Social Networking, The Radiohead Effect and Three Things You Can Do Today

Written Oct. 1, 2007 by Tom Webster in Marketing + Social Networking with 2 Comments


Radiohead's new album comes out next week, and it won't be in stores. It might be on radio, but it needn't be, really. They are giving the whole thing away as 'donationware' on their web site--pay whatever you think its worth. If you want it for free--done.

The best band in the world just hit three birds with one stone:

* I don't need to go into detail on what this means to the labels.

* It challenges iTunes and their monolithic pricing model, which the labels have long railed against to little effect. This move, combined with the NBC situation, may provide enough disruption to allow other software vendors with more flexible pricing models to cut into iTunes.

* It also affects the radio business. We have already seen in at least one recent study that radio now finishes second to the Internet as the place to discover new music (and in the recent studies where this is not the case with the total, it is for persons under 30.) With no 'scarcity' in the Radiohead model, there will be no need to go to radio to hear it first--or hear it at all.

Most significantly, on Oct 10th, I have no doubt that Radiohead's web site will be the most visited music site on earth. You can't fight Radiohead (or the Master Chief). The process of music discovery is now a social mechanism--where the solitary listener used to rely on radio's "tastemakers," they now rely on like-minded individuals (either known or unknown), with these interactions facilitated by the Internet. The "Event" is also more important: just as Prince's recent giveaway of his CD in London spurred a series of sold-out concert dates (where the purple one presumably made back the money from his "loss leader") so too will the upcoming Radiohead tour be one of the biggest "events" of the coming year. Music is discovered and now increasingly transacted at 'events,' whether they are online or out-of-home or both. When I am at a party being "curated" by a DJ, and can get the song he just played beamed to my MP3 player or phone, that is the new model of music discovery.

While Apple will be damaged by this disruption to the iTunes Music Store model, they also know the importance of the "social", as evidenced by their deal with the biggest music retailer on earth, Starbucks. The new wifi functionality of the iPhone and Touch iPod will make Starbucks the curator and transactional facilitator of new music (whether it really is 'new' or just 'new to you.') and Apple will continue to get a piece of that.

And what does all of this mean to you? Here are three things you can do today:

* Build social networking into your web properties--but social networking that makes sense, not just a replica of Facebook. Social Networking around music already lives elsewhere for 12-24, but in formats like Country and Smooth Jazz, where new music is incredibly important for older adults, opportunities abound. Even in formats like Classic Rock, there are loads of opportunities to socialize around the best opening riffs, or the 10 All-Time Worst Song Lyrics.

* Find the arbiters of music taste online--and hire them. Let them talk a little, even. Let them ADD VALUE to your product.

* Become the podcast home for local, unsigned bands. Give them studio space and production facilities and send their fans to you to download podcasts of their shows, demos and singles.

Radio at the local level has little room in its budget to drive wholesale change until the group heads drastically change the model from the top down. But there is no need to wait when all of the things I just listed can be done for practically nothing today. You may not have the money to bring your website completely to 2007 standards today, but wikis are free and half-built by your listeners anyway, so why not build one this week? Or call our friends at Libsyn and start getting your podcasts online today, like WMMR's Preston and Steve have been doing for ages.

No matter what is happening to your budgets, remember that the tools to compete are all out there, and are generally either free or pretty darn close. I'm happy to pitch in, or use your own web staff. In either case, there is no need to wait, and no time like today.

Reader Comments

Your 2¢, in chronological order — add your comment below.
1  john parikhal on October 6, 2007 9:30 AM

Radiohead is part of a bold experiment - the reshaping of music distribution and sale. Apple will be delighted by their model, not threatened. They make money from iPods, not the music.

And the 'monolithic' pricing you refer to was their pushback against the record companies who wanted to charge MORE than 99 cents when iTunes started. iTunes allowed legal digital music sales to flourish.

iTunes makes over $100 profit on each iPod and they've sold 110 million. They are thrilled when artists provide more music to fill them up. It's the record companies who should worry.

2  Tom Webster on October 6, 2007 8:03 PM

Thanks for the comment, John. Monolithic is Monolithic, whether the price is high or low. There is a compelling case to be made for differential pricing for older titles (the model that Hollywood has used for years) and for subscription models (as we see with the Zune marketplace and Yahoo's integration with the Sansa Connect). Surely being able to fill up my iPod with an all-you-can eat music subscription would encourage hardware sales. You are right that they are thrilled when artists provide more music to fill them up, but when it isn't AAC encoded, or DRM-crippled, I don't need an iPod to hear it!

You are, of course, absolutely correct that the big worriers should be the record companies.

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