Vivendi Makes Beautiful Music Online
A case in point is the high-speed, hi-tech world of music. Nobody can do business in music the way they used to. The Internet changed everything for record companies and artists.
In the good old days, a record label such as Universal Music's Interscope would sign an artist and sell their albums. The label would arrange for the recording session, the session would happen, the music would be refined and mastered, then copies of the CD or tape would be distributed to its retail partners on a bid or order basis.
Then came Napster and others, and the world suddenly changed. It caught the record companies flat-footed and left them with little recourse but to sue Napster for providing an environment for what they believe is pirating.
Most of you are familiar with Napster's role as an environment where its members could make copies of an artist's music on their computers and swap the music among members. This made the record companies realize that the way they did business in the past is dead. So they raced into the Internet and tried to find ways to drive business and create consumer demand before their artists' recordings were copied and shared among thousands of potential customers.
Here is a case study of how one record company, Vivendi Universal Music, made the effort to create demand in an untraditional way.
Marketplace situation. The marketplace was such that the Internet was being used widely as a channel for music copying and sales through many sites including Amazon.com, buy.com and CDNow.com. The marketplace also is filled with competing CDs. Vivendi Universal Music wanted to leverage consumer use of the Internet by executing database marketing/CRM strategies and tactics to build its customer base, gather key information and affect album sales.
This was an independent test marketing effort developed for the release of a new CD and a new label, Lost Highways, for Vivendi Universal Music. It was a pilot to determine whether online promotions would affect music sales and whether database marketing strategies and tactics would be effective within this industry. This was the first attempt to marry database marketing techniques with e-marketing activities.
The product marketed was the new CD "Essence" by Lucinda Williams. It was one of the roughly 300 CDs that Universal introduces in a given year. Williams was not a well-known artist, and the genre called "roots rock" was just emerging as a new music style.
A very limited number of radio stations aired roots-rock artists because of its small audience. Traditional distribution channels would be difficult because it would be tough to gain rack space given the newness of the genre and the label.
No systems were established to measure the success, if success were to occur. Frankly, management did not give the idea much attention.
"We didn't know if this would work," said Joe Rapolla, vice president of consumer marketing services at Vivendi Universal Music. "Many of our business units were deeply in-volved in the Internet space and marketing their new releases. This was a different approach. We knew we had to try to drive business earlier in the process."
Target audience. This included existing fans (customers) of Williams and prospects who matched the fan profile. The second, but more important, audience was Vivendi Universal Music managers of the new media and online marketing departments. These managers had been trying to prove to management that online marketing could reduce costs and find new customers.
Objective. The main goal of the campaign was to develop an integrated marketing strategy that affected incremental record sales during the first week of the album release. This included:
· Leveraging and supporting existing Universal Music Group-Lost Highway marketing strategy.
· Using online and offline marketing tactics that are trackable, accountable and measurable.
· Proving the value of CRM in developing fan support and sales.
· Developing a model that can be replicated for other UMG labels and artists.
· Using research to create the ideal customer model that would allow Lost Highways to purchase look-a-like prospects.
Implementation and techniques. As part of the database-driven microsite development, a real-time report was created that was tied directly to the database that drove the site's functionality. Through the report, we tracked response information including response by list source, publication, links and statistical response to the online survey. UMG and Lost Highway were issued user names and passwords to access the report at any time. Prospect data was behind the site, delivering visitors information and content directly after they logged in. Links were developed to go directly to the Amazon.com purchase page for a quick buy.
A music sampler was embedded into the site to give prospects an idea of the quality of the new artist and the new genre.
"We all learned something," Rapolla said. "After the dust settled and we talked to our label managers, they felt that something significant had been achieved. Now, we are trying to develop a template-driven process to make implementation faster and less expensive."