Billboard magazine just ran a massive frontpage article about the band OK GO, (you probably know them for their cheesy and super-viral YouTube videos, like that one with the treadmills, “Here it goes again“). They’ve just split with their record label.
Long story short, they didn’t think EMI (the label) was doing enough for them, and EMI didn’t think they knew how to make money out of 50 000 000 views on YouTube. (That number’s just for one video, mind you. Their total is in the HUNDREDS OF MILLIONS.)
If you don’t mind me, this is kinda ridiculous.
If you don’t know how to make money out of that much publicity you are DUMB.
I market stuff on the internet for a living. Mostly products, sometimes services, and lately I’ve been working with a bunch of musicians to help them make money from their music celebrity. The bottom line in marketing is, “If you have a faithful audience, and you know what they want, you’re going to make money.”
Now, OK GO has an audience – there’s no question about that. They also clearly have SOME idea of what their fans want (they have not just one, but a STRING of massive, goliath-proportion, viral music videos. That’s something not everyone can brag about.)
But, EMI and everyone else in the music industry are too caught up in the old ways of doing things, selling CDs (and selling music in general) to see the wood for the trees. They DON’T KNOW how to make money from celebrity. They only know how to sell shiny pieces of plastic (and now 99c singles on iTunes.)
The record labels have cunningly adopted a clever Anti-Viral video business model
So – before I go any further, can you guess what EMI did when they worked out the OK GO was actually really, really good at making viral music videos that people loved and shared? What would you do? Probably, facilitate the process and help them become even more successful and build that audience, that long-term system.
Oh no.
That would too logical, and strategic.
So they did, what every suit-wearing, short-term gain corporate does in a squeeze. They decided to try squeeze cash out of it, and to try squeeze cash out of it NOW.
They stopped people embedding the YouTube videos – because they don’t earn money from YouTube if you embed the video on your blog or share it with other people. They forced fans into a teeny, tiny little cage on VEVO (the record-label bit of YouTube) and said, “here we go, have your bread and water, son.” And let us enjoy our video from its pitiful confines.
This turned out bad for 2 reasons:
- Instead of getting that ASSLOAD of traffic and video viewers onto their email list and selling them stuff (celebrities don’t just sell what made them famous – Britney Spears makes more money selling her fragrance line than she does selling anything else!), they decided to cunningly tell those hungry-ass fans with money to piss off!
OK GO‘s views dropped by 90%! (New York Times) - OK GO left. The goose that laid the golden eggs is gone now. Sure, they might keep a golden egg or two with the rights to older stuff, but they’re gone. OK GO’s gone indie and they’re gonna take 100% of their profits from now on because they’re smart, and they get how marketing online works.
Don’t get me wrong. I don’t think record labels are always bad. I think they can be very, very good, if you’re very, very lucky. They are GOOD at selling CDs. And punting 3-5 artists really hard. This works!
But even if you do get signed to a major label, and you’re talented and people like you, but you’re not in the top 5 artists – you WON’T get the marketing talent or budget you thought you would. You won’t get punted everywhere. And guess what else? Instead of 100%, you’re now earning 10%. And you have to do what they say, or you’ll get sued.
It’s HARD to get rich, even as a famous artist.
Illegal downloads comprise 95% of all music downloads! Ninety-freaking-Five. This thing is here to stay. What we need to do is stop whinging about it and how it’s broken. And go get creative and work with what we got.
Here’s what they SHOULD have done:
- Let people share to their heart’s content. Help them share. Don’t worry about the quick buck from “royalties” on those views. Focus on building an audience, and building a list. Give people incentives to share, and tell them how to become a fan and join the free mailing list IN THE VIDEO. (A small percentage, between 0.5 and 5% of those viewers will join that list. These are the fans we can sell to.)
- Talk to the hardcore fans who signed up frequently. Share personality and life and offer them value – give them cool free stuff. Basically be cool to them and build a relationship. Listen to them and answer them when they talk back or ask you stuff.
- Make them an offer for even more stuff, that’ll make them even happier. This should be cheap stuff and get them to buy from you for the first time. You now have a QUALITY list of buyers, and have finally made some money from your fanbase (think of this all as a funnel, getting narrower and narrower as people spend more and more money with you, your goal is to help them move down the funnel.)
- Keep being cool to them. And then make them an offer for more expensive cool stuff that’ll make them even happier. High-ticket items (you know OK GO’s selling an exclusive fan package for $1200 right? But some people WILL buy it! And they’ll be very happy they did too.)
The I just signed the declaration of independence 'stache.
Now that’s a really simplified version of it all because that’s all we got time for here.
But, if you enjoyed this: I have a blog all about music marketing over at Christopher-Cox.com – come visit me over there and let me know what you’re thinking (you are thinking, right?).
And there’s more cool free goodies in my members area too (hint: I’m using the exact same model I just explained to you, and I’m gonna be super cool to you because I’m really sneaky like that. Telling you upfront and all.)
Cheers
P.S. What do you think? Show me you’re alive!
(and if you like this, please Digg it or vote it up.)
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Seriously some of the most awesome reading I did all week last week!
I was running the “Marketing” for my brothers band for a while (they have since dismembered). Ultimately their goal was to get signed, but I couldn’t for the life of me see why. I felt with proper Social Media presence, it wouldn’t be hard to turn the Band into a Brand, and start making money like CRAZY! My biggest problem was getting the virality to make them truly have a PRESENCE online, but bands like OKGO help/inspire every garage band everywhere to do just that.
As an added benefit, your “Should have Done” section above, doesn’t only apply to bands. Applying those principles to any business will help to increase profits!
FANTASTIC ARTICLE!
-Devon Jordan
Cheers – thanks Devon, that’s awesome. I absolutely agree. I think just about anyone who’s actually cool to their fans and looks after their mailing list’s gonna make money. It’s hard NOT to! If you have a relationship with your people, they’re gonna look after you because people buy from people!
I’m convinced at least. And I can’t imagine a space where it could be more true than the music industry, where personality, relationship and story are more important than just about anywhere else in the world!
Thanks for the feedback man, awesome to hear from you!
Chris
I love this! I started a band recently myself and everyone has been asking me if we are going to try to get signed. I had always heard awful things about record deals and how they hurt you more than they help you. Luckily I am with a group of guys that know ten times more about the industry than I do. But I wanted to do my own research.
Which is when I found this.
And this is incredible.
I found this article extremely helpful and I enjoyed reading it.
I will for sure be keeping up with your articles in the future.
Thanks!
Ariel