Online Media’s New Model
In this piece, Daniel Pines looks at how mainstream media is reinventing itself in order to accomodate the rise of independent online content creators, and how this new media model is, and will continue to impact the music industry.
Guest post by Daniel Pines from the Berklee College of Music: Music Business Journal
In recent months, major record labels such as Universal Music (UMG) have been scrambling to find and make deals with new multimedia groups such as Mass Appeal, and All Def Digital. These online entertainment companies have made a big splash in recent years as more and more people find their artistic content on YouTube, streaming services, and social media. The recent interest of major labels is particularly interesting since these media companies are not solely or even primarily involved in the creation of original music. It is also very significant, as these recent deals point to a larger trend of how traditional record labels and other outlets of entertainment are preparing for a future in which the majority of content is distributed online.
The Rise of the Online Content
It should be no surprise to anyone that over the past decade, social media platforms have come to dominate the attention of the modern world. This trend is of course most prevalent among adolescents and young adults – the niche clientele pursued by creators of music and other entertaining content – and has provided an unprecedented opportunity for content creators to reach large audiences within astonishingly short periods of time. But this is only the tip of the iceberg.
In this new landscape, photographers, bloggers, artists, and all sorts of other creative types have achieved incredible notoriety through their cunning use of these social media platforms. This niche set of skills – what might be cheekily described as “eyeball grabbing” – has become the foundation for an entire sub-industry which is being competitively pursued by creative, media, and marketing groups alike. In the midst of this 21st century gold rush, new companies have evolved to master all aspects of the online content bonanza. These companies, which are being loosely coined as “online multimedia & entertainment groups,” have become incredibly adept at producing and marketing online content that is both targeted and engaging. These online media groups are the newest addition to the online craze, and are the focus of this article.
Content creators, whether they are independent or incorporated, are not the only actors who are interested in the power of online platforms. Brands and other businesses that rely on trend and popular image for profit have become some of the most active players in the online sphere of culture and influence. Their interest in this landscape has created configurations through which social media influencers, such as YouTube or Instagram celebrities, can make huge profits by promoting the products of brands that hire them. In return, these companies have the opportunity to gain direct access to their niche markets through their endorsee’s cunning use of social media.
With the entrance of online media groups, however, these opportunities for creative advertising are exponentially multiplied. Not only do these groups have the ability to reach these niche consumer markets directly through social media, but they are well connected enough to provide top-quality content that rivals the industry standards of New York and Hollywood. Through this model, Mass Appeal, which began as a New York City graffiti magazine in 1996, has gone from marketing artists on social media to producing creative advertising content for top-tier companies, including Asics, Under Armour, Google, and HBO.
These opportunities for corporate online marketing – whether through independent influencers, or online media groups – have provided strong and evermore prevalent linkages between advertising, the creation of content, and its consumption amongst online users.
So let’s recap. In this new world of online branding and consumer interaction, actors that are able to gain and maintain influence on social media have a significant advantage in the production and promotion of goods and content. Companies have made partnerships with such influencers to promote their bands and products. And now, online media groups are able to combine these targeted marketing opportunities with original content that rivals that of mainstream media sources. Sounds like these online media companies have hit the jackpot, doesn’t it? It sure does, and here’s how they did it.
The “New Model” of Multimedia Entertainment
Online multimedia groups vary significantly in terms of the content, branding, and markets they pursue. But while online media groups drastically differ in nearly all aspects of their business model, they all share one key feature: strategic specialization. More specifically, they excel in areas where traditional media conglomerates fall short.
While online media groups are always on the cutting edge of trends and developments in culture and entertainment, they don’t appear to be interested in mainstream popular culture. Instead they focus on niche pockets of society, such as those that strongly subscribe to a specific cultural identity, to which they can cater their works. In many cases, this focus is tightly woven into an ideology or even a succinct mission with strong political implications. For example, Mass Appeal markets itself as a “media and entertainment company on a mission to represent and progress urban culture on a global scale”. All the content they produce relates to this goal, and host photos of Black Lives Matter protestors on its website. Similarly, All Def Digital describes itself as “leveraging the cultural power of hip-hop, comedy, and social justice”, and focuses substantially on content that is informative on racial issues and discrimination in the United States. These tactics of putting missions and values first seem to be very successful in gaining traction amongst niche viewers. However, it’s not enough to be invested in social issues. In order to gain true influence, online media groups must be a part of the culture they claim to represent.
In a world dominated by social media, the concept and construction of identity has more importance than ever before in the lives of everyday people. By taking strong stances on specific cultural and political issues, these groups are able to prove to their viewers in a concrete way that they are fully immersed in the cultural group they represent, and are thus viewed as a genuine source of its creativity and influence. This strategy is imperative on social media, where every action that is taken by a user is primarily intended as a reflection of self. If social media users regularly display their actions online as a projection of their identity, no less can be expected of any other creative group which hopes to gain influence. Thus, by doubling down on their brand identity, new model media groups are able to attain the complete devotion of their fans – those who fit within their niche cultural sphere – in a way that mainstream media outlets cannot. By focusing extensively on building a strong identity, new media groups are able to cut through the noise and deliver content directly to their niche consumer base.
Although these media groups are gaining a lot of influence online, they don’t work exclusively – or even primarily – within a single established facet of the entertainment industry. Instead they offer a full range of renaissance talent, often including photography, documentaries, comedy skits, live video recordings, and artistic films. Leveraging their work against the high profiles of the artists and brands they collaborate with, these media groups are able to raise their profile as producers of high-quality content.
While they work to curate all kinds of content for their online and user-based platforms, new media groups also put a great deal of their efforts into collaborations and creative advertising for blue-chip companies that are looking to step up their marketing scheme. This may be one of the most valuable sources of revenue they have, and is likely one of the main reasons these entertainment groups are so successful. With access to exceptional artists and producers across a wide variety of creative fields, creative advertisers within these media companies have all the tools they need to make excellent ads and promotional material. Not only can their content shape the consumer image of a brand, but in many cases it can also stand as compelling pieces of online media. In addition to serving the marketing purposes of the companies that hire them, these projects also raise the profile of the media company that created them, further increasing its value to potential clients.
All Def Digital hosts three active and popular YouTube channels, which focus on music, comedy, and civil rights activism. Their music channel flaunts playlists, live performance footage, interviews, short documentaries, and promotional videos with corporate sponsorship. “All Def Nation”, the activist channel run by All Def, hosts a variety of engaging and informative videos which are designed to be spread and shared through social media. Their popular comedy channel features a variety of content, including a series called “Dad Jokes,” in which guests sit across from each other and take turns trying to make the other laugh. All Def’s success is shown through the 300 million views they generate on a monthly basis between their combined YouTube and Facebook pages. They also have a show on HBO, titled “All Def Comedy”.
As a result of this success, they have recently expanded their partnership with UMG. This allows for greater collaboration between the companies, and affords UMG artists more opportunity to be featured in All Def’s online video content.
Mass Appeal, originally founded as a graffiti magazine in 1996, is heavily involved in producing a variety of content mediums, which include film, TV, music, photography, and creative advertising for high-end brands. They launched their record label in 2014, which hosts a small roster of top-notch talent, including Nas, J-Dilla, DJ Shadow, Dave East, and Run the Jewels. They are very active in their production of film and TV content, and have produced work for Netflix, PBS, Showtime, CNN, and TBS. These films include live performances (Nas Live from Kennedy Center – PBS) documentaries on hip-hop and its culture (Rapture – Netflix), the history of racial issues in Los Angeles (Burn, Motherf*cker, Burn – Showtime) and an animated series of comedic and anecdotal celebrity stories (Storyville – TBS). They have done creative advertising projects for innovative companies such as Asics, Google, HBO, and Under Armour. They also have an extensive list of top-notch photographers and film producers who they work with regularly.
As a result of its extensive success and excellent branding across a variety of mediums, Mass Appeal has signed a global, multi-year deal with Universal Music. This deal allows Mass Appeal access to Universal Music’s marketing and promotional teams across the world, while giving UMG exclusive distribution rights for physical and digital musical recordings and short-form video content. It also gives Universal the right to distribute releases from all of the artists signed under Mass Appeal’s record label.
So now we have a clear idea of what these online media groups are, and how they’re making waves in the worlds of advertising and entertainment. But how does this relate to the music industry, and why are major labels so interested in claiming their stake?
New Media’s Impact on the Music Industry
While online media groups are making waves across the entertainment, industry, their new entrance onto the music scene is particularly disruptive. Whereas film and photography lend intuitively themselves to independent success on social media, the barriers to the music industry are much harder to crack. While some artists attain success independently through videos and Soundcloud tracks going viral, record labels act as gatekeepers to the majority of the industry. In order for online media groups to become heavily involved, they eventually need to work with or for record labels, which means they need to provide something that record companies can’t create for themselves.
Luckily, new media’s area of expertise lands directly where, similar to mainstream media outlets, record labels fall short. (Everything that makes them stand out online also gives them an edge over record companies.) Their very nature as a cultural entity, as well as their mastery of social media platforms gives them a trend-setting influence that labels struggle to attain. Their ability to become political and independent allows them to enter and thrive in spaces that record labels find inaccessible. As hubs of all sorts of creative talent, online media outlets can provide high-quality content across a variety of mediums that would normally be outsourced by a record company. Finally, their relationships made through corporate advertising can be leveraged for collaborations and sponsorships.
Upon looking at what online media groups do, and the ways in which their focused tactics compliment the large-scale business record labels are typically involved in, it makes perfect sense that these two business groups would want to work together. Online media groups have the ability to open doors to focused consumer bases that record labels are having a hard time reaching. Moreover, they provide the labels with extra sources of revenue. This is also an excellent opportunity for the media groups themselves. Working with top labels like UMG Global offers media groups the chance to spread their work globally, which means significantly raising the value of their brand, as well as potentially greater profits for them, and all the artists and other collaborators they work with. Clearly, online media groups have a lot to offer to major labels, but labels aren’t the only actors who have in interest in this new model.
As attractive as they are to record labels, new media companies are even more valuable to individual artists who are trying to build their brand. With their strong corporate networks, deft use of social platforms, stellar multimedia content, and excellence in identity branding, online media offers the exact skills and opportunities that artists need in order to succeed. In a sense, the benefits they could offer to artists might arguably resemble that of a typical “360 deal” – that is, plenty of opportunities for collaboration and branching out into different kinds of content – but without as high a pay cut, and without forcing the artist to give up creative control. And in an era where streams and record sales are relatively ineffective at generating net revenues for recording artists , opportunities to expand into different artistic avenues is even more valuable.
The potential worth of this value proposition is encapsulated best by the work and profile of Mass Appeal. In 2014, they teamed up with New York rapper Nas to launch their own label, Mass Appeal Records. Since then, they have signed and worked with a select roster of influential urban, electronic, and hip hop artists, including Nas, J-Dilla, Run the Jewels, DJ Shadow, and Manny Fresh. They produce live video recordings of their artists performances, and are also involved in producing documentary and dramatic film material for cable and online television companies, further adding interest to the work of their signed artists. Nas’s most recent album, Nasir, was released by a collaboration of Mass Appeal Records and Def Jam Records in June of this year. After their recent deal with UMG, there is little indication that Mass Appeal will be slowing down anytime soon.
After finding out what these new multimedia groups are, and all the ways that they have innervated the worlds advertising and entertainment, there is little doubt that they will have an increasingly large role to play in the future of music and entertainment. Universal Music sure seems to think so.
Somewhere in this chaotic business model, there is something very important to be learned here. For the past half-century, major labels have been the keepers of keys to success in the music industry. With what used to be nearly exclusive access to the funds and expertise necessary to create, market, and distribute musical recordings, record labels were the be-all-end-all for aspiring artists to reach their goals of stardom and influence. But in a new era where independent writers, artists, and producers can create basement recordings that rival chart-topping superstars, record companies have lost their collective monopoly on the industry.
This isn’t a declaration of industry-wide Armageddon: record labels still remain the most important players in the marketing and production of records. But today, the hold record companies have on the industry relies critically on their ability to market and influence the new sounds and trends in music. Now, that essential keystone is being challenged by the consumer intuition and online mastery of new media groups. What if this new model of online media does not just apply to social platforms and advertisers, but for the music industry as a whole? It beckons one to ponder whether or not a greater shift of power in the music industry might be looming. Only time will tell if that shift will come – or what the outcome might be.