Finally, it is time for the third and last episode of my Unconvention Groningen report. You can read the first parts here and here.

This panel addressed the issue of zero budget marketing and had the following people on stage: Niels Aalberts from the blog EHPO and manager of the recent Dutch sensation Kyteman, Ruth Daniel from Fat Northerner Records (and one of the founders of the Unconvention concept) and Rense van Kessel from Friendly Fire.

The talk was like a continuous stream of interesting experiences and tips about marketing your music with a limited budget. I have tried to gather the different topics in three clusters.

1. Be creative and interesting
To start, you must grab the attention of your audience by being creative and interesting. The first thing to do is, unsurprisingly: create new, good music. If you don’t have great music, you can stop right away, as Lefsetz keeps telling us. But you can also be creative in other aspects of your artist identity. The panel came up with some good cases in this respect. Kyteman did an original action during the 2009 Eurosonic conference, by sending every music professional attending the conference an sms message to convince them to attend the Kyteman show. Kyteman delivered a great show and that was the start of a very successful year. The sms action cost only € 56 and that was in fact the only cost in the marketing plan of Kyteman.
Another creative case originated in the minds of the Dutch band ‘Jurk!’, which is the Dutch word for ‘dress’. They did a guerrilla marketing action by dressing up a couple of statues in Amsterdam with their own branded dress.

Ruth Daniels also showed us a video about the band The Ironweed Project making an original video clip with Sony Ericsson mobile phones.

What is really important, is to tell a story about your artist or music and to have someone to tell this story (Niels is a very good example of somebody telling the story about the marketing strategy of Kyteman behind the scenes). That even doesn’t mean that you should tell lots of details about your personal life on Twitter or Facebook. That might be the story, but creating a mystery around the artist is also a viable story.

2. Understand your audience
Your fans are your most important asset and it is very important to understand them. In the beginning you should always act locally. Your local fans will do the marketing for you and that is the best marketing you can get. It is also important to reward your best fans. Finally, Niels advised that you should pay for some monitor tools to understand and analyze your fans. Of course, you might use Motion Music Manager for that…

3. Some practical points
The panelists (and the audience) also came up with some practical advice.

The first couple of things are more related to dealing with people in the music industry.

• As a starting artist, you should first try to to do all tasks by yourself: promoting, booking concerts, negotiating deals,… The main advantage is that you have a feeling what it should cost if you start paying someone to do it instead of you, because you experienced yourself what the work is like.
• In relation to the case of the guys who shot the music video with the Sony Ericsson mobile phones, it was stated that brands are nowadays more approachable for creative ideas like the one mentioned. They actually gave them phones to record the clip, because it was good promotion for the band and the phone manufacturer. However, we were also advised to not focus on such deals, because you should always be careful about what your fans think.
• Somebody asked whether you should still send CDs as a promo package. Most panelists said that they preferred links to MySpace or Soundcloud above promo CDs. There was some discussion about the dreadful interface of MySpace and it was stated that it is better to use something embeddable like Bandcamp. However, for many people MySpace is still the standard for listening to and discovering new bands.
• In dealing with music industry people, you should always be friendly. Mail back within one day.

Finally, there were some practical tips about dealing with fans:

• Regarding merchandise, there was strong support for the pay-what-you-want model. Some bands experienced that they sold a lot more merchandise with this model than with a fixed price policy. Andrew Dubber came up with the results of an experiment. It is a good idea to work with three prices: € 3 is the minimum price, € 5 is the suggested price and € 8 is the maximum price. Apparently, people pay € 10 at the end of the day.
• There was also a question about working with memberships. Instead of (or subsidiary to) the traditional album model, you provide memberships via your website, where fans can get exclusive content for an annual subscription fee. The model can work, but the panelists warned for one pitfall: you should keep your website also interesting for non-members.

When I look back at my week in Groningen, I must say that the guerrilla-minded Unconvention was more engaging, inspiring and fruitful than the actual, far more expensive Eurosonic conference. When I read the raving comments about the Topspin and Hypebot drink in Cannes, during the Midem conference a week later, it makes you think that the unofficial gatherings on the sideline are more interesting than the actual, traditional and expensive conferences. Maybe it is a good idea to organize an Unconvention during every important music industry gathering. And I just go couchsurfing and don’t pay the ticket for the actual conference.

In my last post, I explained how the abominable performance of Taylor Swift was not handled well by traditional music industry people. In the second part of this two episode series, I will talk about the viral video sensation OK Go.

The band became famous in 2006 because of the video for Here it Goes Again. They shot the video on a shoestring budget with the band members dancing on treadmills. They published the video without permission of their record company EMI. The video was a big hit: it was viewed millions, then tens of millions of times. It brought big crowds to the band’s concerts all over the world, and by the time the band returned to the studio, 700 shows, one Grammy and nearly three years later, EMI had made a substantial amount of money. To the band, ‘Here It Goes Again’ was a successful creative project. To the record company, it was a successful, completely free advertisement.

The band released a new album recently, but the record label put severe limits on the spreading opportunities of the always very original videoclips of OK Go. As lead singer Damian Kulash states in his opinion piece in the New York Times:

Now we’ve released a new album and a couple of new videos. But the fans and bloggers who helped spread “Here It Goes Again” across the Internet can no longer do what they did before, because our record company has blocked them from embedding our video on their sites. Believe it or not, in the four years since our treadmill dance got such attention, YouTube and EMI have actually made it harder to share our videos.

A few years ago, reeling from plummeting record sales, record companies went after YouTube, demanding payment for streams of their material. They saw videos, suddenly, as potential sources of revenue. YouTube agreed to pay the record companies a tiny amount for each stream, but — here’s the crux of the problem — they pay only when the videos are viewed on YouTube’s own site.

Embedded videos — those hosted by YouTube but streamed on blogs and other Web sites — don’t generate any revenue for record companies, so EMI disabled the embedding feature. Now we can’t post the YouTube versions of our videos on our own site, nor can our fans post them on theirs. If you want to watch them, you have to do so on YouTube.

But this isn’t how the Internet works. Viral content doesn’t spread just from primary sources like YouTube or Flickr. Blogs, web sites and video aggregators serve as cultural curators, daily collecting the items that will interest their audiences the most. By ignoring the power of these tastemakers, our record company is cutting off its nose to spite its face.

The numbers are shocking: When EMI disabled the embedding feature, views of our treadmill video dropped 90 percent, from about 10,000 per day to just over 1,000. Our last royalty statement from the label, which covered six months of streams, shows a whopping $27.77 credit to our account.

Clearly the embedding restriction is bad news for our band, but is it worth it for EMI? The terms of YouTube’s deals with record companies aren’t public, but news reports say that the labels receive $.004 to $.008 per stream, so the most EMI could have grossed for the streams in question is a little over $5,400.

It’s decisions like these that have earned record companies a reputation for being greedy and short-sighted. And by and large they deserve it. But before we cheer for the demise of the big bad machine, it’s important to remember that record companies provide the music industry with a vital service: they’re risk aggregators. Or at least, they used to be.

To go from playing at a local club once a month to actually supporting yourself with music requires big investments in touring, recording and promotion — investments young musicians can’t afford. My band didn’t sign a contract with EMI because we believed labels magically created stars. We signed because no banker in his right mind would give a band the startup capital it needs.

To sum up, based on a crippled understanding of how internet and viral video promotion works, EMI made a decision which made the artist and, probably even to a bigger extent, also the record company loose a significant amount of money. This proves that the traditional companies lack the competences to adapt their business models to the new environment. As Damian notes, this is particularly dangerous, because record labels are traditionally ‘the banks’ that finance new, upcoming talent. But if your bank is not run well, do you want to keep your accounts there?

Ironically, since a couple of days OK Go is back with a new embeddable video thanks to a sponsorship deal with State Farm Insurance who get a little bit of logo exposure early in the clip. Here is the new video:

In the two upcoming posts I want to refer to two cases, which aren’t hot news any more, but which prove how traditional players in the music industry have problems with handling the new rules of surviving in an internet-driven digital age.

The first case is about the popular country singer Taylor Swift. Last September she was still the darling of the general public after she was rudely interrupted by Kanye West during the VMAs (MTV’s video awards). However, more recently she made a bad impression during the Grammys by embarrassingly singing out of tune. The story spread like wildfire on the internet. The Washington Post posted a sampling of Twitter comments about her performance.

@Borowitz Report Satan Chooses Taylor Swift Performance as Ringtone

@questlove dear kanye im sorry

@Borowitz Report: God Hoping Taylor Swift Does Not Thank Him

@jfdulac Wifey, listening to Taylor on the #Grammys: “She couldn’t even get into the chamber choir at my high school singing like that.”

@Borowitz Report T-Pain Hired to Autotune Taylor Swift at 2011

@idolator How suitable: that guy from #americanidol introduces @taylorswift13, who ” we have to say ” sounds a little pitchy, dawg.

@harvilla taylor swift’s career singing on live television should’ve gotten an “in memorium” nod

@Kiarri Last year the big battle was between Rihanna & C Brown. This year the fight was between Taylor Swift & pitch.

@jjjrrr Dear Taylor Swift, the music store called, you left your pitch on the counter with your lip gloss

@jeffstearns Taylor Swift? More like Francis Scott Off-Key, am I right?

@feliciapollack Taylor Swift can’t sing. She sounds like she’s playing “Rock Band” in her basement.

@JenRBoyd Oh boy. Taylor Swift’s pitch is flatter than a pancake tonight. Bless her heart

@ianfrancisbush I am starting a disaster relief fund to get Taylor Swift a chromatic tuner.

As Lefsetz writes in his analysis, the abominable performance didn’t get much attention in the mainstream media, but the story spread quickly on Facebook and Twitter. Some even say that it might ruin her career. Taylor Swift is a product of traditional music business: a young girl who is surrounded by a team making marketing plans in a meeting room. As Lefsetz puts it in his typical style:

So you can sit in your marketing meeting, calculate how you’re going to placate radio, but there’s a shitstorm blowing somewhere you’re not even paying attention. (…) Yes, as oldsters decry Twitter as a waste of time, a place where those with no life delineate what they ate for breakfast, these same supposed peons are ripping their clients a new asshole.

In the digital world, authenticity is key. You can’t fake anything and you must deliver when you are on stage. Taylor Swift underdelivered and the public formed its opinion. People have always had their opinions, but until recently they would only say it to their family sitting in the living room. Nowadays they post their opinion on Twitter or Facebook and they reach an audience of a couple of 100 people. Those people maybe even didn’t see the show, but watch the YouTube movie and further spread the story amoung their audience.

Exactly that is the power of new media such as Facebook and Twitter, and it is a power that may be underestimated by most traditional music business people, who carefully construct a tv and radio image for a young, unexperienced artist like Taylor Swift. Don’t understand me wrong: clear thinking about your image and shaping a thorough communication strategy is also very important in new media. But be aware of the fact that this image must be authentic. You must be able to keep it consistent in all circumstances, since there could be someone with a camera standing behind every corner, ready to upload your faux pas to YouTube. Show your vulnerability, be real, and don’t grow faster than you are capable of. That is probably the lesson that we should learn from the Taylor Swift story.