Culture as Product

There was a rather interesting article on hypebot about the notion of culture as a product. While the article was very nebulous and abstract, he does lay down some interesting ideas about a company that would focus on culture as a product (although he somewhat confusingly equates the two as being identical).

Basically, the idea is to have a story revolving around what problem you want to solve, build features into the culture product to alleviate those problems, ship the feature and learn from the feature being added.

All this talk about culture reminds me of the manifesto that has been making the rounds on the Internet. Called We, the Web Kids, it's give an interesting insight in to the hivemind of Generation Y. In it, the author talks about how growing up on the Internet has changed the way our generation views the world in a very fundamental way.

The manifesto talks bout searching around for several answers before determining the best one ourselves, and the section about the fact that we can talk to anyone, anytime and as a result, the demanding of mutual respect in our interactions. In particular, the line "We have learned to accept that instead of one answer we find many different ones, and out of these we can abstract the most likely version, disregarding the ones which do not seem credible. We select, we filter, we remember, and we are ready to swap the learned information for a new, better one, when it comes along." sums things up rather well

The reason that these were interesting to me were because of a third article about what to do with people's attention once you get it. In it, the article reinforces everything we've heard about how social media is good, how it should play a big part in a band's marketing strategy, blah blah blah. The poignant bit was about how social media offers bands a chance for 'authentic communication' with fans.

It is this communication which has driven the success of direct to fan marketing, social media and even p2p file-sharing (which got us into this 'mess' in the first place) for indie bands. Not to mention, this authentic communication resonates strongly with the message put forth in the manifesto of the Web Kids. It shows us that the artists aren't gods to be admired from afar, but people like you and me. It's real, and above all else, it's respectful.

The idea that Ethan put forth in the first article isn't how to turn culture into a product. Record labels have been doing that since their inception. Rather, it's how to continue doing that in the framework of the Digital Age culture. You need to continually keep updating and interacting, and tell a story while doing so. Social media has put the soul and personal touch back into business. This is somewhat ironic since it (and digital technology in general) has been decried as being both soulless and impersonal.

Irony aside, the important message in all of this is that developing culture around your product is vital to your success and it's easier then ever. The internet allows us to foster connections worldwide at the speed of light. Given how easy it is to talk to and buy from anyone, people don't give you as much time as they used to. It's nothing personal, they have a lot of things vying for their attention. The way to keep their attention (and theoretically, their money) is to foster a culture or coolness around your band, and to do so personally.

Additionally, making things easy is a must. It goes along with the idea of mutual respect and the ability to access several different sources for the same product or information. Like this article states, don't be surprised when people move on to a different product (in this case, piracy) when you don't make it easy for them to access.

To summarize, a band's success depends upon the culture they form around themselves, the ease of access to that culture and how engaging (and personal) that culture is. Because if you don't, like the manifesto states, we are ready to swap up to something new and better. And there are plenty of options to choose from.

Speculations on Spotify

In this age of rampant piracy, Spotify has been heralded both as the music industry's savior and a massive scam on already beleaguered record labels and artists, depending on who you ask.

Hypebot has had a lot to say about the service since it's inception, and this week has been no different. Of particular interest to me was this article that says that Spotify has hit 3,000,000 paying subscribers. The article estimates that Spotify has 12,500,000 users worldwide and a conversion rate of 20% is nothing to sneeze at. Spotify also accounts for 42% of all Swedish record label income (Spotify is based out of Sweden), which is kinda cool and shows that they might be onto something.

However, not everyone is happy with the new streaming service. For instance, indie artists have reason to be mad, as for all this growth they only see $.001 more per streaming. Furthermore, Spotify reportedly has been asking for more money. Despite all this success and paying indie artists next to nothing Spotify is still in financial trouble. While there is no way to verify this, due to Spotify's (somewhat worrisome) lack of transparency, I can speculate as to why this is: the majors

You see, the majors have all invested in Spotify (have shares and what not) and negotiated there way into premium royalty rates. Without their support (read:i catalogs), Spotify would never have been able to take off the way it did. And it would appear that they are bleeding the service dry before it ever reaches its full potential.

Which is sad, both because of the potential Spotify has, and because this is another in a long line of mismanagement of new technologies by the record industry. Record labels really need to hurry the hell up and come to terms with the fact that times have changed, and that they are most likely never going to be the giants that they once were. Especially if they keep pulling stunts like this. The consumers value of music as a product has changed, and their business models need to change accordingly.

However, even if it fails, Spotify still demonstrates some very important facts about modern music consumers. Their most basic subscription plan offers people unlimited music without ads, the ability to import their music collection and the ability to share it with friends. The last perk is the one worth noticing, since the first two are easily achievable through piracy (and don't tell me storage space is an issue, a TB drive is about $100 and will hold more music then most people will ever listen to). Music still plays a large social function (which is why live shows haven't gone away, and won't until we are all living in the Matrix), and many (myself included) form at least a bit of their identity around it. Being able to show your friends that you are as indie/underground/metal/punk/hip(ster)/pop/alternative/etc. as you appear to be has (an admittedly narcissistic) value to it. A value of $4.99/month to be exact

Additionally, the premium service offers high quality audio, offline accessibility, the ability to "take it abroad" (not sure how this differs from offline, but whatever) and will let you take it on your mobile. Again, the last one is the only thing that differs greatly from the benefits afforded by piracy. Not because it is hard to transfer pirated media to a mobile device, but because with Spotify you don't need to keep changing out said media manually. It appears that having instant access to any song ever made on the computer isn't enough anymore, we need it on our smart phones too (because musical ADD is a horrible, horrible affliction). And even though this shows that society's collective attention span is maybe a minute tops, it doesn't matter. Because people will pay for it, despite having the option to get music for free, and that's really what counts.

If Spotify does go under, the next service (for there will be another, Spotify is a game changer) will be wise to keep these benefits in mind. They should also try and avoid the mistakes Spotify has made by giving indie artists equal (or substantially better) treatment and negotiate harder with major record labels to pay reasonable (read: sustainable) rates. Although if Spotify does go down, I imagine the next service will have an easier time pulling this off. Because once it goes away, the majors will start to miss that revenue and realize what a good thing they had going. And how they managed to completely fuck it up. Again.