According to Forrester Research…
In 1999 total revenue from music sales and licensing was $14.6 BILLION DOLLARS.
By 2009 total revenue from music sales and licensing was $6.3 BILLION DOLLARS
In ten years time from 1999 to 2009 total revenue shrank 43.2%
Current Situation: Optimistic
The IFPI digital music report 2013 makes 3 interesting points…
1.) “Global recorded music revenues up 0.3 per cent, boosted by downloads, subscription and other channelDigital revenues up 9 per cent, with major music services now open in more than 100 markets”
2.) “Digital revenues up 9 per cent, with major music services now open in more than 100 markets”
3.) “Music is helping fuel the digital economy, but barriers to growth need to be addressed”
The IFPI digital music report sheds some insightful light into the current health of the music industry. Global recorded revenues are up .3 per cent! That’s right, GROWTH. Before 2013, the last year that the music industry saw growth in sales was 1999. Since 1999 up until now, industry sales have plummeted. It’s not rocket science. The music industry pulled a profit this year simply because of digital music purchases and music subscriptions. CD sales, like every year since 1999, declined an additional 5% for 2012 while digital sales rose 9%.
So I hope by this time that you’ve noticed the trend. The digital sale of music is the future. Hypothetically speaking, the meteorite that crashed into the CD sales in 1998 will finally kill off every CD sale by 2019. That’s right you heard it here first, the sale of music CD’s will become a novelty by 2019. This fate is certain.
I’m quite pleased that the numbers for 2012 are pointing in the right direction for the music industry, however, we’ve got a long ways to go and we need to strive, as marketers and musicians, to make this upward curve in digital music sales as steep as we can year after year. This can all be made possible with proper e-marketing techniques and kickass music.
Don’t worry, you can count on the music being kickass, that leaves the whole industry in the hands of marketers. Marketers totally blew it selling CD’s after 1999. The marketing mix for CD’s was so screwed up during that time. 12 track albums were selling for as much as 19.99! That’s ludicrous, and it brings me to my next point. Marketers must convince consumers that there is value in buying a digital album or single because there is an alternative, digital music piracy. When a consumer is faced with making a decision between stealing a free album or purchasing one that’s over priced the consumer will most likely not purchase the album and pirate it online. There are laws in place to punish music piracy, but let’s get real here, these laws only deter piracy an insignificant amount. Without a doubt, the future of music rests solely in the hands of marketers.
How the 3 P’s of marketing should be implemented into the marketing industry:
Product: There are hundreds of thousands of artists worldwide. In a perfect world every musician would get the same amount of exposure and the invisible hand would take care of the rest, however, the world aint perfect. Marketers will be faced with the decision of choosing bands that they feel will generate the most revenue and market them the most. In doing so, market trends must be closely monitored and evaluated.
Placement: Any marketer will tell you that placement is vital. Marketers will define optimum target markets and market the music directly to that target in the most efficient and effective manner as possible. Market research and advertisement is expensive and budgets are finite. The selling of digital music makes it possible for marketers to target music fans in any area around the world where there is an internet connection.
Promotion: Most of the budget towards marketing music should go towards e-marketing. Marketing over the internet will not only be cost effective, but it will also be the most efficient way to reach potential clients around the globe. When I feel the need to bring out my heavy side sometimes I’ll throw the German supergroup Rammstein up in the tape deck. E-marketing of bands such as Rammstein keep me and users alike posted on what they’re up to.
Price: Simple, don’t get greedy and set the price where demand meets supply aka the equilibrium price and the music industry will maximize profits!
Conclusion: Be aware, the music industry is back on the come up! Support your favorite bands and don’t steal music!!!!!!!!
As I briefly touched on in my “About Me” page, the music industry is an ultra competitive market. You have major labels, small labels, independent self promoted artists, and then there’s www.tunecore.com. In reaching out to artists across the globe, Tunecore proclaims, “We put your music on iTunes, Amazon, Spotify and many other stores. We collect and give you 100% of the money from your music sales along with detailed streaming and sales reports” (www.tunecore.com). Basically, Tunecore offers online e-marketing and distribution services to all artists.
At this point I bet you a wondering how Tunecore is a profitable business if they let the artist keep 100% of their royalties. It’s genius. Part of Tunecore’s revenue can be attributed to member sign ups and annual fees. There are a few different tiers and categories that you can choose from when signing up, you can view those here. The other way Tunecore pulls in money is through charging the artist a minimal fee every time they collect royalties via Tunecore.
Now that we understand how Tunecore makes their money, let’s talk a little bit about how they market their artists. Earlier I punched in Tunecore’s url into the Hubspot Marketing Grader. I had a feeling they would be rated high, but I most definitely was not expecting them to have an overall grade of 90. Their high rating can be attributed to their frequent blogging of Tunecore news and releases, their activity on Facebook, their twitter account, RSS feed, and it’s optimized mobile version of the site. In looking at Hubspot’s marketing critique of Tunecore, the number of sites that have links to their site is what stood out to me most. 3,954 sites provide links to Tunecore’s site. That’s pretty good exposure.
Without a doubt Tunecore is more than efficient at utilizing social media to their advantage in order to market their service and artists alike, however this is not the only way their artists are marketed and it doesn’t cost Tunecore a cent. Tunecore distributes music through the following music outlets; Itunes, Spotify, Amazon MP3, Deezer, Simfy, Rhapsody, Myspace, Medianet, Muve Music, Rdio, Iheart Radio, Xbox Live, Google Play, Nokia, And Emusic. Each of these music providers also have their own marketing departments. The way these companies make money is by selling music. You better believe that they are going to do their best to market their content in order to lure their target market and secure net profits.
With these reasons that I have stated above, I think that Tunecore should be a viable option for any artist no matter how famous or underground they are. Of all the ways an artist can distribute music, Tunecore seems to be the most cost effective, take the man out of the equation and do away with the old ways of major record labels that solely care about money and volume of sales. I really do think that Tunecore can change the way the whole world distributes music! Check them out!