Read Part 1 here.
Ethan: The knowledge [about the economics of the music industry] that you and Benkler have is hard won but it's very powerful. Even though it's complicated, it has a lot of practical applications. From what you've written in the Huffington Post and on the TuneCore blog, I think you're analysis makes sense and is valuable to a lot of people. Giving your customers the ability to learn about their options and opportunities in the music world seems to be a strong marketing move. How are you going about getting the word out about TuneCore?
Jeff: The way we market and promote ties in to the number of potential customers and to social networking, word of mouth, and blogs. Previously, there was only a fraction of a percent of musicians who were even allowed the chance to have a career. The concept behind TuneCore was, "Let everybody in"; turn distribution into a bottle of water. Just like water, anyone can walk into the store and buy it for a simple fee. You know there’s no filters and everyone gets treated the same, be it Keith Richards or Nine Inch Nails or TuneCore customers or Liam Sullivan (who put a video up on YouTube for a song called "The Shoes" and who has sold over a million songs without a record label).
As far as marketing, we know that artists communicate...
with each other. I hope their experience with TuneCore is a good one, because that’s the primary way we let people find out about us: through word of mouth. We certainly have marketing outlets through our strategic partner, Guitar Center. But primarily, I get the opportunity to do interviews like this and send out press releases that discuss how we've been able to change the music industry for the better (as far as I’m concerned), and we just let people blog and talk about it.
The wonderful thing about social networking is that the same force that can propel Liam Sullivan to sell a million songs through word of mouth can propel any idea. TuneCore is just another idea. You look at a site like Digg...oh my gosh the amount of traffic that’s driven us.
Ethan: Oh yeah?
Jeff: It's great, anything from The Unofficial Apple Weblog or Ars Technica or this one very amusing article that ran on TechCrunch.
Ethan: I saw that, that was a trip. So that got Dugg up and that’s given you a lot of help?
Jeff: I don’t know if it helped or not, but what it did do is bring awareness and traffic. We market TuneCore the same way we market and promote our customers. Because we’re in a relationship with Guitar Center, I have the opportunity to utilize their marketing vehicles. So, when you pick up a Guitar Center catalog (and they mail 3 to 5 million of them every month), you’ll see albums by our customers in there with little factoids next to them.
Ethan: I do enough cheerleading for you, but seriously, of all the strategic alliances and deals that happen between public companies and startups, this deal is one of the most intuitive that I’ve come across. It's good to hear that the relationship has been proven to be useful in reality.
Jeff: It’s been great. So when you walk into a Guitar Center store (there’s 220 of them across the United States) and you hear the music in the store, that’s music from our customers being played. That music also gets backsold [the name of the artist, album, and song is broadcast after the song plays]. On top of that, we send out emails to about 4.5 million people [Guitar Center customers], where we select music, put together playlists, and provide links to buy.
So just those three little outlets provide 10 to 20 million impressions every month. That's exposure for our customers and it’s part of what we do on top of promoting ourselves and the music from our customers to digital stores like iTunes. I think we’ve had about 500 artists featured on iTunes at this point.
Ethan: Wow. Well, its self-reinforcing, it's very cool.
Jeff: I think the best way for us to market and promote ourselves is to create a great customer experience. Make it affordable, do it under the right model (where you’re not taking any of the revenue from the sale of customers' music), charge a simple upfront fee, provide them the service for that fee, enable complete transparency, and let them take in the money that they’ve earned. Frankly, I believe that if you do something well, people tell people. Particularly in this artistic environment, they'll tell lots of people because it’s something that’s needed.
Ethan: My take on this (and this goes for web services, or music making, or shoes, or whatever) is: in the information environment that we’ve described (i.e. the Web), it’s pretty much a product meritocracy. TuneCore is a great product, so people are talking about it; if you make good music people talk about it; if you make great shoes, people talk about it. It’s hard or impossible to buy your way into that; it has to be earned.
Jeff: It does. An analogue to that is: a lot of artists and musicians appreciate the distribution opportunity we provide but ultimately come back to, "What about marketing and promotion? We need to be marketed and promoted and we need to go to someone that has that resource."
It’s an interesting time too because it’s confusing out there. There’s a lot of things changing and one thing that I wish I could communicate more effectively is: even though everyone thinks of the major record labels as the brass ring for marketing, 98% of what the major labels release fails. You’ve never heard of these artists. The millions upon millions of dollars spent to market bands you’ve never heard of prove a point: just because you’re on a major, or just because you throw millions of dollars at something doesn’t mean it’s going to get a reaction.
The thing that I need to communicate better is that the best thing that you can do to market yourself is to create some art that reacts. It used to be that you would create something that reacts, and then the first gatekeepers (record labels) would let you in, and then the second set of gatekeepers (the media outlets) would decide which of the labels' releases they were going to expose. Even still, if "Smells Like Teen Spirit" by Nirvana was a bad song, or a shitty video, it wouldn’t have mattered how many times MTV played it. It still wouldn’t have reacted.
The reason why it went on to sell so many copies is because it got the exposure. But upon getting the exposure, there was something magical about "Smells Like Teen Spirit" that moved people to react. So as far marketing now, you first create something artistic, but then you have direct access to the media outlets. You can put something up on YouTube, you can put something up onto Flickr, you can email bloggers, you can get to Last.fm. But the artistic creation still has to cause the listener to react. The point is that the listener or the music fan can now discover it because it’s there in the first place.
Ethan: I’ve been following Ian Rogers and Topspin Media for a while now and was just reading one of his blog posts. He got into a little more detail about their demand-generation ideas. It’s all very opaque, but it’s been interesting to me to follow their path because I'm interested in systems that create demand in a music market that assumes ubiquitous distribution. It’s hard, as an artist, to go out there and do what you just said, do all that emailing, do all that networking, it can be very tough to scale that.
Jeff: I don’t know if I agree with you. What I mean by that is that part of the fun is that you don’t need to do that [emailing and pitching]; others do it for you. That’s the whole concept behind social networking and why Facebook is worth billions of dollars.
Going back to Liam Sullivan, a.k.a. "Kelly," and the video for the song "The Shoes"; the guy made the piece of art. Whether you like it or not is irrelevant, he made it and he put it on YouTube. He didn’t do anything else after that in regards to propagating it online beyond create more content, which he would put on YouTube. Everybody else did the work for him. What’s so damn fascinating about that is that in the old days, even 10 years ago, that didn’t exist.
To revisit the idea of "You’ve got to create something that reacts," there’s many difference artistic avenues you can take to create that piece of art. What’s different now is that you have access to media outlets that enable tens of millions (if not hundreds of millions of people) to be exposed to it. You can’t make them like it anymore than you can make somebody like food that they don’t like, but you can get them to taste it by putting it in front of them and then if they like it, they’re like, "Holy shit, this is really good, you've got to taste this!"
And that in and of itself, it’s the Calgon commercial...they told two friends and they told two friends and so on and that’s how something picks up virally and that’s how something becomes huge.
Ethan: I agree on the potential that's there, but I think that we're far from a "perfect market" for music: a market where every band finds all the listeners it should have (and where every listener knows about every band she would like to listen to). I know many very talented musicians that make great art, sincere art, and who put it "out there," but who haven't gotten the reaction they deserve. It breaks my heart! Of course, some might say that the "perfect market" I just described is a little creepy, but it seems utopian to me.
Jeff: It is a little creepy! [laughter]