Why Amazon and Google Are Fighting to Lead the Voice-First Economy

Posted on January 15, 2019 by ddeal

To no one’s surprise, the story of CES 2019 was the battle between Amazon and Google to lead the emerging voice-first world.

CES was awash with announcements about products such as alarm clocks and thermostats powered by Amazon’s Alexa virtual assistant and Google Assistant, prompting coverage such as CNET’s “Who Won CES 2019: Amazon or Google?” and USA Today’s “CES 2019: Google vs. Amazon, Who Won?”

In the aftermath of CES, though, one question looms: What exactly do Amazon and Google get out of winning this battle?

Numbers Galore

Both Amazon and Google used CES to state the case for their leadership of voice (Apple, Microsoft, and Samsung, while certainly players, are not the leaders in voice although Apple is a strong challenger). Google announced that Google Assistant is on one billion devices, up from 500 million in May 2018 (a figure boosted by the sale of Android phones that contain Google Assistant by default). Amazon disclosed that it has sold more than 100 million devices that rely on its Alexa virtual assistant. In addition, the number of people who use Alexa every day — and who own more than one Amazon Echo smart speaker — doubled in 2018.

Meanwhile, during CES, more telling numbers were disclosed. According to research conducted by Edison Research and NPR, 53 million adults in the United States (or two out of 10 Americans) own at least one voice-activated smart speaker. The number of smart speakers in homes has increased 78 percent year over year. And on January 8, Accenture reported that half of online consumers globally use digital voice assistants, up from 42 percent one year ago.

These figures don’t mean that people are actually using their voices to buy things from businesses. In fact, most people use voice assistants to perform everyday tasks such as listening to music and getting weather information. But the usage data is important nevertheless. It shows that even if we’re not exactly living in a voice-first world, we’re getting there – and doing so quickly considering that the Amazon Echo didn’t exist until 2014, and Google Home just two years later. In addition, by 2016, 20 percent of all Google mobile queries were voice searches.

The rise of voice also helps explains why so many companies continue to launch products fueled by voice at CES, and 2019 was no exception.

Gadgets and Software Integrations

CES unleashed a dizzying array of products powered by voice, usually through Google Assistant or Amazon Alexa. These products typically focus on making it easier for people to use their voices to live in their homes and navigate their cars. For instance:

In the Home

Lenovo announced an alarm clock powered by Google Assistant. KitchenAid and GE rolled out smart displays that rely on Google Assistant to help you get recipes, watch videos, and do anything else to keep you occupied and entertained in the kitchen. Currant’s new smart wall outlet, which can be controlled by Alexa and Google Assistant, monitors energy usage and suggests which products to automatically turn off to conserve power. The Dalkin smart thermostat works with Alexa and Google Assistant to control the climate in your home.

You can learn more about major product announcements here and here. (For those of you keeping score, in November 2018, Recode reported that Google Assistant works with 10,000 smart home devices versus 20,000 for Alexa.) But the most intriguing products, such as the Currant smart wall outlet, use artificial intelligence to not only act on your voice commands but also give you information and manage your home without your intervention.

On the Go

Both Amazon and Google showed that Alexa and Google Assistant are powering our lives on the go, too. Google formally integrated Google Maps with Google Assistant, which is important because of Google Maps’s popularity for mobile wayfinding. As Mashable noted, “Google envisions users asking it for directions home, or to nearby restaurants and saved locations. You can ask the assistant to search for places along your route (like gas stations) or add a stop — all things that used to require some button pushing.”

Amazon announced a stronger push into voice-powered automobiles. CES was barely under way when Amazon and Telenav, a provider of connected car and location-based services, announced a relationship that makes it possible for drivers to use the Telenav Alexa-powered navigation system to do the same kinds of functional tasks that they can do with Google Maps. And then Amazon formally launched Amazon Echo smart speaker for the car. Google announced a similar product through a relationship with Anker’s Roav automotive accessory, which is essentially a Google Home for the car.

These announcements continued a battle for on-the-go voice experiences that has been going on for some with Google, Apple, and Amazon all rapidly launching products and software designed to be the de facto infotainment systems for different car manufacturers. The irony is that major auto makers have been announcing dips in sales for 2018. But overall, automotive has been a strong industry over the past several years. And now cars are getting smarter.

What Do They Want?

No wonder so many “Google versus Amazon” stories have proliferated throughout January. But the more important question than who “won” CES is what do Amazon and Google get out of all these voice-powered products? The answer is simple:

The company that owns the ecosystem monetizes the voice-first world.

Owning the ecosystem yields practical benefits, such as revenue gained from the sale of smart speakers. Amazon commands a strong leadership of smart speakers, but Google is catching up. As of 2019, Amazon is capturing 63.3 percent of the smart speaker market, with Google Home accounting for 31 percent. The numbers matter for another reason besides revenue: smart speakers connect people with other smart devices, thus acting as a gateway for product integrations. As Accenture noted in its survey of global smart assistant users, “[n]inety-three percent of consumers globally expect their home device purchases, such as smart TVs or computers, to be based on ease of integration with their standalone smart speaker.”

Google’s Motivation

For Google, being the backbone of voice protects the company’s online advertising business, which accounts for more than 70 percent of Google’s revenue. Google needs to keep giving people reasons to keep using products such as the Google search engine, Google Maps, and the Google Chrome web browser. As people stay on Google, Google can continue to deliver audiences to advertisers and learn from audience behavior. As people use voice, Google can keep them on Google by incorporating voice into its products, launching new products such as Google Home, and making Google Assistant part of other companies’ products, which is the alarm clocks, thermostats, and cars using Google Assistant come into play.

But it’s not all about advertising for Google. Google also wants intelligent voice assistants to make Google software and hardware (such as Pixel phones) more useful and popular, a dramatic example being Google’s Duplex software, which can make convincing phone calls on behalf of human beings.

What Amazon Wants

Amazon has its own motivations. Amazon is already a popular search engine for product searches, with half of online shoppers starting their searches on Amazon. Amazon also needs to incorporate voice to keep those shoppers using Amazon as they become more comfortable using voice – not just because Amazon wants them to buy things from Amazon with their voices, but also because Amazon is building an online advertising business that is already the third largest in the industry, behind Google and Facebook.

As Amazon creates its own advertising business, it, too, needs to show potential advertisers that it can deliver an audience to them – in the home and on the go, whether they use their voices or text to get what they need. In 2018, it was reported that Amazon was in talks with advertising giants such as Procter & Gamble to permit them to advertise on Amazon Echo speakers. Amazon has denied that it’s going to permit advertising through Alexa. But even if Amazon does not offer ads, per se, it can use voice to mine valuable data about its customers that would be useful to its advertisers, such as Google can.

Amazon is already working with businesses to monetize skills. Through premium content known as in-skill products that reside within Alexa skills, businesses can sell premium content such as in-game currency. For example, Stoked Skill offers free games such as Escape the Room and Escape the Airplane. The games are set up as Alexa skills. Players use Alexa skills to find clues that will help them escape spaces such as jell cells and cars. Customers can pay for optional “hint” packs (in in-skill product) that make it easier for them to escape.

I could see Amazon also offering branded content and products to Prime customers who use Echo, such as discounts at local restaurants unlocked exclusively through Amazon Echo Auto. Doing so would monetize voice without more intrusive advertising that lack any useful offers.

Finally, Amazon has other plans to monetize voice in the enterprise, such as Alexa for Business to help enterprises use Alexa to improve workforce productivity. As these examples show, companies are using Alexa for Business to book conference rooms, manage the connection status of shared devices, and other workplace tasks. But Amazon has competition in the enterprise most notably from Apple and Microsoft.

What Business Should Do

Brands have a clear mandate: prepare for a voice-first world, and one where Amazon and Google call the shots for now. When consumers start really buying products and services via voice assistants, brands will need to play ball with the companies that control the voice ecosystem. Here is how Recode envisions one way that world will play out:

How it works now: If you ask Amazon’s Alexa or Google Assistant to buy, say, shampoo, they’ll surface what they think you’ll want. Alexa uses several criteria to suggest a purchase option: Your order history, whether a product is eligible for free Prime shipping and whether the product has the “Amazon’s Choice” seal of approval — “highly rated, well-priced products available to ship immediately.”

Google picks products from merchants thatare most relevant to the query. It also considers purchase history and information about user preferences, as well as an item’s availability and proximity.

Both companies say there is no favoring of specific retailers — or their own products.

Brands also can’t pay for visibility — yet. For now, Amazon and Google are trying to build trust among new — few — voice buyers by making their search results as relevant as possible. It doesn’t, however, take much imagination to see a future in which Amazon or Google merchants could pay to have their products suggested by their smart assistants — like sponsored ads that crowd their websites — as a way to generate more ad dollars.

Today, businesses are participating by creating sometimes clever and inventive voice-based brand building experiences, such as HBO’s voice-activated Westworld game, in which people use Alexa to explore the mythical Westworld. Other businesses have created their own branded Alexa skills. With Tide’s Stain Remover skill, you can get stain removal instructions shared with you through Alexa. Campbell’s offers recipes through Campbell’s Kitchen. Presumably, these businesses could offer in-skill products if they wanted to, an example being HBO offering a premium-tier Westworld game for purchase. And businesses are optimizing their content to be found through voice search.

Amazon and Google are not the only companies doing the heavy lifting, but they are leading the way to a voice-first world. Smart companies are going with them.

Facebook’s Ambitious Vision for Virtual Reality

Posted on October 22, 2017 by ddeal

Facebook wants to make the world better with virtual reality.

At last year’s Facebook F8 event, Mark Zuckerberg articulated a simple vision for making virtual reality mainstream: social VR, or connecting people in the virtual world. But now Facebook has bigger plans. Delivering the keynote at the Oculus Connect conference October 11, Zuckerberg shared a future in which VR improves every aspect of our lives beyond social (naturally, with the help of equipment created by Oculus, owned by Facebook). He also raised eyebrows by announcing that Facebook wants to get one billion people to adopt VR.

Whether Facebook delivers on this vision depends on three factors: accessible equipment, content, and business adoption.

Mark Zuckerberg Updates a Vision

Oculus Connect is an annual gathering of developers and content creators, and because of Oculus’s influence on VR, the event is a bellwether watched closely by the technology industry – making it an ideal venue for Mark Zuckerberg. He used his keynote as an opportunity to redefine VR as a way to improve all aspects of our everyday lives, beyond connecting people socially.

“We believe that one day almost everyone is going to use virtual reality to improve how we work, how we play, and how we connect with each other,” he said. “[Virtual reality] is not about escaping reality. It’s about making it better. It’s about curing diseases, connecting families, spreading empathy, rethinking work, improving games, and, yes, bringing us all closer together.”

He also said, “We want to get a billion people on virtual reality. We have to make sure virtual reality is accessible to everyone.”

He didn’t give a timeline for achieving that goal, but to put things in perspective, in the United States, there are probably only 9.6 million people who use a virtual reality at least once a month according to eMarketer.

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Why Sprint and Tidal Are Hustling Music Together

Posted on January 23, 2017 by ddeal

Tidal needs a financial partner. Sprint needs new customers. The two businesses just took a step toward addressing each other’s needs. Sprint has announced a 33-percent stake in Tidal, which will “give Sprint’s 45 million retail customers unlimited access to exclusive artist content not available anywhere else,” according to a press release. In other words, the relationship promises to deliver content from Tidal artists only to Sprint’s current and new customers. Sprint’s chief executive officer, Marcelo Claure, will also join Tidal’s board of directors.

The Sprint/Tidal partnership is another example of artists and brands joining forces to distribute content. The premise of these co-brands is simple: artists provide content that the brands can hustle to acquire and retain customers or to generate awareness for a brand and its products or services. The brands give the artists a distribution platform for their music. (When a business uses an artist’s song in an advertisement, a similar principal applies: the business uses the artist’s music as a hook to get the attention of consumers, and the artist gets exposure). The Sprint/Tidal relationship contains two important elements:

Exclusivity: Sprint will rely on Tidal to provide content available only to Sprint customers. That content could potentially assume a variety of forms, including the release of exclusive songs, concerts, video, and experiences involving augmented reality and mixed reality.

Commitment: as noted in the press release, the relationship will “include the establishment of a dedicated marketing fund specifically for artists. The fund will allow artists the flexibility to create and share their work with and for their fans.” According to Billboard, the fund will consist of $75 million annually.

Jay Z, the major owner and founder of Tidal, has a well-established track record for forming distribution deals with brands. He created the template for the Sprint/Tidal deal in 2014 when he and Samsung agreed to distribute one million copies of his Magna Carta Holy Grail album through a special app exclusively on Samsung phones before the album went on sale publicly. Samsung reportedly paid $5 for every album, meaning Magna Carta Holy Grail sold $5 million before a consumer purchased a single copy. Samsung became a music distributor overnight (a model that Samsung later repeated with Rihanna).

Jay Z rebooted Tidal amid considerable fanfare after buying the company in 2015 with the promise of high-quality streaming content from an artist-owned business. (At the time, Sprint was exploring but did not commit to a relationship with Tidal.) But Tidal’s journey since then has been problematic, with the company losing millions and suffering some high-profile PR problems. Tidal said it enjoyed an increase in users after Beyoncé launched Lemonade exclusively on the streaming service before making the album widely available, and, overall, Tidal claims more than three million subscribers — but the company has been accused of inflating its numbers.

Meanwhile, Sprint is looking for leverage in its war with AT&T, T-Mobile, and Verizon to acquire and retain wireless customers. Verizon Wireless leads the pack, with nearly 144 million U.S. subscribers, while Sprint ranks a distant fourth, with 60.2 million subscribers. T-Mobile, with 71.5 million subscribers, claims that the carrier stole nearly a million subscribers from its rivals in the third quarter of 2016, including 300,000 from Sprint.

For Sprint, one answer to fighting back is to provide exclusive content and customer experiences. For years, telecom carriers have tried to out-do each other by offering so many combinations of services and billing options that the industry has become a bewildering experience for consumers. There are only so many ways a telecommunications carrier can continue to offer service packages. Providing interesting content and customer experiences is a way to differentiate, which is why Sprint recently signed a relationship with Niantic to offer branded Pokemon GO experiences.

Sprint has been offering music content for quite some time. In 2005, Sprint launched the Sprint Music Store, a partnership with labels such as EMI and Sony BMG Music Entertainment to sell songs. Sprint learned early on how to hustle music to acquire customers, for instance giving away five free songs to customers at launch. In 2007, Sprint was the official wireless sponsor of the MTV Music Awards. Sprint was more than a sponsor, though — it distributed content, offering a free live simulcast to Sprint Power Vision customers. In 2011, Sprint launched Sprint Music Plus, a free app for Android users to organize their music libraries and purchase songs and ringtones.

Sprint’s efforts to date have largely centered on song downloading. With the Tidal relationship, Sprint has updated its music distribution model for the age of song streaming. And for all its operational problems, Tidal possesses a brand name and the backing of not only Jay Z but also founding artists such as Beyoncé, J. Cole, Nicki Minaj, and Rihanna. (J. Cole recently released a surprise documentary, Eyez, on Tidal).

The Tidal deal gives Sprint a wellspring of music content that will target younger consumers with the powerful lure of new music — so long as Tidal continues to develop fresh artists, which is why I am especially intrigued by Sprint and Tidal earmarking funds to market artists. The fund could be a boon especially for developing emerging artists who need the money far more than Rihanna does.

Here is a golden opportunity for Sprint to develop its image as a forward thinking lifestyle brand of the future by developing up-and-coming artists, as many other brands have done so through an association with music. For instance, Converse operates the Rubber Tracks recording studio to give emerging artists free studio time. Coca-Cola has given exposure to new artists around the world through initiatives such as “52 Songs of Happiness.” Potentially, Sprint could offer its customers a first-look at emerging artists on Tidal, thus providing its customers a sense of hipness that comes with being the first in the know.

The proof of the pudding will be how well Tidal helps Sprint acquire and retain customers, which is a measurable number. If Tidal helps Sprint create momentum, Sprint’s shareholders will sing a happy song. If not, Sprint will inherit a bit more than 99 problems. Stay tuned.

Snapchat and Ed Sheeran: 21st Century Radio

Posted on January 5, 2017 by ddeal

The phrase “music distribution” sounds boring. And yet music distribution is where brands inside and outside music can learn about innovation, as Ed Sheeran and Snapchat have demonstrated.

A new Snapchat lens makes you appear as though you’re wearing a pair of blue sunglasses while listening to a clip of one of Sheeran’s new singles, “Shape of You.” Lenses are one of Snapchat’s addicting features. They allow you to transform your face into, say, a zombie, or adorn your appearance with cute little stickers. The latest lens, while simple in appearance, adds the sonic touch of Sheeran’s song. This is a brilliant piece of marketing that gave Sheeran exposure for the single before it was released January 6 — and an example of how artists need to hustle their content.

Anyone can publish music now, thanks to platforms such as Bandcamp, Reverbnation, or Soundcloud, or social media platforms such as Global 14. The proliferation of music discovery platforms is good for creators and listeners. But publishing your music on Soundcloud isn’t the same as reaching an audience. Few artists succeed by simply being found. Here is where distribution comes into play.

The days of relying on record labels and radio to expose your music to the record listening public are long gone. Nowadays, an indie artist such as AM getting his music played in a Victoria’s Secret ad is a major distribution coup, and OK Go collaborates with brands on content creation and distribution. A brand can act as a content amplifier as well or better as radio can. And an AM, who appeals to a more narrowly defined audience of aficionados, needs a brand to break through to a larger audience. AM also licenses his songs for television and movies, which act as media platforms for his music.

But distribution has become even more sophisticated than getting your music played in an ad or piped into a hotel lobby. These days artists are collaborating with apps, games, and devices to find a lane for their songs. In 2013, Jay Z and launched an innovative deal with Samsung to distribute one million copies of his Magna Carta Holy Grail album through a special app exclusively on Samsung phones before the album went on sale publicly. In 2016, Rihanna and Samsung repeated the model for her album Anti.

Jay Z, Rihanna, and Ed Sheeran are all big-time artists, but they also understand the reality that the music industry has a short-term memory. You can’t rest off the laurels of your last hit. You have to hustle your music widely, then keep it in the public eye through heavy touring, merchandising, and relationships with brands. Ed Sheeran has not released a single since 2015, which is an eternity. Even Ed Sheeran can’t drop new songs and expect anyone to listen. He has to work at finding his audience, and Snapchat is an excellent music distribution channel for millennials. The app has reinvented itself from a messaging app into content storytelling platform for users and brands, ranging from the NFL to musicians — and not just Ed Sheeran. In 2015, musician Goldroom shared an EP of four songs on Snapchat, with each song clip forming a larger story.

The Ed Sheeran example is instructive to anyone who creates content, whether you’re a musician, podcaster, or blogger:

Find the right platform for your audience. Snapchat is perfect for Sheeran’s millennial-friendly music. It’s like Snapchat is the radio station with the right format. An app like Musical.ly, on the other hand, is ideal for younger digital natives.

Be ubiquitous. Snapchat has 60 million total installs. It’s on every millennial mobile phone across the United States. In effect, his song transforms each mobile device into an Ed Sheeran streaming device. Covering his bases, Sheeran also released a snippet of his song on Instagram, but not to the level he did through Snapchat.

Be natural. Embedding the song into a Snapchat lens works because playing with lenses is a natural Snapchat behavior. So the song does not feel intrusive.

Apps are where music distribution will explode. As I blogged recently, I believe that soon artists will debut new songs on Uber — another ubiquitous platform with the data tracking capability to deliver a well defined audience to a musician. I believe the same will happen with wearables. Wearables, especially used for exercise, are perfect especially because music is a natural companion to exercise. Wearables are already headed in this direction. The lesson is clear: if you want to find an audience, hustle your content to places where your audience lives. Snapchat and Ed Sheeran get it.

Rihanna and Samsung Create an “Anti” Moment

Posted on January 31, 2016 by ddeal

Rihanna’s Anti went platinum in 15 hours. But before you think, “albums are back!” bear in mind a big caveat: Samsung bought one million copies of the album and gave them away. For Rihanna and Samsung, Anti going platinum is not about record sales — it’s about creating a moment that earns attention for two giant brands at a time when attention is currency, as Brian Solis has noted. There are many more moments to come, as prepares to launch her Anti World Tour, where the real money will be made.

What $25 Million Will Buy a Brand

A platinum album is certified by the Recording Industry Association of America (RIAA) as selling at least one million copies — a difficult feat to achieve in the digital age. Only three albums released in 2015 went platinum: Adele’s 25; Drake’s If You’re Reading This, It’s Too Late; and Justin Bieber’s Purpose. Adele, Drake, and Justin Bieber all earned their sales the traditional way: by releasing and promoting music for consumers to buy, stream, and download (with the exception of 25).

But Rihanna rolls differently. In 2015, she signed a $25 million deal with Samsung, through which Samsung sponsors her album and tour, and Rihanna promotes Samsung’s Galaxy line of products. As part of their relationship, Rihanna and Samsung have been creating digital content together including video, website, and social media posts. Oh, and Samsung agreed to buy 1 million copies of Anti.

Samsung, in turn, gave away 1 million free download codes to its customers. Each of those downloads came with a 60-day free trial to Tidal, the high-end streaming service that counts Rihanna as one of its owners. The entire album was available on Tidal before any other streaming service could have access to it.

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Apple Pays Dearly for U2’s “Free” Music

Posted on September 12, 2014 by ddeal

Photo credit: Marcio Jose Sanchez, AP

Let’s get something straight: U2 did not give away its new album, Songs of Innocence. To be sure, if you have iTunes, on September 9 you received a free copy (without asking for it) of Songs of Innocence. But Apple paid U2 an undisclosed amount to distribute copies of U2’s album to as many as 500 million iTunes subscribers — a deal announced on September 9 as part of Apple’s roll-out of the iPhone 6 and Apple Watch. Now, let’s do some math: in 2013, Samsung paid Jay Z $5 million to distribute 1 million copies of Magna Carta Holy Grail. Consider the lucrative sum U2 must be scoring ($30 million according to one estimate). And ponder, if you will, the $100 million marketing campaign the band is getting courtesy of Apple. These old rockers from Ireland have found a way to make a killing off a dying art form.

The distribution deal has created some backlash for both Apple and U2. For instance, music blogger Bob Lefsetz wondered why U2 would choose iTunes as its distribution platform, when more popular (e.g., YouTube) and hip (e.g., Spotify) distribution platforms are available. “They’d have been better off releasing it on YouTube, that’s where the digital generation goes for music,” he wrote. “iTunes is a backwater. It may be the number one sales outlet, but it’s not the number one music platform, not even close.” Plus, the approach of a forced distribution of content on to 500 million iTunes accounts is being viewed by many as obtrusive.

Photo credit: Peter Neill

On the other hand, what is a rock group supposed to do in order to make money off its music in the digital age? Album sales have reached an all-time low. Getting noticed for your art is harder than ever at a time when music is just background noise for our digital games, advertisements, and movies. Musicians are not making money off streaming services, and YouTube is hardly a sure bet to monetize music. No wonder Kiss frontman Gene Simmons recently declared that “rock is finally dead.”

Yes, dropping content into our iTunes account without our permission is a controversial move. But the approach is fresh and new, and the old ways are not working anymore in the music industry. The relationship with Apple has given U2 two precious assets: money and attention. By participating in the most important and high-profile day in Tim Cook’s history as Apple’s CEO, U2 has turned an album launch into a global event. Tell me: who else can do that? The $100 million marketing campaign will keep the album in the public eye in the run-up to Universal’s official release of Songs of Innocence October 13 — and, more importantly, will serve as advance notice for the inevitable tour.

And you can be sure a tour is coming. Because that’s why albums still matter: as a launching pad for other revenue streams, such as tours and merchandising deals. U2’s last tour raked in $736 million from 2009-2011. U2 just primed the pump for what comes next.

Update, 22 September 2014: since I wrote this post, the backlash against Apple and U2 that I mentioned has intensified, obviously. As Adweek reported, social media sentiment dropped for U2 by 41 percent in the wake of the deal. My take: years from now, the U2/Apple (and similar Jay Z/Samsung album drop from 2013) will be viewed as flawed but necessary experiments in monetizing music, and others will improve upon those approaches.

Music Streaming: The Haves and the Have-Nots

Posted on July 20, 2013 by ddeal

In recent days, I have blogged about the vast divide between the music industry elite and the have-nots. Last week I focused on the music elite via my post about Jay Z’s relationship with Samsung. (Jay Z responded defiantly by removing the hyphen in his name.) Yesterday my post about Thom Yorke’s war against Spotify focused more on the have-nots (such as indie musician Sam Duckworth), who earn next to nothing from streaming services. On July 19, Sasha Frere-Jones of The New Yorker also posted a thoughtful article about how difficult it is for emerging artists to generate any revenue from streaming services like Spotify. His well-written and well-reported piece also shows how streaming services favor the giant record labels for established artists with strong back catalogues, and I would recommend you read it. (For a dissenting view, I would also recommend two posts by Bob Lefsetz, “Thom Yorke vs. Spotify” and “Spotify?“). I don’t believe the solution to inadequate streaming royalties is for emerging artists to remove their music from Spotify (doing so sounds self-destructive, especially because Spotify gives musicians a platform to generate awareness). The music industry really needs an artist-owned music streaming/distribution service akin to United Artists in the movie industry many decades ago. Right now it’s coming down to big corporate brands like Coca-Cola and Mountain Dew to champion emerging artists. In 2010, Coca-Cola gave Somali-born rapper K’Naan a global stage via the 2010 World Cup tour. Mountain Dew runs its own label, Green Label Sound. Perhaps it’s time for another major brand named Jay Z to invest some of his own millions into a streaming service that champions the artists?

For additional reading:

Future of Music Coalition, “Does Spotify Make Sense for Non-Superstars?”

The Guardian, “Pink Floyd Back Catalogue Available on Spotify after Song Passes 1M”

The Independent, “Thom Yorke Spotify Criticism: Top Producer Accuses Radiohead Singer of Twitter Hypocrisy”

Update: NPR, “Paying the Piper: Music Streaming Services in Perspective”

Jay-Z Writes New Rules for Music Millionaires

Posted on July 11, 2013 by ddeal

Jay-Z says he’s writing new rules. But for whom?

The multi-millionaire rapper created a firestorm of PR by launching an innovative deal with Samsung to distribute 1 million copies of his new Magna Carta Holy Grail album through a special app exclusively on Samsung phones before the album went on sale publicly July 9. Samsung reportedly paid $5 for every album, meaning Magna Carta Holy Grail sold $5 million before a consumer purchased a single copy. Samsung became a music distributor overnight. And the Recording Industry Association of America was inspired to change the way it tracks the sale of digital albums to account for the 1 million units sold instantly. It’s no wonder Jay-Z has been tweeting about creating #newrules, and Billboard has gushed about “Jay-Z’s New Blueprint.”

Essentially, two big brands, Jay-Z and Samsung, are distributing music together as Jay-Z and Nokia did 10 years ago. But how repeatable is the Jay-Z model for the entire music industry? The example of Radiohead is instructive. Radiohead, another Continue reading →

5 Marketing Lessons from the 121212 Concert for Sandy Relief

Posted on December 18, 2012 by ddeal

Rock concerts for causes have come a long way since George Harrison and Ravi Shankar organized the Concert for Bangladesh in 1971 and raised $250,000 to help refugees in war-torn Bangladesh. The Concert for Bangladesh was an untelevised rock show (actually two of them) witnessed by 40,000 people in Madison Square Garden. By contrast, last week’s 121212 Concert for Sandy Relief was a multimedia experience accessible to 2 billion people globally, earning $35 million in one night (with millions more to come). Here are five marketing lessons from the 121212 Concert:

1. Extend Your Reach

The 121212 Concert, which supported Robin Hood Relief (a highly regarded organization assisting Hurricane Sandy victims), made it virtually impossible for you to miss the show. The concert was broadcast on 39 television stations, streamed to 25 websites, and aired on 50 radio stations, creating “the most widely distributed live musical event in history,” according to Nielsen. By contrast, even the highly successful 2001 Concert for New York City (which also benefited Robin Hood Relief) was broadcast on VH1 exclusively. If you wanted to watch the concert, they gave you no reason to miss it.

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