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By: Leighanne Saltsman

News of Netflix’s (NASDAQ: NFLX) change in pricing has much of America abuzz this week, and even Hollywood is getting nervous. On July 12th the digital video streaming giant, which was established in 1997 and “went viral” in 2009 when it surpassed 10 million subscribers, altered its pricing plan options. The official press release states that their streaming-video option will now be separate from their DVD-subscription option with each one costing $7.99 (or $15.98 total, as opposed to their previous combined rate of $10.99? $12.99? We already forget!) and by effectively upping the price of receiving physical DVDs, Netflix encourages subscribers to opt for a streaming-only plan. It’s also producing original programming for the first time. The series “House of Cards” starring Kevin Spacey and produced by David Fincher is a project which “seems more suited to HBO than Netflix,” according to NPR’s Digital Culture correspondent Laura Sydell, and the word is that Netflix paid $100 million for this 26-episode series, outbidding HBO.

So will Netflix’s current monopoly-like hold on the streaming-video market combined with its venture into original programming drive consumers away from theatres? The jury is still out, but a recent study on visual vs. aural media consumption showed that while consumers spend billions of dollars on digital music annually 74% percent value photos or documents over music, and when asked which digital files were most important to them, 41% said photos, followed by 33% for documents, 19% for music and 8% for videos. (Study conducted by cloud storage provider MiMedia). This means that consumers are no longer so concerned about owning film, as they know they can get it online at any time of day or night. So Hollywood – better start cooperating with NFLX and its 23.6 million subscribers!

We don’t think the music industry should stop paying attention to Netflix either —- or to Hulu and even Napster, for that matter. Although Spotify – which finalized its deal with Warner last week and launched in the US on July 14th - is a new and powerful player in the US digital music subscription arena, US subscription statistics aren’t yet in. As a way of measuring potential, the service claimed only 750,000 paying subscribers in the countries where they have been available — the United Kingdom, Finland, France, Netherlands, Norway, Spain and Sweden – in December of 2010. In the meantime we think it might be prudent for music marketers to stop hoping that the magic of social media-enabled distribution will save their incomes and consider the option that no one label / artist / distribution service – regardless of the amount of clout or hype – is going to be able to corner the market in the next twelve months in the way Netflix has.

Indeed, much of what makes Netflix successful (is)… “a strong product that’s easy to use, with incredibly helpful recommendations and constant improvement based on customer feedback.” While music services are competing mightily to do these things and more, competition has rendered them so splintered and numerous we believe it will be impossible for the music industry to develop a cohesive pricing plan in the future that resonates with a mass audience outside the musicophiles.

So how can musical content delivery services stop being envious of Netflix and start using it to evolve (while waiting for the stats on Spotify?) There’s a good editorial here if you care to click through, but in the gist of what is said by Cedric Muhammad (business consultant, political strategist, monetary economist and former GM of Wu-Tang Management) is that “it not as much the movies and shows themselves that people value when subscribing to Netflix it is also the way the movies are 1) released and presented (listed by category and described clearly) 2) packaged and made available (through the mail as DVDs or instantly on your screen) 3) priced (the subscription options feel like an all-you-can eat buffet with the doggy bag!) and allow you to 4) ‘select’ the content (you don’t wait on the anonymous On Demand programmer to guess the right flicks each month) It is these four areas that Netflix excels at, which the music industry has collapsed under the weight of, the past 10 years.”

The part of this quote that resonates with us is “through the mail as DVDs or instantly on your screen”. This tells us that music distributors have two options right now: either make great efforts to reclaim and re-privatize the rights to their products in order to issue them as through the mail rentals (never gonna happen) or start concentrating on producing additional content that can be KEPT private. As per the MiMedia study above, people considered photos their most valued file types after written documents, and we think this proves that we as a globalized culture are really, really ready to assimilate the next generation of visual content.

Now, thinking as we always do about the application of marketing trends to musicians’ incomes, it’s our opinion that in order to be truly competitive in this market musicians must start considering visual component(s) an integral part of the sonic experience. So don’t drop the packaging just yet, kids. Of course the four major labels —- Warner, Universal, Sony and EMI —- have already adopted this 360-product policy on many levels, but indie musicians should take note: tracks are not the only product you must be passionate about producing! We need to stop offering free video downloads while we still can and focus on creating higher-quality live-streaming visual content. As for pre-produced static visual content, how many indie musicians do you know who host their album art on sites designed for graphic designers’ portfolios? There are so many high-quality options…

Which brings me to the conclusion of this piece… —- MTV is missing an amazing opportunity here!! By using Netflix as distribution mechanism while Spotify gets its sea legs and simultaneously re-incorporating the realm of the visual into its standard product (aka partnering with VEVO etc) MTV or a network like it might be able to bring the music industry back into the game. We know, we know —- monopolies are evil and society needs to stop misconstruing corporations as parental figures —— but in this case it might be the only way to re-monetize music in the next two years. After that, bring me my 1TB solid-state Hi-Def player and pocket 3D projector!

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Building Value

"…the industry should focus on building value around new releases – focus on the quality of new releases and the packaging that comes with them. This means an ongoing, strong a la carte business, avoiding the inclusion of hot new releases in cheap subscription and cloud services that devalue them."

- Shachar Oren of http://neuroticmedia.com/about/meet-our-team/

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8 Ways Entrepreneurs Can Get More Out of Twitter

By Scott Gerber

Scott Gerber is a serial entrepreneur, angel investor, public speaker and author of Never Get a “Real” Job: How to Dump Your Boss, Build a Business and Not Go Broke. The content for this post was sourced from the Young Entrepreneur Council, a group of successful Gen Y business owners. You can submit your questions to this group onNeverGetaRealJob.com.

To tweet or not to tweet. That is the question on many business owners’ minds.

For some, Twitter has proven to be a powerful way to engage customers and build a community. For others, tweeting has been nothing but a useless time suck. The fact is, most small business owners have no concept about how to use Twitter effectively. Many entrepreneurs simply produce and promote useless spam, while others over extend and over engage.

In order to teach business owners how to benefit from this tool, I asked a panel of successful young entrepreneurs how their entrepreneurial brethren can utilize Twitter to their advantage rather than to their dismay.

1. It’s A Social Tool

Twitter is an amazing tool to market and really interact with fans and customers. It gives you real-time conversation with them, but if you don’t interact and answer questions people have, it’s a complete turn off. There is a reason that it’s a ‘social media’ tool and the key word is ‘social.’ Don’t constantly shove information down their throats. Be social and see what your customers want or need.

- Ashley Bodi

Company URL: Business Beware

Twitter: @businessbeware

2. Avoid Insecurity Work

“Insecurity Work” is when you compulsively check your e-mail, website traffic, blog comments, etc., and it’s poison. Twitter is one of the most common causes of insecurity work that I see among young entrepreneurs. I suggest that you limit the time you spend on Twitter each day to less than a half hour. Remember: You don’t need to @Reply every single person that mentions your brand.

- Ryan Paugh

Company URL: www.ryanpaugh.com

Twitter: @paughginney

3. Engage With Your Followers

After running Ruby Media Group, a social media and personal branding agency for over a year now, my best tip for using Twitter to market to customers and fans is to not market! This sounds contrary to everything traditional marketers know, but the best companies on Twitter create conversations with fans and become “followers” of their lives, making their product embedded into their daily lives.

- Kris Ruby

Company URL: Ruby Media Group

Twitter: @sparklingruby

4. Autoresponder

I have an automatic responder using socialoomph.com set up so that when people “follow” me on Twitter they get a direct message regarding my website. For Schedule Makeover(TM) time coaching and training, the goal is to drive traffic to my newsletter signup.

- Elizabeth Saunders

Company URL: Schedule Makeover

Twitter: @RealLifeE

Facebook: Time Coaching

5. Provide Value and Get Software to Help

There are two goals you should have when using Twitter to market to customers: Establish yourself as an expert and deliver relevant valuable content. Post tips, advice and guidance that will help your potential customers. Once you get the content down on what you want to post, I recommend using software like Tweet Adder to help you manage your account and stay active with your followers.

- Lucas Sommer

Company URL: Audimated

Twitter: @audimated

6. Provide Relevant Information

Twitter is a brilliant tool to push information out to your customers and fans, but it is important to remember that Twitter is not about self-promotion. Be sure you’re engaging your customer base and starting a dialogue. Create genuine interaction and work to distribute information relevant to your customers. Using this approach will help you harness the power of Twitter.

- Anderson Schoenrock

Company URL: Scan Digital

Twitter: Scan Digital

7. Be Personal and Interesting

Seventy to eighty percent of your tweets should be informational, fun or personal in nature, and only 20 to 30% should be commercial. Retweet interesting links, useful articles and photos taken from your cell phone. For example, at SitePoint we recently tweeted about Movember mustaches, posted photos of 10 staff members who grew mustaches, and asked our Twitter followers and Facebook fans to vote on the best one.

- Matt Mickiewicz

Company URL: 99designs

Twitter: @sitepointmatt

8. Twitter Etiquette

First, understand that quality always trumps quantity when it comes to social media. One hundred evangelists far outweigh 100,000 mere “followers.” Second, follow Twitter etiquette: listen, be relevant, mind your brand, engage, and give more than you get.

- Heather Huhman

Company URL: Come Recommended

Twitter: @heatherhuhman

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"They want new and different, but not TOO different"

By Ben Popper 

In the world of Turntable.fm, his name is legend. “WOOOOOOO” cries the crowd, heads bobbing, approval meter tipping towards Awesome. “There are all sorts of rumors flying around on TT that I’m dating Sasha Grey, that I’m one of the members of Swedish House Mafia and that I’m a DJ in real life.” He denies nothing, preferring to let the mystery build and the music speak for itself. 

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With nearly 9000 points and almost 1000 fans, Woooooo is the most liked and the most followed DJ on Turntable.fm. He was an early user of the service and established a room, DJ Woooooo’s, where he sets the vibe. He’s happy to give noobs a chance to rock the decks, but not afraid to boot DJs who aren’t moving the crowd or keeping with the playlist. “You want to be me? You have to have your own room.DJ Wooooo is a brand.”

EXCLUSIVE: Turntable.fm Raising $5-10 Million at $40 Million Valuation.

Woooooo is a classically trained pianist, but it was travelling in Milan a few years ago that he fell in love with House music. “As far as song selection goes, it’s a delicate mix of popular songs and experimental tracks.” Woooooo used his platform to help artists like @Paper_Diamond and @Lazerdisk debut new cuts to the public. “I give them a spot on the DJ booth and they blow people away. Both groups have literally walked away with hundreds if not thousands of new fans because of the viral nature of TT.”

There are a couple simple rules for success on TT, says Woooooo:

  • Sticking to the genre is key
  • But the crowd is very fickle
  • They want new and different, but not TOO different
  • Mood in the room can shift quickly
  • So don’t “set and forget” your DJ queue
  • People want to be in the most packed room
  • So try and be famous, like DJ Woooooo

“If you’re just yanking songs from Hype Machine without figuring out how they fit the vibe, you’ll get called out. Just because some website says they like a song doesn’t mean the Turntable crowd will.”

In real life Woooooo is a start-up hustler, working on music apps, although nothing that competes directly with Turntable.fm. Playing with the service has taught him a lot about what brings new users in and keeps them coming back. “They’ve put out a great beta product and they continue to make priority fixes.  I really couldn’t ask for much more at this point other than a more badass avatar for being the #1 DJ, and a room big enough to hold everybody that wants to come in.”

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