Thursday, October 11, 2007

Venues Rule: Madonna Signals Content Superstars Can Build Events Revenues Without Publishers

There are any number of people highlighting pop music superstar Madonna's jilting of her contract with Warner Bros. Records in favor of events producer Live Nation, the loudest of recent label signoffs that include pop bands Radiohead and Nine Inch Nails. Music publishers have been squirming desperately to keep consumers from dropping their habit of purchasing copyrighted content from them with lawsuits, DRM and any other types of mechanism they can manage, but sadly they have been unable to overcome the key factor in today's media: distribution is dead and relationships in the right venues rule.

To me the key factor leading up to this move was no doubt the bellweather Rolling Stones tour that recently completed with a record USD 500 million-plus in the bank. When creaking, croaking rock stars can pocket half an extra-large by filling arenas with little more than name recognition, why do they need allegiances to plastic disk distributors to reach people who love them?

I am reminded of our definition of content posted on Wikipedia in this regard: "Information and experiences created by individuals, institutions and technology to benefit audiences in contexts that they value." Events are content by any measure under this definition. We are seeing artists whose primary value comes to life in venues in which they can develop relationships with audiences discovering that music publishers are failing to help them build those relationships effectively in an era of Web-based content distribution. By focusing on protecting the unit sales of copyrighted materials music publishers lost the opportunity to negotiate a compelling position for themselves in the relationship building business that is at the heart of today's Web-powered content industry. Events producers know how to build a crowd and work it for maximum profit in the venues that matter most to an artist's audience.

This contextual approach to profiting from content is as old as artistic performance itself and one that is the dominant factor in the music industry yet again. Online venues such as social media sites that help artists to merchandise themselves to their fan base through videos and downloads and sponsored appearances help them to profit from relationships in valuable contexts as well. While the labels crow aoout six-figure copyright infringement suit awards and try to sue people for listening to someone else's radio at work these punitive actions only seem to decrease the value of their brands as credible venue sponsors that could build the marketable value for their artists.

Relationship marketing is all the rage on many levels of the publishing industry, including B2B trade publishing. B2B publishers are discovering that where once their events marketing was the tail on their revenue dogs increasingly events marketing and marketing through Cost-Per-Action pricing is putting more emphasis on conversational content and collaborative marketing efforts. Social media venues that are becoming increasingly popular in publishing add to the mix of content-as-a-marketable-venue plays that have little to do with yesterday's mass production publishing culture. It takes a different kind of producer to succeed in producing this kind of revenue mix - a factor that both music publishers and other publishers need to adapt to as quickly as possible. You can always make money selling copyrighted content, but today's money is in marketing what cannot be copied - the unique venues and the relationships that they foster built around valuable content.
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