Watch Archetype, Manifest Games and PUNY compete at the Phizzpop Design Challenge LA, Feb 20th, 2009. Register today at Phizzpop.com. Spots are filling up fast!
The music industry has seen dramatic changes over the course of 5 years. As recent as 2007, the largest music retailer was Wal-Mart stores selling approximately 1 out of 2.5 CDs in the country. By 2008 all that had changed with Apple’s iTunes Store eclipsing Wal-Mart as the #1 music seller in the nation. Apple has just sold its 6 billionth song. At the same time this has happened overall music sales have fallen as the "big hit" has become ever more elusive.
At the same time the “mega hit” has become more elusive, so called “niche” media have been driven through users discovering it via Amazon and other internet sites that have recommendation engines. An example of this is the mass discovery of the book “Touching the Void” which drove the creation of the movie. Similarly, “cult” bands are able to merchandize and distribute directly to fans via sites like MySpace.
The retail side of the music business has seen massive consolidation / exits from the business. First we saw the death of most mall music stores such as Sam Goody. This was followed by a massive contraction in the number of CDs carried by “Big Box” stores such as Best Buy. Finally, we’ve seen even dedicated media stores such as Virgin Mega Store scale back significantly, or in the case of Tower Records, close entirely.
All of this represents a massive change for the music industry in specific, and the media industry in general.
Record labels are struggling against these economic conditions. They find themselves have difficulty justifying their existence as artists are able to directly interface with their fans through online channels. In addition, through organizations such as Live Nation and Ticketmaster, artists are increasingly able to promote their own concert tours with little record label support.
Congratulations, you’ve been hired by a consortium backed by the major remaining record labels as well as several of the independents. Your job is to build the platform for the next iteration of the industry, similar to what Hulu is attempting.
As the new President of Customer Experience, your job is to define the new platform for our industry. We need to redefine our service offering the artists, engage with fans, and do all this in a way that allows for each artist to still have his or her own voice. Specifically, you must define:
- Web Site Experience
- Interaction / synergy / leverage of traditional channels such as radio
- Event experience and marketing (Concerts, etc.)
- How artists interact over mobile channels
- How we leverage the power of social networks
- Music sales, affiliate partnerships through Zune, Amazon and iTunes, and other merchandise sales
While we don’t expect you to solve each of these channels in the next week, we do expect your design to account for these channels.
Jack is an account executive at the record label (potentially change his title). Jack has been in the industry since 1988. He’s managed some major bands, and has seen a lot of water under the bridge.
He was definitely supportive of the RIAA’s efforts to shut down P2P file sharing services. After all, they’re stealing money from his artists pockets, and more importantly, his own. He does wonder, however, if the statistic that people who get music from P2P sites buy *more* music, not less is true. Maybe there’s something to that.
Jack still has enormous industry cred. People ‘kill’ to get a lunch with Jack – that said, he has a feeling, almost imperceptible, that this is changing. Lots of people still care, but it seems like newer artists don’t care as much. These kids today…
Rebe is the lead singer of the hit band, Consonant Number. The band has been around for 30 years, and is one of the defining bands of modern rock. They’ve been “A-list” stars for as long as anyone can remember.
Consonant Number’s last album sold $12 million dollars in album sales, and another $2.3 million in digital downloads. This is the lowest recorded dollar value for a #1 record since 1997. Ironically, their tour, Savage Siren, was the top grossing of 2008 with $280 million dollars in sales.
Rebe would love to flip those numbers a little – first, he’s got a family now, and the tour life is really hard on them. Secondly, it takes a lot of time to be on the road that much. Rebe has become one of the leading philanthropic givers, and has been a spokes person for several important humanitarian causes. As much as he loves his music, he really wants to be able to spend more time and energy on the causes that are important to him.
He and the band have websites and have done a variety of different online activities. All of them feel disjointed – he’s not sure what any of it’s gotten him, other a headache. He certainly doesn’t feel any more connected to his fans.
Ella has been the definition of a “struggling artist” for years. She’s been playing local venues for free for years, and has been actually supporting herself as a personal trainer. Recently, though, she’s been able to get some paid gigs, either as accompaniment, or as her band.
Her biggest area of success, however, is really MySpace. Most of her new leads seem to come from people checking her out there first. She’s got 8,000+ friends, has had her profile viewed more than 50,000 times, and has sold a little more than $2,000 in tracks. All in all, pretty good for getting into it about 14 months ago. All this makes Ella feel better about how much time she spends on MySpace.
The thing that excites her most is (maybe) finally being able to quit her day job. She’s talking to a couple websites about listing her tracks, and has even started talking to a publicist. It’s all early, but hope springs eternal. Ella is sure she has the talent; she just needs to get her name out there!
Marsha is 20, and is in her second sophomore year of college at a local college. She was thrown out of her previous school for a combination of academics (missing too many classes, and then failing those classes), and prosecution by the RIAA.
Marsha is absolutely rabid about music of all kinds. She quickly found that her interest in music far outstripped her ability to pay for that music. After she finish borrowing all her friends CDs and ripping them , she started using Kazza, BitTorrent, or really anything that seemed like it was a good bet.
What really got her in trouble, at least from an academic sense, was a little app that scanned her iTunes library and showed her all the places that artist was playing. Somehow, Econ 201 just isn’t as interesting as seeing a great band at one of the many local spots. There’s just nothing better than feeling the connection with the band. She’s also lucky that she’s cute enough to avoid the cover in most cases.
Marsha is active on both Facebook and MySpace. She’s created several fan groups on Facebook, and is always looking for new bands to get excited about. Recently she just stumbled across this new singer, Ella on MySpace. She really likes her sound – maybe she’ll go to the next show!
Dave is in his mid 30s. He got married a couple years ago and has recently had a kid. While he and his wife used to love to go to shows, those days are past. After all, infants and concerts don’t mix very well.
Dave tries to stay on top of new music, but finds he just doesn’t have enough time anymore. More and more, he relies on sites like Amazon to recommend music that he might like. His wife likes to call this his “habit.” While he still buys some CDs, he mostly buys digital now. He works during the day, and just can’t get to the store – there’s certainly no time at night – that’s family time.
Recently, he’s gotten into Pandora as a way to find new music. He tends to put it on as a background. Often, it’s music he knows and likes – sometimes it’s new stuff that he wants to buy. The integration with Amazon and iTunes gets pretty dangerous from a financial perspective.
Dave will still see the occasional concert – the Consonant Number show last year was amazing – but he’s just not interested in seeing that many anymore. As much as he loved the show, his ears rang for two days after. Better to listen to it on his stereo at home anyway. Now if he could just get the bootleg of the show…
- Phizzpop Design Challenge LA: December 6th
- Cynergy’s winning entry, Ben, posted
- Phizzpop Design Challenge LA – Feb 20th, 2009 at Zune LA
- Scenes from the Phizzpop Design Challenge Nationals at SxSW
- Cynergy wins it all!