Six Pixels of Separation - The Blog
April 5, 200810:12 PM

Note To Marketers (And Musicians): Online Social Networks Owe You Nothing

David Usher started a new Blog called, CloudiD, where he plans on Blogging about all things art, technology and communications. He's got my attention and, based on the many comments he's getting on every Blog posting since it launched, others are paying attention to.

Just the other day he had a Blog post titled, Mike Arrington Should Shut Up And Sing, But Who Would Pay Him To Do That? (Dave, you figured out the gentle art of link-baiting pretty quickly ;) The crux of the Blog posting revolves around an op-ed piece Billy Bragg wrote for The New York Times titled, The Royalty Scam, and Michael Arrington's response on TechCruch titled, These Crazy Musicians Still Think They Should Get Paid For Recorded Music.

The crux of the back and forth?

Bragg argues that musicians should get a cut of the money that online social networks make (akin to royalties). Arrington says: "Note that Bragg neatly sidesteps the fact that music was uploaded to the site by artists (or their labels) themselves, with full knowledge that they would not receive payments of any kind (except free marketing, of course, and access to Bebo’s tens of millions of music loving users)."

And here's what David thinks:

"Artists signed and understood the terms when they joined MySpace or Bebo and they get to use this great network so they shouldn’t expect to be paid. Artists have been signing and getting screwed forever by the old model but that doesn’t mean they should, doesn’t mean its fair and it doesn’t mean we shouldn’t push for something better. The money is still in music, its just moved from the record companies to the ISP’s, mobile and social networks. It’s gone from copyright holders to ‘the pipe’."

Three sides to every story.

In the comments, I posted the following:

"...Should artists give a cut of ticket sales, sold out shows and merchandise back to social networks if that’s what they used - as their primary source -to promote the shows and drive people to buy tickets and merchandise?

I mean, after all, these social networks are giving them access to millions of people that, traditionally, they needed the record companies for.

Should Tila Tequila kick back some of the money she’s making off of her TV show, appearances, songs sold on iTunes to MySpace for the space and, more importantly, audience they gave her to promote herself?... The artists need the social networks to connect with their audience, and I believe artists are being 'paid' by these social networks through free web pages, access, etc… - a totally free environment - that’s pretty cool. As you know, it’s not cheap to set-up a web page with hosting and streaming media and then drive traffic there. These social networks are giving this to artists for free (which, the last time I looked, is much cheaper than what the record companies were charging for promotions, audience, etc…).

The rationale behind Bragg’s comments is like saying: 'the social networks should pay each member a portion of the sale because they would not be able to sell it if it weren’t for us - the individuals - who use it.' It’s a little bit of a long stretch (if you ask me)."

I know it's easy to slide into a debate about what the music industry should, could or would do, but that's not what I'm here to debate. I'm looking at you - the Marketers of the world - and saying: when we get involved in online social networks, be very aware that they are mostly used by individuals to connect to friends. If you think a Marketing play is going to be fully embraced, you may well be kidding yourself. All Marketing efforts need a net net result of keeping those you are connecting to interested in whatever it is you're doing. And, if you're successful (like many musicians are), enjoy everything that comes with it, without expecting some kind of additional revenue from the online social network.

Online social networks are an unforgiving space for Marketers (and musicians). If your message really doesn't connect, it will die (and it will be fast and painful). If it does connect, enjoy the fruits of the opportunities that come out of it, and nurture from there. Bragg argues that Bebo would never have been successful without the help of the musicians, and that's why AOL was quick to acquire them for 850 million. If Bragg feels like Bebo could not have done it without the musicians, then why did the music industry use Bebo instead of building their own online social network?

Apparently, Radiohead agree. They just launched their own online social network here: w.a.s.t.e. central.

By Mitch Joel


Comments Comments Feed
  • In every presentation I give about marketing using social media and social networks, I make this point:

    The whole function of a social network is to make money off aggregating a whole bunch of people and showing them ads.

    The whole function of our marketing campaign is to use the people that the network has gathered and get them off the network to our properties as fast as possible.

    This is a fair trade. They did the hard work of aggregating all the people. In exchange for not paying them for that audience, I in turn forfeit deriving money from the audience while it's on their network.

    Marketing on social networks is no different than marketing anywhere else. Find the audience, isolate prospects, make an offer to turn them into leads, convert them to customers, transform them to evangelists. Doesn't matter whether you're talking Facebook or Fox News.

    Deviate from this sales funnel at your peril.

    Reply
  • You're right, Ninja. I also think that the stakes are higher and harder for conversion when you're in such an immersive and interactive environment, like an online social network.

    It's not like consumers are sitting back and watching television. These channels are fast-paced and fluid, so you really have to up your game.

    The winners get huge returns. The others tend to complain how unfair everything is.

    Reply
  • Posted by david usher
    Mitch Joel

    i know im pushing buttons with the post title "mike arrington should shut up and sing...":), but so is he when he uses a photo of billy bragg with the text "sing more, talk less". i not imagining for a second that myspace is about to change its metrics and payout artists. what i am doing is trying to highlight the the fact that artists drive traffic and this can give them power. we are the worst sort for organizing but the model is in flux and there are a lot of opportunities for broad thinkers to create new networks. 50 cent has started his own social network, radiohead just started theirs. this might be a good time to visualize new something with different metrics.

    Reply
  • I think musicians (and record labels) need to realize and understand the difference between digital channels to promote and market themselves, and those that can be used for sales.

    There may be moments when the two can be done at the same place... and moments when they can't.

    Traffic is not sales... traffic might just be a better marketing/promotional opportunity.

    Reply
  • Posted by Rob
    Mitch Joel

    I think that your friends list on any given social network is probably as small or large as your actual fan base statistically. Where the Facebook's and MySpace's of the world fit in is in providing audiences--yes--but more specifically it is an audience that is REGISTERED to a given social net. This allows fans to find and "friend" you with ease in a comfortable, established environment.

    Should musicians be paid for using social nets? Of course they should. We can argue about ad dollars here but the real issue is that in using Facebook for example, David Usher legitimizes the site to his audience. I legitimize Facebook with my Fixion Media company page too. So does Twist Image.

    Without such vibrant bands, brands, and content there is pretty much no point to social networks. There's only so much I want to get poked or write on someone's wall.

    Therefore, without "us" social networks don't exist. Our legitimization of networks X, Y, and Z gives these companies access to: web trends, ad dollars, personally identifiable information, and a slew of other not-so-obvious perks.

    In music media circles, many outlets are signing content distribution deals directly with labels. The catch? The media outlet might have to cough up a percentage of ad revenue in exchange for the rights and priveledge of displaying a music video, audio stream, etc. This will become more common as labels move to providing media with access to musicians and content as opposed to representing actual music. Think of it as glorified PR, but with payola involved.

    Coming from the ad network business with a background in online publishing, I realize that the promotion and potential exposure from social networks might be great to some. There's just something in the back of my mind that wonders why we are all so willing to give it all up for free? Social networks by-in-large own the rights to everything you upload without compensation. (Not to mention they store it in perpetuity) Why not just build a simple dot com so that you can have access to site analytics... your own database of newsletter subscribers... and keep everything centralized for fans rather than across multiple social nets? From a fans perspective that would seem more logical. But more so, your own dot com gives you the freedom to express yourself as opposed to a social network which is defined and rigid.

    Reply
  • Posted by Bob LeDrew
    Mitch Joel

    There seems to be a real groundswell of discussion about economic models for musicians and music right now.

    People who are interested in this may want to check out a new tool that we've created. At the risk of being hyperbolic, 76fanclubs holds the potential of revisioning the whole music business, from a 'product' economy (CD / MP3) to a 'process' economy -- people supporting the musicians they love DIRECTLY.

    Reply
  • Posted by helen2008
    Mitch Joel

    This article gives the details to the marketers online social network I mean, after all, these social networks are giving them access to millions of people that, traditionally, they needed the record companies for.

    Thankyou for your information....
    its nice...

    Reply
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