June 6, 2006
About 6 months ago, Gartner’s Mike McGuire and I published a paper called “Consumer Taste Sharing is Driving The Online Music Business and Democratizing Culture.” The paper argued, based on various data, that new taste sharing tools (e.g., playlist sharing, mp3 blogging, private group streaming) can help support the online music distribution business and create important promotional opportunities. It recommended that rights holders and intermediaries embrace novel sharing tools and predicted that they will play an important role in new services.
Cost, Authentic Promotion,’ 48 percent of music discoverers find out
about music from friends.
Music discoverers continue to
use a broad variety of means to find out about music, 53 percent
discover music through videos and 87 percent through radio, but word of
mouth is a powerful way to expose and influence musical tastes. Sites
that incorporate virtual friends are influential music marketing
“Music marketers should leverage community sites,
such as MySpace, to recreate the feel of personal recommendations of
friends,” said David Card, Vice President and Senior Analyst at
JupiterResearch and author of the report. “Not only are these sites
free, but they can be effective music discovery tools.”
This also aubstantiates a key trend seen elsewhere, including Gartner’s data — consumers are increasingly “content foragers” (as Mike calls them). They take a variety of routes to find music and music-related information, often the shortest path at a particular moment. Sometimes it’s iTunes, sometimes P2P, sometimes it’s a blog, or MySpace, and so on.
This has important implications not just for recommendation tools, but also for access to and delivery of the music itself. As Mike and I wrote, “What has become critical in the market is being able to create initial demand and then finding as many paths to spread it as quickly as possible. What we are describing is an environment in which the ‘velocity’ with which a new song — or songs from a back catalog —can quickly get from initial distribution (or reintroduction) to the maximum number of paying customers.“
The music industry needs to embrace a fluid music distribution model, allowing individuals to use the acquisition method they want and listen to the music using whatever tools they want. Cabining them within one particular service won’t cut it. Whether that takes the form of a VCL model or something else, there would be significant business benefits to trying to accomodate these trends.