Archive for the ‘viral marketing’ tag
BitTorrent ≠ Death of the Music Industry
The following is an essay I wrote in response to an assignment to identify and discuss my favorite viral marketing campaign and give the reasons why I selected it. I’ll put the grade up here when I get it, if it’s good enough. If I fail, I’m not going to tell you!
Viral marketing is not new, but its recent growth and increased power have brought it to the forefront of every corporation’s marketing department. Every conscience marketer of product or service is trying to create a way for the customers to work for them. File-sharing on services like Kazaa or on networking standards like BitTorrent is a great example of viral marketing. A music customer rips a CD and uploads the music files to share with friends or strangers alike. This is the perfect example of a virus in the market. The music starts with one customer, and then someone else downloads the song. If they like it, the song is shared with more people. If they like it enough, that someone else may purchase other songs or albums from that artist, go to a concert, or become a die-hard fan willing to spend hundreds of dollars on merchandise and experiences related to that artist, just like some of the fans of Nine Inch Nails did.
On Sunday, March 2nd, 2008, Nine Inch Nails released Ghosts I-IV for sale in a variety of ways. First, they offer a $5 package including all 36, DRM-free tracks in your choice of high-quality MP3, an open source, lossless format called FLAC, or in the Apple Lossless format which will work in iTunes. This package also includes many extra features. The next choice for $10 includes all of the above and a 2-disc CD pack shipped in April. For $75, you get the five-dollar package, plus the 2-disc CDs, plus 2 hardcover books, plus a data DVD with source .wav files of the recording sessions for remixing, plus a Blu-ray disc of the 36 tracks in extremely high-resolution audio. The last choice for $300 is a limited edition collection of only 2,500 sets signed and numbered by Trent Reznor which include all of the above and a four-LP set of Ghosts I-IV. Next to all of these choices to purchase they offered Ghost I, consisting of 9 DRM-free tracks, for free to download as a sample. They have also posted this sample on BitTorrent among other file-sharing avenues. Giving away something for free to entice customers to buy more is not a new concept, but doing it in the music industry, which has so readily sued its customers for sharing the music, is innovative. The standard thought in the industry is that if you give your music away for free the customers won’t buy anything from you. That theory is starting to fall apart and Nine Inch Nails’ album release is a prime example for how the industry can virally market the music and still make money on it and other premium products or services. By Tuesday, March 4th, all 2,500 limited edition collections had been sold for $300 each; that’s $750,000 from just the most expensive of the choices. It’s too early to say how well Nine Inch Nails will do from this release and marketing strategy, but I’m pretty confident that it will be a large success. Included with all of the packages are desktop wallpapers for your monitor, and more importantly I might add, twenty-two images specifically designed for use on the web. They range in sizes and design for instant messaging icons, webpage banners, images for blog posts, and any number of other uses. Nine Inch Nails wants to give its fans and all of the people who download the free sample an easy way to advertise and spread its product. Nine Inch Nails, Radiohead, and many other bands or artists are quickly catching onto the fact that viral marketing of their music is an important and viable means of generating revenue. They are also realizing that penalizing the fans for sharing the music with others is only increasing the number of people aware of the band and potential customers.
The reason I choose this campaign is because it is close to my interests and my experience. I am very interested in technology and music. The recent technological changes in the music industry have all happened within the grasp of my lifetime. The most significant change is the digital conversion which has happened most recently. Within this decade, 2000 to 2010, I believe that most music will move from a physical medium, such as record, cassette, or CD, to the digital medium. Digital allows for much more flexibility in the quality, access, transportability, et cetera. From listening to songs online, I probably bought 5 or 6 albums and then got my friends to buy several albums after listening to the music with them. The songs we listened to were less quality than when the songs were played on the radio, and much poorer quality than the songs on CD. The lower quality encouraged me to not be satisfied with the free listen but to pay for a higher quality or premium version. One of the music industry’s main concerns is the availability of pristine, high-quality digital songs that can be copied limitlessly. However, most consumers aren’t criminals and would be willing to pay for those perfect songs. This leaves the door open to give out samples of music at moderate sound quality for the purposes of viral marketing. The customer can get a medium quality sample of an album for free on a social networking site such as Last.fm or Facebook, which then entices them to buy the lossless, or perfect, quality full album from a music store or from the artist’s webpage. Change is coming for the music industry, whether they like it or not. There is a great opportunity for them to embrace file-sharing as a means of viral marketing and still be profitable, instead of litigating the fans for just spreading the word, and product, of their favorite music artist, which in the end only hurts themselves.
