CourtesyKevin Keplar, director of technology for the Elliott School of Communication, sat down recently with 麻豆传媒's media relations for a Q&A concerning changing marketing and sales trends in the music industry. A number of musicians, including bands Radiohead and Coldplay and rapper Lil鈥� Wayne, have been giving away music or allowing fans to pay what they want. This new concept has baffled many fans and analysts alike. Keplar speculated what the reasoning might be, and what consumers can expect in the future.
Media Relations: Why would musicians sell music on a pay-what-you-want basis, or in some cases give it away free?
Keplar: There are a number of reasons, but certainly at the top of the list would be sticker shock. Record companies set the price of albums (CDs) and that price is based on recuperating the enormous cost of getting a band signed and recorded. Though it may only cost pennies to physically burn a CD, the consumer will end up paying upward to $20 for it in the store. Artists, in most cases, just want to get their art to the fans as inexpensively and efficiently as possible. Give a sample and it鈥檚 good advertising. When music is sold, most of the money goes back to the record company because they have been paying all the bills. The revenue generated by record sales pays them back. It is usually by the artist鈥檚 request that music is given away.
Media Relations: Do free and pay-what-you-want music have anything to do with the current economic slowdown?
Keplar: Certainly it makes sense. If you have the choice of paying the electric bill and buying a new CD, I鈥檇 think you鈥檇 pay the electric bill.
Media Relations: The term 鈥渧iral marketing鈥� has been used to describe what happens when consumers become acquainted with artists and their music for little or no charge while building awareness of the album鈥檚 release date. Is viral marketing a new concept?
Keplar: It鈥檚 been done before but not on this scale. In different forms it鈥檚 been around for a long time. Every bit of promotion helps. The concept of reaching consumers around the globe in this manner using the Internet is new.
Media Relations: Is viral marketing a good tactic for anyone in the industry?
Keplar: If you can do it, yeah. I can鈥檛 see how it could be negative, unless you鈥檙e losing money. If you have the resources, then I鈥檇 say do it.
Media Relations: Will consumers take advantage of pay-what-you-want music?
Keplar: I think it鈥檒l be 50/50. Some people might feel guilty and pay more and some people won鈥檛.
Media Relations: Some experts speculate that artists giving away music are making a statement in response to their record companies keeping too much of their revenue.
Keplar: Not necessarily. There are many artists trying to get their art out, and it鈥檚 not about the money. Anything you do to market yourself is valuable. I have read that George Michael is actually quite satisfied with the money he has made selling his music over the years and now just prefers to give it away on his Web site.
Media Relations: Musician/activist Billy Bragg argues in the British news publication The Guardian that the record industry needs to reverse its policies and pay artists a larger portion of the profits.
Keplar: I don鈥檛 know if it鈥檚 about negotiating a better deal. The record companies are paying the bills so I don鈥檛 blame them for wanting to make their money back.
This past year, Nine Inch Nails treated fans to their album for free. Trent Reznor, the lead singer, claimed to be so happy to be free of his record company obligations (his contract had just expired) that he was treating the fans to their latest album for free. He didn鈥檛 feel as though his band wasn鈥檛 making enough money, he just felt the fans were being penalized for wanting their music.
Also, online music sales have become very popular. Most albums are only $10 on iTunes, for example. It seems logical that the physical production of CDs has actually been reduced. I鈥檇 like to think artists should want to get their art out for the best price possible.
Media Relations: One of the solutions Bragg suggests is having consumers pay a license fee to download as much music as they wish. Do you think this would work?
Keplar: One way of testing this is looking at how popular Netflix is. The first two weeks I had an Emusic account (similar to iTunes), I downloaded all the music I possibly wanted and then they ran out of material. If the users aren鈥檛 happy, they aren鈥檛 going to use it. The subscription is a good idea, though. We鈥檙e all used to monthly fees with phone services and cable bills, etc. I鈥檓 always leery, though.
Media Relations: In your opinion, will this trend in music spread into other areas of entertainment such as movies or video games?
Keplar: There鈥檚 already some of that going on. You can go online and purchase films and in some cases watch them for free. You can go to McDonald鈥檚 and rent a movie for a buck. There are all kinds of Web pages offering monthly fees for downloading video games. I think we鈥檝e had a distribution process for so long (albums, tapes, CDs) that it鈥檚 been slower adapting to a new method. It鈥檚 not quite as popular for music, but it鈥檚 getting there.
Media Relations: Do you think consumers who are downloading music will begin to expect giveaways?
Keplar: I don't think anyone will come to expect giveaways necessarily. I think habits are pretty set for music buyers/downloaders, and seeing something for free is usually just a treat. But time will tell 鈥� habits could certainly change.