Beyond Frequency

The Perpetual Doom Of Music Startups? Define Doom.

At YCombinator’s Startup School at Stanford University, the founder of the now-defunct music sharing startup Imeem, Dalton Caldwell, stated that “every time a founder does a music startup, a likely more successful startup dies.”  (Follow the link to Mashable for the full article).

I think that any blanket statement is difficult to support, but I do understand Caldwell’s point of view.  I do, however, take a slightly more nuanced stance.

First, I do agree that most music startups that seek to distribute, sell or provide major label content are in trouble from the start.  Those companies just do not have the intellectual wherewithal to see how they can benefit from multiple forms of distribution.  

I am not a person, however, that believes that major label content is necessary for a music startup.  There was a line in the article that called the major label content the most popular in the world.  That is only true because the majors have historically had the biggest bullhorn, but recent sales stats show that music popularity is clearly democratizing and will continue to do so.

With that in mind, I believe the model for a successful music startup should be discovery centric, not licensing centric.  Similar to the modern online advertising world, if we look at the data of content consumption and audience profiles to get down to the granular level of what drives “listening intent”, a company could be a matchmaker for artists to their most likely audience.  In that case, they are not only a benefit to the independent artists, but also the major labels, which I do not believe are necessary from a music quality standpoint but are helpful from a marketing one.

Also, by serving as an middleware, matchmaking engine, there is no need to license and the majors could ignore participation only at their peril, just as the advertising agencies did for a while in the advertising world and are not far behind the smaller upstarts.

As is my mantra it seems, I think there can be a lot of successful music startups if they focus on the middle ground to match any artist with targeted audiences, just as the real-time bidding systems (RTBs) and both Sell Side and Demand Side platforms have exploded in the advertising world. 

I am not just talking about recommendation engines as that is only one side of the equation, but in matching those tools (ex. Pandora) with the dynamic audience consumption engines (ex. Shazam) for the benefit of both sides in real time.

I believe there can be a lot of success there and, if so, that could serve as the beginning of an ecosystem that allows for all music startups to win because they do not then need to go beg for a license but, instead, find and deliver audiences time and cost efficiently.

Ford signals the need to reinvent Radio - are you listening? (Mark Ramsey/Hear2.0)

One of my favorite bloggers and simply an extremely knowledgeable and friendly individual, Mark Ramsey had a great post today. Mark has been on the leading edge of pushing the radio industry into the digital world as they should be.

Below is today's post  and I encourage you all to make reading Hear 2.0 a regular habit.

Last week Inside Radio featured one of the most important items of the year, and I'm guessing the significance of it evaded many readers:

Auto rebound has Ford reinvesting in media, but it’s not “buying off the shelf.” The automaker’s seasonally adjusted year-over-year sales rate is up 17%, according to Ford Motor Media-Team Detroit senior partner and managing director Kevin Brown. “We’re all about consumer engagement and brand advocacy,” Brown says. That means giving consumers first hand experiences with its brands so that prospects can then “push out to their own personal networks.” The goal is to build a “culture” around the product, followed by endorsements and, ultimately, traditional advertising. It’s the opposite of the old one-to- many paradigm where Ford would start with a big network TV campaign. During his nearly 60-minute chat with 35 Michigan stations, Brown illustrated the approach with a pair of recent examples. To bring back the Ford Fiesta, which hasn’t existed in the U.S. for 15 years, it put 100 vehicles into the hands of bloggers and other user-generated content producers so they could share their experience with their own social networks. “Those people in turn, pushed it out even further,” Brown says. Within five months, Ford was able to measure 60% awareness of the brand — months before commercially re-introducing the vehicle in the marketplace. “Social media will play a role in how we market going forward,” Brown says. So will event marketing, such as a recent Drive One For Your School campaign. Working with high schools, Ford staged 800 test drive events where it donated $20 per test drive to school booster clubs to help under-funded school activities. The campaign generated close to 120,000 test drives. Such events represent a “huge opportunity for local radio and TV stations getting their on-air personalities involved,” Brown says. He also suggested that the distinction between traditional and digital media needs to be “erased — all of this is audience-driven media.” His advice to sellers: Forget “off the shelf ad packages. If you can customize a program that meets the strategic needs of the product, your opportunity to make the sale greatly increases.”

While it's lovely to suggest that this represents "a huge opportunity for local radio and TV stations getting their on-air personalities involved," one might legitimately ask: "WHAT on-air personalities?"

But that aside, can you read between the lines here?  Because if you can you'll see that Ford is putting your best personalities on par with bloggers.  Why?  Both have audiences - and, if anything, the audiences of their target bloggers, while smaller, are far more interested in the subject matter than your audiences.

If there's anything we know about "viral" messaging, it's that it spreads through communities that are interested in the content, regardless of how big or small they are.  Ford is placing a premium on first-hand experience and the social networks of influentials.

And what about advertising?  Rather than being the first step in the process it's the last.  And that means it's automatically less important than it once was.

So if we "erase the distinction between traditional and digital media" we have to recognize that, as I have been saying here for some time now (thank you Tom Asacker), there is no longer any such thing as radio per se.  We - and the bloggers who compete for our dollars - are all "media."

What Ford is saying is that the customer - the consumer - the listener - owns the ability to spread the word about the product.  The customer is driving the messaging bus.  Building a "culture" around the product (and that word really does not require quotation marks) is not some kind of manipulative pre-fab exercise. Rather, it's about tapping into existing threads of interest and sparking them with something attention-worthy which drives their passion.  In other words, it has everything to do with "marketing" - and nothing to do with "advertising."  

Thus leading to the obvious question: Which business are you in, Mr. and Ms. Broadcaster?

What Ford is really signaling is an interest to shift ad dollars to marketing dollars.  Now because radio reaches so many people and, in many cases, has relationships with these people, we have an opportunity to leverage those relationships in interesting ways for our clients.  But we need to recognize the significance of Kevin Brown's words:  Media today is audience-driven.  Audience-driven.  Not radio-driven.  And not ad-driven.

As I read headlines from radio conferences where group heads bemoan "radio's need to get new customers" or "too much reliance on Detroit" or other low-hanging nonsense du jour, I feel like there is a high-ranked tier of this industry which is completely out of touch with audience trends and completely deaf to the words of one of their largest clients.

Listen to Ford.

They are your client.

They know their audience and yours - perhaps better than we do.

Thank you Mark.

Going Beyond Time & Money For Real Brand Value

Mary Meeker of Morgan Stanley recently released and presented her Internet Trends study at the CM Summit in New York City. 

Amidst discussions of mobile, online advertising, e-commerce and international trends, the item that caught my eye related to the value of digital advertising compared to the time spent on online and to CPMs of other media.

I have heard this argument quite a bit as an indication of the undervaluation of digital ads versus other media and I do not necessarily disagree, but I think it is incomplete.  In looking at the chart below from Meeker's strong presentation, both Internet and Radio have less Ad Spend than Time Spent, which by the basic definition would mean they are both undervalued.

That is certainly a debate that is common, but I think it misses the point because a brand will derive value not simply from the ad on a well-trafficked medium, but from the power of the relationship it can drive.  These days, that brand relationship value is the combination of media, not each one in isolation.

I, therefore, do not happen to adhere to the idea that Time Spent and Ad Spend (along with CPMs) necessarily need to be equal for each medium because it is the combination of time spent across media that is the critical data to understand.

All media are there to drive brand relationships and the value placed on the time should reflect that capability.  Impressions, clicks, comments, views both online and offline are all pieces of that brand relationship so focusing on on one medium as under or overvalued based solely on 2 data points I believe paints an incomplete picture.

 

4 Social Media Questions For Media Finance Focus 2010

#in

Today, I am very fortunate to speak to media finance professionals at the 50th Annual Media Finance Focus conference about Social Media Measurement.  While that is the title, the session will focus on social media as one tactic of overall brand relationship management and how it directly ties into finance and business results.

I am beyond excited to be joined in the session by:

- Stephen Day – COO at Digome LLC

- Dawn Iacobucci - E. Bronson Ingram Prof. in Marketing, Associate Dean, Owen School of Management, Vanderbilt University

- Paul Jankowski - Chief Strategist, Access Brand Strategies

- Les Ottolenghi – CEO, Fuzebox Inc.

We are opening the discussion with a quick 4-question poll, which I welcome anyone to take.  

http://polldaddy.com/s/6885588B4EDBC7CB

5 Themes On Building Companies From Philly Startup Leaders Starter Stories

#in

I was honored and excited to be asked by Philly Startup Leaders to record a video for their Starter Stories series that asks entrepreneurs from the Philadelphia region to share their background, ups, downs and current projects. 

Thank you very much Cliff Stevens and Blake Jenelle for the invitation!

College Radio Still At The Forefront

While we here at Mediaguide and our close partners at CMJ have known this for quite a while as we see the best new music come across every day, it is nice to see the New York Times acknowledge the strength of college radio.

Media, especially music, discovery fragmentation is here to stay; no doubt about it.  To me, this NYT article is further affirmation that the combination of online and offline discovery of content and brands has become the norm, not the exception; especially amongst the sub-30 crowd.

While the business models still need to catch up to the consumer demands and, therefore, we are all experiencing some growing pains; the end result will be one of tremendous originality, creativity and innovation.  We just need to act smartly and conservatively to get there.

Happy Time To Ponder

I just spent the last 2 weeks in Mexico to get married to an absolutely wonderful and magnificent woman.  During those 2 weeks I enjoyed time with my friends and family, did not work and had time to think and ponder the news of the day, both general and radio/media/tech industry-specific.

A strong part of our relationship is the fact that we constantly challenge each other, making sure that we are always moving forward in our personal and professional lives.  I am sure many relationships are the same.

It is with that constant search for growth and improvement in my mind that I gasped out loud at the announcement that Nielsen would be launching a once/year diary service for radio.  Now Nielsen is a pioneer in the world of audience measurement to be sure, but this service, in my opinion, is exactly the OPPOSITE of what the radio industry needs for 2 main reasons:

1. Lack of Timeliness - At Mediaguide we believe in immediate information for advertisers and have learned that the demand for fast information turnaround has increased, not decreased.  To serve both the brand and direct response advertisers well in this competitive advertising environment, we must all provide as close to real-time analytics as possible to give an accurate view of the world and, more importantly, an accurate measurement of the ROI.

2. Lack of Interactive Relevance - A snapshot of audience once per year, or even once per quarter for that matter, does not give the brand or content owner any insight into how their message moved the listener and consumer to action.  The primary objective of business intelligence in this new era of fragmented media must be the actions of the consumers.  To be blunt, there is limited value to the advertiser in knowing how many people MAY be listening; but there is tremendous value in knowing and measuring who RESPONDED.

The combination of traditional media to inform and digital/mobile applications to respond and measure should be the focus of all of us that touch the radio industry.  While Nielsen is a tremendous company I agree with Mark Ramsey and fail to see how this service moves the industry forward.