotional agency of various Austrian and German
artists. Furthermore, Monkey Music has also been a pioneer of alternative ways of providing
music to listeners, by installing Austria’s first “CD on demand” store in Vienna.
Currently, as a small enterprise, the company employs only five people in its office in
the city center of Vienna and concentrates on music label-related activities, in cooperation
with a diverse group of artists ranging from smaller alternative bands to popular music
groups. As a record label, Monkey Music is responsible for the thorough marketing of artists,
including the coordination of manufacturing, production, distribution, promotion and
copyright protection of sound recordings and videos, and the maintaining of contracts with
recording artists and their managers. Consequently, the tasks which I was given during my
work placement were diverse and thus provided a professional insight into the whole
functioning of the company and the music industry.
Administration & Invoicing
General administration and filing of incoming and outgoing invoices were a part of my
everyday tasks at the company, which I found useful from the point of view of professional
precision. By entering the details of all invoices, shipping documents etc. into the company's
common administrative files, I had to pay particular attention to the various projects to
which each invoice belonged. The administration system was applied to the diversity of the
projects Monkey Music was involved in, and all entries in the system had to be carefully
indexed with a given artist or project. These indices made it possible to filter invoices, and
both online and physical costs or benefits on the basis of artists, which always provided
meaningful and up to date information about the company's operations. Furthermore, while
working with the administration files, I also gained insight into the company's distribution
system, since the movement of products and payments of Monkey Music became
transparent in the files.
27
Inventory Management & Operation of the Webshop
Inventory management was assisted by an equally precise system at Monkey Music. I
was responsible for monitoring the movement of compact discs and various promotion
materials in the warehouse of the company, issue delivery notes, enter incoming and
outgoing quantities into an inventory file, and report shortages while taking reorder times
into account, to make sure that all business partners of Monkey Music receive the quantities
they require on time. Due to the great number of artists cooperating with the company, the
warehouse contained both fast moving and slow moving goods, depending on the popularity
of the given albums of artists, which I obviously had to keep in mind while managing
inventory levels, thus I was required to have continuously updated information about the
artists' current position on the market.
I soon became the sole operator of the webshop installed on the website of the
company. With the help of the Macromedia Dreamweaver software, I first had to create the
given page of an artist in the webshop in HTML format, which made it possible to upload the
songs and albums for sale on the website. After submitting a new item into the webshop,
once I was notified in an automatically generated e-mail about an incoming order, I was
responsible for getting in touch with the customer, issuing an invoice and asking for
prepayment. Usually a few days following the receipt of an order, I checked whether the
required amount of money arrived on the company's bank account, and provided that there
was no problem with the transfer, I posted the products together with a copy of the invoice
to the customer. A successful transaction was closed by administrating the invoice in the
company's file containing outgoing invoices, while there were many payments outstanding,
about which I regularly had to send inquiries and reminders to customers.
Publishing-Related Tasks
An equally high degree of exactitude was needed when I prepared so-called label
copies of the different albums marketed by Monkey Music, which served as the most
important source of all data about a new product and had to be prepared first when an
album was published. All songs on an album were given an ISRC, an International Standard
Recording Code, which uniquely identified the given recording with twelve characters,
divided into four groups of letters and numbers which represented the country, the
organization and the year of recording, and finally the given record itself. Together with the
thirteen character-long EAN (European Article Number), these codes gained special
importance when the songs of an artist were published, downloaded or streamed on the
Internet or played on radio/in television. In these cases, all types of remuneration in
connection with copyrights were transferred to the label company represented in the codes,
that is why I had to pay particular attention to the proper format of these codes and double
check them each time when I wrote them down.
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I frequently used the data in these label copies, when I prepared production
notifications for Austro Mechana, a non-profit organization working in the interest of
composers, lyricists and music publishers. Each time Monkey Music planned to publish a new
album, a so-called production notification was sent to this organization, from which a
permission to manufacture the compact discs had to be received first. After that, when the
compact discs were produced and their distribution on the market started, Austro Mechana
was responsible to secure the proper remuneration of the owners of mechanical rights on the
basis of the sales reports submitted by Monkey Music on a regular basis. The company
followed a similar procedure with another organization, LSG, the task of which is the
collection and management of rights, compensation and equity claims of beneficiaries in
harmony with the substantive copyright law. After signing a so-called management
agreement with both organizations, Monkey Music could be certain about the proper
handling of both mechanical and performers' rights, provided that the company had
submitted all the necessary information, for which I was responsible.
I was given full responsibility in the case of online publishing of songs as well. Online
distribution was facilitated by the use of a software called Rebeat. Once Monkey Music
purchased this software and connected its credit card data with it, individual songs or
albums could be made worldwide available for download and streaming on the Internet.
Together with the songs, artist information and promotion materials could also be published
online with the help of this program. While entering all data about the individual songs and
artists, I had to be perfectly accurate and pay attention to the smallest details in the
information, especially to the ISRC and EAN codes. After filling out an online form with all
these necessary data, I also organized the online promotion of the uploaded songs or
albums, decided on the airdate of online promotion, and wrote short and attention grabbing
texts for the online press. After all these steps, the uploaded items soon became available
for all Internet users around the globe.
Online Music Marketing
Besides the frequent use of Rebeat, I also worked a lot with a software named Cool
Edit Pro, which was easily usable for the cutting of short samples of songs. Each time a new
album was produced by Monkey Music, it was my task to cut thirty second-long samples of
each song on the album which were later published and made available for pre-listening on
the website of Monkey Music. In the music industry, this task could be viewed as the
creation of short advertisements for online marketing purposes, and as such, I was
responsible for forming a positive first impression in the listeners' mind when they heard
these short samples of the songs marketed by Monkey Music. When I succeeded in finding
and cutting the most attention-grabbing part of a song, it was later visible in the listeners'
feedback and the company's sales data that the given song had the potential of becoming a
hit, one of the most popular songs of an artist.
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Besides these short samples, I was also responsible for editing photos and album
covers for promotion purposes and publishing them on the website of Monkey Music. I
received the photos in their original form and it was my duty to edit and resize them in a
proper way with the help of the Adobe Photoshop software. I had to choose the most
attractive pictures and modify, e.g. lighten, sharpen, cut them in order to make them more
convenient for public relations purposes, since they were later used in various press
materials and on websites involved in the marketing and distribution of music.
While editing the songs and pictures, I got an overall impression of the artists Monkey
Music was dealing with, and this impression was completed with biographical information
and various press texts published on the company website, written either by the artists
themselves or by my company mentor. I was often asked to translate these texts into
English or French, in order to use them for example in the company's international
newsletters or on English-language websites dealing with music. Besides these texts
originating from the company or the artists, I was also asked to monitor online and
traditional media, and scan and administrate the relevant texts dealing with one of the
artists marketed by Monkey Music, for further PR use.
Communication
I also had the opportunity to make use of my various language skills when I was
involved in the daily communication of the company with its business partners. When
Monkey Music received inquiries in foreign languages, it was always my responsibility to deal
with these foreign issues and to handle them properly. Besides these, I was often asked to
prepare short and stylish translations of official announcements concerning the artists
marketed by Monkey Music. For example, Bauchklang, a music group managed by Monkey
Music won the Best Live Act Award at Amadeus, the greatest competition of the Austrian
music industry, and it was my task to include this good news in the company's newsletter in
English in such a manner, that Monkey Music can introduce one of its artists as a brand new
award winner band and can generate concert bookings all around the world with the help of
an attention grabbing text.
Besides the above mentioned tasks, I was in daily contact with the employees of
Monkey Music with the help of the company's online correspondence system, and personal
meetings were also organized on a weekly basis. These meetings provided a good
opportunity to gain an overall impression of all the current issues concerning the different
projects of Monkey Music. Generally, the meetings were opened by the CEO of Monkey
Music, who gave a short speech about the current state of affairs from his point of view and
then requested all the employees to give a short update about their own field in the
operations of the company. After that, questions and problems were discussed and solved
together, and finally, the meeting was closed by agreeing on guidelines and projects for the
future and the distribution of new tasks for all employees.
30
Special project-related meetings were also organized, on which I often took part.
Depending on the topic and importance of the meetings, there were occasions when I
remained a listener during the whole time and was busy with understanding the problem
discussed and the points of view of the two parties. These meetings helped me gain a
deeper and more diverse insight into the current functioning of the music industry, thus were
useful and necessary; however, I preferred the ones at which I was able to actively take part
in the conversation and share my ideas with the other participants.
On smaller meetings with artists at the start of their professional career, I soon
received the opportunity to answer their basic questions and explain the most important
milestones of entering into the music market and publishing an album or a video clip.
Besides these, there were two greater projects concerning two music groups in a longlasting relationship with Monkey Music in which I also had the opportunity to participate: the
renewal of the website and the establishment of the international presence of the band
Bauchklang; and the entry of The Vegetable Orchestra on the international music market. In
the first case, I was responsible for recommending possible layouts and creative ideas for a
new official website and collecting useful contacts in Western-European countries outside
Austria and Germany. I was able to make use of my personal contacts in various fields of
visual arts, and with their help I submitted a few usable ideas for the web page of the band,
which unfortunately could not be finished until today. Besides this, the members of both
music groups mentioned above found my language skills useful and could use my help in the
search for new international contacts with which a long-lasting partnership could possibly be
established. While collecting these contacts, social media websites proved to be of great help
from the point of view of recruiting future fans and informing them about newsletters and
other issues related to the artists. On the other hand, professional contacts for the purpose
of event booking and promotion were rather hunted out through international websites,
forums, blogs and conferences concentrating on various fields of music.
Besides researching new partnership opportunities, I was responsible for the
management of the already existing contacts of Monkey Music as well. With the help of the
Microsoft Outlook mailing software, I regularly sorted and updated the e-mail addresses and
other details of the partners of the company. First I gathered all contact information
belonging to one person or organization, and created a digital business card in the system of
Outlook on the basis of these data. After that, I grouped the various business cards
according to countries, business fields and projects, to make the system more transparent
and easier to use. Finally, I overviewed these names and contact information on a regular
basis, in order to administrate changes in addresses or telephone numbers. Although this
was a time-consuming task, it was worth the effort, since a carefully managed contact list
provided a strong basis for the success of the company in the fields of communication and
promotion.
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Personal selling and promotion at live events
One of the tasks which I liked most at the company was the organization and
promotion of live events, such as Monkey Lounge, a mixture of a press conference and a
concert, organized on a two-monthly basis. These Monkey Lounges were organized for Public
Relations purposes in order to make the company more well-known and to inform the public
about the latest news concerning Monkey Music, and featured artists from the company’s
roster. Visitors of these events were mostly journalists and other press-related music
experts, and business partners of Monkey Music. My task was to first gather the contact
information of these guests, think about possible new sources of visitors and then inform
them about the upcoming event. After promoting the given event in e-mails and in social
website messages, I took part in the preparation for the event during the day of the concert
and discussed several issues with our sponsor, a company which provided a significant part
of the budget for the event. The Monkey Lounges were sponsored by Golden Eagle, a brand
new energy drink on the Austrian market. In exchange for the financial contribution of the
company marketing Golden Eagle, together with two of my colleagues I installed a stand at
the entrance of the venue of the Monkey Lounge, decorated it with promotional materials of
the energy drink company, and distributed free samples and information of the product to
every guest of the event.
Similarly to the promotion of Golden Eagle, I was sometimes responsible for the sale of
merchandise, such as artist-related T-shirts, CDs, DVDs, records and posters at the concerts
of musicians marketed by Monkey Music. I particularly enjoyed getting in touch with the fans
of the given artist, seeing their enthusiasm, and providing them with a new T-shirt or an
exclusive CD in which they were extremely interested. While selling merchandise I served as
a representative of Monkey Music; besides providing them with a given product I also
answered the questions of the customers and tried to achieve a positive overall impression
in their mind. With some fans I changed contact information with the purpose of putting
them onto the company’s newsletter list because they were particularly interested in other
projects of Monkey Music as well. I always tried to establish a closer, more personal, longlasting relationship between the company, the artists and the fans, and fortunately I proved
successful in this task. At the end of the concerts, both the musicians and my supervisor
from Monkey Music were highly satisfied with my enthusiasm and the manner in which I
served customers.
To sum up, I found my practical tasks performed at the company useful and enjoyable.
While gaining an insight into the different fields of management, finance, marketing, logistics
and communication at the company, I was able to significantly improve my personal
competences such as accuracy, precision, creativity, responsibility and problem solving skills,
of which I believe I will make great use in the future.
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PART 3: ADDITIONAL THEORETICAL BACKGROUND
3.1. Marketing and Arts
While Dr. Tschmuck, quoted in Part 1, Theoretical Background, considers promotion as
an inevitable part of support structures in the music industry, according to Kotler and Scheff,
the role of marketing in arts is still a debated issue. In some cases, “marketing is feared and
even hated for what it might do to the arts; on the other hand, there is an unquestioning
conviction that marketing can work miracles for the arts” (Kotler and Scheff 24). Indeed,
especially in today's competitive cultural environment, with consumers becoming more
sophisticated, demanding and unpredictable, targeted and clearly positioned marketing
activities are needed to support artists (Van der Vlugt 7-25). Both van der Vlugt and Kotler
and Scheff discuss the increasing financial pressure that artists, especially music industry
players have to face. They state that on today's market there is an oversupply of music
groups which obviously have to share a limited income from supporting organizations and
governments, and with the increase of the number of these groups, the share they can
receive from subsidies decreases. At the same time, the audience for the arts is limited and
is decreasing with the emergence of other leisure activities, which might serve as substitutes
for the arts and thus make artists face tough competition on the market.
Taking into account that artists on their own without any marketing activity are not
likely to stay successful in today’s competitive market, as a solution, all the above
mentioned authors advise looking at the demand side on the market when applying
marketing techniques in the field of arts promotion. Emphasis should lie on broadening the
audience base, increasing the audience size, increasing the accessibility of arts and meeting
the specific needs of the audience. Although artists tend to concentrate on the product itself,
“the essence of art is in its communication with the audience member”, and this
communication needs to be facilitated by effective marketing tools in order to achieve
sustainable success (Kotler and Scheff 25). Concerning the digital era we live in, getting
closer to the audience, in other words potential customers, can be maintained effectively by
making use of the provided advanced technologies and thus marketing music online for
example. Electronic publishing revolution together with the growth of computer-mediated
communication has inevitably caused significant changes in decision-making processes and
in the ways of communication between companies and customers, or in this case between
artists and the public (Clive Hoey 273). These changes and developments should definitely
be built into the marketing of arts in order to better identify the needs of the public.
3.2 Computer-mediated communication, hypermedia and interactivity
M.W. Delozier identified the role of marketing communications as early as 1976 as the
following: to “share the meaning of a company’s total product offering with its customers in
such a way as to attain their goals, and at the same time, move the company closer toward
33
its own goals” (Clive Hoey 278). While this basic goal of marketing communications has not
changed since then, the means to achieve the company’s targets with marketing
communication has undergone a significant development since the emergence of the
Internet
and
computer-mediated
communication.
Parallel
with
the
development
of
technology, Rudy (1996) explained computer-mediated communication as “any kind of
communication involving the transmission of electronic signals between computers.” The
importance of this “communications revolution” was soon discovered, and the British
management writer, Charles Handy claimed it to be the key success factor of the future of
organizations.
Donna L. Hoffman and Thomas P. Novak, internationally-recognized scholars of
electronic commerce and Internet marketing identified a shift from traditional “one to many”
communication model toward a “many to many” method. The previous describes a situation,
in which organizations reach many current and potential customers with the help of various
marketing efforts; however, receiving feedback from consumers is limited, due to the oneway nature of communication. This traditional form of marketing communication has
radically been changed by the emergence of the Internet, creating a “many to many”
communication network, in which immediate feedback can be obtained from customers.
Consequently, interactivity has soon been identified as the key difference between traditional
mass media and computer-mediated communication and has been in the focus of marketing
strategies of organizations ever since then. R. C. Blattberg and J. Deighton, well-known
researchers of optimal budget allocations for customer acquisition, defined this as “the
facility for individuals and organizations to communicate directly with one another regardless
of where they are or when they wish to communicate.”
In order to make the best use of this interactivity, it was necessary to take a closer
look at the “hypermedia environment” which was born with the emergence of the Internet.
Bornman and von Solms, authors of the book “Hypermedia, multimedia and hypertext”,
explained the term “hypermedia” as the combination of hypertext allowing users to connect
information with each other via different paths or links, and multimedia providing interactive
access to both static (graphics and texts) and dynamic (audio, video) content. This way, in
the hypermedia environment, communication is possible both person-to-person and through
the media, and besides these, it can potentially support one-to-many mass communication
(Clive Hoey 280-281).
3.3 Shift in Today's Marketing Communications Model
In their book Principles of Marketing, Philip Kotler (Northwestern University) and Gary
Armstrong (University of North Carolina) also emphasize that significant changes are taking
place on today's markets, which largely affect marketing communications. Firstly, they draw
the attention to the fact that consumers are changing. In the present digital age, they have
better access to any kind of information and have also more opportunities to exchange this
34
information with each other, enlarging the word-of-mouth effect through Internet channels.
Secondly, in line with the emergence of computer-mediated communication described above,
Kotler and Armstrong state that marketing strategies are subject to change, since they tend
to shift away from mass marketing and concentrate on focused marketing programs and
closer relationships with customers. Finally, the ways in which marketers and customers
communicate with each other are continuously changing and improving as digital technology
changes. In the digital age, new communicational tools such as cell phones, iPods, satellite
and cable television systems, and many channels on the Internet are provided. It is
important to mention, however, that the fundamentals of proper marketing do not change,
and companies should continue to keep their core objectives in view, and then integrate new
promotion tools into their strategy (Brassington and Pettitt 463).
In connection with this new marketing communications model, two theories are
discussed in professional literature. One of them depicts a “chaos scenario”, and assumes
that the old mass-media communications model will totally collapse and digital technologies
will take its place entirely. This view is based on the logical assumption that simultaneously
with the increase of mass media costs, audiences will shrink and viewers with more and
more Internet experience and access will use online video on demand systems in order to
skip television commercials which they often find disruptive. In contrast to those who believe
in this “chaos scenario”, other theorists are expecting a more gradual shift to the new
marketing communications model. They claim that broadcast television and other mass
media still constitute a large share of promotional budgets, and this fact will probably not
change quickly in the future. Their argument is supported by the fact that in the US in 2008
“more than 43% of advertising dollars were spent on national and local television
commercials versus 7.6% on Internet advertising” (Kotler and Armstrong 428). Kotler and
Armstrong prefer the second view, and forecast that the new marketing communications
model will consist of a mixture of both traditional mass media and new, more personalized
media.
The idea of a less radical change and a mixture of traditional and new-age media was
further preferred by Dr. Wilson F. Ozuem (Ashcroft International Business School, Essex,
England) in his dissertation study Conceptualizing Marketing Communication in the New
Marketing Paradigm: A Postmodern Perspective. In this study, Dr. Ozuem elaborates on the
concept of postmodernism in marketing and the role Internet can play in future marketing
communications, and he states that “the consumer is becoming more of an abstract concept,
alternating identities between the extremes of cyber-consumer and traditional buyer”
(Ozuem 14). This diversity in consumer behavior obviously requires the use of different
marketing communication media. Thus in order to reach both traditional and new age
consumers, the use of a mixture of mass media and personalized online tools is reasonable
in the near future.
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3.4 Integrated Marketing Communications and Online Marketing
Today’s rich mix of media and communication tools makes marketers face a serious
problem: consumers perceive commercial messages from a lot of different sources, between
which they do not distinguish, thus they merge all the received information into one
perceived image of a given company. Conflicting messages in this case can quickly confuse
consumers and destroy the company's image and its relationship with customers. To avoid
this, more and more companies follow the theory of integrated marketing communications.
Under this concept, all communications channels of a given company are carefully
integrated, in order to guarantee that they deliver a clear and consistent commercial
message. This involves paying attention to each brand contact that consumers have and
leads to the creation of a total marketing communication strategy aiming at strong customer
relationships. As it can be observed on the following graph, commercial messages and
images can reach consumers from different marketing communications sources, such as
advertising, personal selling, sales promotion, public relations and direct marketing (the
newest form of which is online marketing).
The main idea of integrated marketing communication is to tie together all these
messages and images, and make sure that for example the website of a given music group
projects the same image as its advertisements or social network presence (Kotler and
Armstrong 424-430).
Integrated Marketing
Communications
Personal
selling
Advertising
Sales
promotion
Consistent, clear,
and compelling
company and
brand messages
Public
relations
Direct and online
marketing
Source: Principles of Marketing
Kotler and Armstrong discuss online marketing, jointly with other promotional tools, in
the framework of integrated marketing communications. They state that digital revolution
largely affects the way marketers communicate with their customers, and the emergence of
36
online promotional tools widens the set of marketing communications methods that can be
used by a company. Such a mix of traditional media (e.g. television, magazines) and newage digital media (online and mobile channels) requires careful coordination, in other words,
integrated marketing communications by marketers, in order to deliver a clear and
persuasive message about a given company, or in this case a musician or music group. This
careful combination of traditional and new-age digital media is present at Monkey Music as
well, and requires constant attention on delivering consistent messages. This consistency
and a perfect fit of online marketing into the company’s overall communication strategy had
to be kept in mind when new promotion activities with the help of online tools were
introduced during my research.
3.5 The Importance of Direct and Online Marketing
Online marketing is the fastest growing form of direct marketing, and as such, it
shares the four distinctive characteristics of direct marketing. Compared to other elements of
the promotion mix, it can be considered:
• less public, since most of the times the message is directed to specific consumer
groups;
• immediate, meaning that messages are prepared quickly;
• customized, since messages can be tailored to specific customers' needs anytime;
• interactive. A dialogue can take place between the marketing team and the consumer,
and this way, direct and online marketing suit well highly targeted marketing efforts
and are able to build one-to-one customer relationships (Kotler and Armstrong 442).
The importance of direct marketing, with online marketing being a part of it, should not
be overlooked by marketers. According to Kotler and Armstrong, a gradual change can be
observed in this field, and a new direct marketing model is emerging. Earlier, direct
marketers, such as direct mailers, telemarketers and catalog companies, gathered customer
names and tried to sell their goods by mail and telephone. In the digital age, as technology
makes it possible to create accurate market databases and provides new marketing media,
the model of direct marketing is being transformed. Although most companies still use it as
a supplementary channel jointly with the other promotion methods, there are some firms
that go further than that and rely solely on direct marketing. Nowadays, if this happens,
then the given company usually bases its business model on online marketing, and sets up
an attractive website and webshop, with online marketing being its only one business
approach.
Direct marketing, and especially online marketing, is continuously growing due to the
fact that it fits into the recent trend of building a closer relationship with customers. This
closer relationship is of great importance in the music industry, where brand loyalty appears
in the form of being a fan of a given artist. To retain these fans, who can also be viewed as
brand ambassadors, regular communication is needed from the artist’s side as well, who this
37
way builds and tries to maintain a closer, seemingly personal relationship. In doing so,
“direct marketing continues to become more Web-oriented, and Internet marketing is
claiming a fast-growing share of direct marketing spending and sales” (Kotler and Armstrong
515). Indeed, Internet now constitutes only 20% of direct marketing-driven sales, however,
according to the Direct Market Association's predictions, over the next five years Internet
marketing expenditures will grow at 16% a year, and Internet-driven sales will increase by
almost 15%.
3.6 Benefits of Direct and Online Marketing
According to the authors, direct and online marketing benefit both buyers and sellers
on the marketplace. For customers, these forms of marketing are convenient, easy and
private, since they are able to gather information, make purchasing decisions and order
products from the comfort of their homes. Consumers are provided with an improved access
to products, since through these new media, an unlimited selection can be offered to them
all over the world. The number of separate items that can be offered for sale on the Internet
or in catalogs is much higher than the number of products that can be displayed in shops.
This way, buyers have an increased freedom of choice, which is further raised by the fact
that they can easily access and compare information about companies, products and
competitors, which, in theory, all lead to a more rational purchasing decision at the end and
to efficiency of markets. This, together with the interactive and immediate nature of direct
and online marketing, gives the feeling of a greater measure of control to customers.
This is all true for any kind of consumer products; however, greater measure of control
of customers in the case of the music industry is even more significant: when aiming at a
rational purchasing decision and researching a given artist or a record before buying it,
customers often turn to the solution of illegal digital file sharing. When this happens, online
tools are affecting music industry players in a negative way. This research aims at the
reversal of this tendency.
As for sellers, direct and online marketing are powerful tools of establishing and
improving customer relationships. These forms of marketing give consumers the opportunity
to ask questions and to volunteer feedback and suggestions, which leads to possible
improvements in the marketers' products and generates customer satisfaction and retention.
Besides that, direct and online marketing also provide a low-cost, efficient and fast way of
reaching target markets, since the setting up of websites and the introduction of online
advertising tools do not require much time and huge costs. Finally, online channels make it
possible for marketers to handle their prices, announcements and programs with greater
flexibility, to react immediately on the moves of their competitors, and to reach previously
not served market niches as well, thanks to the fact that Internet marketing can be
considered as a truly global medium, according to Kotler and Armstrong.
Brassington and Pettitt also examine e-marketing from the seller's perspective, and
38
summarize the main benefits of investing into online marketing as the 5 Ss:
• Sell: Selling goods and services online, to a global market, to a theoretically unlimited
number of Internet-using consumers.
• Serve: Websites can be used to provide additional customer service or to streamline
service delivery.
• Save: Significant overhead cost savings are made possible by online marketing.
• Speak: Companies can enter into one-to-one dialogues with customers online. Valuable
feedback can be provided, and important databases can also be set up this way.
• Sizzle: a well designed website can add extra benefits to the brand image through
educating and entertaining visitors. Creative interactive content added to the website
can grab and retain customer attention (Brassington and Pettitt 465).
3.7 Online Marketing as the Fastest Growing Form of Direct Marketing
As it is summarized on the following graph, direct marketing can take many forms from
the traditional catalog, direct-mail and face-to-face selling to the recent innovations of digital
technologies (interactive television, mobile phone marketing, podcasts and vodcasts) and
online channels.
These tools all share the typical characteristics of direct marketing communications
already discussed above. From among them, this report raises the forms of online marketing
and discusses those in detail. Since the music industry is changing dynamically, and, as Dr.
Tschmuck also noted, online channels play a more and more important role in the music
business, it can be assumed that online marketing has the greatest potential compared to
other forms of direct marketing in this case.
Forms of Direct Marketing
Face-toface
selling
Online
marketing
New
digital
media
Direct-mail
marketing
Customers
and
prospects
Kiosk
marketing
Telemarketing
Source: Principles
of Marketing
Catalog
marketing
Directresponse
TV
39
As Kotler and Armstrong discuss it, the revolution of the Internet gave rise to
fundamentally new ways of value creation and relationship building by companies. Today, it
provides the possibility of marketing online to two kinds of companies:
• click-only companies with no brick-and-mortar market presence (such as the e-tailer
Amazon.com or Yahoo! and Google search engines), and
• click-and-mortar companies which can be considered traditional companies with online
marketing added to their operations (in other words, all companies having a website),
such as Monkey Music.
These companies can be involved in operations in four major online marketing
domains:
1. Business-to-Consumer (B2C): similar to traditional marketing approach of attracting
consumers, however, in this case, it is the online customer who initiates and controls
the contact by visiting the website of a given company or subscribing to its e-mail
newsletter.
2. Business-to-Business (B2B): using B2B websites, e-mail, online product catalogs and
online trading networks to reach new business customers and maintain relationships.
3. Consumer-to-Consumer (C2C): communication occurring on the Internet between
interested customers, who buy and exchange goods or information through blogs
(online journals). Such blogs containing commercial information can have enormous
impact on their readers. Companies advertising themselves on blogs or establishing
their own blogs are aiming at influencing readers this way, by generating online wordof-mouth advertisement among consumers.
4. Consumer-to-Business (C2B): through the web, consumers can easily communicate
with companies, which usually invite and welcome suggestions and questions, such as
users’ comments in the forum of their official company website (Kotler and Armstrong
529-532).
In fact, Monkey Music is involved in all of these four domains, by managing and
promoting artists to the public (B2C), providing publishing and communication solutions to
other businesses (B2B), participating actively in online social networks and generating
customer discussions (C2C) and collecting customer feedback (C2B).
3.8 Ways of Conducting Online Marketing
It must not be forgotten that using the Internet as an advertising medium includes
disadvantages. In online advertising, only a limited visual presentation is possible,
furthermore, the audience is not guaranteed, since most of the time it is the consumer which
initiates contact with a company or artists, by seeking relevant information on the Internet
and opening the company’s official website. Finally, the success of online advertising is
largely dependent on infrastructure, since only those consumers may be reached with online
marketing tools which have a functioning Internet connection, thus can access all kinds of
40
websites and online applications.
Still, despite these disadvantages, it can be stated that advantages of online marketing
outweigh them, and make the Internet a helpful promotional tool (Brassington and Pettitt
475). In the music industry, chances of an online promotion campaign to be successful can
be considered relatively high, since the audience can be carefully targeted in various
websites (e.g. webpages dealing with different music genres) and young listeners usually
have access to the Internet and are actively taking part in online activities.
Once a company decides to use Internet as a means of promotion, it can choose
between four main ways of moving online, each of which has to be integrated with each
other and with the rest of the promotion mix. In the case of Monkey Music, some of these
means are already used; however, all of them are worth elaborating on and considering
possible improvements. The four main online marketing methods are the following:
Creating a website
Kotler and Armstrong state that the creation of a website is the first step for most
companies when they decide to go online. They distinguish between corporate or brand
websites and marketing websites. Corporate websites are designed with the aim of building
customer goodwill, collecting feedback from consumers, providing information, and
generating excitement about the company or brand. Although such webpages fulfill many
functions, purchasing is not possible on them. On the contrary, marketing websites engage
consumers in an interaction that leads them towards direct purchase, by describing the
latest hot deals, and offering online ordering and payment possibilities. Currently, the
website of Monkey Music both provides information and collects customer feedback, and
offers the possibility of online record ordering and payment.
Once a website is created, it needs to be promoted, usually in offline print and
broadcast advertisements, and through ads and links on other websites. After that it
becomes important to constantly update company and marketing websites, to make sure
that they remain interesting and attractive enough to generate repeated visits of consumers.
The theory of the seven Cs of effective website design summarizes the key aspects in this
field and states that the following factors determine the success of a given website:
• Context: the design and layout of the website;
• Content: text, sound, pictures and video, that the site contains;
• Community: the ways that the website enables user-to-user communication (for
example through forums);
• Customization: how the site can tailor itself to different users or how it allows users to
personalize it;
• Communication: the ways site-to-user, user-to-site, or two-way communication is
enabled;
• Connection: how much the site is linked to other websites or is integrated into online
social networks;
41
• Commerce: the site's ability to enable commercial transactions.
This list is often extended with one more C, namely constant change, the continuous update
of the content (Kotler and Armstrong 534).
Besides Kotler and Armstrong, Brassington and Pettitt also summarized the basic
requirements for websites to be successful. According to them, a website “should have all
the creative flair of an advertisement, the style and information of a company brochure, the
personal touch and tailored presentation of face-to-face interaction and, not least, always
leave the visitor clear as to what action should be taken next” (Brassington and Pettitt 465).
To sum up, based on their definition, a website should fit into the overall promotional
activities of the marketer, and should complement traditional media in delivering a consistent
company image. Taking into account its complementary function, a website can then serve
as an additional research and planning tool, distribution and customer service, and
communication medium.
Placing Ads and Promotions Online
Online advertising is becoming a major medium, with American companies already
spending more on it than they spend on newspaper, outdoor or radio advertising. It can take
three basic forms, such as display ads, search-related ads, and online classifieds. Depending
on the amount of financial resources held for these purposes, each company has the
opportunity to be engaged in any of the forms of online advertisements below.
Online display ads may appear anywhere on the browsing consumers' screen.
• Their most common form is banners, meaning the banner-shaped ads that can be
found at one side or at the center of a website. According to Brassington and Pettitt,
this type of online advertising can be effective in terms of increasing brand awareness,
advertising recall and purchase intent. According to a survey conducted among 50,000
consumers in the US, all the three indicators grew after increasing the intensity of
banner advertising (Brassington and Pettitt 472).
• Other option is the use of interstitials, which appear when the user opens a new
website, especially while the new screen is loading.
• Thirdly, pop-ups appear suddenly in a new window, in front of the window which is
being viewed at that given moment. This form may have an annoying effect on
customers, which led to the creation of applications that enable the user to block such
pop-up windows. It obviously lowers the effectiveness of this form of online
advertisement.
• As an answer to that, advertisers developed pop-unders, which appear behind the page
that is being viewed, so that pop-up blockers cannot explore them, and the user only
recognizes them when he/she closes all the pages that were viewed previously.
• Finally, simultaneously with the wide spread of broadband Internet access which allows
greater speed of browsing, advertisers are developing rich media display ads
nowadays, which combine animation, video, sound, and interactivity. These rich media
42
displays draw users' attention more effectively.
Another area of online advertising which is growing significantly nowadays is searchrelated ads, or contextual advertising. This means text-based ads and links appearing
alongside search engine results displayed on sites such as Yahoo! and Google. These ads are
highly effective, which of course demonstrates itself in the related costs as well; this form of
online advertising requires the most financial resources compared to all other methods.
Search-related ads account for more than 40% of all online advertising expenditures, and
constitute nearly the whole amount of Google's enormous revenues.
Other tools involve content sponsorships, when companies gain name exposure
similarly to the traditional way of sponsorship, by supporting special content on various
websites. With the careful selection of a sponsored content, it is possible to generate
significant awareness, in case the given company’s name is well-displayed on the sponsored
website and is relevant in the given field of activities. Furthermore, alliances and affiliate
programs can also be developed, in which certain companies work together both on- and
offline, in order to promote each other and thus themselves as well, by placing each other's
banners on the sites.
Finally, the online word-of-mouth, namely viral marketing is frequently used today. It
involves the creation of a website, video, e-mail message or other marketing event that is so
infectious that users will pass it along to their friends. This addictive and self-propagating
promotion is then displayed more and more on websites, blogs, cell phones, and message
boards. Although most of the times the company itself does not have a say in viral
marketing, and the control is in consumers' hands, a well-started viral campaign can turn
into a huge success. The greatest advantage of this method is that it requires an only onetime effort and investment, when the given marketing event is created. After that, it is the
users’ activity and enthusiasm which is responsible for the spread of the given video or
message; the online marketer does not need to further promote the event.
Creating or Participating in Online Social Networks
The popularity of the Internet as a communication channel led to the creation of web
communities or online social networks, providing users with the opportunity to congregate,
socialize and exchange views and information. Such sites as MySpace, Facebook, YouTube
and Second Life are recognized by more and more companies as potential advertising media,
resulting in an ever increasing number of company profiles on these sites, among which the
profile of Monkey Music for example can also be found. Joining such an existing network
seems to be the easiest, however, own community websites can also be set up, like Nike did.
Obviously, the presence of a given brand is much more intensive in a social network created
by the company itself; however, attracting members to such a network may be too difficult
for smaller or less popular companies.
Although these websites appear very attractive for marketers, attention should be paid
to the fact that they are still new and thus results of marketing activities on these sites are
43
hard to measure. Besides that, these sites are largely controlled by users, meaning that
marketers cannot force consumers talking about their products in any artificial ways;
companies and brands have to become part of the online social lives of customers. This, of
course, is hard to control and maintain. Companies have to find a proper way of
communicating with their potential customers in these networks, which on the one hand
should not be too pushy, but on the other hand should provide sufficiently active and
frequent display of the company’s products and services.
As a result of the fact that online social networks merge a huge number of different
customer groups together, there is a recent trend of companies joining smaller communities
of like-minded people, and focusing on niche networks that way. These niche sites are
extremely advantageous vehicles for marketers who want to target special interest groups,
since they constitute a better marketing message environment, and tend to spend more
time on the site which is specialized and connects people with the same interests.
Furthermore, while the bigger sites become overloaded with advertisements, and make
users immediately ignoring ads when those appear, niche network members tend to pay
more attention to ads, since they trust more both the content and the other members
advertising something. That is why those companies which market products or services for a
specific group of consumers (for example for people with a hobby of listening to music,
cooking or fishing) should focus on these smaller sites gathering users with the same
interest.
Using E-Mail
E-mail is an important and increasing online marketing tool, especially its enriched
form which contains animated, interactive and personalized messages with audio and video.
The main aim of e-mail marketing is to encourage users to look at a given website which is
advertised in the e-mail, and to obtain permission to send more information afterwards, and
include the given user in the company's marketing database, for example by offering the
possibility to subscribe to the newsletter of a given organization. Carefully designed e-mail
marketing plays an important role in both creating initial contact with customers and
maintaining relationships with them later on. First, companies acquire customers with the
help of an opt-in mechanism when users agree to receive regular e-mails, newsletters etc.,
and then marketers try to retain these customers by designing special offers for micro
segments. Brassington and Pettitt depicted this on the following graph.
44
Source: Essentials of Marketing
The authors also identified three distinct phases which e-mail marketing has gone
through since the first messages were sent through cyberspace in 1971. They named the
first phase the Broadcast/Spam era, which was characterized by indiscriminately sent
messages, often with little targeting and tailoring, without careful attention to the recipient.
Unfortunately, some companies still belong to this first generation, although European
regulation is becoming stricter concerning e-mails, favoring an opt-in mechanism, thus
assuming that people do not want to get e-mails unless they specifically ask for it.
According to the authors, the second phase is representative of today's e-mail
marketers, operating on a permission basis, offering the consumer the opportunity to
volunteer to receive regular messages on special offers. Considering the fact that this
particular theory was set up in 2001, there are reasons to believe that e-mail marketing in
these days can already be in between the second and third generation, in a transition. The
third phase, precision marketing combines the power of e-mail with the power of information
technology, and relies on precise customer databases, records and analyses responses of
customers, and this way ensures greater targeting and almost individual customer
relationship management (Brassington and Pettitt 481).
First Generation
Second Generation
Third Generation
Broadcast/spam
Permission marketing
Precision marketing
•
•
•
•
•
•
•
•
•
•
• High volume/low cost
• Send and forget
• Generally not relevant
Responsible
Poorly segmented
Minimal personalization
Approaching bulk mail
45
Focus on individual
Dialog-based
Utilizes reply button
Minimized opt-out
Builds brand affinity
‘Mail Worth Opening’
Although these new generation e-mails as attention-grabbers can be very effective
when targeted appropriately, e-mail marketing is often avoided because of the huge number
of spams (unwanted, irritating commercial e-mails) sent each day. The number of spam
messages sent worldwide already exceeds the number of normal, person-to-person e-mails,
which discourages companies which are considering using e-mail marketing, since it may
easily ruin the company's image.
To handle this problem, most legitimate marketers nowadays are trying to improve
permission-based e-mail marketing, and send e-mails only to customers who opt in, and
sign up for example for regular newsletters. This way, frustration and irritation is avoided,
and personal relationships and attention are built again.
Besides spams, Kotler and Armstrong mention other public policy issues that can harm
and irritate consumers and make marketers appear non-benevolent. Such issues are
annoying and offending customers with unwanted banners and pop-under ads, taking
advantage of impulsive or less-sophisticated buyers with TV shopping and online
“infomercials”. Besides these, Internet fraud, such as identity theft, financial scams and
phising (identity theft using deceptive e-mails and fraudulent websites to fool users into
giving away their personal data), and the lack of Internet privacy are becoming an important
issue as well. Online marketers should be aware of such concerns and worries of customers,
and should provide proper information on their policies regarding personal data of users, in
order to preserve and improve the positive public image of online marketing tools, and build
strong customer trust (Kotler and Armstrong 512-543).
3.9 The Future of Online Marketing – The Concept of Web 3.0
The above described techniques of online marketing were all designed for the Web 2.0
environment. The term Web 2.0 was originally used as the name of a conference in 2003,
and its creator, Tim Oreilly, planned to signify the resurgence of interest in the web after the
dot.com bust with it. Nowadays, many people tend to tie the term Web 2.0 to a particular
decade of Internet technology, which results in the fact that Web 1.0 and Web 3.0 are also
frequently mentioned in the literature concentrating on online marketing today. Based on
this point of view, Web 1.0 is attached to the 1990s, Web 2.0 describes the 2000s, while
Web 3.0 is the new Internet era, which started with the year 2010.
Web 3.0 concerns not only the web itself, but mobile technology, sensors, and all other
advancements which contribute to the development of Internet technology and broaden the
use of the web. According to Dave Chaffey, together with the evolution of web functionality,
the following approaches will gain significance during this era:
•
The usage of web-based applications and services is likely to become more common,
meaning that most activities will be facilitated by only a computer and a functioning
Internet connection, and the need for specific software packages will decrease.
46
•
Syndication, in other words, the increased incorporation of syndicated content and
services from other sites into a particular webpage will become more important. This is
relevant in the field of online marketing as well, requiring marketers to better integrate
various sources of information in their online presence.
•
Increased usage of streamed video or IPTV will complement or even replace traditional
television, through the evolution and wide spread of YouTube and various online
television channels. This phenomenon can lead to disadvantageous changes in
traditional advertising, since TV commercials between shows, news etc. can be
perfectly
filtered
by
online
viewers
who
would
like
to
watch
films
without
advertisements in between. This of course suggests greater concentration on online
advertising and the restructuring of financial resources, leaving a smaller share of
budget for traditional TV commercials.
•
Increased use of virtual environments modeling real life such as Second Life. The
active participation of companies, or in this case, artists in these virtual environments
may be of great marketing value in the future. Once users of such virtual networks are
confronted with companies and artists in online communities, they are likely to become
interested in them in their real life as well.
•
More intensive personal data integration, such as the exchange of data between social
networks is foreseeable in the present Web 3.0 era. As it was already described above,
the importance of social networks in online marketing should be explored even more,
since these online platforms can be viewed as excellent source of consumer
information nowadays. The fact that all kinds of community websites have a
continuously rising number of registered members is highly advantageous for online
marketers, who may easily become a user of these sites and then be connected to
potential customers. Moreover, the efforts and financial resources required in this case
are extremely low, allowing marketers apply other, more expensive marketing
techniques as well.
•
Finally, semantics is likely to revolutionize the use of the Internet, and online
marketers who recognize the importance of this development can take advantage of
semantics in the future. According to nowadays’ predictions, with the help of semantic
markup, artificial intelligence applications will be developed, which will be able to
recommend content and services to users without them actively having to look for
these contents. This means that such a great knowledge of users’ preferences will be
obtained, that special applications will be able to provide users with the required
information without even asking questions or using online search engines. These
applications will apply their own judgment as to the best brands and company
offerings, for example with the help of an automated shopping comparison service.
Other examples are Wesabe and Mint, which have the potential to turn everyday
people’s credit cards into a sensor providing meaningful information about tracks which
are left in the real world. Obviously, when semantics will constitute such a great part of
47
Internet technology in the future, online marketers will have to pay attention to it and
make use of the extremely meaningful information provided by semantics (Oreilly).
To sum up, the continuous development of Internet technology will inevitably require
an ever increasing concentration on online marketing methods in the future. However, it
should always be kept in mind that the amount of information that can be found on the
world wide web is so huge and incontrollable, that the evaluation and selection of relevant
data among all useless information will soon become very important, facilitated by
semantics. That is why online marketers need to tailor their methods to consumers’ needs
better than ever before, and they have to concentrate on providing meaningful and
distinctive information in order to identify themselves among all other online market players.
48
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51
APPENDIX
Appendix 1: Questionnaire
Questionnaire
about Internet usage and downloading behavior
Dear Sir/Madam,
With the help of this questionnaire, I am researching the file sharing behavior of Internet
users and testing their knowledge about the effects of their behavior. With answering my
questions, you will help me draw meaningful conclusions about this topic, which constitutes
an important part of my college graduation thesis. Please give honest answers and do not be
afraid of any consequences of filling out this questionnaire; you do not have to provide your
name or any contact details. Thank you in advance for your cooperation!
1. Gender:
Male
Female
2. Age:
……… years
3. Work status:
Working
Studying
Both
None of the above
4. Monthly net income:
………….. EUR
5. Do you have any kind of access to the Internet?
Yes
No
6. Do you download music or films from the Internet?
Yes
No
7. If so, how often?
Every day
Weekly
Two weekly
Rarely
8. Do you also buy CDs/DVDs in music shops or other stores, or you rather
download them from the Internet?
I prefer buying CDs
I download them
Both
9. Do you think that the prices of CDs/DVDs in stores are too high nowadays?
Yes
No
10.Would you buy more CDs/DVDs if they were cheaper?
Yes, I would buy more CDs if they were cheaper, e.g. 15 EUR.
No, I would not buy them anyway.
52
11.Do you usually pay for your online music/film downloads?
Yes
No
12.From where do you download these songs and films? (more answers possible)
Official artist/movie website
Website of the music label, official webshop
iTunes or other similar payable download sites
With the help of BitTorrent, eDonkey, Soulseek or other similar free file sharing
software
Other
13.Are you aware of the fact that if you download or upload copyrighted material
(song, film) with the help of a file sharing software (such as the ones
mentioned above) to peer-to-peer networks, you are committing crime and you
are an illegal file sharer?
Yes
No
14.Do you agree with this view? Do you consider peer-to-peer file sharing as
harmful?
Yes
No
15.Are you afraid of the possible consequences, such as penalty, lawsuits and
various punishments for illegal file sharers?
Yes
No
16.Some people say that illegal file sharing behavior can significantly harm artists
and music/film industry employees. Do you agree on this opinion?
Yes
No
17.Opponents of illegal file sharing claim that it can lead to serious losses of the
economy and increasing unemployment, just like it already happened in the US
for example. Have you heard any news about these harmful effects of illegal file
sharing? Are you aware of these negative consequences?
Yes
No, I’ve never heard about such harmful effects.
18.Will you continue using file sharing programs, now that you are aware of their
effects?
Yes
No, I won’t use them anymore.
19.You ought to know that, although artists lose a substantial amount of their
income due to illegal downloads, they can be supported in other ways as well.
E.g. you can attend their live concerts, purchase merchandise (T-shirts,
posters), or donate some money to them. Have you considered these
possibilities as a means of supporting artists so far? (more answers possible)
Yes, I went to concerts for this reason.
Yes, I already knew that by buying merchandise I can help my favorite artist.
Yes, I have already heard about music fundraising (donation) possibilities.
No
20.Now that you know how illegal file sharing behavior may harm your favorite
artists, are you planning to support them somehow in the future? (more
answers possible)
53
Yes, I will visit more concerts.
Yes, I will buy merchandise of my favorite artists.
Yes, I will donate them some money, e.g. on www.sellaband.com
No
Thank you very much for your answers!
Appendix 2: Analysis of the Questionnaire Results
The questionnaire which constituted a significant part of the research had a two-fold
aim: the first few questions concentrated on the demographic data and downloading
behavior of Internet users, while the second part dealt with providing information to the
respondents and testing their reactions on this information. The questionnaire was
distributed between 12 October and 10 November 2010 on the Internet with the help of
Survey Gizmo, a questionnaire creator and analyzer website, and in a traditional physical
way. Altogether 160 respondents filled in the questionnaire completely, in various age groups
between 17 and 65 years, all around the world, as it can be seen on the following map
where groups of responses are marked with an orange spot:
The proportion of males and females in
the sample population was nearly equal, since
51.2% of the respondents were women, while
men constituted 48.8%.
The age of respondents ranged from 17 until 65 years, with a slight overrepresentation
of the age group 20-24, due to the fact that many respondents were of the same age group
as the researcher herself. However, if we take into account the fact that the most active
Internet users also belong to this generation, this overrepresentation does not need to be
considered disadvantageous from the point of view of the research.
54
Further demographic data was collected about the respondents’ working status and
monthly net income. As the pie chart below shows, half of the respondents was working,
nearly 19% of them were student, 28.7% stated that they both work and study at the same
time, while 1.3% chose the answer “none of the above”, meaning that they nor worked,
neither studied during the time of the research.
There were significant differences in the monthly net income of the respondents,
ranging from 0 to 6,000 EUR/month. Obviously, higher incomes were typical in the age
groups between 30-60 years, while many younger respondents, especially students claimed
to have no income.
The above listed demographic differences proved to be influencing in the respondents’
Internet usage and downloading behavior; elder, better-off Western-European respondents
showed more willingness for buying CDs and preferred payable, legal downloads, while the
younger population chose free illegal downloads more often and preferred those to CDs.
The next few questions dealt with the Internet usage and music purchasing behavior of
people. 98.7% of the respondents stated that they had access to the Internet, which served
as a basis for the following questions. Such a high proportion of Internet users may be
subject of falsifications, similarly to the fact that 88.6% of the respondents admitted to
regularly download films or music from the Internet. These percentages are inevitably high
and
not
representative
in
worldwide
terms,
and
may
be
a
consequence
of
the
overrepresentation of younger European people in the sample population.
As for the frequency of downloads, 40.6%
of the respondents admitted to download films
and songs from on a weekly basis and 13% on
a two weekly basis. 17.4% stated that they
downloaded such contents every day, while
nearly 30% answered “rarely”.
When asking people about their music purchasing preferences, nearly half of the
respondents said they prefer downloading music from the Internet. 28.6% purchased music
and films both in their physical and digital forms, while 23.4% stated they rather buy CDs
and DVDs. Respondents preferring downloads belonged typically to the younger age groups,
while CD and DVD buyers constituted the elder groups of the sample population.
55
The next question researched the opinion of respondents on today’s CD and DVD
prices, and it was found that a clear majority (72.2%) of people considers prices too high on
the market nowadays. In order to find out if these high prices influence the respondents’
music purchasing decisions, people were asked if they would buy more CDs and DVDs
provided that prices would not be higher than 15 EUR.
70.5% stated that they would buy more CDs and DVDs if prices were lower on the
market, which means that even a
proportion of “downloaders” would
consider buying CDs for a lower
price.
29.5%,
influenced
however,
by
these
was
prices
not
and
showed no interest in physical forms
of music anyway.
Then, respondents were asked if they usually paid for their downloads, and a strong
majority of them, more than 84% stated that they did not pay for the music or films they
consumed from the Internet. As for the source of these payable and free downloads, nearly
half of the respondents answered that they used a free file sharing software, such as
BitTorrent or eDonkey. While younger respondents mostly chose these free softwares, elder
people stated they downloaded from official artist websites, music label webpages, and
official webshops. The use of iTunes was preferred by nearly 15%, both younger and elder
respondents, while 18% said they used other means of downloading.
The respondents were then asked if they are aware of the fact that the free up- and
downloading of copyrighted material is illegal, and 82.3% of them stated to be already
familiar with this fact. Although a clear majority of them knew about the illegality of this
behavior, it does not mean, that they also accept it: in the next question, nearly 52% of the
56
people said they did not agree with this view and did not consider peer-to-peer file sharing
as a crime.
Just like any other illegal activity, peer-to-peer file sharing has consequences, such as
lawsuits, penalties etc. as well. When asked if they were afraid of such consequences, 74.4%
of the respondents said they had no fear of these penalties. Such a high proportion indicates
that regulation and punishment of copyright infringers is not effective and people generally
do not take these options seriously.
After that, respondents’ opinion on the issue of
harming
artists
with
illegal
downloads
were
researched. Nearly 64% of people agreed with this
view and stated that they found illegal downloading
disadvantageous
for
artists.
A
relatively
great
proportion, however, said they did not consider
copyright infringement harmful for the right owners.
The next question approached the problem of illegal file sharing from a rather
economic point of view and asked if respondents knew about the fact that illegal file sharing
harms not only the artists, but the whole economy of countries as well. The proportion of
“Yes” and “No” answers was nearly equal, since 51.2% stated that they had already heard of
negative economic consequences of file sharing, while 48.8% said they had not known about
it. This clearly shows the need for more intensive communication of harmful consequences of
copyright infringement and for proper education of people about this issue.
Unfortunately, the questionnaire showed that people’s opinion about illegal file sharing
is not easily changeable, since 82.7% of the respondents said they would continue using
illegal file sharing softwares even after becoming familiar with the negative economic
consequences of their behavior.
Finally, the last two questions tested if people are familiar with alternative ways of
supporting artists, such as attending concerts, purchasing merchandise or donating money
on a voluntary basis. Merchandise and concerts were the most common supporting tools,
while donations were only known by 15.6% of respondents. A bit more than 13% of people
said to have not considered any of these possibilities as alternative means of supporting
artists.
57
At the end, after providing people with this information, it was asked if they planned to
practice any of these methods in the future and support their favorite artists this way.
The majority (40%) of respondents chose to visit more concerts in the future, which is in
harmony with the findings of Dr. Tschmuck, who claimed the live performance sector to be of
significant importance in the coming years. 34% of the respondents were unfortunately not
influenced by the information above, while 22% said to buy more merchandise. Online
donations as a supporting possibility were considered only by 4% of the respondents. That is
why there are reasons to believe that people are willing to support their favorite artists,
however, they also expect something in exchange, e.g. a live concert experience or a
merchandise product, and prefer one-sided, charitable transactions much less.
Appendix 3: Analysis of the Sell-A-Band Website and the Concept behind It
Sell-A-Band (www.sellaband.com) is a unique music fundraising website created with
the aim of uniting “Artists and Fans in an independent movement that aims to level the
playing field in the global music industry.” Sell-A-Band in its company form is based in
Munich, Germany and Amsterdam, Holland, in two melting pots of creativity in Europe. It
provides
the
possibility
for
artists
to
register
themselves
as
fundraisers
on
the
www.sellaband.com website and collect donations from their fans, the so-called believers,
via PayPal, an online payment method. Since the launch of the website in August 2006, 58
artists have been able to have their albums funded completely by fans with the help of SellA-Band and more than 3,000,000 EUR has been donated to various music groups by fans
and big supporting organizations. In exchange, fans receive various incentives (CDs,
merchandise, small portion of the artists’ income) determined freely by the bands. Besides
this, bands registered on Sell-A-Band can also decide independently on entering into deals
with labels, publishers or management agencies once they reached a given level of
popularity and funds, and retain complete freedom in creating music in the way they would
58
like to. This way, Sell-A-Band tries to provide an equal chance to all music industry players
by letting the everyday music lovers decide on which band should become popular and
successful in the future, while it also aims at connecting record labels and powerful music
companies with emerging new artists, by raising their attention to these Sell-A-Band chart
leader bands (“About us”).
There are reasons to believe that the general concept of Sell-A-Band should be
applauded in today’s music industry. It provides a real alternative and a choice for music
lovers to have their say in the success of artists and give rise to projects which could not be
funded any other way. However, the website is not popular and well-known enough to reach
a considerable public base and it is not targeted and advertised in the proper way. That is
why it can be observed that Sell-A-Band as a German company is mostly known in WesternEurope and its success and growth is based on word-of-mouth advertisement among
enthusiastic users. Although the functioning of donation on Sell-A-Band is unique and
interesting, relatively few users know it well. Basically, artists register on the website and
are required to submit a short summary of their plans, the incentives for believers to donate,
state whether they would like to raise funds for the production of a new album, a tour or a
promotion campaign, and decide on a target, a sum of donations they would like to reach
(usually between 1,000 and 100,000 EUR). Believers can then purchase parts in these
projects, generally for 10 EUR each, by using PayPal online payment method and
transferring a given amount of money to Sell-A-Band. Once this donated part enters the
believer’s account in the system of Sell-A-Band, it can be withdrawn from the given artist
and moved freely to another until the target of an artist is reached. Once a project is
finished, believers’ money is transferred to the given artist, donations cannot be withdrawn
anymore, and fans who purchased parts in the project can expect rewards in the form of
CDs, money or merchandise (“Believer FAQ”).
This means of supporting artists differs significantly from other methods and fits into
the trend of establishing closer relationships between artists and their fans on today’s music
market. It also makes use of online platforms, is trendy, youthful and revolutionary,
however, the potential behind it seems to be unused, based on the interviews and the
observatory research conducted in this field. Sell-A-Band concentrates on a certain region of
Western Europe (mainly the German-speaking countries and the Benelux states) and shows
no significant attempt to grow more international. Although it has a relatively intensive
presence on online social networks such as Facebook and Twitter, meaning that short fewword news are posted on a daily basis, users barely react to these posts: a few of them click
on the “Like” button under the news, but nearly none of them writes comments or starts a
closer interaction with Sell-A-Band. This way, even if online communication has a great
potential
to
be
interactive
and
two-way,
Sell-A-Band
maintains
mostly
one-way
communication and receives only a few feedback (on average, 5 “Like”-s per post) from its
relatively little fan-base (1,675 fans on Facebook). Besides social media platforms, Sell-ABand tries to provide possibility for communication on its own website as well in the form of
59
forums; however, posts are usually outdated and irrelevant. Unfortunately, traditional media
is even more rarely used by Sell-A-Band for marketing purposes: since its launch in August
2006, Sell-A-Band has created its first TV and online video commercial in only September
2010, and this half-minute long advertisement is a German-speaking one, which significantly
limits the target group of the commercial.
Probably due to the few marketing efforts, those Sell-A-Band member artists who can
reach their targets and raise a considerable amount of money mostly come from only a few
countries, namely the USA, Canada, Great Britain, Germany and the Netherlands. While SellA-Band currently has 4341 registered artists since August 2006, only 58 of them (which
equal 1.34%) has reached their target until 13 November 2010. Naturally, this low
percentage of successfully completed projects can depend on various factors; targets might
be set too high, artists’ profile pages may be non-attractive or incomplete, it is possible that
artists do not communicate their goals well enough or do not offer proper incentives etc.
Besides these factors, however, low popularity of the website and the lack of proper
promotion are certainly influencing as well, which might be viewed as an overall weakness of
Sell-A-Band. As of 13 November 2010, there were altogether 155 registered artists, who had
reached at least 1% of their target since their registration on Sell-A-Band; in contrast to
them, 4186 projects had not been able to raise even 1% of their required funds. These
minor and unsuccessful projects usually have a low number of believers as well, ranging
from zero to about 40 people, donating on average one part, namely 10 EUR.
On the other hand, there are a few success stories worth mentioning as well. There are
about 30 projects relatively near (70-99%) to reaching their target, and having 143-665
believers, who determine the current status of these artists depending on the amount of
funding target of course. The bands with the highest number of believers are obviously those
which have already reached their target once or even more. Some of them have more than
1000 believers, while others have already reached a small (e.g. 3,000 EUR) target with 76
fans. Based on the data collected from the charts published on Sell-A-Band, it can be
assumed that one believer purchases on average 4-7 parts from a given project, meaning
that a fan donates 40-70 EUR to its favourite artist. However, keeping in mind that there are
a few music supporting organizations registered as believers on Sell-A-Band, which purchase
tens of parts at a time, the average number of parts bought by an ordinary user must then
be even lower.
With such a low number of donations, obviously a long time may be required to
complete a project with the help of fans. Artists have to wait weeks, or often months, to
reach their targets and receive the whole amount of money with which they can then
execute a given project. However, there are a few exceptional artists who managed to reach
their targets already 2 or 3 times, among which Hind, a Dutch pop singer is definitely worth
mentioning: she managed to raise her first target, 40,000 EUR for recording an album within
only 11 days after launching the project on Sell-A-Band, with the help of 979 believers. In
the frame of a well-organized and communicated marketing plan, she has already raised
60
71% of her following target, 30,000 EUR for marketing her album, and plans to raise
another 30,000 EUR for shooting videos for her songs. After being a finalist of the first Idols
talent show of the Netherlands 7 years ago, she already released two albums and had
numerous international concerts before she joined Sell-A-Band at the end of November
2009. Within less than one year, she raised altogether 61,600 EUR on the website and has a
real chance of collecting another 40,000 EUR in the near future. With these amounts of
money, she can definitely be called a miracle of Sell-A-Band, however, it must be kept in
mind that her Sell-A-Band membership has always been properly communicated, advertised,
and carefully built into the overall marketing of the artist. Researching Hind’s marketing
activities on various Internet platforms, it can be stated that attention is drawn to the
possibility of donations through Sell-A-Band in many ways, and through intensive and close
cooperation with fans Hind collects positive feedbacks in this field. Through her example, it
can be proven that Sell-A-Band may serve as a real supporting option for artists, provided
that it is integrated into the artist’s marketing activities and attention is drawn to it as often
as possible. Without such marketing input, however, the website remains unnoticed and an
unrealistic supporting tool.
Appendix 4: Sell-A-Band Interviews
In order to present an analysis of the Sell-A-Band concept from more points of view,
personal interviews were also made in this topic. Eight questions were put to three
professionals who are currently working in different fields of the music industry. The three
interviewees were a record label manager with 4 years professional experience (A), a young
journalist specialized in music (B) and a music promoter with 15 years professional
experience (C).
1) Do you like the overall concept of Sell-A-Band in general? Why/why not?
A: It is of course a nice idea, but I do not think that the concept is really usable and can
provide real help for artists. I do not believe in the system of Sell-A-Band.
B: Generally, it should be applauded, since the core idea of Web 2.0 is totally pursued in this
system: the user/fan can have a direct impact on the success of the bands.
C: Yes! I find the idea of Sell-A-Band basically good and original. If it is well executed, it has
the potential to provide a new way of supporting artists and establishing a closer connection
between fans and bands.
2) Do you think it is worth the effort, registering artists on the Sell-A-Band
website? In you opinion, can Sell-A-Band really provide considerable help for
artists? Why/why not?
A: I am not an experienced user of the website and I have never supported any bands on it.
However, regarding the low popularity of this method, I do not think can help artists get
closer to being famous and successful.
61
B: Registration of bands on the website is definitely not counter-productive. From the
perspective of the international music market, however, I consider the role of Sell-A-Band
rather marginal. The question whether it is really a useful tool requires a more precise
definition. It is certainly useful for gaining a wider presence and for having the chance to
complete a given project. However, Sell-A-Band cannot provide an ultimate solution for
every issue. An Internet platform can never take over the tasks of an ordinary promoter or
booker and cannot guarantee musical talent.
C: In principle yes, it does not take any huge efforts to register on the website and create an
attractive and interactive artist profile. However, now that a restructuring and re-launch is
coming, I am curious how it may effect the functioning of Sell-A-Band. Hopefully it will make
it even better.
3) In your view, is Sell-A-Band well-known enough or should the concept be
advertised and promoted more widely?
A: In my view, there are relatively many people who know the name of the website, but the
concept is rather unknown to most music lovers. That is why I think Sell-A-Band is in need
of a strong and informative advertising campaign.
B: I must confess that I did not really know Sell-A-Band until now, which may suggest that
more intensive promotion would be necessary in this case. We are talking about an Internet
service. In our fast-paced information world, it will soon turn out whether the concept of
Sell-A-Band can be sustained. It is also possible that similar, but better promoted concepts
will emerge and wash Sell-A-Band away.
C: In its present form, Sell-A-Band is not well-promoted: it does not reach the general
public, is not well-targeted, and relies on mainly word-of-mouth advertisement. Keeping in
mind that currently there is a re-launch under a new owner, this development should be
communicated in the frame of a well-executed marketing campaign, making use of both
online and traditional media. If such a campaign is not organized, Sell-A-Band will never
take one step forward, but will remain a small, relatively unknown way of helping bands.
4) Do you consider the various motivational tools for Believers on Sell-A-Band
(CDs, merchandise, small portion of income) proper and effective?
A: I like the idea of “giving something back to the fans in exchange for their help” and find
the motivational tools good.
B: No. As for me, I do not see any incentive to invest into Sell-A-Band. I rather believe in
bands which I can hear in rehearsal rooms and at live performances and I invest in these
bands, if possible. The Web is not a base for such investments for me.
C: In my view, motivation should be music itself, the respect for artists and being a true fan
of musicians. I do not think these motivational tools are valuable enough to influence those
people who like music in general; I think believers on Sell-A-Band are more than ordinary
music lovers: they are fans of a given artist. But of course, it is not bad to receive something
62
in return for their generosity.
5) Do you think that online payment methods (e.g. PayPal, which is also used on
Sell-A-Band) are trustworthy enough and people like to use them? Do you
trust these payment possibilities?
A: I do not have great experience with using PayPal but as I have heard, it is used by more
and more people every day. However, I would provide the users more payment possibilities,
e.g. traditional money transfer as well, to make sure Sell-A-Band does not lose any believers
because of lack of trust in online payment methods.
B: PayPal is nowadays a common practice on the Web and, in my view, has stood the test as
a payment form on the Web in developed countries.
C: Yes, I think more and more people trust these methods nowadays.
6) Have you already donated money to an artist on Sell-A-Band? What is your
experience with it?
A: No, I have never used it.
B: I have not used the system of Sell-A-Band yet, thus I have no experience with it.
C: Yes, I donated three parts to three different acts. Two of them have already reached their
target and produced an album. The third band is still waiting for enough believers. From the
first band, I received three CDs and there was no problem with them. In the second case I
refused to get the CDs, although they were willing to send me a few. In contrast to the CDs,
no proportions of income have arrived on my bank account yet, but I have to say I am not
surprised about that. From the beginning, I did not believe that money would be transferred
to the donators.
What I truly missed, however, was the feedback from the musicians’ side! Once their target
was reached, there were no updates anymore and believers received no news about the
bands. Interaction disappeared completely, and I had to research some information on my
own, when I wanted to get some news about the artists.
7) Do you think that the idea of charity in the music business may become more
common and accepted in the future? Why/why not?
A: I do not think business could or will function like this. In my view, there are less and less
people willing to pay for something on a charitable basis, and nowadays many of us think
twice before spending money and look for valuable goods.
B: The traditional structures in the music industry are currently falling apart. CD sales are
continuously declining. Everything and everybody turns more and more to the digital world.
On this basis, the acceptance of such an online platform as Sell-A-Band is likely to
strengthen as well.
C: I do not think that artists should view charity as a real option to rely on. Sell-A-Band is
also dominated by a few big supporters, and it is relatively rare that bands reach their
target. Personal interaction is needed, and I think other ways of supporting artists will
63
always remain more common than donation in itself.
8) Would you modify the concept of Sell-A-Band? How do you think it could be
improved?
A: Even if in my view Sell-A-Band does not have the potential to become a great artist
supporting possibility, I would invest much more into marketing and PR because I think SellA-Band could be a perfect “PR topic” in which many people would be interested, if its owners
paid more attention to marketing.
B: Major labels could also take part in the activities of Sell-A-Band and offer contracts (about
production, management, promotion, tour) to the most popular/best bands. Sell-A-Band
should therefore cooperate more closely with such labels.
C: I would definitely make it more proactive. Newsletters and updates should be sent to
users on a regular basis. Currently, Sell-A-Band is waiting for the believers to open the
website and search for information. It should be the other way round, thus Sell-A-Band
should contact its users first with attractive and eye-catching news. And, of course, much
more intensive promotion would be needed to make the whole concept more well-known and
used.
Appendix 5: Analysis of Facebook marketing activity
To test whether Dr. Tschmuck’s theory about the live performance sector being a boom
segment in today’s music industry is correct and if it can be strengthened with online
marketing activities, small lotteries were published on Facebook, one of the most popular
online social networks. To the request of the company, these lotteries were connected to the
live concerts of Bauchklang, an Austrian alternative beatbox music group managed by
Monkey Music, with the aim of motivating people to visit more concerts and, at the same
time, of making the page of Monkey Music on Facebook more popular. By encouraging users
to become a fan of the page of Monkey Music, these small contests had an advantageous
effect in the long run: the fan base could be broadened and this way the messages of the
company could reach more and more people.
That is why the initial hypothesis was tested on Bauchklang and Monkey Music, while
Ginga, another music group marketed by the company served as the control group, without
any marketing activities. As the company requested, the small contests helped raising the
number of fans of Monkey Music and promoted the concerts of Bauchklang at the same time.
For technical reasons, it was the number of fans of Monkey Music that could be influenced,
since I had no access to the profile of Bauchklang on Facebook. That is why in the frame of
this research, it can be assumed that the new fans joining the fan base of Monkey Music
during the few day long contests were those users who were particularly interested in
Bauchklang. Consequently, the concerts of Bauchklang were advertised, and the number of
fans of Monkey Music and Ginga were compared and observed during the research.
64
1) 11 September 2010, Gasometer, Vienna, Austria
Promoted event:
Concert of Bauchklang and Sofa Surfers (both music
groups marketed by monkey.) in Gasometer, Vienna, 11
September 2010
Text of advertisement:
LOTTERY! You have the chance to win 3x2 tickets on the
concert of BAUCHKLANG and SOFA SURFERS on the 11th
of September 2010 in Gasometer Vienna. For that, you
only have to press the “Like” button on the Facebook page
of monkey. and then tag yourself on this photo. Hurry up,
the lucky winners will be selected and notified on
Thursday at 17:00!
Number of pages where the 3 pages (monkey., Bauchklang, Sofa Surfers)
promotion was published:
Duration of promotion
7 September, 14:30 - 9 September, 17:00
(date, time):
Progress (repeated
7 September, 14:30
1,585 fans, 0 tags
message, fans of monkey.,
8 September, 13:30
1,593 fans, 13 tags
people tagged):
9 September, 16:30
1,598 fans, 15 tags
9 September, 17:00
1,600 fans, 17 tags
End result:
15 new fans of monkey. within less than 2 days, 17
players, 3 winners
65
2) 25 October 2010, Mosquito, Timelkam, Austria
Promoted event:
Text of advertisement:
Number of pages where the
promotion was published:
Duration of promotion
(date, time):
Progress (repeated
message, fans of monkey.,
players):
End result:
Concert of Bauchklang in Mosquito, Timelkam, 25 October
2010
LOTTERY! You have the chance to win 2x2 tickets on the
concert of BAUCHKLANG on the 25th of October 2010 in
Mosquito, Timelkam. For that, you only have to press the
“Like” button on the Facebook page of monkey. and then
press “I’m attending” on the event page of this concert.
Hurry up, the lucky winners will be selected and notified
on Saturday at 17:00!
2 pages (monkey., Bauchklang)
21 October, 09:30 - 23 October, 17:00
21 October, 09:30
1,655 fans,
22 October, 14:30
1,667 fans,
23 October, 10:00
1,673 fans,
23 October, 17:00
1,680 fans,
25 new fans of monkey. within 2 days, 32
winners
4 players
13 players
27 players
32 players
players, 2
3) 13 November 2010, Halle B, Baden, Austria
Promoted event:
Text of advertisement:
Number of pages where the
promotion was published:
Duration of promotion
(date, time):
Progress (repeated
message, fans of monkey.,
people tagged):
End result:
Concert of Bauchklang in Halle B, Baden, 13 November
2010
LOTTERY! You have the chance to win 2x2 tickets on the
concert of BAUCHKLANG on the 13th of November 2010 in
Halle B Baden. It’s easy: you only have to press the “Like”
button on the Facebook page of monkey. and then tag
yourself on this photo. Don’t waste your time, the winners
will be selected and notified on Thursday at 18:00!
2 pages (monkey., Bauchklang)
8 November, 16:30 - 11 November, 18:00
8 November, 16:30
1,702 fans,
9 November, 15:00
1,709 fans,
10 November, 12:30
1,718 fans,
11 November, 18:00
1,723 fans,
21 new fans of monkey. within 3 days, 28
winners
66
0 players
10 players
21 players
28 players
players, 2
4) 20 November 2010, Volkshaus, Weiz, Austria
Promoted event:
Concert of Bauchklang in Volkshaus, Weiz, 20 November
2010
LOTTERY! You have the chance to win 3x2 tickets on the
concert of BAUCHKLANG on the 20th of November 2010 in
Volkshaus, Weiz. What you have to do is to press the
“Like” button on the Facebook page of monkey. and then
tag yourself on this photo. You better hurry up: the
winners will be selected and notified on Thursday at
17:30!
Text of advertisement:
Number of pages where the
promotion was published:
Duration of promotion
(date, time):
Progress (repeated
message, fans of monkey.,
people tagged):
End result:
2 pages (monkey., Bauchklang)
15 November, 18:30 - 18 November, 17:30
15 November, 16:30
1,734 fans,
17 November, 13:00
1,746 fans,
18 November, 18:00
1,757 fans,
23 new fans of monkey. within 3 days, 24
winners
0 players
16 players
24 players
players, 3
Control group: the fan page of Ginga (another band marketed by Monkey Music), without
lotteries and advertisements:
Fans on Facebook
monkey.
Ginga
Sep- Sep- Sep- Oct- Oct- Oct- Nov- Nov- Nov- Nov- Nov- Nov- Nov07
08
09
21
22
23
08
09
10
11
15
17
18
1585 1593 1600 1655 1667 1680 1702 1709 1718 1723 1734 1746 1757
917
919
920
961
963
964
990
993
995
995 1003 1005 1006
1900
1800
1700
1600
1500
1400
1300
1200
1100
1000
900
800
monkey.
Date
67
Nov-18
Nov-17
Nov-15
Nov-11
Nov-10
Nov-09
Nov-08
Oct-23
Oct-22
Oct-21
Sep-09
Sep-08
Ginga
Sep-07
Number of fans
Fans of monkey. and Ginga on Facebook