Music should look like professional sports

Famous football songsI was understandably rankled when I read about the recent merger between Ticketmaster and Live Nation. Just when we were getting some competition going in the live ticket sales industry, we’re going back to the monopoly. In the article, the writer tried to put a positive spin on it by saying that perhaps now they’ll go to an auction-based ticket sales format so that artists can get paid the true value of their performance (much of which is now captured by Stubhub and ticket agencies on the secondary market).

The thought of an auction is a bit scary. Demand for hot show tickets in most cities is out of control, with individual tickets to most desirable shows going for 2 to 3 times their base sales price – typically hundreds of dollars each. It seems like you’d be able to see a lot fewer shows than you do in the current system.

But for the sake of comparison, let’s look at another public-venue entertainment industry: professional sports. One of the reasons professional athletes get paid as much as they do is because of the economic concept of “rivalry.” Simply put, rivalry identifies whether a good or service can be enjoyed at the same time by more than one person. For instance, only one person can eat my box of junior mints. Therefore that box is only worth the three dollars the movie theater overcharged me. However, the movie we sit down to watch can be enjoyed simultaneously by everyone in the theater. That is why one movie can be worth hundreds of millions of dollars (if it’s any good).

Professional sports teams and the athletes that play for them know this. They do as much as possible to get their on-field activities in front of as many people as they can. People pay top dollar to attend events, with ticket prices set close to market price, and then the leagues have massive TV contracts that bring the events to people all over the world. Merchandising and celebrity-athlete spokesperson contracts are for huge amounts of money, fueled by TV availability and awareness (the Dallas Cowboys, Chicago Cubs, and Notre Dame Fighting Irish all excel at grabbing national attention, which is why they are more valuable than other teams in their leagues).

So why aren’t rock concerts like that? Why can’t you watch them all live on TV (I know some of them are on pay-per-view, but that doesn’t count)? Well, I’ll point an accusatory finger (again) at the packaged media business. By putting musical content on to a tape, a CD, a DVD – by slapping DRM technology on digital downloads –  media distributors are trying to introduce rivalry into a medium that is characteristically non-rivalrous. Follow me?  Music is intangible, abstract – not at all like my junior mints. When people say that “music wants to be free,” they don’t mean without cost. They just mean that it, by its very nature, is supposed to be enjoyed by more than one person at the same time.

The economic reality of music and the musicians that produce it is that they are like professional athletes, and that economic reality is now causing a collapse in packaged media sales. Because you just can’t fight the nature of something.

What do record companies do? Is the music industry going shrink or even <gulp> collapse? No, not at all.

A big part of the solution is to follow the lead of professional sports. Raise tickets prices so your “athletes” get paid what they’re worth. Don’t fire everyone who works in your packaged media business. Move them over into a new type of distribution job for “ConcertTV” channels 1-20 that air live concerts of all types from all over the world on cable, 24/7. I’d pay $15 a month for those channels. With this increased personal exposure for artists, ramp up the merchandising and sponsorship dollars (there is so much that could be done here that isn’t being done). More distribution and marketing jobs there, too.

The side effects of this approach? Prices for albums lower further to a price that lets more people enjoy more of the good stuff (25 cents a song, anyone?) – music becomes more accessible and demand is further stimulated. Supply follows: Bands tour more, more venues are built, more musicians can actually make a living doing it on the low end – music becomes bigger and more diverse. Bands that can’t actually play their instruments, are supported only by good production and marketing, or write albums full of filler can’t put on a decent show and fail – music becomes more about talent and quality.

I for one think the above realities will come to pass regardless of what the record companies do, and I’m pretty excited about it. But I’d like to see the record companies continue to employ the good people they have, I’d like to see the transition happen faster and with less heartbreak. So here’s hoping that sometime soon, during a Sunday afternoon football game, a few record executives have epiphanies.

Photo Credit: Originally uploaded by Mark Sevigny

Can marketing agencies evolve into social?

The other day I read a great blog entry over on Mediapost that talks about how “The Future Agency of Record Will Be Social.” In it, Joe Marchese of Socialvibe opines:

There is a quiet battle raging in the advertising industry over who will become the Agency of Record (AOR) for marketers’ social media efforts. With traditional media for delivering advertising declining in reach and effectiveness, and an even greater call for advertising efficiency in a down economy, becoming a marketer’s social media AOR can be a huge win and provide a map to a much-needed new business model and revenue stream for agencies.

Later in the article, Joe gets into how basically every possible classification of agency (from PR to Media to Interactive) could potentially evolve into the coveted role as the social media AOR. But by doing this potato-evolutionhe more or less makes the point that every agency will have to evolve to keep their seat at the table, because the social web is changing how every marketing discipline is practiced. But what does it mean to evolve? How does an agency’s DNA need to change to grab the social media brass ring?

I joined Powered a little over a year ago from an interactive agency in Chicago. In that move, I got to transition from one company whose focus is on more traditional (though sophisticated), online programs (corporate/brand web presence, relationship marketing/CRM programs, campaign sites) to another whose focus is social marketing (branded communities).

The transition opened my eyes to some of the evolutionary differences that Joe is surfacing in his article, albeit solely within the interactive marketing space. (Perhaps others can speak to other areas like PR/Media in the comments?) The surprising thing is that although both my current and past company fundamentally build websites – requiring strategy, design, content, front/back end development, project management, and maintenance – they are strikingly, fundamentally different.

Creative Differences

The first major difference is within the creative teams of the respective organizations. Creative within a typical interactive agency is highly focused on elegant visual design. The primary goal is to catch the eye, connect to the user on an emotional level, and engage and convert them with inventive content. Most creative teams in agencies focus on hiring rock-star interactive designers, videographers, and creative writers. The social marketing provider creative teams are far less focused on visual design, and more on delivering content in an approachable way that taps into what users care about and starts conversations. Learning is a key aspect of good community content. Social marketers hire creative people who are rock-stars in journalism, education, and instructional design. Of course, I’m not saying an agency can’t produce content for a community any more than I’m saying a social marketing provider can’t produce content for a campaign site – it’s really more a matter of emphasis in the creative skill set.

Technology Lockdown

The more an interactive program stops looking like a website and starts looking like an application, the more opportunity there is for leveraging a reusable technology platform. Many agencies, especially those who deploy lots of relationship marketing or CRM programs, have developed simple platforms to enable the quick development and deployment of those efforts. In my last agency, we had a relationship marketing platform that we even branded “Backstage.” However, online communities are far more complicated from a technological standpoint and really have to be treated like a product in order for the technology to work reliably. For that reason, a social marketing provider is likely to have a much larger engineering staff (typically with separate product and implementation roles) and an enhanced competency around product management and development.

Experts who Talk, Experts who Listen

The added complexity of an in-market online community is also the reason for additional operational staff to support the effort. There are two roles here that will be atypical in a standard interactive agency. The first is the operations people who are there to watch over a community to make sure user-generated content is moderated and to enhance the experience by corralling resources to interact with users in real time. The second is a social analytics expert who not only understands typical web analysis and data mining, but also gets how to watch, measure, and mine UGC. These roles have to cooperate tightly with the strategic account manager (who also needs to have experience in planning community) to adapt and close the loop quickly as they learn – community members are far less patient than those who are participating in an email campaign.

Must we evolve?

So will interactive agencies choose to evolve into social marketing providers? And even if they choose – can they?

I think all agencies will need to evolve, so the choice is just a matter of timing. And I do think agencies can negotiate the pathway to social – in three different ways. First, I think the larger agencies will likely acquire social marketing providers who were born that way, integrating their capabilities and becoming instant players. Second, other smaller agencies will likely focus on campaign-oriented social media and interactive work (Facebook apps, Mobile apps, Twitter build-outs, UGC campaign sites), choosing to farm out communities to partners. Finally, still other agencies, small and large, might change tack and try to re-invent themselves as social marketing providers.

It’s this last pathway that presents the most danger, but recognizing that community is not just a new type of marketing program – but a new way of approaching marketing and a new organization to support it – is the first step to getting there.

This post is cross-posted over on Powered‘s blog, The Engaged Consumer.

Photo Credit: Originally Uploaded by Narly