Archive for the ‘Marketing’ Category

Beyoncé Raised the Bar With ‘Lemonade.’ Now Others Are Leaping, Too.

September 29, 2016

By JOE COSCARELLI NYTimes.com 9/27/16

Does every pop star these days need a “Lemonade”?

Among Beyoncé’s more influential tactics at the moment is her insistence that an album should not be just an auditory experience and that the standard music video — a sort of trailer for an artist’s current sound or creative era — is far from enough. “Lemonade,” her sixth solo album, had its premiere in April as an artsy and provocative hourlong film on HBO, raising the bar set by “Beyoncé,” the surprise “visual album” that came with videos for every track in 2013.

As the value of digital music continues to hover near free for many consumers, some brand-name acts are following Beyoncé’s blueprint with high-concept mini-movies that can add artistic heft to projects competing for attention in an infinite pile of content. These extended videos, with their headline-grabbing cameos and high production values, have also become the latest theater in the music streaming war as services like Tidal and Apple Music function not just as platforms but as creative partners (and sometimes financial backers) with artists, in exchange for exclusivity.

On Sunday night, Apple Music released “Please Forgive Me,” a 22-minute video with a loose action-movie plot that strings together hits from Drake’s “Views,” the biggest album of the year so far. Shot in the Soweto area of Johannesburg, “Please Forgive Me” is available only as an Apple stream — even screenshots have been disabled, minimizing Drake’s usual meme-ability — and credits Larry Jackson, the service’s head of content, as a producer and co-writer. It follows the release last month of Frank Ocean’s “Endless,” a 45-minute “visual album” and musing on the artistic process that was also exclusive to Apple. (The “Lemonade” film is available for streaming and downloading only on Tidal.)

“We are living in such a visual time, social media-wise, with Snapchat and Instagram, that every project needs to have some sort of multimedia component,” said Jeff Rabhan, a veteran artist manager and the chairman of the Clive Davis Institute of Recorded Music at New York University. But a single with an accompanying four-minute video “just doesn’t cut through the noise,” he said.

By advertising “Please Forgive Me” as a film that was “inspired by the album” — not simply a long music video — Drake and Apple cryptically telegraphed the premiere as an event à la “Lemonade” instead of another step in the “Views” marketing plan. In fact, by aiming for prestige, artists may sacrifice some commercial impact: “Please Forgive Me” came in lieu of an earlier stand-alone YouTube video for Drake’s chart-topping summer single, “One Dance,” which could have juiced its Billboard statistics and extended its reign. (Streams have been a significant part of Drake’s success now that Billboard counts them, along with album sales, when calculating chart positions.)

“For an artist who is really wanting a body of work to be examined as a conceptual whole, this creates that environment in a singles-driven world,” Mr. Rabhan said.

Beyond the artistic-credibility incentive, the immersive experience of an extended video can also serve as “a commercial for the tour,” he added. “Drake, Beyoncé — they’re not making their money on streaming or sales. They’re making money when we spend $180 to go to Citi Field and watch ‘Lemonade’ in person.” (With Drake as its most prominent artistic face, Apple Music has also partnered with him on a Beats 1 online radio show and sponsored his “Summer Sixteen” tour with Future, another Apple-affiliated artist.)

While high-concept promotional music films and event videos date back to the Beatles and Michael Jackson, with Lady Gaga and Kanye West picking up the torch to begin the post-MTV YouTube era, more recent video projects have taken advantage of new outlets for distribution, knowingly sacrificing wider audiences by partnering with closed digital platforms thirsty for buzzy products.

Tom Connaughton, the senior vice president for content and programming at Vevo, the online music-video platform that provides some of the top clips on YouTube, said that a video is twice as likely to be shared on social media than an audio track, according to his company’s data. As a result, he said, “You’re seeing big multinational companies involved in a music streaming war using video in addition to audio to drive their agenda.” That includes luring subscribers with exclusives.

And while a major label may be reluctant to fund big-budget music videos in leaner times, ambitious artists can capitalize on their clout with streaming services that are willing to shepherd and promote such projects.

“There’s an element of competitiveness among top-tier pop stars to making bigger, flashier delivery systems for their music,” Mr. Connaughton said. “They all want to outdo each other.”

Fans still prefer music live to digital, Nielsen Music 360 report finds

September 17, 2016

By Randy Lewis LATimes.com 9/15/16

How do people most like to enjoy their music? Live, at least according to the Nielsen Music firm’s latest edition of its Music 360 report, which tracks how consumers take in music in today’s fractured, multi-platform world.

Of all the ways to experience music, Nielsen found, 36% of consumers’ money spent goes toward live events, far and away the most popular way of consuming music.

Of course, that no doubt partly reflects the fact that the cost of tickets for most live events far outpaces the cost of buying downloads, CDs or paying for a monthly streaming subscription.

But in an intriguing facet of the study into the changing habits of fans in an era in which music is increasingly defined by streaming services, 21% of overall music spending still goes toward physical CDs or downloaded digital singles and albums, compared to only 6% to streaming service subscriptions.

Among 13- to 17-year-old consumers, 38% of their money is spent on physical and digital albums and tracks, with a higher-than-average 9% for streaming services, and just 5% for satellite radio subscriptions.

Those are just a couple of highlights of the report, which Nielsen has excerpted for public consumption from the full paid study that goes out this week to its entertainment industry subscribers.

“Fans are interacting with music differently,” the report’s summary states, “but their passion for music remains strong. In fact, listeners are spending more time and more money on music-related expenses in 2016 than they did in 2015.”

On the streaming front, Nielsen reports that 80% of music listeners used such a service during the 12 months preceding the study. The report was conducted from July 14 to Aug. 5 of this year, among 3,554 consumers “reflective of the population of the United States.”

That figure is up five percentage points from a year earlier, when 75% of respondents said they had used a streaming service in the prior year.

In terms of the time spent listening to music, Nielsen reports that radio is still the most popular method, accounting for 27% of the time people spend listening by format. Digital music collections accounted for an additional 20%, followed by streaming of on-demand audio (12%), programmed audio (11%), and music video and physical music collections (tied at 10% each).

Demographically, Hispanic consumers (as defined by Nielsen) spent on average 90% more on music than the general population and also scored higher numbers than average for attending DJ events and smaller live music sessions.

Hispanics also posted higher numbers than teens or millennials (ages 18 to 34) for attending live concerts with one main headliner, small live music sessions, live concerts with multiple headliners, music festivals, club events with DJs and club events with a specific DJ.

The survey also explored music preferences broken down by political affiliation, with Democrats scoring higher than the general population in money spent on club events with DJs (124% more than average), small live music sessions (+54%), digital music (+43%) and video on demand or pay-per-view services (+38%).

Republicans, meanwhile, spent more on premium TV subscriptions (76% above the general population), comedy performances (+65%), sports events (+35%) and satellite radio services (+32%).

Entertainment options that appeal the most to independent voters were video games (+42%), live music concerts (+31%) and paid online streaming (+14%).

The study also digs extensively into how consumers respond to branding affiliations at concerts and festivals they attend, with nearly two-thirds of festivalgoers saying they viewed a brand more favorably if they offered product giveaways at live events and nearly as many (64.8%) saying the same if a brand sponsors an air-conditioned tent at a festival.

More than half (53.7%) said their estimation of a brand improves when that brand sponsors an existing festival, while 46.3% said they view the brand more favorably for producing its own music festival.

Epic Records Whips Up Hit Album Out of Thin Air (and Online Streams)

August 9, 2016

By JOE COSCARELLIAUG. NYTimes.com 8/08/16

You technically can’t buy the digital compilation album from Epic Records featuring hits by French Montana and DJ Khaled that has been a steady presence on the Billboard chart this summer. In fact, the album has sold a total of zero copies since its quiet release seven weeks ago.

Yet thanks to an updated formula for determining positions on the Billboard 200 that accounts for online activity, as well as some savvy opportunism from the label, the album, “Epic AF,” has become a disruptive presence on the charts, landing in the Top 10 four times by exploiting — or mastering — the new system.

It works like this: Since late 2014, Billboard has counted 1,500 streams or 10 paid downloads of a song as the equivalent of one album sold. But if a hit single comes from an album that is unreleased, the millions of plays it tallies on services like Spotify, Tidal and Apple Music go nowhere.

Epic has collected its album-less artists’ most popular summer songs across streaming services — “Lockjaw” by French Montana and Kodak Black, “Don’t Mind” by Kent Jones, “Pick Up the Phone” by Travis Scott and Young Thug — into one digital playlist, giving it a hip title and some generic cover art. In 2016, that’s enough to call it an album.

Now, when Billboard counts the weekly plays for “Don’t Mind,” which has 139 million Spotify streams to date, they are attached to the album, catapulting the digital compilation over traditional albums from artists on competing major labels. Chart position equals bragging rights — and its own form of marketing via brand visibility.

Dave Bakula, a senior analyst for Nielsen Music, which supplies the data Billboard uses for its charts, said that some could see the tactic as “trying to manipulate the charts.” But “if they’re living within the rules, good for them in being creative and having enough of a stable of big-name artists and big songs,” he said.

“It feels a little bit like a ‘Now’ record for streaming services,” he added, referring to the “Now That’s What I Call Music!” CDs, which peaked in the early 2000s.

Billboard declined to comment on Epic’s methods. But this week, the chart company opted to change its rules slightly so that paid downloads of singles included on this album do not count toward its chart position but streaming numbers do.

Still, the system is flexible.

The album which has added tracks since its initial release, includes current hits from DJ Khaled (“For Free,” “I Got the Keys”). Before the release of DJ Khaled’s own album “Major Key” on July 29, the streams for those songs were going toward the compilation album. This week, however, they were counted toward “Major Key,” which hit No. 1. (As a result of losing those streams and all song sales, the compilation album dropped to No. 32 from No. 5, having accomplished its goal as a placeholder hit.)

“It did what it was supposed to do,” said Celine Joshua, a senior vice president for commerce at Epic and its parent company, Sony Music Entertainment, who oversaw the project.

“It was born out of a need and a problem,” she said. “I was thinking about our hot roster and the cycles of which content was coming out when, albums that were around the corner and how young fans on these platforms are behaving — consuming in the playlist manner.”

For hip-hop and R&B especially, streaming has become the dominant mode of consumption. Streaming activity nearly doubled in 2015 as traditional sales and digital downloads fell; this year, on-demand audio streams are up another 97 percent. As a result, the online discovery of new artists increasingly comes from streaming playlists like Spotify’s influential Rap Caviar, with its more than four million subscribers.

“Why don’t we design a product that behaves the way our consumers do?” Ms. Joshua said she had asked, bringing the idea to Epic’s chief executive, L. A. Reid, who gave the green light and helped to pick the track list. (The associated costs — “none,” Ms. Joshua said — helped the process along.)

Buoyed by the label’s biggest names, including Future and Puff Daddy, the album also features lesser-known artists, like Lotto Savage and Rory Fresco, who the label hopes will take off with young fans.

The album title, which includes a popular online abbreviation for a vulgar phrase, was designed to speak to millennials as well, Ms. Joshua said.

Assuming Billboard does not further adjust its rules to block digital-only label compilations, imitators can be expected. Already, within Sony Music, more versions are planned, including another from Epic featuring more pop-leaning acts, and a potential follow-up from sister label RCA.

“Streaming,” Ms. Joshua said, “is the now and the future.”

Record labels are far from the evil suits Prince made them out to be – they’re redistributive business models

April 27, 2016

When big acts attack the funding model of record companies what they are doing, whether they know it or not, is pulling up the ladder behind them

Ben Chu http://www.independent.co.uk 4/26/16

When pop stars go to war with their record companies which side do you get behind? The creative artists or the money-grubbing, talentless, suits? Surely a no-brainer. And yet reading about Prince’s epic battle against Warner Music in the 1990s I can’t help but feel sympathy for the suits.

Prince was signed as a precocious 18-year-old by Warner in 1977. He produced an album every year between 1978 and 1981. None of them were commercially successful but Warner kept on funding him as a promising prospect. Then the breakthrough came with the hit single “1999” and Prince was suddenly pop royalty.

The dispute apparently came when the prolific Prince wanted to release a studio-load of new material all at once. Warner said no, arguing that oversupplying the market was not the way to maximise revenues. They wanted the best possible return on their investment by restraining the supply of Prince. This would avoid swamping demand and also enable them to maximise the sense of occasion around each new release.

Warner got their way because they owned the rights to Prince’s music. Prince was royally annoyed though. He eventually likened his relationship with Warner to “slavery” and, later, advised all new artists not to sign contracts with record companies.

This was – and probably still is – terrible advice. Around a decade ago there was lots of optimistic chatter about how the internet would enable new artists and bands to reach audiences directly. They could, we were told, make the commercial big time without having to tap the promotional resources of record companies. The web would enable the talented to cut out the greedy middle man. But it hasn’t worked out like that. Vanishingly few artists have made it big without serious support from record companies somewhere along the line.

But don’t record companies milk top artists like Prince unfairly? Not really. Think about the model from the point of view of the record company. You sign a host of promising new acts. You pay for them to record. You promote their work. But only a tiny number will prove successful. The money the record company has spent on the unsuccessful acts is gone for good. The company makes all its money from the ones that do make it. That’s why it takes such a large share of the proceeds from a minority of successes.

The big acts simply see the large sums of money made by the company from their work and they resent it. But they often fail to grasp that these funds are what enable the record companies to invest in new acts and keep the machine running. Globally, record companies spent $4.5bn (£3bn) on marketing and investment in 2014, representing a quarter of their total revenues.

Small acts might be tempted to think established artists are looking out for their interests when the big guns attack the rapacious record company model. And there has been a lot of purple prose in recent days talking about how Prince valiantly stood up for all musicians with his various battles with record labels. But it’s nonsense. When big acts attack the funding model of record companies what they are doing, whether they know it or not, is pulling up the ladder behind them.

This isn’t to defend the taste of the record companies and the acts they select to sponsor. And there are signs that they do not stick with new artists as long as they should. It’s unlikely that an artist today would get funding for four years without any major hits, as Prince did. They would probably be cast aside much earlier. Nor is this to argue that record companies are saintly. It’s merely to point out that the underlying business model is a redistributive one in a way that the top artists generally fail to acknowledge.

Prince certainly didn’t acknowledge it. Yet he was remarkably quick to capitalise on another trend in popular music economics. He released his Planet Earth album free with the Mail on Sunday (of all publications) in 2007. People said he was crazy for giving away his product. They said he was devaluing it. That’s certainly what his (new) record company felt. They hadn’t been told and were forced to scrap plans to sell the album in UK shops. But Prince himself still made a commercial killing from a back-to-back run of 21 live British shows in the wake of the stunt. What Prince discovered – and many have discovered since – is that the big money in music is now in the live “experience”, not the recorded product.

Of course Prince was a quixotic character – and not just creatively but commercially. He spent a lot of time in the years following that Mail on Sunday give-away trying in vain to stop his music being distributed for free online. In that sense Prince actually had something in common with the record companies, who wasted vast sums fighting an unwinnable battle with the unlicensed distribution of music online.

Record labels are starting to be more sensible now. They seem to have grasped that there is money to be made from working with the internet rather than fighting it; from advertising revenues from music videos on YouTube, from legal downloads on iTunes and from royalties from streaming sites. Global industry revenues in 2015 rose for the first time in two decades.

But the digital world is still in flux. Online music consumption is increasingly shifting from downloads to streaming. And the lion’s share of revenues could in future flow to the streaming companies – cutting out artists and maybe even record companies in the end.

In response the big players of the artistic world including Jay-Z, Rihanna, Beyoncé and Arcade Fire have established their own streaming service: Tidal. This week Beyoncé released her new album, Lemonade. It will exclusively stream on Tidal. The dominant streaming players, such as Spotify, Apple Music and Deezer, have been cut out (although it is available to buy on iTunes). This is an attempt by group of successful artists to monetise musical content once again, not just experiences. This will be the biggest test yet of their model. If an artist with the reach of Beyoncé can’t make it work, it may be a dead end.

“When life gives you lemons, make lemonade”. That’s the reference in the title of Beyonce’s new album. It’s what Prince, generally, did. It’s what the record companies seem to be, finally, doing. The Tidal crew are trying it. The question as far as fans are concerned, though, remains the same as ever: is the music sweet or not?

 

Now that’s what I call an oral history of Now That’s What I Call Music!

January 19, 2016

Now that’s what I call an oral history of Now That’s What I Call Music!

By Lauren Duca avclub.com 1/15/16

Now That’s What I Call Music! feels like a distant memory, a present you got for Christmas when Juicy sweatsuits were a thing. Yet, the series continues to be successfully sold in CD form. It’s remarkable to think that anyone besides Adele might be able to move physical copies, never mind the irrelevance of professional curation in the age of streaming services. But this juggernaut of nostalgia has endured since the days of the teenaged music industry of the early ’80s.

At the time, the U.K.-based record company Virgin was a smaller unknown on the precipice of its golden age. Virgin was using a share of its fledgling library to license tracks to companies like K-tel and Ronco to recoup royalties. The compilations that came out of those negotiations were so cheesy and phoned-in that one of them was actually titled Raiders Of The Pop Charts. As Culture Club launched and The Human League’s third album began taking off, Virgin’s repertoire began expanding. It occurred to the company’s legal representative Stephen Navin and head of marketing Jon Webster that the label might be able to make its own compilations.

Before Now! was introduced in 1983, compilations were seen as tacky. The compression was messy with tracks often being cut off mid-song. Sleeves were simple, if not simply cheap. For the most part, the business was helmed by companies who dealt in TV advertising, sloppily pulling together songs as just another product to be sold. From the start, Virgin—and eventually Virgin in partnership with EMI—understood that the company needed to replicate the visceral joy of purchasing an album using the medium of compilations. Virgin needed to create a brand.

The other challenge was convincing major artists to participate. Along with their managers, big acts were concerned about how being on Now! would affect their reputation or cannibalize sales. But the promise that this was a record company curating the best of the best with care convinced them to take the risk. Well, that and a few personal calls from Richard Branson. Eventually, Now! came to represent the gold standard in compilations, with more No. 1 hits than The Beatles. It became a snapshot of the musical moment, and, at one point, allegedly had Queen and Paul McCartney vying against one another for a track one, side one spot.

The A.V. Club spoke to Webster and Navin; original compiler Ashley Abram, who worked on Now! from 1983 to 2012; the current U.K. heads of the brand, Peter Duckworth and Steven Pritchard, who joined the company in 1991; and U.S. compiler Jeff Moskow, who has been with Now! since the fourth edition of the series was released in the states. Together, the six men told the story of Now!, from the inception of its title—derived from a picture of a pig talking to a rooster—to the establishment of the current family-friendly iteration of the brand, and the way it has defiantly survived in spite of the rise of digital music and streaming services.

Jon Webster: Stephen and I came up with the idea, though we still slightly argue about who it was.

Stephen Navin: It’s one of those classic music industry comments: A flop is just a bastard, but a hit has many fathers.

Webster: In those days, there were three TV merchandising companies doing these compilations. I worked at Virgin and they were constantly telexing us—it was even pre-fax back then. These compilation companies were making us offers for tracks and often competing with each other. Stephen Navin called me and said “Who are we going to license these to? Should we give all to one company or some of them?”

Navin: I was a business-affairs lawyer at the time at Virgin, and one of my tasks was to license all of our tracks to third-party TV advertising companies, names like K-tel and Ronco. It was a lot of bargaining and convincing them to take lesser tracks as well when we needed to recoup royalties.

Ashley Abram: Ronco was barely even a music company when I worked for them on compilations. They had put out products and gadgets with compilation records on the side.

Webster: These companies would write and say, “I want to license six tracks, I will pay you £2,000 and a royalty of 18 percent” or “I want eight tracks and I will give you £3,000 and royalty of 20 percent.” We’d say, “Okay, if you take these few tracks as well.” It just went round and round, until one of us said, “Well couldn’t we do this ourselves?”

After we came up with the idea, we drew up a plan for how we might do this and how much it would cost. Then we just sat there and went, “Wow, this could be fun. This could be really lucrative.”

Navin: The head of the company at the time was Simon Draper. I worked very closely with him in the context of whether we should license tracks or not and whether we should go back and get the artist’s consent or the manager’s consent or whatever, so I went to see him one day. I said, “We’ve just had an incredible run on licensing tracks, but it seems to me that there’s a real commercial opportunity here that we should be grasping, to do the licensing ourselves.”

Webster: We almost had enough tracks on our own to make that first record, because it was one of Virgin’s best-ever years.

Navin: We had such incredible talent on our roster at the time. You could put out a compilation album with just a mass of our tracks. But, of course, that’s not what the Now! series is about. The Now! series is about getting the very best, the actual cream of the cream of what was hot. So, we realized we needed partners.

Webster: EMI was our distributor and they were a big, old-fashioned record company in the U.K. So, we went to have a meeting with them and said, “Why don’t we do this together? You’ve got lots of hits, we’ve got lots of hits.” It’s like a show tune, you know, [Singing.] “Let’s fall in love!”

Navin: Simon said we ought to talk to EMI and perhaps we can talk to one of the other majors to make sure we get a fantastic combination of tracks. And I said we should get Jon in. Jon was the marketing director at the time and I knew he’d be great for it. Then the question became, “Oh, well, what should we call it?”

Webster: We just got an idea of the logo and did it on the back of a cigarette packet.

Navin: I’m afraid I’m a man given to punning, and looking around Simon’s room there was a little framed advertisement for Danish bacon, which is a lovely drawing of a cockerell on the wall and a pig with some musical notation coming out of his beak. And on the ground looking up at it in admiration is a pig and the shout line beneath the pig is saying, “Now that’s what I call music!” My eyes alighted upon the wording and it just seemed to me, “That’s it! Let’s call it that! It says exactly what we want to say.”

Abram: The series took its name from a picture of a pig saying, “Now that’s what I call music!” as he listened to a chicken singing. It’s ridiculous. There was a lot of worry that people wouldn’t know what it meant. I think there was a real concern of “What does that mean?” Or “What on earth is that?” But it’s like any name, once it takes a hold and people get used to it, it’s kind of a different story.

Peter Duckworth: I came on in 1991 and one of the ways I’ve been involved in marketing is with the visual element. The Now! logo has changed quite a bit over the years. There was a strange pig involved in the very early days. I’m not sure who came up with that.

Jeff Moskow: Compilations have always been, to this day, significantly more popular in the U.K. than they have in the U.S. There’s a separate compilation chart in the U.K. Retail is different now, but in the late ’80s and ’90s, you would go into a record store in the U.K. and there would be a compilation wall. There would be a whole separate compilation section. So, it just became more a part of their culture. And, for some reason, here it just wasn’t.

Webster: Before Now!, these three companies had carved out a compilation market for themselves. If you look back in the U.K., we always had a tradition—and I don’t think happened in America—of people doing cover versions of big hits, of putting out cheap albums of cover versions of hits. They were called Top Of The Pops. An album in those days might have cost £2 and an album of cover versions of hits would cost, like, 75 pence.

Navin: Compilations were considered irrelevant by a lot of record companies. The original albums done before Now! were done badly, because the compression was a mess. They’d be cut off randomly in the middle of the song to make them fit, and they didn’t sound very good because the grooves were so tight.

Abram: They weren’t always the best quality and didn’t always have the best artists, but they were fairly popular in the U.K. They were successful and did well in terms of sales.

Webster: Overall, they were seen as tacky. So, lots of big artists decided they didn’t ever want to be on those records, and they did have the kind of controls in terms of having to give permission to stop them happening.

Navin: You would have some fantastic discussions with managers and artists about whether it was a good thing for their career or not deep down to the sales of a single. Did it help? Did it hinder the sales of the album? All of those sort of conversations were had with artists and managers on a regular basis, especially in the beginning.

Steven Pritchard: I think for one of the first Now!s, Richard Branson actually phoned up Mick Jagger and got the Rolling Stones to participate. That was a few years before I came along, but that sort of attitude helped with U.K. artists.

Abram: Richard would say things like, “Oh, should we get The Rolling Stones for Now! 2.” And a lot of people would say, “Oh, no, they’re the past, they’re not really the cutting edge of 1984 pop music.” But I thought, if we could get them, we might be able to get someone else, which is what happened. Then, bit by bit, you walk away with a lot of acts.

Webster: We did have to work quite hard to convince people. Partly what we did was give better royalty rates than the third-party companies were offering. Then, of course, it got so successful, people began to see the cash flow that was coming in and going, “Oh, we like this.”

Navin: When the damn thing took off it just was so successful. It was a phenomenon.

Pritchard: Today, Now! confirms status. People expect to see artists of a certain stature on Now! Artists will share that they are included or tweet about it. It’s become a mark of having arrived.

Webster: Eventually, it got to the point of artists quibbling over being side one, track one. There was one particular battle, I think between Queen and Paul McCartney. They said, “Yeah, we’ll be on the album, but we want to be track one, side one.” Luckily, that was an EMI problem, not a Virgin problem. I think what they did is they put one on track one on disc one and the other on track one, side one on disc two or something like that. I can’t remember; it was some ridiculous compromise.

Abram: The first album I officially compiled was Now! 2. I managed to get superstar acts like Queen, David Bowie, Paul McCartney on the first Now! that I compiled. I think what convinced them is the fact that it was being done by the record companies. So, I managed to get some of these bigger artists on and eventually we got to a stage where a lot of the acts were coming on the album.

Webster: From the start, we separated ourselves from the previous compilations with packaging. They were all basic black-and-white or black-and-red sleeves; there was no class to it. So from the first one, we made sure we put sleeve notes on there; we made sure we put pictures of the albums that they came from.

Abram: One thing that I helped in convincing artists is that Now! was sort of souped-up. It had beautiful packaging, liner notes and all that. It made for a luxurious product that was much more exciting than the original third-party compilations.

Webster: There were also the ad campaigns, which made it so easy to sell to retail. I said, “Look, we’ve got this album coming out. It is full of quality hits and we’re going to spend a quarter of a million pounds TV advertising it.” It was as simple as that. We went out and opened with a 60-second ad, which was unheard of at the time, and it just went mad.

Navin: You also have to remember, that first vinyl was gorgeous. It wasn’t the logo you see today.

Pritchard: But by the time I came one for Now! 19, they were really struggling with an identity. I was concerned that the sleeve was changing on every release. I felt the brand should have a logo and stick with it. So, Now! 20 was the first one where we developed the 3-D logo, that is still used today. It was an attempt at something that looked monumental, almost like 20th Century Fox. It was harder to do that than I realized. It would be easy to do that on a computer, but going back 25 years it was actually stretching the capabilities of 3-D graphic engineering. That first 3-D logo I think it took about a week to render and it was fairly expensive.

Navin: There are two components of sequencing. One is making something that’s listenable. And as important is making something that’s marketable. So, we know that when people look down a track list, they’ll often just scan the first and last tracks to see if there’s consistency. We have to make sure that the tracks toward the top and bottom of the CD are the most successful or the most popular in order to keep the consumer’s attention.

Webster: There is an art to compiling a record. It’s not just all by numbers. You’ve got to get a flow right; you’ve got to get ups and downs. It’s the same way a DJ would do it if you’re out clubbing or whatever. There are also certain tracks that, even though they were massive, they often polarized people. You’ve got to think about that.

Abram: In January 1983, about 10 months before Now! started, I was a young fellow compiling compilation records. The second one I did for Ronco was called Raiders Of The Pop Charts and it managed to get to No. 3 in our combined charts of everything. That got me a bit of attention. Eventually, I got phone call from the man himself, Jon Webster. He said, “If you phone this number, you might learn something to your advantage.”

Webster: After the first Now!, we hired a guy named Ashley Abram to compile the records and also to make sure that no fillers got on. The purpose was for him to be independent. He talked EMI and Virgin into what else they could do with those filler tracks and ensure Now! was the best it could be.

Abram: I phoned the number Webster gave me and didn’t know who I was speaking to. The soft-spoken man on the other end said, “Oh, we’re thinking about getting into this compilation business and I’m told you’re the person to talk to.” And at the end of the conversation he said, “Oh, I run a record company, you probably know me, my name’s Richard, and I work on a houseboat, so come see me and have chat.” Of course, that was Richard Branson.

They were talking to me about getting involved with compiling, but because they had so many of their own tracks, they weren’t licensing tracks from the outside. They needed a third party to look at the thing. And that was hard, because they were just looking to get this album into the marketplace for Christmas in 1983. The album actually came out in November, so it was quite late, but it did make it.

Moskow: I came on in the U.S. for Now! 4. In the beginning, I was involved in creating and compiling the record. That meant identifying what the songs would be, licensing the songs, negotiating for the licensing of those songs and then you compile them. So, there’s the aspect of actually deciding what’s going to be on it, getting the rights to put it on and then the ability to create a compelling story with the repertoire. This part usually makes people’s eyes glaze over, when I tell it, but there’s an art to the sequencing.

Abram: It was just kind of a feel for it that you sort of build up, really. You sometimes try to link the songs in some way.

Moskow: We don’t sequence by power, we sequence by story. I was a club DJ for a number of years in my hometown of Philadelphia. It was very similar really to being a club DJ, because, again, every club DJ will tell you that their job is to take listeners on a journey. You’re playing this and that and you’re playing it in a flow that makes sense. That’s the art. It’s like painting with these beautiful colors that these artists have created, which are the songs, and putting them together in a way that makes sense. I take it very, very, very seriously.

Abram: It’s also easy to look back now and say certain songs are missing from some albums, but you can’t really do that. At the time, not everybody wanted to be on the records.

Moskow: I can give you one example. With Now! 56, we opened with “See You Again” [by Wiz Khalifa feat. Charlie Puth] very specifically. We did that because what we’re saying to our fans is, “We’re seeing you again.” It had to be a huge song, but I didn’t have to open with it. But we’re saying, even though the song doesn’t mean that, it lets someone subliminally think “I’m comfortable with this brand again, they’re seeing me again.” It’s a little cheesy, but that’s the example I can think of right now. I can tell you that every song is thought about for hours, if not days.

Abram: A big challenge was keeping things current. We needed to make the album live longer, and that was hard since it took a while to get things to marketplace. I also liked to include upcoming hits. We put Culture Club on one album and had a little blurb on the cover that famously said, “Almost certain to be No. 1 by the time you have this LP.” I think it went to No. 3 or No. 4 or whatever it was. So, that kind of set the precedent.

Moskow: It would really easy to say, “Oh, these are the songs, let’s just put them in random order, it doesn’t really matter. But then, if you do that, you’re not really building the essence of what your brand is, and that is so key to us.

Navin: Now! reached the parts of the record-buying market place that, in some cases, no matter how much marketing money you would spend, it just couldn’t deliver those people from those recesses. We managed to get to those outlying areas of Britain who would never have gone into a record store, or may have, at most, bought one album a year.

Duckworth: From the start, we were selling to our version of middle America. The “middle England” market, as we might describe it, are the people who don’t have their finger on the pulse. They don’t measure their own sense of identity by music, but they are very much into music. So, buying a Now! album was fine for them. It didn’t have any meaning. They didn’t define their personality through music, so they could buy a Now! album and it wasn’t a guilty pleasure like some music can be considered. It was just a way of accessing the charts.

Webster: I’ve always thought that music buyers fall into two groups. There are people who are really into music, who buy a lot of stuff and pride themselves on what they like. And then there are the one-album-a-year buyers. Maybe they buy two or three, but it’s harder to get them into the record store.

I think you go through a sort of life cycle with Now! You grow up with them. Until you’re a young teenager, you’ve got the latest Now! album. Then, suddenly when you become 16 or 17, you think you’re the coolest person on the block and suddenly you wouldn’t be caught dead with a Now! album. Eventually, you might get married and have your first child. You might have a party and you need music, so you go out and buy a Now! album. I think there’s very much a sort of flow that happens in terms of the people who are predisposed to buy these records. I think there’s an age gap where they’re distinctly uncool, which is probably 18 to 30, but then after that they are very welcome and liked and people still buy them.

Pritchard: There are at least two generations of moms and dads, even grandparents now, who are using Now! to keep up with their kids’ music and to share music. But I think it probably took about 10 years for it to really develop into a family brand with a bit of nostalgia and trust. It’s been a fixture. If you look at the consumers of Now!, the end-user profile is strongly preteen and early teen. Then it starts coming back with peaks up in mid ’30s, who are people buying for young families.

Navin: I think the thing about Now! is that it cuts across generations. It’s like Adele, who has obviously has struck an enormous chord. People buy the album partly as a knee-jerk reaction either for their auntie or their daughter. It’s that must-have piece of music across the board.

Pritchard: Children never understand if you try to be nostalgic about a band. They’ll say, “You listened to this? It’s rubbish!” Whereas you can be nostalgic about a Now! album and buy it today and children will love it because it’s still current. To you, it’s a Now! album and to them it’s all the current hits. It does work far better than trying to be nostalgic with your children because not many artists try and transcend.

Moskow: We make statements like, “No one listens to CDs anymore” or we say, “No one has CDs in their car anymore.” And the truth of the matter is that there’s been something like 90 million CDs sold in the U.S. in 2015. I mean, besides what Adele did, which is a whole different story. Are sales down? Of course they’re down. No one is arguing that point. But it’s still a huge business.

Webster: We thought that digital music would be the death of CDs, but it’s not for two reasons. One is that they are a much better deals than buying individual tracks. And two is that when in the U.K. we killed off the CD single, which was just about when digital came in. There are still huge amounts of people in the U.K. who buy CDs. The only way you can buy a track, on a CD, if you don’t want to by the album, is on a Now! album. They just don’t exist anywhere else.

Moskow: There are still lots of people who have CD players in their cars in the U.S. Most do. So, imagine your family is going on a road trip and you have a choice. Your choice is, “I’m going to fumble around, connect my phone and play a playlist that may or may not be clean, where I have to fumble around and skip songs” or, “I can just get a brand that I’ve grown up with, pop it in the CD player and know that it’s clean and that it reflects reasonably recent pop culture.”

Abram: The CD format still lives on and it’s very successful. In the U.K., the CD sales now are largely through supermarket chains. So, in Tesco and Sainsbury’s, especially this time of year, they carry huge volumes of CDs. Digitally, it’s available and it sells, but 10 to 20 percent of the sales are digital, which is still fairly minor. CD is still a massive format.

Pritchard: We do have digital sales, but at the moment we’re about 90 percent CD. Of course, the next struggle is streaming services. When Spotify came along, we were very quickly into Now! in experimental ways, trying to draw more attention to the tracks. Obviously, going forward, we’re trying to devise ways of actually monetizing Now! itself instead of just the individual tracks. The digital download thing was quite easy to spot. We’re trying to look at that behavior within streaming products.

Moskow: CD physical sales are declining, yes, more people are consuming music by streaming or downloading, but there are still a substantial amount of people who buy physical CD or who buy the album via digital download and enjoy it because someone has done the curation for them. We’ve made the playlist for them. They come to us for the Now! brand, and I think they’ll keep coming to us for the Now! brand.

15 Innovative Album Releases That Shook the Music Industry

September 15, 2014

From Radiohead’s payment scheme to Beyoncé’s midnight surprise, the most unusual drops in recent history
By Daniel Kreps Rolling Stone 9/09/14

Album releases can be a monotonous pattern of press releases, cookie-cutter Q&As and by-the-books song premieres. Or they can be industry-stunning moments that show an artist’s creative powers go beyond the music studio. As the biz has changed in the digital era, so has the art of album promotion, and doing something unique and retweetable is often more powerful than a page-one interview. Here’s a look back at 15 of the most innovative, game-changing releases ever — from midnight sales to surprise freebies to alternate-reality games.

GnR (1991)
Four years. That’s how long Guns N’ Roses made fans wait for the follow-up to Appetite for Destruction. When GN’R finally finished their new LP, it was revealed that they had two albums worth of material. But instead of releasing Use Your Illusion as a standard double-disc set, Axl Rose and Co. opted to split up the albums as Use Your Illusion I and Use Your Illusion II. As the release date drew near, fans couldn’t wait one minute longer to buy it, lining up outside music shops starting on Monday, September 16th, 1991 in order to get a copy, even though the album was due out Tuesday — making the Use Your Illusions one of the earliest and most high-profile midnight releases. As the Los Angeles Times wrote in 1991, over 1,000 record stores nationwide stayed open until midnight so they could get a jump on the September 17th release date. Geffen estimated that nearly 500,000 copies of the albums were sold by Tuesday morning.

U2 (2004)
In 2004, Apple wasn’t the music industry force it is today. The iPod and iTunes were still in its infancy, and MP3s still weren’t quite as popular as CDs. In an effort to tip the scales toward the digital side, Apple teamed with the biggest rock band on the planet, U2. With Bono and Co. ready to release 2004’s How to Dismantle an Atomic Bomb, they teamed with the tech giant for a commercial that made memorable use of the single “Vertigo.” Next, Apple crafted limited edition iPods that came stocked with the entire U2 discography, which included unreleased songs, laser-engraved autographs and, of course, How to Dismantle an Atomic Bomb. A decade later, Apple and U2 reteamed again for the surprise release of Songs of Innocence.

Nine Inch Nails (2007)

While the lead-up to a new album’s release is often just a parade of press releases and song premieres, Trent Reznor turned promotion into an immersive, addictive alternate reality game. It all started with a portable USB flash drive in a Lisbon, Spain concert venue’s bathroom. Nine Inch Nails performed at the venue that night, and the USB ended up containing a new NIN song as well as a clue that would unlock a massive Internet-based universe that revolved around the band’s upcoming new album Year Zero. Reznor and game creators 42 Entertainment crafted a dystopian online world and riveting storyline that helped spread the word of Year Zero’s arrival in an innovative way no press release could ever match. The alternate reality game was such a hit, HBO even considered turning it into a TV drama, though those plans have since stalled.

Radiohead (2007)

Radiohead fans waited four years for the band to follow up their 2003 disc Hail to the Thief, but a post on the band’s Dead Air Space site changed all that in an instant. “Hello everyone. Well, the new album is finished, and it’s coming out in 10 days,” guitarist Jonny Greenwood wrote. “We’ve called it In Rainbows.” Finally free from their longtime record deal with Parlophone and Capitol, Radiohead would forever change the music industry by offering up their new album to fans with a “pay what you want” option. While there was extra incentive for hardcore fans to shell out cash, if the casual fan wanted to pay nothing, it was theirs as a free digital download. The experiment worked: The band is on record as saying they made more money from In Rainbows than any of their other albums. Plus, when the album arrived on compact disc in January 2008, it still topped the Billboard 200.

The White Stripes (2008)

As a member of the White Stripes, Jack White had gone to great lengths to keep his new albums from leaking before release date. When the Stripes sent out promos of Elephant to critics, it was in vinyl form only, making digitizing the albums almost impossible. With his side project the Raconteurs, White concocted another plan: Announce second album Consolers of the Lonely only a week before it would hit shelves, which would handcuff critics and illegal downloaders. Unfortunately for White, Rolling Stone uncovered his scheme when listings for Consolers of the Lonely started popping up unexplained in music stores’ inventory listings. When the band begrudgingly announced the album a few days earlier than planned, iTunes accidentally made the album available before street date, totally crushing White’s intentions in the process.

Nine Inch Nails (2008)

The In Rainbows pay-what-you-want scheme changed the way established, veteran artists could economically navigate in the music industry, and Nine Inch Nails’ Trent Reznor, fresh off his Interscope contract, was eager to “pull a Radiohead” and test the waters. Just over a year after Year Zero, Reznor self-released Ghosts I-IV, a collection of instrumental recordings. While a portion of the four-part, 36-song album was made available for free, Reznor toyed with different pricing plans to reflect different physical formats or better digital file quality. Like In Rainbows, the self-release was a massive success for Reznor, so much so that he gave away NIN’s album The Slip four months later as a free download to thank fans. “This one’s on me,” Reznor wrote.

Smashing Pumpkins (2009)

Billy Corgan is well known for being prolific, but here’s one instance where he grasped beyond his reach. When Smashing Pumpkins announced their 44-song Teargarden by Kaleidyscope, it sounded impossibly ambitious. Corgan and his revolving door of Pumpkins would record a song and then promptly offer it as a free download or – for the diehards – a limited edition EP. The project held Corgan’s attention for 10 songs that spanned from December 2009 to May 2011 before he dropped it entirely. The following year, the Pumpkins released Oceanea, and the 13 tracks on that “album within an album” were added to the Teargarden lot… but two years later, the project remains stalled at 23 songs. Corgan has said the next two Pumpkins albums will complete the half-decade-old project, but don’t hold your breath.

Prince (2010)

Prince has always had difficulty with record labels, going as far as changing his iconic name to “The Artist” and that “Love Symbol” after falling out with Warner Bros. in the mid-Nineties. He also expressed his undying disdain for the Internet by hiring the Web Sheriff and warring with his own fan site. Operating without a record label, Prince schemed a unique way to deliver his 2010 album 20Ten, and we use the word “deliver” literally: Prince included his LP within copies of select European newspapers and magazines, like the United Kingdom’s Daily Mirror and the German Rolling Stone. In all, 2.5 million copies of 20Ten were distributed, and while the album was free of charge, it did give all the newspapers a temporary boost in circulation while also eschewing the Internet’s mercantile system. To this day, 20Ten still hasn’t been released officially stateside.

Kanye West (2010)

Kanye West recorded so much music for his 2010 epic My Beautiful Dark Twisted Fantasy that he could have easily made the overstuffed album a mega-sized double-disc affair. However, the rapper instead opted to take those extra cuts and distribute them as a free downloads on every Friday leading up to Twisted Fantasy’s release. The weekly handout was dubbed GOOD Friday as a nod to West’s record label, and it featured some standout all-star tracks like “Chain Heavy” with Q-Tip and Consequence, “The Joy” with Jay Z and Pete Rock and “See Me Now” with Beyoncé. That’s right, Bey was relegated to a free download, that’s how much good material Kanye accumulated. In the end, all the GOOD Fridays tracks made for the perfect compliment to West’s masterpiece.

Death Grips (2012)

This is not how you impress your new record label. From the beginning, Death Grips signing with Epic Records seemed like an imperfect pairing. While the release of 2012’s The Money Tree went relatively smoothly, the abrasive and elusive duo promptly canceled a tour to promote the album in order to record their next one. The band always planned on releasing both LPs in 2012, but when Epic wanted to delay the second LP until 2013, Death Grips responded by dropping No Love Deep Web — and its ultra-explicit album cover — as a free download on October 1st. “The label will be hearing the album for the first time with you,” Death Grips tweeted at the time. After a very public war of words with Epic that featured legal briefings and leaked e-mails, the record label dropped Death Grips from its roster in November 2012.

Godspeed You! Black Emperor (2012)

Imagine going to your favorite band’s concert and then going home with an awesome album of theirs that you never knew existed. That’s the experience Godspeed You! Black Emperor fans had in Boston. It had been 10 years since the Montreal post-rock collective had released an album, but when they performed at the Orpheum Theatre on October 1st, 2012, attendees found something surprising at the merch table: A brand new LP titled Allelujah! Don’t Bend! Ascend!. And just like that, the decade-long wait for new Godspeed You! was over. Word quickly spread about the new album’s arrival, and two weeks later, Constellation Records was distributing it to the masses. Allelujah! Don’t Bend! Ascend! ended up winning the 2013 Polaris Music Prize as the Canadian album of the year.

Boards of Canada (2013)

Record Store Day is like Christmas for music fans, and in 2013 Boards of Canada delivered the best present. At only a few of the hundreds of shops participating in the event, hidden among all the other exclusive releases, were a 12-inch cardboard sleeve that simply had the words “Boards of Canada” and part of a code. When all the 12-inch vinyls were uncovered and the entire code was deciphered, it revealed that the mysterious electronic music duo would be releasing Tomorrow’s Harvest, their first full-length album in eight years, in June 2013. And those rare Record Store Day 12-inches that Boards of Canada secretly distributed? You can buy one of the six on eBay now for only $5,700.

Jay Z (2013)

Ever the entrepreneur, Jay Z devised a clever partnership to deliver his new album to (some) fans. First, there was the way Jigga revealed that his new LP Magna Carta Holy Grail was arriving: A minute-long commercial that co-starred producers Rick Rubin and Pharrell Williams that was shown during a key moment in the NBA Finals. As part of the deal, 1 million digital copies of MCHG were distributed for free to Samsung Galaxy users via a special app on July 4th, three days before the album’s wide release. While the free downloads didn’t count toward the Billboard 200, for one long July 4th weekend, everyone was crowding around someone with a Samsung.

Beyonce (2013)

This was the most shocking, industry-shaking album release since In Rainbows. On December 13th, 2013, Beyoncé’s long-awaited new album, titled simply Beyoncé, appeared in the iTunes Music Store. No press release, no big announcement, no promotional tweets. It just appeared, and it left an aftershock that could be registered on the Richter Scale. Fans knew that Bey had an LP in the works, but it was rumored to arrive in 2014, not 12 days before Christmas. Not only did Beyoncé drop an hour’s worth of new material, it was accompanied by a “visual album” that featured cinema-quality videos for each of Beyoncé’s songs. “The whole project is a celebration of the Beyoncé Philosophy, which basically boils down to the fact that Beyoncé can do anything the hell she wants to,” Rolling Stone’s Rob Sheffield wrote in his review.

Wu-Tang Clan (2014)

Thanks to Kanye West and Jay Z, hip-hop has shifted its gaze toward art galleries, and the Wu-Tang Clan are taking that to the extreme. In March 2014, Clan mastermind RZA revealed that the long-running collective had recorded a new 31-song album titled The Wu – Once Upon a Time in the Shaolin. Only one copy of the double LP would be produced, transforming the album into a singular work of art. As RZA revealed, he envisioned having The Wu tour the world’s art galleries as a special installation, allowing fans to hear the album in a museum setting before auctioning the lone copy off to the highest bidder. “Mass production and content saturation have devalued both our experience of music and our ability to establish its value,” Wu-Tang Clan said in a statement. “Industrial production and digital reproduction have failed. The intrinsic value of music has been reduced to zero. Contemporary art is worth millions by virtue of its exclusivity. This album is a piece of contemporary art.”

Taylor Swift Maximizes Use of Social Media in Release of New Album

August 19, 2014

BEN SISARIO NYTimes.com 08/19/14

For most pop stars, the announcement of a new album is a pretty routine affair. But most pop stars are not Taylor Swift.

Demonstrating her mastery of online media, and of the aggressive yet folksy style of self-promotion that has made her one of the most successful acts of her generation, Ms. Swift on Monday released a new music video and announced that her next album, “1989,” would come out Oct. 27.

The announcement took the form of a talk-show presentation with cheering fans that was streamed live by Yahoo, with the simultaneous premiere of the video for her new song, “Shake It Off,” on the online music service Vevo. During the brief announcement, Ms. Swift, who started out firmly in the country world but has gradually moved closer to pop, chatted breezily about the inspirations for her new music and called “1989” her “very first documented, official pop album.” She also answered questions from fans that came through Instagram, Skype and Twitter.

Ms. Swift, 24, also directed fans to her website, where they could preorder different versions of the album, named for the year of her birth.

With the announcement, Ms. Swift seemed to be taking the next step in a constantly evolving game of album promotion by pop stars. For her last release, “Red,” in 2012, she relied heavily on partnerships with consumer brands like Target, Walgreens and Papa John’s pizza, a strategy that helped the album sell 1.2 million copies in the first week of its release.

But since then, other big albums have been accompanied by ever more inventive release plans. Jay Z put out an album through a smartphone app, and Beyoncé’s came out on iTunes with no advance warning — a strategy so novel that it became a news story on its own. Last month, Weird Al Yankovic helped make “Mandatory Fun” the first No. 1 album of his three-decade career by releasing a video a day for eight days straight, complete with a Twitter hashtag that increased the videos’ viral appeal.

Ms. Swift stoked interest in the days leading up to her announcement by appearing on “The Tonight Show” with Jimmy Fallon and posting teases to her Instagram account, which has 10.4 million followers. (Her Twitter account ranks fifth in terms of followers, with 42.7 million.)

Yahoo did not immediately respond to a question Monday evening about how many times the video had been watched. But within minutes of Ms. Swift’s announcement, Twitter had ranked her as a top discussion trend.

The rise and fall of the Columbia House record club — and how we learned to steal music

May 18, 2014

Send no money
By DANIEL BROCKMAN AND JASON W. SMITH thephoenix.com 11/18/11

On June 29, 2011, the last remnant of what was once Columbia House — the mightiest mail-order record club company that ever existed — quietly shuttered for good. Other defunct facets of the 20th-century music business have been properly eulogized, but it seems that nary a tear was shed for the record club. Perhaps no one noticed its demise. After all, by the end, Columbia House was no longer Columbia House; it had folded into its main competitor and become an online-only entity years before.

A more likely explanation, though, is that a new generation of music fans who had never known a world without the Internet couldn’t grasp the marvel that was the record club in its heyday. From roughly 1955 until 2000, getting music for free meant taping a penny to a paper card and mailing it off for 12 free records — along with membership and the promise of future purchasing.

The allure of the record club was simple: you put almost nothing down, signed a simple piece of paper, picked out some records, and voila! — a stack of vinyl arrived at your doorstep. By 1963, Columbia House was the flagship of the record-club armada, with 24 million records shipped. By 1994, they had shipped more than a billion records, accounted for 15 percent of all CD sales, and had become a $500-million-a-year behemoth that employed thousands at its Terre Haute, Indiana, manufacturing and shipping facility.

Of course, most of the record clubs’ two million customers failed to read the fine print, obligating them to purchase a certain number of monthly selections at exorbitant prices and even more exorbitant shipping costs. At the same time, consumers plotted to sign up multiple accounts under assumed names, in order to keep getting those 12-for-a-penny deals as often as possible. Record clubs may have introduced several generations of America’s youth to the concept of collection agencies — and the concept of stealing music, decades before the advent of the Internet.

THE PROMISES MEN LIVE BY

The architects of the record-club concept were two men named Maxwell Sackheim and Harry Scherman, who in 1926 had come up with a little thing they called the Book of the Month Club. The genius of the book club wasn’t just the idea of selling books through the mail, thus penetrating untapped rural markets; Sackheim and Scherman’s real prize was devising what would come to be known as “negative option billing.” This meant that instead of waiting for people to actually order books by mail, the club would send you books every month, unless you expressly told them not to. The concept presumes that a lack of response was a “yes.” It was wildly successful. By the 1950s, the Book of the Month Club was a multimillion-dollar business.

Scherman wasn’t just an ad man and entrepreneur — his true love was economics, and in 1938 he collected his staunch anti-Keynesian rants into a tome entitled The Promises Men Live By. The book’s central premise is that a capitalist society is only as solid as the promises (or in economic terms, “credit”) kept honorably amongst its members. “When men’s promises cease to be good,” Scherman wrote, “trade and production are hampered, credit collapses, people cannot buy, sellers cannot sell, chaos and social degeneration inevitably follow.”

There is a certain irony in a man partially responsible for one of the more dishonest and predatory marketing devices of the 20th century lecturing on the sacred honesty of the promise at the core of capitalism. The “promises men live by” seemed to involve a fair amount of fine print.

In 1948, Columbia Records introduced the long-playing microgroove 33-1/3 rpm record album, or LP, creating a standard format for recorded music that would last until the advent of the compact disc. One of the LP’s main advantages, besides sounding great, was that it was lightweight and relatively unbreakable, perfect for shipping through the mail. Soon after, Columbia successfully tested its Family Record Club in the Ohio market, modeling their plan after the Book of the Month Club system.

Seeing Columbia’s success, Scherman and BOTM started their own Music Appreciation Record Club in 1955 — one of their first free records, given as an incentive to members, was a recording of Debussy’s “La Mer” conducted by Scherman’s son, Thomas.

It wasn’t long before Columbia and the BOTM joined forces. The heads of Columbia could certainly sense that Sackheim and Scherman had a flair for getting subscriptions — Sackheim, now considered one of the all-time advertising greats, always knew how to attract attention with simple statements. The Book-of-the-Month Club may have never gotten off the ground, for example, without his insistence that early ads boldly state “SEND NO MONEY!” at the top.

In his autobiography, My First 65 Years In Advertising, Sackheim details the clandestine meetings he held with the heads of Columbia Records: “They had watched with concern or envy (or both) the success of other of-the-month clubs and were eager to ‘do something about it.’ We were to prepare the plan on our terms, but we were warned that every detail must be kept secret, even from our own employees.”

The secrecy was well-founded, as Columbia was planning to use the club to aggressively market the LP (and the players the discs required) to a public that didn’t know it needed them. The record club was a loss leader, and Americans were soon hooked on buying vinyl. A new consumer addiction was born, with Columbia and its record club at the forefront.

MUSIC FOR NOTHING

However, Columbia House Record Club didn’t truly go supernova until the mid-1960s, when Les Wunderman took over the account and shaped it into the form that we’re familiar with. Wunderman, considered the father of direct marketing (a phrase that he himself coined), is credited with pioneering such now-standard concepts as the database, the 1-800 number, the magazine subscription card, and the credit-card customer rewards program; his ideas for Columbia were equally epochal.

First, he devised the now-famous “12-for-a-penny” concept; then, he created the post-paid insert card, allowing subscribers to order records with no upfront cost, not even the cost of a stamp.

But perhaps his most ingenious promotion was the Gold Box — a “buried treasure” in the company’s advertising that offered free records to subscribers who found them, filled them in, and mailed them back. It rewarded obsessive behavior, identifying record-club subscribers as geeky fanatics willing to spend hours combing through the company’s advertising if they thought they might get a free record out of the deal. In a famous (to advertising junkies) speech he gave at MIT a full 25 years before the Internet was conceived, Wunderman described the sales relationship of the future as “interactive.”

In a pre-Web world, his interactive Columbia House concepts led millions to mail in their pennies. There was nothing like the elation of getting that first shipment of records for essentially nothing — but that ecstasy was quickly offset by the anxiety of finding out that you owed $34.74 for those Sir Mix-A-Lot and Crash Test Dummies discs you never asked for. Now you were on the hook: either you could fulfill your obligation, or start ducking collection agencies.

Unless, of course, you could find a way to cheat the system. For a large contingent of the record-club membership, scheming a way to get more free records — usually through fake accounts and multiple addresses — was the ultimate caper. Everyone had a friend of a friend who had supposedly done it: signing up using a false name, or having the records sent to a conspirator’s address. After all, in the pre-supercomputer age, it wasn’t hard to stay one step ahead of Columbia House’s detectives.

The patron saint of the records-club schemers would probably be Joseph Parvin. In 2000, the 60-year-old was prosecuted for having received, between 1993 and 1998, nearly 27,000 CDs, using over 2000 fake accounts and 16 P.O. boxes. All told, he bilked Columbia House (and rival BMG) out of $425,000 of product, selling them at flea markets. For anyone who was paying attention when his arrest made headlines at the time, it was kind of like finding out that Paul Bunyan is real — someone actually was able to cheat the system the way everyone dreams of.

END OF AN ERA

In many ways, though, the real victim of the clubs wasn’t the consumer, but the recording artist. As record clubs’ popularity mushroomed, the introductory incentive deals became more and more important to the success of the whole system. Since these incentive records were considered “giveaways” by both the clubs and the labels, artists were not paid royalties on them. Additionally, artists’ royalties on even normal record-club purchases were typically far below the industry standard. The artists’ financial losses became more noticeable in the CD era: for one, record clubs began to account for huge percentages of overall sales of certain blockbuster albums. On top of that, the cost of manufacturing a compact disc dropped to a fraction of what it had previously been to create vinyl.

It’s important to understand that record clubs not only sold and distributed their records, they pressed them as well. What this meant to an artist during the 1990s CD boom was that while they were losing royalties hand over fist, the clubs were netting a fortune from low costs, high sales, and minuscule royalties.

For example, Cracked Rear View, Hootie & The Blowfish’s 1994 debut smash, owed a whopping three million of its 13 million sales to record clubs — and yet the band received little to no royalties for any of them. Pearl Jam claimed to have lost royalties on a million “free” copies of its 1993 sophomore outing, Vs., and in 1995, Meat Loaf sued Sony over unpaid royalties from a million record-club sales of his 1977 classic, Bat Out Of Hell.

Of course, very few successful ventures can continue making money forever. The record clubs’ ongoing battles with traditional music retail outlets (who, on average, paid $5-$6 wholesale more per CD than the clubs) eventually resulted in litigation that closed many of the licensing loopholes that had been so integral to the clubs’ bread and butter. By that time, though, many labels had already jumped ship, leaving the clubs with fewer artists’ catalogs to draw from.

Both clubs and traditional brick-and-mortar music stores also suffered as big-box, nontraditional conglomerates like Barnes & Noble, Best Buy, and WalMart took on a greater market presence. Oh, and there was the small matter of this little thing called the Internet, too.

Columbia House was bought in 2005 by its main competitor, BMG Music Service — a move precipitated in part by the 2004 merger of Sony Music Entertainment and Bertelsmann Music Group. This wagons-circling move also spoke to the decline of the vitality of the club business, which had been in a tailspin for the previous decade. By 2008, BMG Music Service was folded into yourmusic.com, which still required the purchase of a CD a month, but no longer offered the introductory incentive deals associated with the record-club salad days. Yourmusic.com hobbled along for a few years, but the gravy train was over. Earlier this summer, it was dissolved by parent company Direct Brands, Inc. (DBI), which also owns other mail-order direct-marketing services such as Doubleday Book Club.

That wasn’t quite the last we would hear of the record club, though. In August of this year, a nationwide class-action lawsuit was filed against DBI, seeking monetary damages and an injunction stopping them from alleged unauthorized credit card charges, inability to cancel, unwanted products being mailed, overcharging, and other abuses (which might explain DBI’s unwillingness to go on record for this piece). When former club members, who’d had no account activity for years, began receiving notices in their mailboxes suggesting they had not fulfilled their membership obligations, these individuals received not only a dubiously conceived threat to their credit, but also a last-gasp reminder from a fading business, crying out: “Remember us, the once-almighty and popular record club?”

It is, perhaps, a fittingly ignoble end to a sketchy business that scammed consumers and artists alike while anticipating and facilitating the inevitable fracturing of the traditional music-business model.

And yet, the record club was one of the most ingenious marketing ploys of the 20th century, perhaps right up there with rock and roll itself. It introduced the notion of getting music for free — which may have ultimately led to its own destruction, when people stopped buying even CDs. But those of us who remember it in its prime find pause when pillaging a torrent site or googling for the .rar file of a new album, and remember the halcyon era when checking off which records to get for “free” with an introductory signup to the club felt like the sweetest deal in the universe.

RECORDLANDIA: THE TOWN THAT COLUMBIA HOUSE BUILT

Up until the end of the 1990s, children grew up corresponding with two seemingly fantastical postal addresses: little kids sent letters to Santa at the North Pole, and teenagers joined Columbia House and sent letters to Terre Haute, Indiana. Specifically, a magical building on North Fruitridge Street. When you joined, you picked out your eight records or 10 tapes or 12 compact discs or whatever the promotion was that year, and you mailed that sucker off to North Fruitridge, where Columbia House’s elves would read over your list, see if you’d been naughty or nice, and reward you with your XTC and Jethro Tull cassettes that you so desperately wanted.

The Santa-like aura faded, of course, once you started having to send those magical packages back when the club tried to make you pay for Record of the Month selections you never ordered — but many of us still wondered what this fabled land of records must be like.

Sorry to disappoint you: the real Terre Haute, Indiana, is a company town that rode the boom-and-bust roller-coaster fortunes of a massive corporation. In the 1950s, Terre Haute was chosen by what would eventually become Columbia House Record Club as the perfect town: already the site of a CBS Records vinyl plant, it was perched at an important juncture of several key train lines, making nationwide record distribution easy.

The rest, as they say, is history: generations of families put food on the table by punching in at a massive manufacturing and shipping factory built on North Fruitridge. The complex eventually sprawled across more than a million square feet of Terre Haute’s south side; in the mid-1960s, it took over a converted supermarket on Lafayette Avenue to handle the manufacturing of 8-tracks, then cassettes.

Even in boom years, record manufacturing was hot, loud, and noxious with the fumes of molten black vinyl. And that was when there was work. In the late 1970s and early 1980s, as the music industry slumped, thousands of employees were pink-slipped. In 1986, the dawn of the CD age revived the town; by 1999, some 3500 Terre Haute employees fulfilled the CD- and video-club orders of a staggering 16 million club members worldwide.

We all know what happened next, as the shrinking of the music industry in the 2000s gutted not only Columbia House but its Indianapolis-based rival, BMG Music Service. The two consolidated in 2005, at which point the combined workforce still plugging away in Terre Haute was reduced to a mere 500 — and on and on until the plant’s 2009 shuttering.

Terre Haute is still a hub for CD manufacturing — though at a drastically reduced scale. These days it’s home to the only Sony CD-manufacturing plant east of the Mississippi, where 150 employees labor — a shadow of the thousands who pressed wax here for generations.

Beyoncé Rejects Tradition for Social Media’s Power

December 16, 2013

BEN SISARIO NY Times 12/16/13

The release of a blockbuster album has historically come with a few standard marketing moves. Flood the radio with an early single. Book as many TV appearances as possible. Line up partnerships with big retailers and consumer brands.

But at midnight on Thursday, when Beyoncé released her latest album, she did none of those things. Instead, she merely wrote, “Surprise!” to her more than eight million Instagram followers, and the full album — all 14 songs and 17 videos of it — appeared for sale on iTunes.

The stealth rollout of the album, “Beyoncé,” upended the music industry’s conventional wisdom, and was a smashing success. It sold 365,000 copies in the United States on its first day, according to people with direct knowledge who requested anonymity because they were not authorized to discuss its sales. Depending on how it performed through the weekend, “Beyoncé” will likely have one of the year’s biggest opening sales weeks.

“I didn’t want to release my music the way I’ve done it,” Beyoncé said in a news release, which so far represents the only public comments that she or Columbia, her label, have made. “I am bored with that.”

Though very few acts could attract the same attention as Beyoncé, the episode contains some lessons — and possibly a future blueprint — for the music industry. In bypassing the industry’s traditional promotional machinery, she demonstrated social media’s power to amplify news and to forge a direct connection to her audience. The release was “designed to highlight that it’s about her and her fan relationships,” said Alice Enders, a media analyst with the firm Enders Analysis in London.

Beyoncé appeared to agree with that assessment. “There’s so much that gets between the music, the artist and the fans,” she said in the news release. “I felt like I didn’t want anybody to give the message when my record is coming out. I just want this to come out when it’s ready and from me to my fans.”

The news quickly spread well past Beyoncé’s core audience, however. The online reaction to the album’s release — according to data from Twitter cited by Billboard, the news generated 1.2 million tweets in 12 hours — became a news story in itself. Other stars like Katy Perry and Lady Gaga promoted it to their millions of followers on social media, magnifying the attention. The album also quickly gained critical acclaim.

The release also showed the marketing value of no marketing. Typically, to spur sales for high-priority albums, record companies follow Hollywood’s time-tested strategy of pointing consumers — repeatedly, and through every media platform available — to a specific release date in the future, and piggybacking on the promotional might of big consumer brands. Justin Timberlake, for instance, blitzed late night-television and was in commercials for Target and Bud Light Platinum before releasing his album “The 20/20 Experience” in March.

Beyoncé also bucked other industry trends. At a time when singles are the dominant sales unit for pop music, the album was presented to fans as a complete multimedia work that had to be purchased in its entirety for $15.99. Accompanying the songs is a collection of videos by celebrated directors like Hype Williams and Terry Richardson. As Beyoncé explained in a video posted to her Facebook account, she wanted the album to be consumed and appreciated as a full artistic expression.

That decision may have also helped sell more full albums — a far more profitable product for Beyoncé and Columbia. To prevent leaks, Columbia waited until after the exclusive iTunes release to manufacture the CD-DVD version of the album, which the release on Friday promised “will be available at retail in time for the holidays.”

Beyoncé’s surprise album did not turn away radio stations, which are usually supplied with music in advance and courted by the record labels. Dion Summers, who programs urban music at Sirius XM Radio, said that rather than wait for Beyoncé’s label to deliver the music, he bought the album early Friday and began to play the songs “Drunk in Love” and “Partition” immediately.

“It’s an instant classic, a game changer,” Mr. Summers said. “It has a long life ahead of it.”

In the music industry and among Beyoncé’s fans, it was no secret that she had been working on a new record. In fact, she had gone into 2013 with what seemed to be a by-the-book marketing campaign for an imminent album. Late last year she formed a lucrative global partnership with Pepsi, and in February sang at the Super Bowl halftime show and had an HBO documentary. She even embarked on a world tour in April, stoking gossip about a possible delay for the record.

But that expectation may have heightened the anticipation — and the rush to buy — when the album, her fifth studio release, finally came out. Her first-day sales surpassed the 310,000 copies that her last album, “4,” sold in its first week two years ago.

Even last week, a release date looked nebulous. In an interview with the industry publication Hits, Rob Stringer, Columbia’s chief executive, said that as part of the label’s plans for 2014, “Obviously, at some point Beyoncé will put a record out.”

“And when she does,” he added, “it will be monumental.”

Sneaker Wars: Kanye West Signs Deal With Adidas, Drake With Jordan Brand

December 6, 2013

Jason Belzer 12/05/13 Forbes.com

Rival hip-hop moguls Kanye West and Drake are at the center of the celebrity endorsement battle between sports brands Nike and Adidas.

The sneaker endorsement arms race has officially reached a new level. Yesterday, after rapper Kanye West revealed he was leaving Nike to sign with Adidas, rival Drake told fans at a concert in Portland he was joining Nike’s famed Jordan brand. The announcements signal an escalation in the continued battle between the two sportswear giants to acquire celebrity co-signs for their most valuable product lines.

Rumors swirled over the last few weeks of Kanye’s imminent departure from Nike due to the brand’s refusal to give the rapper creative control over his Air Yeezy product line and pay him royalties as part of his compensation package. During an appearance on Hot 97 last week, Kanye explained that during negotiations, he told Nike, ”‘I need royalties.’ It’s not even like I have a joint venture. At least give me some royalties. Michael Jordan has 5% and that business is $2 billion. He makes a 100 million dollars a year off of 5% royalties. Nike told me, ‘We can’t give you royalties because you’re not a professional athlete.’ I told them, ‘I go to the Garden and play one-on-no one. I’m a performance athlete.’”

Of course, Nike’s immediate signing of Drake is no coincidence. With Kayne’s negotiations coming to an impasse, the brand almost certainly realized it would have to move quickly to find a replacement in the genre who would be willing to abide by their terms. While Drake, who ranks five spots behind Kanye on Forbes’ ranking of the World’s Highest-Paid Hip-Hop Artists, may not yet come with the same size following, the Toronto star’s meteoric rise to the top of the Hip-Hop charts positions him incredibly well to be a powerful counter-punch to Adidas’ future Kanye line. Moreover, Drake’s recent deal to be the face of the NBA’s Toronto Raptors franchise provides for synergies between the artist’s music brand and sports that West simply could not offer.

The practice of sportswear brands aligning themselves with endorsers out-side the athlete world is nothing new, and can be traced back to Adidas’ deal with Run DMC almost 30 years ago. That partnership allowed Adidas to tap into the growing Hip-Hop counter-culture of the time and mitigate the effects of Nike’s rise to prominence under Michael Jordan. While other consumer brands have attempted to emulate Nike’s success with Jordan over the last three decades by finding their own super-stars to align with, only now have sportswear brands realized that endorsements by cultural icons outside their own industry might provide more bang for the buck than adding just another athlete to their stable. That being said, because it is far easier to judge a professional athletes performance over that of a music star, deals like the ones made with Drake and Kanye will be judged by the industry with far greater scrutiny.

Jason Belzer is Founder of GAME, Inc. and CSA, and a Professor of Organizational Behavior and Sports Law at Rutgers University. Follow him on Twitter @JasonBelzer.