The 4Ps is 1950s marketing theory, so it's really out of date if you don't see it in the context of contemporary marketing, but it still provides the basic framework for a good marketing plan and it's still widely used today.
The 4Ps are product, price, place, promotion.
Product: as an artist you have to view yourself and your CD as products. Tom Peters will tell you everyone is a brand - so are you. Think of your CD as a brand extension or marketing collateral (like merchandise is - T-shirts, badges, buttons, caps).
Price: not too high or too low. Too high = you won't make the sale (people must sense there is value in what you're offering - as your perceived value increases you can push up your price). Too low = people will also not buy (they will question why it's so cheap).
Place: this is distribution. If you create demand for your product (CD) and it's not available in stores/online, you lose the sale. Try to create demand so that you have clout in the channel (i.e. nobody is gonna turn down stocking a Madonna CD because she's Madonna).
Promotion: also known as marketing communications. How do you TELL people that you exist? Traditionally included advertising, public relations/publicity, personal sales and sales promotion. Don't forget digital media, which today are more important for entry-level artists.
Wanna know more? Check out www.mbac.co.za.
Monday, March 30, 2009
Saturday, March 28, 2009
Music in Emerging Markets Part 2
And how has “the New Music Industry” affected SA? With lower Internet connectivity, the biggest winner in the new game is the cell phone. There are only around 6 million Internet users out of a population of 45 million, and only 700,000 of those with high-speed broadband connections, thus P2P file sharing is limited to the tech-savvy few, while paying for music content online is rarer still. Where there is more access to high-speed connections at work, companies tend to block sites which may cause a drop in productivity (such as Facebook).
The general consensus is that the ratios between the developed world and the developing world (the term “Third World” is so passé) are reversed in terms of mobile download vs online download (the extent to which people use mobile devices to connect to the Net and download to cell phones is still in its infancy). Thus, in the US it would be 9:1 (for every 9 Net downloads there is 1 mobile download), while in SA it would be 1:9 (the exact opposite). SA therefore exhibits the same trend as Asia – a very sophisticated mobile phone network with use of premium content sms/mms downloads for music, and/or illegal file sharing using Bluetooth capabilities, with the cell phone doubling as an MP3 player.
To this end, MTN, the second-largest cell operator which has now also moved into Africa (Nigeria, for example), is the content aggregator which is becoming a de facto new record label. MTN has teamed up with a local company to source new talent and plug it using the cell operator as an interface, in much the same way some have suggested that Apple may become the biggest record company in the world by 2015. Ironically, Apple has enjoyed only moderate success in SA with the iPod, iPhone and Mac, mostly because the country is used to PC and because of Apple’s prohibitively expensive price. It is thus viewed as an aspirational product.
The use of podcasts, vodcasts, blogs and RSS feeds to create, promote and share content is all but non-existent and in this area the market demonstrates a relative lack of sophistication. In terms of 360º deals, some music managers and booking agents are starting to combine resources to offer the “one-stop-shop” for clients and act as funnels for musicians, but this is also relatively new and small-scale. Unfortunately, the artist mentality of “a major label is gonna come rescue me” persists, with a few music entrepreneurs making a whack of money.
And what of the future? While it’s difficult to predict, US and UK mainstream music will continue to dominate radio airplay (Amy Winehouse selling 30,000 copies of her album in SA was considered a successful release), with quotas enforced to provide local artists with a voice. SA looks more like the US every day, tempered by local cultural conditions. It will be an interesting ride!
Rob Rodell is a singer-songwriter based in Johannesburg. He is currently doing his PhD on trends in music marketing and branding and is one of the partners of the Music Business Academy, a school aimed at addressing the skills shortage in the music industry in Africa while also empowering artists with music business skills. For details check out www.mbac.co.za or www.robrodell.com.
The general consensus is that the ratios between the developed world and the developing world (the term “Third World” is so passé) are reversed in terms of mobile download vs online download (the extent to which people use mobile devices to connect to the Net and download to cell phones is still in its infancy). Thus, in the US it would be 9:1 (for every 9 Net downloads there is 1 mobile download), while in SA it would be 1:9 (the exact opposite). SA therefore exhibits the same trend as Asia – a very sophisticated mobile phone network with use of premium content sms/mms downloads for music, and/or illegal file sharing using Bluetooth capabilities, with the cell phone doubling as an MP3 player.
To this end, MTN, the second-largest cell operator which has now also moved into Africa (Nigeria, for example), is the content aggregator which is becoming a de facto new record label. MTN has teamed up with a local company to source new talent and plug it using the cell operator as an interface, in much the same way some have suggested that Apple may become the biggest record company in the world by 2015. Ironically, Apple has enjoyed only moderate success in SA with the iPod, iPhone and Mac, mostly because the country is used to PC and because of Apple’s prohibitively expensive price. It is thus viewed as an aspirational product.
The use of podcasts, vodcasts, blogs and RSS feeds to create, promote and share content is all but non-existent and in this area the market demonstrates a relative lack of sophistication. In terms of 360º deals, some music managers and booking agents are starting to combine resources to offer the “one-stop-shop” for clients and act as funnels for musicians, but this is also relatively new and small-scale. Unfortunately, the artist mentality of “a major label is gonna come rescue me” persists, with a few music entrepreneurs making a whack of money.
And what of the future? While it’s difficult to predict, US and UK mainstream music will continue to dominate radio airplay (Amy Winehouse selling 30,000 copies of her album in SA was considered a successful release), with quotas enforced to provide local artists with a voice. SA looks more like the US every day, tempered by local cultural conditions. It will be an interesting ride!
Rob Rodell is a singer-songwriter based in Johannesburg. He is currently doing his PhD on trends in music marketing and branding and is one of the partners of the Music Business Academy, a school aimed at addressing the skills shortage in the music industry in Africa while also empowering artists with music business skills. For details check out www.mbac.co.za or www.robrodell.com.
Music in Emerging Markets Part 1
This post was originally intended for another blog, but there's no harm in duplication, hey?
I can only speak from a South African perspective, but as Raiser and Volkmann (Google it) point out, Johannesburg has a lot in common with Sao Paulo, Mumbai and Shanghai, so you could easily change it from BRIC to BRICA (Brazil, Russia, India, China, Africa).
Here goes:
Despite the increasingly global economy and the rise and rise of Web 2.0, many people in the Western world especially remain ignorant about the state of affairs in Southern Africa, often thought of as an AIDS-infected, crime-affected region with lions roaming the streets and no electricity.
Yet according to Billboard, South Africa specifically was one of only two growth markets in 2007, the other being India. Sources at Universal Music (local) report, however, that there was an 8% decrease in CD sales in 2008, and while this is significant, it is nowhere near the 23% average that CD sales have dropped in larger markets every year since 2000, without a concomitant rise in digital download sales.
A little perspective: South Africa’s music sales contribute about 1% to the globe, compared with about 36% for the musical juggernaut which is the United States. While Apartheid is long dead and gone, the historical make-up of the country can still be clearly seen in its music. SA is a juxtaposition of rich and poor, of sophisticated and urbane versus uneducated and parochial. The emerging Black middle class increasingly mirrors the formerly privileged White minority, although their tastes in music are quite different. Johannesburg is a vast city which, it is estimated, will be bigger than Los Angeles in 10 years (with the same freeway snarl-ups).
Generally, this is how the industry looks: the small English speaking populace centred in the urban areas of Johannesburg, Cape Town and Durban are true rockers at heart. They form rock bands and make music that would fit comfortably in the mainstream US and UK music markets (think of SA’s biggest music exports, including Dave Matthews, Mutt Lange and Seether). The larger Afrikaans market have spawned a counter-culture all their own which has a dedicated following such that bigger Afrikaans artists can do exceptionally well from CD sales and gigs. Although this is a simplistic taxonomy, the Black market (no pun intended) can be split into two groups: the Gospel/traditional African market (think Ladysmith Black Mambazo and the Soweto Gospel Choir, both Grammy winners); and the newer Afro-Pop scene, which could be genre-fied as “world music.” Kwaito, for example, is the local equivalent of rap music, complete with upbeat drum loops and spoken word verse-chorus configurations in Zulu. The jury is still out on whether this music form is losing ground to mainstream contemporary African pop.
But Gospel is the biggest selling genre in SA, where it’s not unusual for tapes still to be sold in very small rural areas. A successful Gospel or Afro-Pop album might sell 100,000 copies, which is 5 times gold (20,000 copies in SA) or more than double platinum (40,000 copies, according to RISA, the local equivalent of the RIAA).
I can only speak from a South African perspective, but as Raiser and Volkmann (Google it) point out, Johannesburg has a lot in common with Sao Paulo, Mumbai and Shanghai, so you could easily change it from BRIC to BRICA (Brazil, Russia, India, China, Africa).
Here goes:
Despite the increasingly global economy and the rise and rise of Web 2.0, many people in the Western world especially remain ignorant about the state of affairs in Southern Africa, often thought of as an AIDS-infected, crime-affected region with lions roaming the streets and no electricity.
Yet according to Billboard, South Africa specifically was one of only two growth markets in 2007, the other being India. Sources at Universal Music (local) report, however, that there was an 8% decrease in CD sales in 2008, and while this is significant, it is nowhere near the 23% average that CD sales have dropped in larger markets every year since 2000, without a concomitant rise in digital download sales.
A little perspective: South Africa’s music sales contribute about 1% to the globe, compared with about 36% for the musical juggernaut which is the United States. While Apartheid is long dead and gone, the historical make-up of the country can still be clearly seen in its music. SA is a juxtaposition of rich and poor, of sophisticated and urbane versus uneducated and parochial. The emerging Black middle class increasingly mirrors the formerly privileged White minority, although their tastes in music are quite different. Johannesburg is a vast city which, it is estimated, will be bigger than Los Angeles in 10 years (with the same freeway snarl-ups).
Generally, this is how the industry looks: the small English speaking populace centred in the urban areas of Johannesburg, Cape Town and Durban are true rockers at heart. They form rock bands and make music that would fit comfortably in the mainstream US and UK music markets (think of SA’s biggest music exports, including Dave Matthews, Mutt Lange and Seether). The larger Afrikaans market have spawned a counter-culture all their own which has a dedicated following such that bigger Afrikaans artists can do exceptionally well from CD sales and gigs. Although this is a simplistic taxonomy, the Black market (no pun intended) can be split into two groups: the Gospel/traditional African market (think Ladysmith Black Mambazo and the Soweto Gospel Choir, both Grammy winners); and the newer Afro-Pop scene, which could be genre-fied as “world music.” Kwaito, for example, is the local equivalent of rap music, complete with upbeat drum loops and spoken word verse-chorus configurations in Zulu. The jury is still out on whether this music form is losing ground to mainstream contemporary African pop.
But Gospel is the biggest selling genre in SA, where it’s not unusual for tapes still to be sold in very small rural areas. A successful Gospel or Afro-Pop album might sell 100,000 copies, which is 5 times gold (20,000 copies in SA) or more than double platinum (40,000 copies, according to RISA, the local equivalent of the RIAA).
In the beginning...
It sounds so prophetic...
Welcome. This blog is for those who wish to inform themselves on the music biz as it applies to the devloping world, but also to the developed world.
There are lots of blogs which will tell you how the music industry is changing. Here's another one!
I have always said, "Music is spiritual. The music business is not." You have to protect your soul as you enter this industry.
But another tale of caution: nobody is going to do this for you. If you have the heart, you, like those before you, must find the way.
I am based in Johannesburg, a forward-thinking, entrepreneurial city of go-getters and high-fliers. That's why they call it the New York of Africa. But I am shocked at the number of artists here who are waiting for a major label to come and rescue them.
Read on and empower yourself... For starters, connect to http://www.mbac.co.za/ for more info.
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