10 music business case studies prove Social Media ROI

Posted on May 27, 2013 by Rob Petersen




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Nowhere do the words, Fan Engagement, have greater relevance than in the music business and social media.

The music industry, the first media business to be consumed by the digital revolution, has experienced profound change. But in 2012, for the first time since 1999, sales increased. They went up 0.3%, to $16.5 billion, a far cry from its $38 billion peak in 1999 (source: International Federation of the Phonographic Industry).

Although it may not be time to party like it’s 1999, the music business is growing again. Social media is helping the transformation. That’s why from June 9th through 11th, you’ll find me at the NMS New York New Music Festival. It’s dedicated to help artists and players break through in this difficult market by providing the knowledge and connections they need to succeed.

The New Music Seminar (NMS) began in 1980 and ran through 1994. In its 16-year run, the first series of seminars annually attracted more than 8,000 participants from 35 countries. In 2009 NMS was revived because the music business was in crisis after a decade of dropping album sales. Label executives, agents, promoters and artists needed find ways to break away from the traditional album-based business model.

The #1 goal in the music business today is monetization. That’s why social media plays a prominent role. Here are 10 case studies that prove Social Media ROI in the music business.

  1. JUSTIN BIEBER: Owes much of his fame to social media. One example is when he created a huge PR buzz in a seemingly innocent way from a rumor he spread that the music video, ‘Baby,’ was to be deleted from YouTube because it had 1.5 million dislikes, and millions of Follower tweets poured in to protest. Today, “Baby” on YouTube has 836,039,006 views.
  2. BONNAROO AND CMA FESTIVAL: Are two big festivals that occurs every year in Tennessee. A local SEO, SEM and Social Media Monitoring software company, Raven, captured the social attention the festivals were getting with Infographics (one is shown at the bottom of this post). The Infographics were featured in the Tennessean’s Business Section and USA Today. From the publicity, the agency secured new business from a regional tourism entity, an international record label and and an international entertainment television network.
  3. MATTHEW EBEL: A Boston-based singer generated 26.3% of his income from 40 hard core fans.  Matthew used social media to drive his super fans to a susbscription based website. He sold packages ranging from $5/month to $15/month, as well as annual options.  He offered a wide range of perks are including members-only parties, VIP seating at shows, access to new music as soon as he creates it, new live concert recordings every month, broken apart tracks ready for remixing, behind-the-scene sketches and drafts.
  4. KING ISSA: A rising hip-hop turned to a  unique, first-of-its-kind mobile app: an iPhone application that delivered a musician’s mixtape with exclusive in-app content. In one week, the app received 50,000 download and live tracking and analytics data from over 35 countries that were used to secure iTune sales and depth of Fan Engagement for repeat purchase.
  5. LADY ANTEBELLUM: Integrated exclusive social sales offers, such as their “Own The Night” flash sale, where the band offered fans an exclusive bundle offer for a zip-up hoodie and an autographed photo. By combining the exclusive offer with social commerce apps that enabled fans to click through and complete their purchases within the Facebook Newsfeed, the deal sold out in an hour, with 85% of sales going to new customers. Another flash sale in Facebook Newsfeed that same night sold out in just 10 minutes, proving the value of social media as an effective sales tool when used intelligently.
  6. LIVE NATION AND SMASHING PUMPKINS: The Smashing Pumpkins took over Live Nation’s Twitter Feed for 7 hours. In that time, they answered 200 questions and had 570 engagements with Fans and Followers. The real time engagement generated 12,280,000 impression generated in that time.
  7. NEXT BIG SOUND: An analytics and insight company that tracks billion of social signals to help record labels, artists and brand managers make better decisions did an analysis on the key factors impacting digital sales of iTunes. In order, they were: 1) Radio Spins, 2) YouTube Views, 3) Facebook Fans and 4) Twitter Followers.
  8. AMANDA PALMER: On a boring Friday night, Amanda managed to make in $11,000 in just two hours. It all started with her tweeting about how she was alone, again, on a Friday night sitting in front of her computer. Others started chiming in and began claiming how “we are all losers.” Dialog continued and grew at a rapid pace. A faux organization was started called, “The Losers of Friday Night on their Computers.” Amanda created the hashtag #LOFNOTC and thousands joined the conversation. A follower suggested the group create a t-shirt. Amanda quickly decided to run with it. She took a sharpie and made a t-shirt design. A website was thrown up that night with the t-shirts available for $25 a piece. 2 hours later… $11,000.
  9. ROXY: The legendary Sunset Strip music venue uses social media to measure Fan Engagement. They use TweetReach to measure the number of people their tweets reach, as well as the number and quality of retweets. They also like Klout, which helps them compare their efforts to similar businesses.  TweetReach demonstrates to a talent agent that they could reach a larger potential audience through Twitter so they should stop advertising in certain local publications. Print advertising is expensive, but Twitter promotion is a free.
  10. “SOCIAL STRIP”: is the name and social umbrella that lives over the Sunset Strip for all the entertainment venue (e.g. Comedy Store, Roxy, Viper Room. It’s part marketing, part information and part online community. One of their events is the the Sunset Strip TweetCrawl. The TweetCrawl is a bar and restaurant crawl using Twitter to promote specials and other prizes and encourage participants to patronize multiple business on the Strip. The first TweetCrawl was in July 2009. It has been an annual event ever since.

These case studies show how important listening, analytics, monitoring and partnerships are in the music business. They also show how many different types of music or music-related businesses can benefit.

Do these case studies prove Social Media ROI in the music business for you? Will you be going the the New Music Festival in NYC this June? Will you give me a shout if you’re there? Here is the Bonnaroo Infographic.

Music Business Social Media ROI


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