Digital Models of Music:
A Case Analysis of The Music Industry’s Response to Technological Changes
Taurra SunEagle
A Capstone Project
Presented to
The Faculty of the School of Communication
In Partial Fulfillment of the Requirements
for the Degree of Masters of Arts in Public Communication
Supervisor: Prof. Lauren Feldman
April 26, 2010
i
Copyright © 2011
Taurra SunEagle
All rights reserved. No part of the material protected by this copyright
notice may be reproduced or utilized in any form or by any means,
electronic or mechanical, including photocopying, recording or by an
information storage and retrieval system, without written permission from
the copyright owner.
To obtain permission to use materials from this work, please submit a
written request via email to:
tsuneagle@gmail.com
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ABSTRACT
Over the past decade, the digitization of music has led to a significant decline in record sales.
The challenge for newer artists hoping to attain commercially successful (or at least financially
stable) careers, then, rests on their ability to reach a wide audience and captivate enough loyalty
to influence consumer spending. The construction of a fan base and development of loyalty are
supported through the frameworks presented in this paper. With the advancement of the digital
age, the theories of personal branding, social identity, and the two-step flow of communication
have become intertwined to create a model through which individuals share and embrace music.
This capstone looked at the force that the technological shift has had on musicians and, more
importantly, their audience. The noted frameworks were combined together to examine why and
how individuals engage in seeking and sharing music online and, further, what factors influence
the adoption of music. Justin Bieber and Arcade Fire were analyzed as examples of new artists
who have capitalized from the presented framework. The implications, then, lie in understanding
that while the Internet has contributed to a significant change in the music industry, its tools can
be harnessed for financial and artistic profit.
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TABLE OF CONTENTS
COPYRIGHT ............................................................................... ii
ABSTRACT................................................................................. iii
INTRODUCTION........................................................................ 1
INTERNAL DYNAMICS............................................................ 7
The music industry’s old model........................................ 8
The music industry’s new model..................................... 12
EXTERNAL DYNAMICS......................................................... 20
Diffusion......................................................................... 21
Two-step Flow................................................................ 22
Branding.......................................................................... 24
CASE ANALYSIS...................................................................... 29
Justin Bieber.................................................................... 31
Arcade Fire...................................................................... 39
DISCUSSION............................................................................. 46
Limitations and future research....................................... 47
CONCLUSION........................................................................... 48
REFERENCES........................................................................... 49
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INTRODUCTION
From the perspective of major record labels, the music industry is in a state of chaos. To
many new musicians who are vying to get noticed in the mainstream market, however, the music
industry is thriving now more than ever. The Internet has fostered a new age of communication,
connectivity, and access to information that has opened the floodgates for public consumption of
new artistic material. Over the past 12 years, the digitization of music has transformed the way in
which music is produced, distributed, promoted, and consumed. The effects of these changes
have yet to be seen in full force, but they have already had major consequences on the business
of music.
In 1999, the music industry’s revenue from recorded music sales hit an all-time peak at
$14.6 billion (Goldman, 2010). This was supported by record-high CD prices ($19 per album)
and pop idols whose manufactured image, rather than musical talent, helped to build a teen fan
base with huge purchasing power (Shah, 2008). By 2009, profits from music sales had declined
to $6.3 billion (2010). When computers and the Internet became household staples in the late
90s, music responded with the digital music file, or mp3. This digitization of music inevitably
led to the invention of peer-to-peer file sharing software, most notably Napster in the summer of
1999. The program, once downloaded to a user’s computer, allowed music lovers across the
world to search for and share files with one another. Within months, Napster had attracted 50
million users and sent the recording industry into a frenzy (Bergmann, 2004). Industry
executives and artists contended that, because music was intellectual property, file sharing was
stealing. Under this perspective, revenue from recorded music was destined to fall and the
industry would head for dissolution. Technology was killing the industry, or so we were made to
believe.
1
For newer artists, technology was a gateway to musical freedom. Musicians used to rely on
expensive studios to record, mix, and engineer tracks, but home desktops and portable laptops
made it possible for anyone to create a song with an inexpensive computer and music editing
software. Additionally, instead of relying on major record companies to finance the production
and distribution of CDs, musicians were now able to use the Internet, free of charge, to promote
and share their music online.
As the cost to create music dropped and the ease of record
distribution rose, a dramatic effect took place in the public’s consumption of music. Before
Internet-supported increased communication, music fans depended on record stores and radio to
supply music. Now, music insufficiency is a distant memory and, instead, we struggle with a
scarcity of consumer attention. Additionally, as the world has become increasingly connected, it
has also become increasingly complex. Humans, by nature, strive to organize and make sense of
a world with a seemingly endless supply of information and music. The sudden flooding of a
market has left musicians in constant competition for the sustained attention of consumers. The
music business, in turn, has experienced a shift from an industry that drives availability and
influence to one that is ever sensitive to the trends and demands from the public. Effective
marketing techniques now hinge on drawing in consumers rather than driving products toward
them. Bob Greenberg, the founder of R/GA, a New York-based interactive advertising agency,
recently admitted in a Washington Post interview, "Traditional agencies are set up as factories to
produce advertising, which is a dying industry. We're in the business of stimulating consumer
engagement, which is where things are going" (Pearlstein, 2006). The problem of discovery,
then, manifests itself differently for the creators of entertainment, consumers, and the venues that
connect them. (Rosen, 2002)
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As new musicians followed their audience to online environments in attempts to share
music, develop a fan base, and attain recognition, the Internet had important implications for a
comfortable industry that had just ended the most profitable decade in its entire history.
Although research studies and consumers argued against the industry’s claim that one
downloaded song was equivalent to one lost sale (Cheng, 2009), the industry continued to fight
the inevitable transformation of its business model. They sued file sharers and Napster, ran attack
campaigns, and jumped into the digital age with an aggravated customer and no plan for
adaptation. The Internet had allowed the consumer to acquire control of the industry. The
corporate model was broken.
The decade that followed the demise of Napster brought with it more court battles, a decline
in record sales, and failed attempts at adaptation such as government regulation of downloading
and subscription services (Knopper, 2010). But, as the business struggled to surface from
disorder, many artists found relief in the Internet’s novelty for targeted marketing and
interactivity with fans. New channels for targeting audiences meant that marketing could be
conducted in a more streamlined manner by utilizing email databases, websites, and social
networking sites for promotion. Some artists tapped into these resources by actively engaging
their supporters, breaking down the celebrity/fan barriers, and giving coveted access into their
own lives. Others simply let the music speak for itself and encouraged the sharing of their music
among online communities.
For established, commercially successful artists such as Britney Spears, Beyoncé, and
Eminem, digital marketing proved to be a mere supplement to traditional advertising. Although
record sales were significantly impacted by the digitization of music, many artists transitioned to
the digital age with a solid fan base and, subsequently, guaranteed sales with or without a
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personal online presence. Beyoncé, for example, maintains a fortified personal life and doesn’t
manage her own Facebook or Twitter (her Twitter, in fact, has nothing posted to it, yet has
garnered over a million followers). In November 2010, she released a concert DVD with
minimal promotion online. Within a week of its release, the DVD was certified double platinum.
(Sanders, 2010). The sales game, then, looks different for each artist depending on their tier,
genre, and the strength of their fan base. However, the digital age has established one fixed idea:
increased access to information and streamlined communication have changed the consumer.
For newer artists, the Internet provides a wealth of opportunities for product distribution and
self-promotion, but a subsequent intense competition for attention. As many music lovers turn to
the Internet to find new music, many executives and labels have followed suit and now turn to
the Internet to find new talent. Under the pre-21st century model, connectivity and
communication with fans was solely dependent on touring and traditional media. However,
artists today can begin building their fan base without the financial backing or resources that
come along with a major record deal. Record companies are increasingly drawn to signing these
artists who have shown an ability to create their own success. Many artists, however, have
established music careers without ever seeking the backing of a major label. This do-it-yourself
phenomenon has not only been made possible by advanced and inexpensive recording
technology, but also the ease with which word of mouth spreads online. Whether artists rise
through the ranks with a major label or an independent label, the concept of creating an artist
from scratch, as Bob Greenberg noted, is dying. Talent that is backed by consumer support is the
new requirement.
This paper examines the role that contemporary online cultures play in the intentional
marketing and unintentional word-of-mouth processes that surround new musicians. Because the
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digital environment is organic and ever-evolving, the more recent dynamics involving the
promotion of new artists through social media and digital marketing have been addressed by few
academic studies; thus, this paper helps to fill the void. This study considers a case analysis of
Justin Bieber, who has quickly come to embody a new model of discovering and marketing
talent with a built-in fan base. As a point of comparison, this study also looks at Arcade Fire, an
independent band that has attained mainstream admiration for fusing time-tested methods with
modern technology to develop a devoted following. These case analyses help to examine
whether there are certain components of digital promotion that are integral to mainstream
recognition, the building of a substantial loyal fan base, and the ability to turn a profit.
While many academic studies have analyzed the impacts that online environments have had
on the distribution of music, none have examined this process by comparing a corporate-backed
artist with an independent band. This capstone constructs a narrative through which we can
understand how the passing of information happens in an online environment. It begins with
diffusion theory to explain the unseen and unintentional force that occurs when audiences
accumulate and contribute to a viral hit. The theory of a two-step flow communication will then
help to explain how buzz is created through the diffusion process, and how it can contribute to a
massive rise in an artist’s popularity. Branding and social identity theories then explain why,
once diffusion occurs, consumers are motivated to adopt an artist or song and continue passing
the material along. Justin Bieber and Arcade Fire are then examined within the context of the
framework to explain that, while online marketing of artists has success-driven components,
expanding and mobilizing an online fan base is still subject to variations of an imperfect model.
The conclusion subsequently explains that the contemporary rise of musicians through layers of
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success is dependent on their presence online. However, this presence manifests itself differently
across genre, audience, and status as an independent or mainstream artist.
6
INTERNAL DYNAMICS:
Understanding the Music Industry
The record industry’s reticence to embrace the digitization of music was predictable
because it fought each new technological innovation that came along over the last century. At the
end of the 19th century, phonographs were seen as threats to live shows and the opera. Musicians
worried that there would be no incentive to buy tickets to live performances if music was readily
accessible in homes. In the 1930s, the industry worried that broadcast music on the radio would
kill the motive to buy records. Why would anyone pay for music when they could hear it for
free? In the 1980s, cassettes made it possible for consumer duplication of albums and the
creation of mixtapes. Again, the industry worried that this would lead to a radical decline in sales
as people would group together, buy one album, and pass around recordings (Breen, 2004). Of
course, none of these fears came to injurious fruition. In fact, as with each technological advance
before it, home taping gave more people access to more music than ever before, and the appetite
for music only increased. A study conducted by The Copyright Royalty Tribunal found that
home tapers were actually among the most active record buyers (Kot, 2009). Under
contemporary music cultures, live music, radio, and recorded music are still in high demand
although each invention changed consumption. Throughout history, resistance and fear proved to
be futile and the industry inevitably responded to its audience’s demands by adapting the model
to fit each technological innovation.
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The Old Model
The record industry is a corporate machine. Its survival depends on sales from intangible
(live and digital music) and tangible (records and merchandise) products. Historically, this
fortitude has been supported by the structure of the music business. Record labels often function
under a large corporation called a music group, which also house publishing companies, record
manufacturers, and distributors. Because of the vertical integration that now manages the
creation and distribution of music, 80% of the contemporary American music market is
controlled by only four companies: Universal Music Group, Sony, Warner Music Group, and
EMI (Leeds, 2005).
Independent labels control the remaining 20% of the market (2005). These labels are run
on their own, without the supervision of a major label. They usually do not enjoy the resources
available to the big four such as financial backing, technical equipment, specialized and seasoned
personnel, and business contacts, but reap benefits of artistic freedom from commercial and
corporate restraints. Often, “indie” artists will record under independent labels, only to get
picked up for distribution deals through one of the major labels. Major labels, interested in the
entire clientele or brand of an independent label, sometimes buy out these smaller businesses
altogether. Several indie-turned-commercially successful artists follow this route from minor to
major labels. However, the Internet has transformed the independent industry from a steppingstone to an entirely self-sufficient business model.
The current state of the recording industry has its roots in the late 1990s when the major
labels (then Universal, Sony, EMI, Warner, and BMG) bought up many of the independent labels
that flourished throughout the decade’s widespread use of home studios and consumer recording
technology (Knopper, 2010). This process of acquisition, known as consolidation, had major
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effects for the future of the recording industry. With consolidation came pressure to produce
guaranteed profits. Shareholders, who wanted a steady flow of quarterly returns to justify their
investment, essentially ran record labels (Leeds, 2005). While this may have seemed like a
standard business model for any major corporation, it was not a sound strategy for a creative
industry that was supposed to be devoted to creating a highly volatile and unpredictable product.
No longer were artists encouraged to take time to develop and find their sound. Labels sought
desperately to manufacture and market sure-fire music brands. Singer/songwriter Sheryl Crow
was one of the most outspoken artists about the effects of consolidation,
It’s a frightening time as far as the music industry being an artist-nurturing industry. Now
everything is so numbers oriented and new artists get one shot, maybe two, to get a hit,
and that’s it. They sign two-album deals now. I was signed to seven albums and I was
given a chance to hone my craft…But now artists aren’t getting that opportunity because
there’s pressure to have instant hits. (Kot, 1999)
Michael Jackson, The Eagles, Bob Dylan, and other artists of the 70s and 80s not only
took their time to build an audience, but they built a career by being different. It was their
idiosyncrasies that made them interesting and gave them staying power. But the industry of the
late 90s didn’t want idiosyncrasy. The long-range career-building view was out. Instant payback
was in. Throughout this era, the acts dominating the charts were marketing triumphs more than
creative ones.
The relationship between label and artist may differ depending on what tier of success an
artist has reached. When newer artists enter into an exclusive recording contract with a major
label, the label is often involved in hiring producers and selecting songs to be included on the
final copy of an album. For established artists, the label is usually less involved in the recording
process and simply requires the artist to deliver finished recordings. In either case of new or
established, the label undertakes the manufacture, distribution, and marketing of the finished
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record. They then yield a profit by maintaining royalties on songs and taking a large part of the
revenue made on the recordings. In the age of the compact disc, the typical breakdown of
revenue from record sales gave the middlemen the vast majority of the split: 29 percent to the
label, 29 percent to retail, 15 percent for marketing and promotion, 6 percent to the distributor, 5
percent to publishing royalties, 5 percent for packaging, 1 percent to the musicians’ union, and
10 percent to the artists only after repaying the label for recording costs and touring (Kot, 2009).
Because of their vested commercial interest, record labels often make business-guided decisions
and ultimately find themselves at artistic odds with their musicians. The relationship between
independent labels and artists typically stands in stark contrast to those with major labels. The
main benefit to being an indie artist is the liberty to explore, create, and self-direct. Indie artists
maintain much more artistic autonomy than major label artists because the music is typically
motivated by artistic and expressive interests, rather than commercial ones. While, admittedly,
the livelihood of indie artists and labels depends on more than just creative fulfillment (and many
indie artists ultimately sign to a major label and hope to attain a commercially successful career),
countless music consumers still look to indie music culture as a more artistically authentic
faction of the music industry.
In 1999, the major labels were riding high on the heels of Britney Spears, ‘N Sync, and
The Backstreet Boys, otherwise known as the teen pop phenomenon. The success of these acts
was characterized by the development of their brand, rather than their craft. Potential pop stars
were paired with the most prestigious songwriters, producers and choreographers, media trained,
and given personal stylists who, quite literally, crafted their image. Many artistic veterans
attacked the industry’s pursuit of inexpensive hits and a quick return on investment. Recording
10
artist and producer Moby was particularly outspoken about the unsustainable business model that
industry executives had created,
It makes bad creative sense, and it makes bad business sense. Under the circumstances of
the music business right now, Bruce Springsteen and Fleetwood Mac would have been
dropped long before they had a hit because their first few records didn’t do that well.
Prince’s first few records were not huge sellers. So the major labels in pursuit of quarterly
profits are shooting themselves in the foot by putting out lowest-common-denominator
music that works on the radio but doesn’t generate any loyalty. There’s no room for
idiosyncratic artists. You have to fit the mold, and radio defines that mold. (Kot, 2009)
The record industry, in the words of Def Jam president LA Reid, “was intoxicated with
its own success, and it became bloated” (Lipsky, 2011). Executives were under the false
assumption that they had discovered a foolproof model. The problem with pop music, however,
is that manufactured artists cannot sustain profitability when their main product – the music – is
a mere afterthought to the overall brand. The genre is produced specifically for commercial play
on Top 40 radio, MTV, and in clubs. Furthermore, successful pop music is not typically
generated by listener preferences, especially at its initial introduction to the public. Payola, a
staple of the record industry since the advent of radio, is a practice in which record labels and
management pay radio DJs and corporations under the table to entice them to play a certain
record (Boehlert, 2001). “You can’t have a pop hit without spending enormous amounts of
money in payments to independent promoters,” said Trey Anastasio, a singer-guitarist for the 90s
indie rock sensation Phish, “Even that doesn’t guarantee you’ll have a hit. But if you don’t spend
the money, you definitely won’t have one” (Kot, 2009). Unsurprisingly, the industry’s
dependence on revenue from Top 40 music would eventually backfire because it forced them
into a unsustainable balance. While pop music fans tend to be fiercely loyal in the short-term,
they typically lose interest over time (Halperin, 2011). Of all the pop acts that came out of the
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late 1990s, only three (Justin Timberlake, Britney Spears, and – to a much smaller extent –
Christina Aguilera) went on to generate lucrative careers over the next decade.
The New Model
As Napster rose to phenomenon status in 1999, consumers started creating their own
versions of digital mixtapes. Music transformed from a tangible, sellable product to a digital,
sharable file. Not only had peer-to-peer file sharing turned consumers into distributors, but email
and instant messaging software provided additional built-in capabilities to share songs with
friends. The abrupt amplification of the spread of music worked to the benefit of bands and
artists whose ultimate success was built on the buzz that was created by sharing their records.
Meanwhile, established artists such as Prince abandoned their labels and took advantage of the
Internet’s capabilities for self-distribution (Larson, 2004). It seemed as if the need for a
middleman was on its way to being an archaic concept. Record labels responded by playing
policeman: unreceptive to consumers and preventing progress. In reality, the expertise of music
industry executives was very much needed at this point of transformation, but none were willing
to break from the traditional business model. As Warner Music Group CEO Edgar Bronfman
said at the GSMA Modile Asia Congress in 2007,
We used to fool ourselves. We expected our business would remain blissfully unaffected
even as the world of interactivity, constant connection, and file sharing was
exploding…By standing still or moving at a glacial pace, we inadvertently went to war
with consumers by denying them what they wanted and could otherwise find. And as a
result, of course, consumers won. (Aughton, 2007)
Frustrated with the industry’s reluctance, artists and audiences took it upon themselves to move
the music industry into the digital age without the approval of the labels.
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There were two basic schools of thought toward Napster. On one hand, record labels and
many established artists declared that downloaders were guilty of copyright infringement and
theft of intellectual property. Dr. Dre was one of the most forthright public figures to protest
what piracy was doing to their career,
The issue is basically this: they’re stealing my money. They are hi-tech bootleggers.
When I started making music I had a dream to do something I really love and make a
living from it and feed my family from it. This is a job. Free downloading is a good thing
for new artists who want to get their music heard. But for a person like me, who makes a
living from it, it’s a different story (Kot, 2009).
Many other established artists, like Metallica and Elton John, publicly objected to an invasion of
their craft. To their dismay, however, digital was here to stay. The floodgates to music discovery
had been permanently opened.
In contrast to the consumers-as-criminals position, digital music consumers and many artists
argued that file sharing was a natural response to technology. The labels, comfortable with their
$20-per-album model, initially ignored the potential impact of music’s digitization and left
Napster to create and dominate its own market. No longer were music fans restricted to listening
to music that was played on radio, shown on MTV, or sold by the local record store. The
Internet, in its true fashion, listened and responded to the demands of music consumers. Some
established artists, like Chuck D, diverged from popular corporate opinion and embraced this
shift of power, questioning the legitimacy of the label’s protest,
Piracy? The biggest pirates have been the record companies. The people running the record
labels are lawyers and accountants and they could be selling Brillo pads for all they care. It’s
not about the art at all. What has that got to do with the music? So when people download a
song, if it’s a good song, people want the artist…Downloading music gives people a chance
to be exposed to an artist, not just a Brillo-pad manufacturer. (Kot, 2009)
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As the argument for and against piracy played out between artists, labels, and consumers in
the courts and media, many newer artists were unintentionally reaping the benefits of new
technologies. The potential marketing powers of the Internet had yet to be seen in their full
forms, let alone harnessed by managers and music promoters. Still, indie rock bands like Death
Cab for Cutie became accidental success stories when they put their music online and it spread
like wildfire in the early 2000s. Nick Harmer, bass guitarist for Death Cab, explains their
unexpected expansion of popularity,
When we were having these face-to-face interactions with people who were coming to our
shows and letting us stay at their apartments, that's when we discovered what role the
Internet was playing. They’d say, ‘A friend of mine emailed me a link or sent me a song of
yours that I ended up really liking’…It seemed like magic; this thing was happening around
us that we really couldn’t control or really have a presence in…It was the equivalent of a big
party chat line where a lot of people were calling each other and you really didn’t have any
influence on shaping the conversation. You never asked for it, never did anything for it, it
just popped up and started running (Kot, 2009).
The underground band became a mainstream success in 2003 when it was featured on an episode
of The O.C. (a television show with a cult-like following among young adults that was known for
featuring relatively unknown bands in the soundtrack of each episode). The O.C. episode
coincided with the release of Death Cab’s second album, Transatlanticism. Within two years, it
had sold more than 325,000 copies and would be certified gold by 2007 – a remarkable hit for an
indie rock band without the backing of a major label (Read, 2010).
Piracy’s impact on major labels
Record labels, initially wary and ignorant of the power of Napster, jumped to shut it
down as soon as it gathered a substantial following. In late 1999, the Recording Industry
Association of America (RIAA) filed a lawsuit against Napster and by March 2001, an
injunction was issued ordering Napster to prevent the trading of copyrighted music on its
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network (9th Cir. 2002). Although the publicity surrounding the court battle boosted Napster’s
popularity among consumers (Napster: No such thing as bad publicity, 2000), in July 2001,
Napster shut down its entire network in order to comply with the injunction. Additionally,
hundreds of individual music downloaders were brought to court and sued under federal law that
held them liable for $750 to $150,000 per downloaded song (Dyrli, 2003). Unsurprisingly,
Napster users (who comprised a sizeable chunk of the music consumption market) were outraged
and confused. The PR fiasco that followed suit pitted industry against consumer. Music fans
were more motivated than ever to find a way to bring music into the digital age, with or without
the help of the music industry.
While the labels, executives, artists and the RIAA claimed that digital downloading was
destroying their industry, a study conducted at Harvard Business School in 2002 argued to the
contrary. Researchers found that file sharing had a limited effect on record sales, “While
downloads occur on a vast scale, most users are likely individuals who would not have bought
the album even in the absence of file sharing." Even high levels of file-swapping seemed to
translate into a positive effect on album sales (Borland, 2004). Many industry representatives,
however, claimed the opposite: that downloaders used Napster as an absolute replacement for
purchasing music. The argument over the adverse effect on sales, however, felt futile. In
accordance with music’s transformational history, it simply seemed that the industry was
fighting, rather than embracing, an inevitable change that had brought on a revolution in the way
that people consume music. Hank Barry, Napster’s chief executive officer echoed this sentiment,
“Piracy is helping, not hurting the recording and music publishing industry and artist. Like all
other advances in technology, what Napster shows is that more access to music leads to more
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interest in music” (Kot, 2009). At the root of the debate over financial implications was the fact
that the consumer had changed and the business needed updating.
The industry finally rallied profits from digital music sales with iTunes, Apple’s online
music store. It opened in 2003 and attracted more than a million sales in its first week by offering
individual song downloads for ninety-nine cents (Apple, 2001). The store didn’t so much revive
the music industry, however, as much as it set the stage for Apple to dominate the technological
gadget-driven economy of the 2000s. The volume of illegal downloading continued to dwarf the
official industry. Steve Jobs, Apple’s CEO, admitted in 2008 that only 3 percent of the music in
all iTunes libraries was purchased from the iTunes store (Hansell, 2008). If anything, iTunes
actually worked in favor of the consumer instead of the record label. Instead of offering a
replacement for piracy, iTunes provided the opportunity for customers to purchase music in a
way that they had preferred for decades: in the form of a single song. Until Napster, consumers
bought entire albums because there was no economical way to obtain the one or two songs that
they wanted. iTunes unearthed the ability to unbundle albums, and havoc ensued because the
industry was prepared for a revival, not a major blow to their business. Kunal Jerath, chairman of
independent label Gracie Productions, sees this as the primary issue that the industry and artists
face today, “Major labels are dropping artists because they haven’t figured out how to
successfully promote them and get their dollars out of it. People aren’t spending $10 on an album
anymore” (K. Jerath, April 15, 2011). A study by the Harvard Business Review echoed this
sentiment. It looked at music sales of 200 artists over two-plus years and found in 2011 that a 1%
increase in music downloads returned a 6% decrease in album sales (The music industry’s
unbundling blues, 2010). It seemed as if the biggest culprit wasn’t piracy, but the fact that
unbundling had allowed consumers to only buy 10% of what they used to.
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As piracy and unbundling became the new preferred means of music consumption, major
labels and record companies scrambled to find a new archetype to replace the $14.6 billion dollar
model. After cycling through many failed solutions, 360 deals are catching on as a potential
answer. These types of contracts give labels rights and percentages to artist's touring,
merchandising, and endorsements. In exchange for these rights, labels usually offer higher
advancement payments to artists and higher percentages in CD sales (Kaubian, 2009). These
deals, however, depend on the long-term maintenance and commercialization of an artist. For
this reason, the 360 deal model has brought along significant repercussions. Artist development
is key to sustainability, but labels now expect for this process to take place before they sign an
artist to a record deal (2009). The strategy is a throwback to the 90s business model under which
artists were manufactured, marketed, and still only signed to one or two album deals. Now,
however, this has simply transformed into a different strategy where labels expect artists to
undertake the development themselves. Rapper Wiz Khalifa, for example, spent years releasing
free mixtapes and building his fan base before he was offered a record contract (Maindrault,
2010). As Charley Greenberg, president of Roundabout Marketing, points out, “Labels want to
see teams with artists that are doing everything themselves before they invest their money and
time” (C. Greenberg, March 18, 2011). Meanwhile, however, the Internet has created a facet of
the music industry that is entirely independent of major record labels, making it easier for new
artists to produce, distribute, and promote their material.
In the midst of a downturn in music revenue, independent labels flourished. In 2005, CD
sales in the entire music industry were down 8% from 2004. The output from independent labels,
however, represented 18% of the market, the largest share that they had held in at least five years
(Leets, 2005). Although independent record stores were being driven out of business by the state
17
of the industry, indie labels took advantage of the shift of power from tangible records to digital
files and followed audiences online. They supported buzz that was being generated online about
underground acts by marketing artists through blogs, MySpace, and message boards.
Additionally, they sold, and in many cases gave away, digital music to interested audiences.
More importantly, indie labels stuck to their trusted model of running leaner operations (without
expensive music videos or engaging in payola) while aiming for more modest sales levels. In the
mid-2000s, an established independent label could turn a profit after selling roughly 25,000
copies of an album while a major label record couldn’t provide a return on investment until a
record sold at least 500,000 copies (2005). The record sales slump, coupled with the pressure on
the big companies to meet quarterly financial targets, played directly into the hands of small
labels that were willing to invest time into developing an artist and a fan base.
The transformation of the marketing model
It seems as if Moby’s nostalgia for a more substantial business model with idiosyncratic
artists has found an unlikely manifestation in the Internet. Even though major labels are no
longer eager to risk investment in artists that cannot produce an almost-guaranteed profit, the
Internet has allowed for more music experimentation among artists who can now autonomously
create buzz, develop their personal sound, and build a fan base without corporate backing.
Marketers find immense value in artists who initially find success on social networking
sites such as YouTube, MySpace, or Facebook. Many of these musicians have the advantage of
an established, captive market and streamlined channels through which their audience may be
reached. The old model, however, required a significant amount of traditional marketing through
television, radio, touring, and magazines. While those outlets still have value because they reach
a large, diverse audience, the relative inexpensive cost and streamlined ability to reach a specific
18
audience are benefits that cannot be rivaled by digital marketing. Further, by leaving the
audience in control to create buzz for an artist, an Internet-focused development and marketing
strategy allows for more consumer influence over which talent seeps into the offices of music
executives. While it may seem as if labels have verged upon a massive reduction of their role in
product creation, massive marketing campaigns, and distribution deals, their guidance still plays
an integral part to the success of mainstream artists. Piracy will likely never go away, but music
executives have finally embraced their digital role by recognizing that marketing, branding, and
sharing music through online networks is key to maintaining a profitable industry.
For independent labels, the marketing process looks slightly different. Many indie artists
rely on traditional methods, such as touring and album reviews, to distribute their music. These
methods typically spark word of mouth, which the Internet has allowed to occur at a rapid pace
and transcend cultural and international borders. The success of contemporary indie artists, then,
demonstrates that the Internet has redefined success in the music industry.
The challenge for many musicians in the 21st century is to figure out how to reach and
captivate a wider audience in hopes of generating fan loyalty and attaining some level of
recognition and subsequent financial success. Many artists do this by creating a relatable brand,
while others simply rely on the digital transmission of their music to draw in fans who are
willing to pay for recordings or live shows. The recipe for viral success seems to be an
indefinable combination of appealing music, access to the right audience, and luck. Still, the
commonalities and trends among all human behavior may help us to understand how music is
spread and embraced. Scholars have laid out multiple frameworks that can explain how people
obtain information and what influences their adoption of that information. These frameworks
may help us to recognize the importance and function of online networks and online marketing.
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EXTERNAL DYNAMICS:
Understanding Consumer Behavior
Along with the technological shift, traditional ways of finding new music have changed.
Consumers no longer rely only on influence and recommendations from immediate social circles
and record sales charts. The Internet has allowed us to expand beyond these venues and tap into
an endless supply of networks and sources of information. We have become increasingly reliant
on digital recommendations from music blogs, postings on social networking sites, and music
suggestions from iTunes, Amazon, and Pandora. As music lovers intensify their reliance on
obscure and imprecise pathways for music recommendations, consumer preferences become
more inconsistent and, in response, the market becomes more unpredictable. It is, therefore,
important for academics, musicians, and the music industry to understand the process through
which people discover and share music online. Furthermore, it is imperative that these same
stakeholders understand the progression from music discovery to a consumer’s investment of
time, money, and loyalty in an artist. The research compiled in this paper examines how people
discover music online and why they are motivated to adopt a song or musician. While most
communication theory on idea sharing focuses on the spread of information, few studies examine
how it functions within the context of an online environment. Furthermore, music sharing
behaviors and their implications for new artists have not yet been analyzed from an academic
perspective. A familiarity with these systems can help us understand the power of networks that
share novel, relevant and interesting music recommendations with mass amounts of people they
directly or indirectly influence.
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Diffusion Theory
Within the context of music marketing, the theory of diffusion explains the process through
which new music is spread amongst different routes to reach an audience (Rogers, 1994). But the
two-way path of communication of ideas from one person to another only functions as one part
of this entire process. As listeners stumble onto new music through channels such as friend
recommendations, blogs, or actively searching for new music, the success of diffusion is
dependent on the adoption of a song or artist. Adoption can manifest itself in the form of a
listener actually listening to, purchasing, or further passing the song along (1994). A certain level
of uncertainty is involved in the adoption process, however. The acceptance of an innovation
(new music, in this case) is dependent on multiple factors, such as whether it fits with the
preferences of a listener’s social structure and preferred genres of music, and how complex it is
to understand or access (1994).
While there are certain identifiable factors that influence adoption or rejection of a song or
musician, it is still difficult to predict what types of music will catch on and reach a wide
audience. Furthermore, although it is tempting to want to generalize the behavior of all online
music consumers, it is important to remember that everyone finds and shares music through
different means and venues. Some people are active in seeking out new artists, genres, or songs
via blogs or digital radio. Others stumble upon music that is shared by friends. Additionally,
some individuals see music recommendations as irrelevant to their interests and priorities and
will ignore music suggestions altogether. The theory of two-step flow of communication can
help us to understand these active and passive roles that people take part in through an online
environment. Additionally, branding and social identity theories can help to explain why
21
individuals are motivated to participate in adoption, and why diffusion happens differently for
different artists.
Two Step Flow of Communication
The communication process involved in the spreading of an idea or product is dependent on
the sharing of music from one person or entity possessing knowledge about the innovation,
through a particular channel, to people who are unfamiliar with the innovation (Rogers, 1994).
For example, a disc jockey introduces new music to listeners through a radio station while
interpersonal communication utilizes such channels as mixtapes, burned CDs, or digital playlists
to influence adoption.
Two-step flow is a process that is vital to understanding how people interact within the
model of information seeking, sharing, and diffusion of ideas. This framework demonstrates the
influence that networks have in spreading word about an idea or product (Nisbet, & Kotcher,
2009). It rejects the notion that the public receives messages from the mass media and, instead,
focuses on the uncontrollable process that occurs when people talk. The two-step flow of
communication notes that opinion leaders mediate the transmission of ideas and information.
These individuals are typically those who are deeply rooted in social norms, easily accessible to
others, innovative, pick up information, and are trusted by their social circles to pass on
knowledge or opinions (2009). They function as the main channel by which the rest of us make
sense of our environment by sorting out important and unimportant information. Additionally,
people have a natural inclination to listen to opinion leaders because we have grown increasingly
distrustful of mainstream media and look to them for cues on what choices to make
(Venkatraman, 1989). Online, opinion leaders can either be explicit (bloggers, music reviewers,
those who have a lot of Twitter followers and/or Facebook friends) or implicit (those who are
22
vocal about their music preferences within their personal online communities). Marketers, then,
have two options to influence networks: they can tap into already established online opinion
leaders or attempt to create opinion leaders (in the form of artists), themselves.
Many academics give attention to two-step flow and the power of opinion leaders without
giving legitimacy to a reverse flow of communication. Emanuel Rosen (2002) explains the
communicative process as more complicated than a simple transmission of ideas or opinions
from the mass media to an opinion leader to communicative adopters. Reverse flow, visualized
as the dissemination of information through a waterfall rather than through a steady, linear
stream, attends to the presence of ongoing dialogue between those who spread the word about a
product and those who receive information. This dialogue occurs when information flows from
one of many “hubs”. Network hubs are composed of individuals who fit the traditional concept
of an opinion leader. They serve as sources of information within their social circles and
influence a particular category of the consumer market. Mega hubs are composed of the press,
celebrities, and bloggers who have the two-way connections that network hubs possess, but also
have thousands (and sometimes millions) of one-way links. Twitter, for example, serves as a
venue through which mega hubs can exist. Lady Gaga, Britney Spears, and Justin Bieber all have
over 7,000,000 Twitter followers who, by the nature of the flow of information, do not rely on a
traditional opinion leader to mediate a message.
Marketers have become increasingly interested in how to spark buzz, or the ongoing dialogue
that occurs between network hubs and communicative adopters (Rosen, 2002). Since the advent
of the Internet, online communities have intensified the power that lies within the human
tendency to talk, share, and recommend. Viral marketing is the advertiser’s attempt at tapping
into online network hubs to spark discussion. The goal of viral marketing is to use linked
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networks between consumers (as opposed to networks from mass media to consumers) to
disperse information about a product, ultimately leading to a quick adoption by the overall
market. The key force in viral marketing lies in genuine recommendations that create awareness,
trigger interest, and generate sales (De Bruyn, & Lilien, 2008).
Branding
Once receivers have access to music, their adoption can be influenced by social factors and
an internal investment in the artist’s success. These influences, however, only find true strength
when a consumer feels an initial attraction to the music. Branding can heavily influence loyalty
toward an artist. This loyalty is the marketer’s ultimate goal because it may determine a
consumer’s motivation to monetarily support an act. Companies consistently utilize product
branding as a key marketing tool. In marketing, the term “brand” is typically applied to firms,
products, and services, and marketers generally accept that brands may be described in terms of
perceived quality and image .(Bendisch et al. 2007). Celebrities, however, can also be considered
brands when they take on identifiable characteristics, narratives, or symbolic meanings (Tan &
Ming, 2003).
Celebrity brands are beneficial because they foster more durable relationships with
consumers. Thomson (2006) found that these personal attachments can be supported and
strengthened by feelings of autonomy, relatedness, consistency, and authenticity. He concludes
that, “benefits would accrue to organizations such as entertainment firms and political parties
that establish direct and routine interaction between human brands and consumers, that human
brands to which consumers are attached offer significant potential as endorsers, and that
organizations should address how to make the human brands they manage more authentic”
24
(2006). Furthermore, Sarri and Drennan (2006) found that emotional loyalty to an artist or song
inclines a consumer to purchase music rather than download music free of charge. Loyalty,
therefore is a key component in convincing music consumers to invest time and money into an
artist. In the digital age, many artists have improved adoption by making themselves available
through social media and inadvertently fostering personal attachments through autonomy,
relatedness, consistency, and authenticity. While each of these qualities is present in an artist’s
communication with an audience, they may contribute to a sense of loyalty and subsequent
financial support from fans.
Previous studies have found that these attachments to celebrity brands have
commonalities with real relationships. For example, these connections evoke many of the same
expectations, cognitions, emotions, and behaviors that operate in normal interpersonal
relationships to the point that a consumer might view a human brand as an acquaintance, good
friend, or romantic mate (Cole and Leets 1999). Furthermore, consumer attachments to human
brands have shown to result in elevated levels of satisfaction, trust, and commitment (Thomson,
2006). Social media has made it possible for celebrities to foster these attachments by creating
digital versions of themselves. Facebook, blogs, and Twitter allow for direct digital interaction
with fans, a practice that would have been impossible before the Internet. For many celebrities
who maintain an online presence (particularly younger, newer artists), this instant accessibility
strengthens attachments by conferring emotional security to the attached party and by being
responsive to a person’s needs (Hazan and Shaver 1994). This is developed in recent work on
fundamental human needs that concludes that if a celebrity is responsive to a person’s needs for
autonomy, relatedness, and authenticity, intense attachments may result (La Guardia et al. 2000).
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Autonomy
Autonomy refers to a person’s need to feel that his or her activities are self-chosen, selfgoverned, and self-endorsed (Deci and Ryan, 2000). In order to fulfill this need, a person must
perceive that he or she is free from pressure, constraint, or coercion to behave in certain ways.
Feelings of autonomy are likely to be produced when human brands make consumers feel
appreciated, empowered, and understood. Human brands, therefore, typically do not succeed
when they seem to be promoted through greedy advantageousness. For example, in 2009
celebrity blogger Perez Hilton tried to jumpstart the career of a young male pop singer named
Travis Garland. His career was supported by a catchy debut song and a performance on the
popular television show American Idol. The public, however, didn’t embrace his music and
brand, and Garland was never able to create a successful career. This was expectedly due largely
in part to the perceived over-the-top promotion from Hilton, who shamelessly flooded his
Twitter account and website with advertisements for his new project. The audience, then, was
likely to reject the adoption of Travis Garland because Hilton didn’t provide the opportunity for
autonomous judgment and acceptance.
Relatedness
Relatedness refers to a person’s need to feel closeness with others (Deci and Ryan, 2000).
A person whose need for relatedness is satisfied is likely to report feeling “connected with and
cared for by another” (La Guardia et al. 2000). In general, human brands that promote
acceptance, openness, and belonging succeed in fostering feelings of relatedness. Attachments to
human brands, according to Thomas (2006), come from feelings of connectedness with a
persona. This innate desire to belong in a social sphere can also manifest itself in the music
26
world through communities of fans. The Internet has unified these communities in one common
space. Fan sites, blogs, and common meeting ground through social media (those who ‘like’ an
artist on Facebook or ‘follow’ a musician on Twitter) have cultivated the relatedness felt
amongst music supporters.
Authenticity
Authenticity is best developed slowly (reflecting sustainability) and by avoiding
perceived opportunism, a characteristic that can signal that the human brand is being promoted
by a corporate force. A careful introduction of a celebrity brand may improve the quality of the
interaction and also encourage feelings of autonomy and relatedness by “reducing hierarchy,
making consumers feel appreciated and understood, and reducing the prominence of economic
motives by the human brand” (Thomas, 2006). Additionally, when human brands are seen
publicly in a nonperforming role, they should not be “perceived as acting” (Tolson, 2001),
because this may lead consumers to feel manipulated and to view the human brand as lacking
credibility. Authenticity explains the importance of the personality of the celebrity. Not only do
people want to feel that their investment in a human brand is motivated by autonomy and
relatedness, but they also want to know that the entire persona is not a construction, but rather a
genuine representation of who the celebrity really is (2006).
General conditions
For an investment in the human brand to form, the consumer must initially be minimally
attracted in some way to the artist and music (Boon and Lomore, 2001). If a person rejects
adoption solely on the basis of hearing a song, it is unlikely that the attachment process will be
27
given an opportunity to occur. Furthermore, consistency of the interaction between brand and fan
helps create the conditions under which an attachment is likely to grow by reducing uncertainty
about the dependability of the personality (Berman and Sperling, 1994). In recent years,
consistency has been made more feasible with social media. Celebrities regularly interact with
fans through digital channels that are likely to reinforce the same loyalty that real-life
interactions foster.
The literature reviewed in this section supports the fact that, while technological
developments have led to a massive decline in revenue for the recorded music industry, they also
provide avenues through which musicians can be promoted and fan bases can be developed.
There is no question that the music industry has completely changed over the past ten years and,
although labels and artists have begun to seek out unique ways to reach out to music consumers,
effective digital marketing is still a rarity. This study seeks to determine, through the framework
presented, how major and independent label artists might facilitate the diffusion process with the
ultimate hope of developing a supportive fan base that might help lift musicians into mainstream
recognition.
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CASE ANALYSIS
To better understand how musicians attain success under the constraints and freedoms
that the digital age presents, a case study analysis will examine the culture surrounding the
changes over the last decade. The research focuses on the rise of an artist, Justin Bieber, and a
band, Arcade Fire, whose success over the past ten years was highly dependent on an online
presence. Justin Bieber is the major label’s model for revival. His rise through YouTube created
an identifiable brand that became the cornerstone to his eventual status as a pop idol. Arcade
Fire, like Death Cab for Cutie, simply set out to make great music as an indie band. Influential
music blogs caught on to their appeal and set in motion the word of mouth process amongst their
soon-to-be fans.
Analysis was conducted using the following information sources:
•
Personal interviews with
o Charley Greenberg, president of Roundabout Marketing
o Baron von Luxxury, recording artist
o Kunal Jerath, chairman of independent label Gracie Productions
o Devon Malene, Arcade Fire fan
•
Videotaped interviews with Scooter Braun, Justin Bieber’s manager
•
Justin Bieber: Never Say Never, a documentary that tracks Bieber’s rise to fame
•
Books and articles about the music industry dating throughout the past decade
The research seeks to understand how online networks influenced these very different career
paths. Both of these cases, when examined within the theoretical framework presented in the
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previous section, demonstrate commonalities, variations, and new definitions of how to attain
success in the digital age of the music industry.
30
Justin Bieber
“We took on the big corporate machine armed with the passion of teenagers. Now the entire
music industry is changing.”
- Scooter Braun, Justin Bieber’s manager
Justin Bieber is fundamentally emblematic of achieved success through two-step flows of
online communication. His popularity was supported by his posted YouTube videos, which not
only spread by word of mouth among his target audience, but among millions of other people
who felt a connection with and investment in his talent. Bieber’s diffusion through the Internet
brought about a new genre of teen pop stardom. He deviates from the old variety of pop star
because his fans, not a record label, built his momentum through online channels. Still, major
record labels were only willing to back him after his solid, loyal fan base showed offline support.
The homemade quality, comprised of all the necessary components to foster a fan connection
with a human brand, that came out of Justin’s rise to success became the new model for pop
music in the post-Napster era of the industry.
Justin Bieber began his journey as a 12-year-old Canadian kid who, with the help of his
mother, Pattie Mallette, uploaded a video to YouTube of himself singing a cover of Ne-Yo’s So
Sick. Scooter Braun, an Atlanta-based hip-hop manager, stumbled across one of his videos and
recognized Bieber’s potential. Braun contacted Mallette and, together, the two continued putting
videos on YouTube. After building a substantial following on YouTube, Braun flew Bieber and
his mother to Atlanta to record demos. They ran into hip-hop superstar Usher in the parking lot
of a recording studio where Justin asked permission to sing for his idol. Usher passed at the time
in what would be the first of many rejections for Braun’s young protégé, “Everyone passed on
Justin. They all said the same thing: ‘He’s too young.’ ‘No one’s broken from YouTube.’ Go get
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a TV show; you can’t compete with Disney or Nickelodeon’” (Halperin, 2011). Braun was
referring to Miley Cyrus, The Jonas Brothers, and Selena Gomez. Each one was a mouse-house
success story that established the paradigm for profitable tween stars. Each was built through
traditional promotional mediums with a guaranteed audience: sitcoms and films on The Disney
Channel and song play on Radio Disney.
Meanwhile, Justin continued to build his fan base on YouTube, Twitter, and Facebook
until Usher could no longer deny the power of an unlikely star in an unconventional avenue.
After hearing that Justin Timberlake was interested in flying Bieber to LA to talk about a record
deal, Usher quickly struck a production deal with Braun. Usher then introduced Bieber to L.A.
Reid, president of hip-hop megalabel Def Jam, who signed Justin to a record deal. The
unrecognized loyalty and power of his fans was felt first hand by Braun with the release of his
debut EP, “Universal Records’ research department bases off of what has happened in the past.
We put out an EP of seven songs November 17, and they told us that their research showed that
Justin would sell 60,000 records from November 17 to December 31. That EP sold 800,000
records by December 31” (Braun & Carter, 2010).
Since then, Justin’s EP (My World) and follow-up debut album (My World 2.0), have sold
a combination of over 10 million copies worldwide. My World 2.0 debuted at number one on the
U.S. Billboard chart, making him the youngest solo male act to top the chart since Stevie
Wonder in 1963 (Caulfield, 2010). He became the first artist to have seven songs from a debut
album chart on the Billboard Hot 100 chart (2010), the first solo artist in Billboard history to
have at least four singles enter the Top 40 of the Hot 100 before his debut album’s release
(Halperin, 2011), and is currently the highest paid teen performer, reportedly pulling in over
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$300,000 per concert (Justin Bieber banks $300,000 nightly, 2010). In 2011, he was nominated
for two Grammy awards, including the highly coveted Best New Artist honor.
Two-step flow
Early on, Bieber and Braun took advantage of the potential to foster a devoted fan base
through two-steps flows of communication. The videos that were posted to YouTube worked as
a springboard for the word of mouth process. They accumulated millions of views because
people were sharing them through email and social networking sites. As a product of the digital
age, Bieber had an inherent understanding of the power that lay behind establishing online
relationships. Social media was a natural component in launching his career. Aside from
YouTube, Twitter became a tool for him to extend his reach far beyond his target audience. Over
the past three years since joining Twitter, Justin has accumulated over nine million followers and
accounts for 3% of all Twitter traffic (Ross, 2010). This presence has accounted for the
exponential growth of his online fan base, which played an integral role in mainstream media’s
eventual acknowledgment of him. With such a large following, Justin functioned as an opinion
leader who was able to communicate with and mobilize his fans for offline support. During an
interview with celebrity blogger Perez Hilton, Braun was asked how Bieber managed to get an
invitation to present at the MTV Video Music Awards although the majority of mainstream
media was still completely unfamiliar with who he was,
MTV reached out to us because we shut down their server. That’s what was going on.
Justin was shutting down radio servers and MTV servers all over the place because the
fans were so active and still are because he talks directly to them. So what they were
seeing was this incredible response online and they wanted to be a part of it. (Braun,
2010)
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Relatedness
From the beginning, Braun understood the importance of fans’ ownership over Justin.
Prior to flying him to Atlanta, Braun made the decision to "build him up more on YouTube first"
and had Bieber record more home videos for his YouTube channel. "I said: 'Justin, sing like
there’s no one in the room. But let's not use expensive cameras.' We'll give it to kids, let them do
the work, so that they feel like it's theirs," (Hoffman, 2009). This strategy promoted the
relatedness factor integral to adoption because of the ownership that was generated by the fan’s
‘discovery’ of Justin. As Braun, points out, “Kids would rather discover something on the
Internet than hear it on the radio… there’s a sense of ownership. People feel more connected to
Justin, and they deserve to, because they made him” (Braun, 2010).
By nature, pop music is niche and audience driven. Its fans are intensely loyal, and the
accessibility and information saturation that comes along with the Internet has bred an entirely
new type of devotion because it advances community and solidarity. Key to Justin’s online
appeal is the legitimacy that his Internet voice has. He, not his management or record label, post
content to his Twitter account – much of which consist of his interactions (replies and retweets)
with his fans. His fans subsequently are likely to experience feelings of connectedness, openness,
and acceptance (Thomas, 2006) because they are given genuine access into his life.
Authenticity
Before the digital age, celebrity culture was an untouchable fantasy world. As instant
access to information blurs the lines between fantasy and reality, this interaction with fans is a
key component of the contemporary model of human branding. Troy Carter, the manager for pop
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star Lady Gaga, echoed the importance of acknowledging the Internet’s transparency and
disseminating the true personality of the artist,
[Younger artists] don’t even look at it as tools…Lady Gaga is 24. She’s a digital baby.
It’s just the way they communicate. There can’t be any layers in between the artist and
their fan base at the end of the day because fans see through it. They know when it’s the
record label talking. They know when it’s the management talking. They know when it’s
the artist talking. They know [the artist’s] voice. (Braun & Carter, 2010)
Authentic interaction, when conducted effectively, reduces feelings of hierarchy between
celebrity and fan (Thomas, 2006). Bieber’s ‘just a normal kid’ persona, communicated through
digital channels, is likely to resonate with his fans because his life seems analogous to theirs in
many ways. By feeling that they have genuine access into a Bieber’s life, his audience is likely to
develop an investment in an actual person instead of a marketed, constructed personality. A large
part of the authenticity of this personality included the narrative of Bieber’s rise to success with
the incorporation of behind-the-scenes characters. Scooter, Malette, Usher, Reid, and Justin’s
entire management team have become integral pieces to the Justin Bieber brand. This, Charley
Greenberg notes, is vital to effective social media marketing, “Everyone involved on an artist’s
team should be active in social media. People feel connected to the whole team because it feels
like a family. Audiences want things that are relatable and the ‘I’m just a kid and my manager
and I work hard’ strategy generates huge amounts of loyalty” (C. Greenberg, March 18, 2011).
Greenberg’s insight has strong legitimacy in the digital age. This story creation, and
subsequent attachment to a persona, has actually functioned in place of a traditional branding
effort and helped newer mainstream artists to sidestep the financial repercussions of piracy and
unbundling. Braun explained why, in pop music, it is so important to equate music with the
brand,
If you think about all the artists that actually have gone platinum in the last five years,
kids know not only the music but actually know the story better than the music. Kids
35
know they can steal anyone’s music if they want at this point, but they are actually going
to buy that product if they want to support that personality. So you have to strategize and
figure out how to introduce the story just as much as the music. (Braun & Carter, 2010)
This is not to say that traditionally intentional branding efforts were not put behind Justin;
his brand was developed through guidance into the industry by a hip-hop manager with
connections to Usher and Justin Timberlake. Usher alluded to the fact that potential in someone
as young as Bieber would have been unmarketable without direction from mentors who
understood the business of music, “Meeting someone that talented is a once-in-a-lifetime chance.
He was cute, so I knew the girls would love him, and with that voice, it was, like, ‘Wow — if we
guide, nurture and direct him right, the possibilities could be endless’” (Halperin, 2011). Usher
also appointed one of his former assistants, Ryan Good, to be Bieber's road manager and stylist.
Good, nicknamed Bieber's "swagger coach", created a look for the singer that consisted of
baseball caps, purple hoodies, dog chains and flashy sneakers.
These branding efforts were made with sensitivity to perceived opportunism in
conjunction with an awareness of the Internet’s predisposition toward exposing manufactured
images. The Justin Bieber brand had to feel genuine, especially to his fans who were initially
introduced to a white, suburban kid from Canada. With this in mind, Braun and Usher helped
developed Justin’s fan base in a uniquely transparent way by utilizing online tools. They ensured
a smooth transition by building him in front of his audience – a strategy that would not have been
possible without his presence on Twitter and YouTube. Bieber remained accountable and
available to his fans through the Internet as he was brought into celebrity culture. This strategy
proved to be fiercely successful. Bieber’s cross-cultural appeal took off with his fans, and
subsequently introduced the 21st century pop music business model that monopolizes on music
as culture. L.A. Reid explains, “People are still buying music, dancing to it and dressing like it.
36
They’re using it to sell cars and CoverGirl makeup, so we sell product lines with our artists. The
popularity of music is at an all-time high. How we monetize it is sometimes a moving target”
(Halperin, 2011).
Autonomy
In its innate state, Internet culture allows for people to decide what to consume and what
to ignore. Autonomy in the digital age of music, however, is also determined by the freedom
from the traditionally marketed teen pop star. As Thomas (2006) describes, autonomy is
motivated by the absence of feelings of coercion. The fan ownership that came out of the
‘discovery’ of Bieber not only lifted him to recognition by a major label, but it also continues to
function in direct support of creating feelings of appreciation, empowerment, and understanding
amongst Bieber’s fans (2006).
Adoption
Bieber’s unconventional rise to success followed traditional rules for fan investment and
adoption in nontraditional ways. With Bieber’s runaway success, his team’s strategy now is to
take advantage of the present while being responsive to the demands of fans without flooding the
market (Halperin, 2011). Because of technological changes over the past decade, the music
business is no longer about just selling the music. L.A. Reid admits that Bieber’s brand
capitalizes on this, “We haven’t had what I consider a huge amount of radio success, but Justin
doesn’t just sell music, he sells everything: concert tickets, dolls, books, fragrances, even nail
polish” (2011). However, as Braun explains, this isn’t simply a throwback to the 90s pop model.
37
Components of authenticity, relatedness, and autonomy will always play a major part in the new
marketing effort,
I don’t think it will ever be the same. Music has to become a multimedia business. We
have these brands that can introduce platforms or bring people into different
technologies. But if you’re promoting shit, it’s still shit. So if you have a great product
and our people introduce someone to it and they discover it, they’re going to use it for
themselves. So now we have to go into that business (Braun & Carter, 2010)
By utilizing all of these channels for profit, the Justin Bieber brand is estimated to have brought
in over $100 million in 2010 (Robinson, 2011), proving that money can still be made in the
mainstream music industry.
The musician as a brand is not a foreign concept to the record industry. As long as fan
loyalty has existed, companies have tried to turn a profit. What is different under the new model,
however, is that profits generated by pop artists – historically the most lucrative of all music
genres – are dependent on selling an authentic brand. This, of course, is simply an evolved
version of the old strategy that hinged on manufacturing of talent. Now, however, singing ability,
songwriting skills, and personality are positioned as cornerstones to the sustainability of the new
genre of pop stars. Justin hadn’t released any original content before he was signed to a major
label, but the support of the fans and of Scooter Braun coupled with his knack for perfect
harmony and unparalleled ability to play multiple musical instruments was enough to convince
Usher and Reid to sign him. While previous teen idols depended solely on branding and image
construction to build their careers, Justin Bieber proved that an authentic updating of those
methods, paired with actual musical talent, can lead an artist into the arms of a successful (and
hopefully sustainable) career.
38
Arcade Fire
“I don't think bands like Arcade Fire need to brand themselves or advertise heavily. Becoming
famous isn't really a goal. The objective is to make music your fans will love. It’s about saying
something relevant and something that matters.”
– Devon Malene, Arcade Fire fan since 2004
In February 2011, an indie rock band named Arcade Fire won the Grammy award for
album of the year. The morning after, blogs and Twitter were set ablaze with “Who is Arcade
Fire” comments (Abebe, 2011). The Grammy award was the band’s official ticket into
mainstream culture, yet they had dominated festival circuits, niche music blogs, and ‘best album’
charts since 2004. Their underground support system had carried them through the music
industry’s most transformational decade, proving that even with the availability of free file
sharing, invested loyalty in an artist or band can motivate an audience to support the entire
operation of an act.
The earliest Montreal-based incarnation of Arcade Fire consisted of future husband and
wife Win Butler and Regine Chassagne, singer/guitarist/original band co-founder Josh Deu, and
multi-instrumentalist Brendan Reed. They performed small shows in the summer of 2001 but
broke up after a disastrous CD-release show in Montreal in March 2003. A new lineup coalesced
around Butler and Chassagne as well as multi-instrumentalists Richard Parry, Tim Kingsbury,
and Will Butler. Merge Records, an independent label based in North Carolina, jumped to sign
them after hearing samples of the band’s music and seeing them play live. Arcade Fire’s debut
album Funeral was released in late 2004 and garnered a lot of critical acclaim, particularly from
Pitchfork Media, a music review site known for its harsh critiques and high standards. Pitchfork,
as well as MTV2, Filter, and No Ripcord, crowned Funeral album of the year (Moore, 2004).
39
The high praises from Pitchfork put Arcade Fire on the radar of the underground music
community. With minimal mainstream media coverage, Funeral landed on the Billboard 200
chart and had sold over 500,000 copies worldwide within a year of its release (Pareles, 2011).
While the Internet can be held responsible for much of Arcade Fire’s success, traditional
outlets and promotion played a vital role in ushering the band into mainstream consciousness. In
2005, Arcade Fire made key festival appearances at Coachella, Sasquatch!, Lollapalooza, and
Halifax Pop Explosion. This exposure was heightened with placement of their hit single “Wake
Up” on the soundtrack for Six Feet Under, in multiple advertisements, and the Spike Jonze film
Where The Wild Things Are (Montgomery, 2009). Arcade Fire’s career was further supported by
public acclaim from rock stars like David Bowie and U2, as well as television appearances on
The Late Show with David Letterman, BBC’s Top of the Pops, and Saturday Night Live. In
March 2007, the band released its second album, Neon Bible. It was leaked to peer-to-peer
networks in January, yet managed to debut at number 1 on the Canadian Albums Chart and
number two on the U.S. Billboard chart and UK Top 40 chart (Abebe, 2011). Three years later,
their junior album The Suburbs would debut at number 1 in the U.S., UK, and Canada (2011).
Two-step flow
Major traditional and online media outlets functioned as network hubs through which
consumers initially discovered Arcade Fire’s music. Pitchfork was the most influential of these
channels because it had a captive audience with a vested interest in the indie rock genre.
Pitchfork and Arcade Fire quickly became intertwined in media reports on the underground rise
of the indie band. The connection was sensible because Pitchfork essentially led the Internet
cheers that supported Funeral’s sales. Steve Sowley, the product manager of the leading
independent record store in Chicago, Reckless Records, recalled the influence that Pitchfork-led
40
buzz had created, “For a debut album, that’s insane. I hate to give Pitchfork credit, but I have to.
We got a couple of copies for each store when it first came out, and when that review went up,
those sold out right away. We couldn’t get it for about a month, and then when we did get more,
those sold out. It continued for months afterward” (Kot, 2009).
While a band like Arcade Fire with a product and music style that appeals to so many
people might have eventually hit it big without the Internet, the pre-digital age would have
required months of touring and record-shop hype for an underground band to build a cult
following. Because of the 21st-century word of mouth that multiplies across blogs and social
media sites, rave album reviews and euphoric concert reactions made the group a nearly instant
sensation. A large part of this was the Internet-provided ability for Arcade Fire’s music to
transcend international barriers. Without online diffusion, their success would not have happened
simultaneously across the world. Furthermore, the licensing and distribution obstacles presented
by the 1990s music industry suddenly became irrelevant to Arcade Fire because their music
readily embraced transmission through online channels. Death Cab for Cutie’s manager, Jordan
Kurland, explained the innovative conditions under which indie rock bands have been able to
attain widespread recognition,
I don’t think Arcade Fire’s success could’ve happened ten years ago, or even five years
ago. It’s not like people didn’t want to hear good music five years ago, they just didn’t
know it was out there. They were getting spoonfed music by corporations, and if it wasn’t
played on commercial radio or MTV or written about in Rolling Stone, it took some
effort to find it. And now you have a world where people are turning their friends on to
music on a mass scale, with the click of buttons. The Internet media has obviously been a
huge part of that (Kot, 2009).
Relatedness
Word of mouth processes create and reinforce the communities that have been so central
to Arcade Fire’s success. When factions of the Internet were set abuzz with post-Grammy “Who
41
is Arcade Fire?” comments, long-time fans of the band were validated when New York Magazine
pointed out the irony in Internet communities’ self-proclaimed absolute knowledge of pop
culture movements,
The funny part is that while the Internet tends to make people feel like they’re more
aware of what’s happening in music, and what “everyone” else is talking about, it’s just
as effective at doing the opposite — sustaining all different kinds of huge and vibrant
music worlds, to the point where whichever one you’re aware of is surely just a single
weird corner among many, many more (Abebe, 2011).
This notion of exclusive Internet music communities, however, is precisely one of the reasons for
fans’ attachment to Arcade Fire. The natural dynamics within the communal online culture of
indie rock fans, in particular, are perfectly suited to feelings of connectedness and the consequent
transmission of support,
Indie fans are pretty proud of the fact that they are indie fans. This means that sharing
new bands with friends is sort of cultural capital. It’s cool when you get to introduce
friends to a new band and its exciting when other people also get excited about the
potential of a band. Arcade, at least from my experience, spread by word of mouth. I have
a girlfriend out in CA who heard about them and passed me their album. Simultaneously,
the guy I was dating also gave me a copy of Funeral. He worked at a radio station that
played alternative/indie music and they often got free CDs to test and play. That was how
he came into possession of the album (D. Malene, April 21, 2011).
Authenticity
Although Arcade Fire has had no intentional image marketing effort, their very status as
an anti-opportunist indie band has fostered attachment and loyalty among fans. The band’s
success is a result of remaining true to their craft and allowing the music to speak for itself. The
New York Times heralded them as, “simultaneously a throwback to a more heroic age of rock and
a glimmer of hope in a digital era that forces musicians to fend for themselves” (Pareles, 2010).
Nowhere is this seen more than in their approach toward making records. They consistently give
a great amount of detail to the artistic format, physical objectivity, and emotional experience of
42
their albums. Arcade Fire albums seem to be the tangible manifestation of the band’s fusion
between old and new music styles, marketing practices, and technologies,
The artwork also emphasized what made the band so appealing to hard-core music lovers.
As much as the band was seen as an Internet-fired phenomenon, its values were rooted in
old-school album rock. This was a band that conceived of albums as complete works,
designed to be listened to as a whole, complemented by lyric sheets, liner notes, and
album art that enhanced and embellished the music. No amount of MP3 file sharing could
fully replicate that experience. (Kot, 2009)
Furthermore, the actual content of their records was a demonstration of their deviation from
traditional pop or rock. The songs on their albums consistently cross-reference each other,
creating a deep, full-circle experience for the listener. Frontman Will Butler explained the
motivation behind his unique approach,
I’ve been moved by albums a lot more than I’ve been moved by singles, and we’re an
album band. I’m not going to stop making albums because of some fad of digital
distribution. The idea that you just have to make bad cheap stuff and sell it cheaply
because the format changes, to me, is crazy. It’s more important than ever to me to have
the artwork and the recording be as great as they can be. (Lackner, 2011)
The fact that the band has never sacrificed its artistic freedom for the sake of cultural capital, as
Devon Malene explains, is precisely why Arcade Fire fans feel an authentic attachment to them.
Autonomy
Further unique to Arcade Fire’s success is their business model that advances feelings of
self-governed decisions that are free from pressure or coercion (2006). The band’s rise through
the tiers of success have led to many offers from major labels, yet they have remained with
Merge in order to maintain artistic freedom. Merge functions solely as a manufacturer and
distributor as Scott Rodger, Arcade Fire’s manager, described the label’s role as, “floating the
expense, executing the marketing and retail plans that we have approved, and insuring that the
43
music is available on all credible digital service platforms” (Frere-Jones, 2010). Arcade’s most
recent album, The Suburbs, signals not a radical change so much as a scaling back, a return to a
business model that involves fewer people, and concentrates on the product. Fans, in response,
are likely to support the band because of its minimalist business, marketing, and branding
approaches when compared to mainstream acts. Arcade Fire’s audience is responsive to the idea
of selling music instead of an image because of the absence of traditional, and sometimes
transparently desperate, marketing strategies.
Adoption
Mac McCaughan, the founder of Merge Records said,
Since ‘Funeral’ took off in such a crazy way, they’ve been in the position almost their
whole recording career to not do anything they don’t want to do, which makes them
pretty unique at this period of history. One thing they talked about is this sense of being
in it for the long haul and creating a sustainable life in music. (Pareles, 2010)
The public’s adoption of Arcade Fire was a result of the band’s consistent determination to
remain true to their music. Even as major labels struggle to find new ways to make money,
Arcade Fire is proof that the ‘music without intentional branding’ model not only works, but it
looks to the future of acts that can make their livelihood primarily through touring and album
sales.
Top 40 radio does not define success in the music industry anymore. Even though pop
acts such as Justin Bieber bring in millions of dollars in revenue for record companies, recent
acts such as Mumford & Sons, OK Go, and Adele have consistently topped record sales charts
without a boost from excessive radio play. Labels will always try to make a quick buck off of
pop artists, but executives now realize that sustainable artists are key to a sustainable industry.
This sustainability is developed from musicians who, like Arcade Fire, grow at their own pace,
44
make music without the commercial impositions from management, and subsequently develop a
loyal fan base. Transparency and genuine creativity, as frontman Win Butler explained, is the
new standard for indie artists, “We definitely didn’t choose to be in the position that we’re in, but
I really think it’s come about in a pretty direct way, as close as something can get to people just
responding to the music and it getting bigger. I think it’s important, if you’re going to do it, to do
it for real” (Eustice, 2011).
45
DISCUSSION
“So, the battle to discover the new model continues on all fronts as the realization sinks in that
the answer surely will be a combination of ideas (such as bundled subscriptions, cool artist apps,
compelling fan experiences), not one magic solution. One thing won’t be the answer, everything
will be.”
- Jeff Pollack, Chairman/CEO of Global Media and Entertainment
People will always be consumers of music. The technological innovations of the
phonograph, radio, and cassette tapes, and subsequent survival and prosperity of the music
industry, proved that. The Internet brings an entirely new dynamic and business model, but it
stimulates competition, and thus artistic development, of newer artists. Furthermore, the old
product is not obsolete. Great value still lies in recorded material and studies prove that
audiences are willing to pay for music that they feel a personal investment in. Although there is
no cookie-cutter approach to digital marketing of new artists, all successful models come with a
loyal fan base. The development of this fan base is dependent on engaging music as well as an
artist’s ability to communicate with their audience in authentic and personal ways. The case
studies examined in this paper echo this sentiment. Justin Bieber’s success worked in
cooperation with his brand, yet Arcade Fire’s audience was receptive because of the very
absence of a marketing effort. Justin Bieber has attained success by selling a brand; Arcade Fire
has attained success by selling music. Both versions of product consumption work, however they
prove that the contemporary music model is imperfect because it is inconsistent. No one factor
can predict the success of an artist because each audience is different. They speak a different
language, they communicate through different channels, and they expect different things from
46
their favorite musicians and bands. It is up to the music industry to understand these
communities of fans in order to stimulate consumer engagement and respond to demand.
Limitations And Directions for Future Research
The limitations of the study lie in its limitative scope. There are many dynamics at play in
a consumer’s adoption of new music, many of which were overlooked in this study. In particular,
the role of traditional media (such as radio, television shows, magazines, and movie soundtracks)
is not addressed with regard to major label artists. Additionally, many music consumers have
recently relied on digital music recommendations from iTunes, Amazon, and Pandora
(personalized radio) to help introduce them to new artists that fit within their preferred genres.
And, of course, nothing can undermine the power of touring and live music. Touring stands
above recorded music sales, product endorsements, and royalties as the top revenue source for
artists. Additionally, live music festivals and touring (as briefly discussed with Arcade Fire)
provide unparalleled opportunities for bands to open themselves to discovery by large audiences.
This study has further limitations in that it assumes online attentiveness of music. A large
portion of music consumers don’t look online for new music and is still highly receptive to
traditional marketing models. Furthermore, this study only looks at successful models of newer
artists. Many talented artists utilize the same components and channels of digital marketing that
were evident in the Justin Bieber and Arcade Fire case studies, yet few artists end up attaining
commercial success. Future studies would benefit greatly by examining examples of failed
artists, looking at the impacts of offline communication, as well as taking into consideration the
power and influence of traditional media.
47
CONCLUSION
The objective of this capstone is to identify commonalities and differences between
models for success in the contemporary state of the music industry. The framework demonstrated
in this paper shows how people function when searching for, sharing, and adopting music
through an online environment. As this process of individual music discovery changes along
with technological advances, consumers are given increased control over the potential and
sustained success of artists. However, corporate powers (such as major record labels and radio)
still retain major roles in talent discovery and promotion. Justin Bieber’s mainstream success
depended on the recognition from management and record companies who had to be convinced
to sign him. Arcade Fire’s success depended on their promotion through online network hubs
and subsequent word of mouth process that occurred amongst their audience. Previous studies
have proven that a brand (whether created intentionally or unintentionally) with components of
authenticity, relatedness, and autonomy can help to foster investment and loyalty amongst music
fans. The goal for marketers and musicians, then, should be to attain recognition by stimulating
online buzz through the transmission of music, communication with an audience, and consequent
development of fan loyalty. Consumers will continue to change the power dynamic between
artists, labels, marketers, and audience. However, one constant has threaded itself throughout the
history of music and will remain vital to the success of artists: the support from fans. Still, as
many music industry insiders will agree, although digital marketing of new musicians is better
understood than a few years ago, the process of finding success online still takes determination,
creativity, and a certain amount of luck.
48
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