Weblog Consulting Register Login Subscribe to Free Influx Emails Join our Facebook Group Follow us on Twitter Branding Street Cred Technology Lifestyle Style Entertainment Interviews Art InfluxTV Map Widgets RSS — All Subjects RSS — More Feeds

Search

Advanced Search

Contact Privacy Policy

MTV or Music Television built its brand celebrating the new art form of the early 80s, the music video. It gave the music industry just what it needed, the eyeballs of a young generation to promote its product which it made a buck a disc for.

Fast forward several decades to the emergence of MySpace as THE music brand and you see a radically different notion of the role of music. Music is given away and streamed, the value of this is to provide exposure and shared advertising revenue for bands and record companies. The money is not made in the music, but in the merchandise and concert ticket revenue.

As Techcrunch told us in October.

"But today the labels have all but given up on DRM, and users can now play virtually any song ever recorded on demand for free. MySpace has created the first ecosystem that has a shot of producing sustainable revenue streams for artists based on advertising, merchandise and concert sales.

If it works, the next step is the fall of per-stream fees and download fees. Instead labels will see music consumption for what it really is - free marketing. Labels will compete to encourage song downloads and streams to move those songs up the charts, attracting premium advertisers, merchandise sales and sold out concerts."

What's interesting to see here is the role music has played as a glue to generate revenue for media companies, but the context of that revenue generation has changed over time.

It seems that MTV has lost its way as a brand with television no longer being the dominant media of the youth generation, music video dying as a form and the network shifting focus away from music to regular television shows.

Apple became the next brand to exploit and dominate the music channel with iTunes and the iPod, but the software was always just there to sell the high margin hardware. iTunes has now being panned by the critics for not keeping up with the times and Apple has a few other heavyweight players including Nokia trying to take a big share of the hardware business.

Another player is MySpace, who came out of the gate in October with a relaunched music service that achieved incredible traction. Just a few DAYS after launch, the brand streamed one billion songs.

At the recent Web 2.0 conference there was all kinds of speculation about the potential for an MP3 player to be launched by MySpace.

However, this isn't really the game anymore.MySpace's core competence is all about community and from day one its community has been focused on music. This is something that can't easily be copied and Apple, Nokia and Sony will struggle to make this happen. The story here is not about an iPod rival from MySpace, but instead the arrival of MySpace as a formidable media player in the new world of music.

Posted by Ed Cotton The rise of social networks and the promise of monetization is driven by the belief that recommendations hold significant value.

There are numerous studies that show "Word of Mouth" as the leading source of influence on a person's purchase decision. However, WOM has become something of a general term to describe general conversations that people pick up from a wide variety of sources. Social networks like My Space and Facebook are hoping to make money based on the recommendations of "friends" to "friends".

Interestingly, a paper published in 2006 by Andrew Gershoff and Gita Johar at Columbia, suggests that we tend to over-estimate the knowledge and understanding our close friends have about us, when in reality, their recommedations are no better than others who aren't as close.

However, the sharing of ideas and recommendations, even if their recommendations aren't great, the process plays a crucial role in strengthening the bond between friends. We still want to recommend and be recommended things, because that's one of the ways we become closer to others.

Here's the opening paragraph of conclusions from Gershoff and Johar's paper.
 


However, Facebook, Amazon and MySpace know far more about us than our friends ever will.

Perhaps the "secret sauce" and the "tricky territory" will be for these players to help our friends to know us better and therefore increase the likelehood of succesfull recommendation, leading to a win-win situation.

Toolsets and applications that help friends better understand the taste of their friends could play a significant role in helping to monetize these social networks.

Although this is the role of many of the current applications on Facebook that determine taste and interest, there are too many of them and there's no way to aggregate the information and build interesting friend profiles, perhaps that will come.


Posted by Ed Cotton