How has consumer behaviour and audience response transformed by online media, in relation to the past?

Looking back 15 years, there where three main places the average consumer accessed their media. Television, physical CD and newspapers. 15 Years later, in 2010, there is only one place to go to access all of these mediums and that’s the personal computer.

Consumers behavior in recent times would have been every hard to predict just a few years ago as they have been transformed by such breathtaking technologies as the Internet.

Two industries that have been greatly affected by this transformation in audience behavior are the television and music industries. Both of these have been faced by the drop in the use of traditional forms of purchasing and accessing their content and the trouble of online piracy that comes hand in hand with all forms of online media.

The change in how media is consumed has affected all industries, spending on 'traditional' media such as newspapers and magazines have dropped almost 20% in the last six months. This is in contrast to the report that came out, indicating that hours spent consuming digital media increased even more, from 6 hours 14 minutes to 7 hours 28 minutes. This gives a slight indication to how audiences are changing the ways in which they used to enjoy their media, and the print industry is no different to the key industries that I have highlighted above, Music and Television.

The music industry has been seeing some very dramatic changes over the past number of years. Just as the cassette defeated the LP, the CD defeated the cassette, now mp3 is king and this has lead to a number of changes within the industry. With the introduction of paid downloads, consumers no longer have to buy a full album if they were only interested in two or three songs. This new freedom for consumers has dramatically changed the music sales landscape.

During our AS course, we got to meet one of the founders of a local record label. Andrew Ferris is the co-founder of Small Town America. Small Town America (STA) is an independent record label based in London and Derry. He had some very interesting figures on how he has seen first had the changes in consumer behavior. “STA Income 2006-07 - Physical 92% Digital 8%

Income 2007-08 - Physical 76% vs. 24%

Income 2008-09 - Physical 66% vs. 34%”

These figures are by no means unique as Andrew explained how this was an industry norm.

This year for making our music video, we met front man Deci Gallen from the band The Jane Bradford’s and he had some interesting points on how he has seen his own audience behavior change. He explains how, “ Few or no bands today will consider solely releasing on digital or physical CD, it is important to cover both bases.”

With the ever increasing figures of digital download fast approaching taking over physical sales of CDs, bands must conform to the consumers response to the online media and the new methods of doing things in this digital age.

In November 2005, the record for the best-selling digital single in the United States was held by Gwen Stefani's "Hollaback Girl", which has sold over one million downloads, making it the first song to achieve platinum download status. Not even 5 years later and now bands are solely releasing their tracks for digital distribution, cutting out physical copies all together.

The music industry has seen another change in the behavior of their audience, piracy is now worse than it has been at any other time in the music industry. With reports such as, “Around the world in 2006, an estimated five billion songs, equating to 38,000 years in music were swapped on peer-to-peer websites, while 509 million were purchased online.”

Piracy has cause a massive crisis in all industries. In our discussions with Deci Gallen, we gain a greater insight to how this particular impact of online media affects the artists, “The Jane Bradford’s album was available to illegally download before it went on release which was unfortunate as we’re struggling financially to put out the record. Its very hard not to feel like people are stealing from you as there is no guarantee that you’ll make back the money you put into producing it.”

The consumption of media is always changing, and even in recent months we can see massive changes in the way in which people are consuming their media, in particular their music.

People are now less concerned with “owning their music” and more so access to it. Music streaming is now becoming more and more popular. Consumers will pay a monthly subscription fee, which allows them unlimited plays to a massive online library. Sites such as Last.fm, we7 and Spotify are at the forefront of these music-streaming sites. A new term has been born, calling the services that these sites offer a, “freemium,” service. This basically describes anyone’s access to these sites, but in order to avoid adds or limited plays, they have the option to pay for the subscription fee.

These services are what are known as, “in the cloud,” technologies. This refers to the content having no fixed point, such as on a hard drive, allowing consumers to be able to access it form any computer with a working Internet connection. I feel that in the future there will be a greater push for this, allowing the audience access to their content from anywhere.

The second industry that has changed dramatically due to the way in which consumers have transformed the way, in which they consume their media, is television.

Historically, when television broadcast the show that you wanted to watch, the viewer had to organize themselves around the specific time the program is being shown live, or be lucky enough to catch it on repeat.

However, in just a couple of years, the television industry has changed dramatically to how audiences have transformed how they consume the traditional media product.

Traditionally television the only way in which people could see the programs that they enjoy, now the stream of content is coming from more and more sources everyday.

Audiences are now turning turning towards the internet to watch their favorite television programs. Sites such as BBC iPlayer, Sky Player and ITV Player have been introduced allowing large media institutions a new means of distributing their content and the customer an ever more popular method of consuming the content.

The way in which the power is now in the consumers hands, their ability to choose when and where they watch their content, has been described brilliantly by (INSERT JOURNALIST HERE), “it's not a lecture anymore, it's a conversation.” I feel this depicts how the past looks in relation to the television industry in the past, how there was only one way to watch your content and that was to huddle around one TV in your house and fight over the remote, where as now, any laptop, most modern game consoles and even now portable media players are able to access this content where ever they please, now its a conversation, where the audience has a say which is an amazing transformation from just a few years ago.

Large media institutions are now beginning to hear the message and see how their audience has evolved in the digital age and therefore they must transform themselves in order to keep this new audience.

BBC iPlayer has an estimated 5.2 million regular viewers of the site. This gives an indication to how popular online streaming is becoming and what a massive potential audience it is. With networks such as MTV teaming up with Gorilliz in broadcasting a date of their live show, not only across their 68 channels, but also streaming it simultaneously online. This is similar to how even YouTube, arguably one of the original sites to offer streaming video, has been changing. Not only does Youtube now have deals with some international broadcasters, such as its deal with Channel 4, but has just recently began offering streaming of live Indian Premier League cricket. Two examples of how large institution are adapting themselves to fit their audiences behavior.

The music industry is not alone in its trouble with internet piracy. P2p sharing is very high, using software such as BitTorrent and LimeWire, consumers are able to download their favorite shows for free, hours after its been originally aired. This has lead to more and more media producers to, in order to combat their trend in illegal downloading, to offer their content for free on the internet with the possibility for a 45 second ad at the beginning of the video. This not only combats the illegal downloading of content but also allows for ad revenue as well as people to view the content in high quality, just as it was originally aired.

Based on the points raised, i feel that consumer behavior has changed so dramatically in such a shot period of time, and this change would not have been possible without online media. I feel that if businesses which to remain profitable and successful, they will have to adapt to the changing demands of their audience. This massive change has given the power to the consumers and allowed them to be in more control of their media and content than ever before.

What difference has the Internet made to media production and consumption?

Over the years, we can greater see the impact of the Internet and technologies on the media and in particular, media production and consumption.

For my A2 project, I created a music video featuring a local band, The Jane Bradford’s, while working closely with them we learned a lot about how the Internet has affected how the produce their music.

Deci Gallen, the front man for the band, made it very clear to our group if the Internet was not what it was today, he would not have been able to make the album that they had. One of the point he raised was, “Releasing the Jane Bradfords debut album wouldn’t have been financially viable about ten years ago,” he went on to say that, “Advances in computers and software mean that it is now totally possible, and indeed acceptable, to produce an album or single at home.”

This last point is something that is becoming ever more popular option. Artists and Musicians are now producing their media at home due to technology becoming cheaper. An example of this is Deci worked out, “It cost £1000 for this (mixing) but had I needed to record instruments instead of doing it in my home studio it would’ve cost closer to £5000.”

A band can now record a single on software such as GarageBand, mix it and then publish to the Internet on such websites as My Space or online stores such as iTunes.

A major impact of the Internet on production is that no longer are artists and bands limited to the talent and facilities in the local area as Deco Gallen found, “The beauty of the digital world is that I was able to outsource this (the record) to a guy called Carl Saff in Chicago. A man that I will probably never meet played a vital roll in the record’s release.” This is in massive contrast to how things where done just a few years ago, thanks to the Internet.

During our AS course, we got to meet the co-founder, Andrew Ferris, of Small Town America (STA). Small Town America is an independent record label based in London. One of the more interesting aspects of STA and what stands them out in comparison to the big four is that in many ways they carry D.I.Y. ethics in their work and as all institutions in this modern industry they must embrace technology like the Internet if they want to survive, an example of this is what co founder of the label, said to our class in our exchange, “For every stumbling block you imagine there is a free solution already on the Internet.”

Andrew Ferris produced figures which show how the Internet has been effecting sales of Small Town America and so how it is effecting consumption,

“Income 2006-07: Physical 92% Digital 8%

Income 2007-2008 Physical 76% vs. 24%

Income 2008-2009 Physical 66% vs. 34%”

The growth in the Internet has effected production drastically, as the public move from physical purchase to digital download. This has effected production in a number of ways, Deco Gallen speaks on behalf of the Jane Bradfords, “The big difference with modern music is that you can finish a track and have it available online for millions to hear that same day.”

Deci wasn’t naive to the fact that that Internet not only has a wealth of advantages but recognizes that it has its drawbacks. “The Jane Bradford’s album was available to illegally download before it went on release which was unfortunate as we’re struggling financially to put out the record. Its very hard not to feel like people are stealing from you as there is no guarantee that you’ll make back the money you out in producing it.” This is a major problem, piracy, not just in the music industry but spanning across the whole of the media world. Deci referred to this battle between the advantages of developing technologies such as the Internet and the disadvantages such as piracy, “The major downside of the technological advantages and the Internet is that despite offering you a larger audience and larger market, it also takes away a large amount of your revenue by piracy. It feels like being handed a sword going into a fist fight and then realizing the other guy has a sword as well - in other words with every new opportunity there is a downside that levels the playing field.”

Consumption has changed not just in music but also in a number of media institutions, such as television. With more homes than ever having high speed broadband at their disposal it has in recent years become more popular to stream media, especially video online.

Evolving from sites like YouTube, organizations such as the BBC are now streaming high quality content on their own sites, such as BBC player. People are now no longer limited to consuming the shows and programs when there are first aired, they now can control what they watch, when they want to watch them. This has inspired the term “On-Demand”. This has caused a massive change on the traditional way in which we consumed television.

It is not just television that has been changed by the Internet, in terms of how it’s been consumed. Why drive to the local video shop when you can log on to innovative sites such as Netfilx, stream and download your favorite and most recent movies. Instead of people having to wait in line at the cinema, sites like this can stream high quality video over the Internet and right into the home of movie lovers everywhere.

I believe that the Internet has changed production and consumption of Media forever and on the most part I feel for the better. The barrier between Artist and consumer has been reduced, bringing these to groups closer than they have ever been. Although there are problems with this new, powerful tool, I feel they are outweighed by its ability to help small artists penetrate large media intuitions and well as allow consumers to easier consume the media that they love.

Rewrote to include Consumption.

Digital Economy Bill

The Digital Economy Bill was drafted in order to "ensure a world-class digital future following the Digital Britain White Paper, published on 16 June 2009, setting out the Government's ambition to secure the UK's position as one of the world's leading digital knowledge economies and take forward a new, more active industrial policy to maximize the benefits from the digital revolution".

In your opinion, and in light of the recent media backlash, how has the original philosophy behind the Bill changed and why do you think this is?

Copyright, the exclusive legal right, given to an originator or an assignee to print, publish, perform, film, or record literary, artistic, or musical material, and to authorize others to do the same. This word “Copyright,” is what this Digital Economy Bill basically boils down to.

Upon first hearing about the bill and listening to some of the main developers of this bill, such as Stephan Timms and Peter Mandelson, there are some very good points being made when it comes to the current state that the British and global entertainment industries epically in the current sate of the economy.

The original philosophy of this controversial bill was to try and catapult Briton into being on of the digital leaders of the world as well as creating digital businesses of the 21st century, all while trying to turn around the trend in an industry that is ever becoming, less and less profitable as broadband gets faster, hard-drives get smaller and the sense of guilt for illegally attaining music, film or games is becoming non existent.

One of the reasons I feel for such a drastic and controversial bill could be because of the economy and the recent disastrous recession that has crashed through all industries and businesses. Briton has a creative sector, providing jobs for more than 1.8 million people in the UK. With unemployment booming and illegal file sharing persisting, it could be said that this bill has been introduced to try and bring much more money back into the economy. This could be seen as quite a fair feeling for Map’s such as Mandelson and Timms and is easily justifiable, however there are some aspects to this bill that seem to try to go beyond putting a stop to file sharing.

If this bill was to pass, this would allow any future secretary of state sweeping powers to take action against any user who is accused of illegal file sharing, with out any proof, possibly disconnection, al this with out setting foot in court, giving it the nickname, “The copyright protection and punishment bill”. This seems to not only be a skewed version of the original philosophy of the bill, but in also many ways a breach of democracy.

Another reason why I feel that this bill is not a step forward for the economy into the 21st century and the digital age, is that it seems that people like Mandelson are trying to keep Briton in the, “Analogue Age”. MP’s are doing this by trying to protect the particular outdated business models used in music and film. I feel that only so much should be done for this over paid, over priced industry.

It was Darwin who said, “Survival of the fittest,” this attitude should be taken towards business, businesses who can not adapt to their surroundings, as in piracy and an ever online demand for content, should not be allowed to go on. Businesses such as Spotify and Last.fm, offering music for free, on demand and also making a profit at the end of the year, should be what businesses in these industries should be striving towards. These kinds of businesses that revolve around what the customer wants are a step forward for the digital economy however if this bill was to allow outdated businesses to continue, it would further delay Britons potential to be a beacon to the rest of the world on how businesses are to handle this new digital age.

There are two main aspects to this bill which I feel go completely against its original philosophy. One aspect is the unprecedented power that it would give to ministers over the Copyright, Designs and Patents Act. This part of the bill, known as clause 17, would allow parts of the act to be changed, without having to be presented in the House of Lords. This could potentially lead to the monitoring of users data where no illegal activity of any nature is taking place. This is a massive breach of privacy and gives the government a window into the home of almost every household in the UK.

The second main reason why i feel that this bill has alliterative motives, that separate to the philosophy of the original bill is mainly to do with the far from realistic target to implement the more drastic measures of this bill if piracy does not fall by 70%. As mentioned before, one of these more drastic measures in the bill is the ability for anyone to be punished for illegal file sharing without evidence and without a court hearing and this i feel will be violently abused by big media businesses. Studies have shown that illegal downloads have become 150 times more profitable for businesses than legal sales and once broken down this bill seems to become less about protecting copyright and more about punishing the avid music listener.

On average, every case that alleged file sharers pay out is around €450. Of this money, 80% goes to the anti-piracy outfits, in this case the government, and therefore 20% to the copyright holders. This works out as for a €0.60 illegal download would end up giving these big music companies €90 per infringement. This is one of the reasons why i feel the music industry is especially happy with this new bill as well as the government who can make €360 per offense without having to provide evidence that the accused is guilty.

Based on the points raised i feel that this bill has completely transformed from the philosophy of trying to put Briton ahead of the rest of the world in terms of its digital economy, to a bill that could cripple its digital growth and potentially damage its growth.

Inspiration

It is great to be back in media studies for another year of blog posting, filming and banter.

Here are a few music videos that i feel may inspire our final piece when coming to film.

The Makings of an Introduction

Over the years the music industry has changed. Changed so much that the whole model that the industry previously lived by has been transformed into an entirely new structure. The main reason, i feel, for this change is the development of technology and how this has been implemented and how this has effected people, artists, audiences, customers and institutions.

The main development, that i feel, has changed all facets of the music industry, is the internet and specifically web 2.0. The phrase web 2.0 is used in describing the new attitude towards operating and existing on the net, allowing anyone to create material and distribute is in a new found democratic environment, the internet.

This new found environment brings wealths of advantages to audiences, consumers and artists. However, with these advantages comes major problems that are facing the industry, such as piracy, copyrighting difficulties and illegal downloads. 

As frontman for local indie unsigned band The Jane Bradfords, Decky Gallen said, 

“The major downside of the technological advances and the internet is that despite offering you a larger audience and larger market, it also takes away a large amount of your revenue by piracy.  It feels like being handed a sword going into a fist fight and then realizing the other guy has a sword as well – in other words with every new opportunity there is a downside that levels the playing field.”

Due to this level playing field and democratic atmosphere the traditional patterns of interaction between institutions and it's audience has changed dramatically. The audience is vastly different to the wide eyed consumer of yesteryear, idling a band from afar. The modern audience is much more hungrier for information and more importantly, content.

The audience must now feel in contact with the band and their music. To create this connection, institutions must converge over all the media resources at their finger tips, ranging from having a profile on MySpace for the band for the audience to comment to a video diary of the band touring on YouTube. It is this connection between the music and the audience is the new found method that institutions are using to, 

“Get the tenner from your pocket,” 

as put by one of the co founders of local independent record label Small Town America.

CD Baby Site Review

"CD Baby is a little online record store that sells albums by independent musicians."

CD Baby is a free resource used by STA in order for them to sell and distribute music online.

This allowed a small record label to introduce themselves to one of the largest market of consumers of music in the world.

"Cool thing: in a regular record deal or distribution deal, musicians only make $1-$2 per album, if they ever get paid by their label. When selling through CD Baby, musicians make $6-$12 per album, and get paid weekly."

STA's policy is that artists should get paid fairly for what they produce, a policy shared with CD Baby. This resource has allowed the band and the label, not only a much larger market than what they would have had before but also, a much larger revenue stream as they are getting much more money every time an artist on STA sells an album using this site.

With facts like,

"5,410,892 CDs sold online to customers

• $110,070,509 paid directly to the artists"

We can see the opportunities that this site has allowed for STA and as a free resource, its value is phenomenal.

Institutions and Audiences

Class Notes 7th May '09

“Candidates should be prepared to demonstrate understanding of contemporary institutional processes of production, distribution, marketing and exchange/exhibition at a local, national or international level as well as British audiences’ reception and consumption.”

We have decided to study the record label Smalltown America. (http://www.smalltownamerica.co.uk/)

Smalltown America is an independent record label based in London.

Smalltown America has in many ways carries D.I.Y. ethics towards all aspects of their industry.

Some examples that we discussed in class were of the band “ The Young Playthings.”

Examples of how in which STA and The Young Playthings used “D.I.Y. ethics” can be seen from within their first single.

The “Love U Like That” single was made by cutting and sticking an ad that they placed in the newspaper, which tied in with the name of the single. This was an example of how STA are using added value and a personal approach in order to gain an emotional connection between the artist and the audience, in oder for them to have the mindset that they are not just purchasing a piece of music, but a piece of art.

The use of the advertisement can be seen as a viral approach in order to publicise the band.

Viral marketing is a form of marketing in which news of a product or service is passed from person to person rather as a virus is transmitted. The media message may be passed on simply by word of mouth or more popularly/ effectively by internet or as in the case of STA and The Young Playthings, an ad in the news paper.

Of this particular single, 50 copies where sold, it took £76 to make compared to a gross profit of £200.

The next single “She’s A Rebel”  was also given the same kind of treatment with much added value going into the CD with it’s interesting parcel / present display.

In the case of this single, 120 where sold (more than doubling the previous single) with the cost of producing increasing to £154 and a massive jump in gross profit to £480.

The third and final single, called “Fit for Me” had an interesting addition to the single. In this case each CD sold was given a free temporary tattoo. This was used as a very good, very original marketing tool. Another example of how they added value and an example of another viral campaign.

This single saw their numbers ever increasing with 150 copies sold, a production cost of £246 and a gross profit of £600.

This final single brought the total net profits to £806, however this does not include the exposure that all the single releases, gigs and press that The Young Playthings received.

Next they went on to produce the D.I.Y album. With the revenue generated from the first three singles they set their recording budget at £800. They spent £150 on mastering the tracks, mastering is a form of audio post-production, is the process of preparing and transferring recorded audio from a source containing the final mix to a data storage device (the master); the source from which all copies will be produced (via methods such as pressing, duplication or replication). £150 for artwork, which includes an hour to turn the images into CD artwork.

£496.15 for 500 CD’s, including a 4 page booklet inside the common jewel case. £100 on promo mail outs, making sure that their music was heard by the right people. 300 where sent to shops at £6.15, generating £1845. 100 sold online at £10, generating £1000

Approximately the total costs of this process was £1500 and the total profit was £1000.

The process ended with a full album “Who Invented Love?” which allowed The Young Playthings to go on a full UK Summer Tour playing in big name concerts and artists. With a sales expectancy of 1200 and a profit base of 6000 with which The Young Playthings will use to record and market the 2nd album.

Marketing was a very large process of the success of The Young Playthings and STA as a whole.

STA made sure that their songs, sent out using the promotional mail outs, on the radio by the right people and on stations where the potential audience of the band would listen to. They also made sure to display posters at places that the band would be expected to play and where their expected audience was to be. T-shirts and other merchandise was given out to fans of the band, this was to give the bad a larger audience and encourage word of mouth advertising.

STA encourage the idea of “being bespoke.” This is, the encouragement of being original and individual to all the other music and products out there. The fact that STA is an independent record label allows them to be different and much more engaging. 

An example of how STA was helping their artist’s to being bespoke is with a band called Oppenheimer.

In an Oppenheimer album, STA created a CD that which was designed in such a way that the listener had to rip it open in oder to get at the CD inside. This subliminally gave the message of a present inside the packaging as we have seen before with The Young Playthings previous single but also came with another advantage. As the cover was so beautifully done, had crafted with amazing art, the customer was forces to buy two of the same album. One in order for them to listen to but also one in which that they could keep as a collectors item. This simple design and originality allowed a relatively unknown band such as Oppenheimer to boost sales dramatically compared to how they could have fared with a simple CD jewel case.

Remembering that STA have a keen eye on D.I.Y. they believe that there are many free solutions on the internet to a lot of the problems that may arise.

One site in particular that we will be looking in to more is “CD Baby.”

CD Baby allowed a small record label with little money to spare, free US sales and distribution. This allowed STA a chance to enter into one of the largest music markets on the planet.

Another site that we discussed is Myspace. It is a social networking site that has become very focused on networking between bands, artists and DJ’s. This is breaking down the barrier between themselves and the audience allowing for a much better connection. This connection is the new found power in order to “get the tenner out of your pocket” i.e. to generate sales.

This site allows the public to see what they are doing using their blog, listen to some of their music e.g. their new single, back catalogue, remixes all by using the online player built into the site. It allows them to see the bands schedule with the upcoming gigs menu, see pictures of the artist and past gigs, embedded videos of the gigs or music videos.

Arguably the best feature with this site in breaking down the barrier is the comments option. This allows the audience to leave a comment on the page of the artist that they may read and reply to.

However this site in resent years faces much spam due to this feature, it again is a free resource that STA encourages their artists to use.

An example of how this kind of social network marketing can benefit bands comes from another STA band, “And So I Watch You From Afar”. This allowed a relatively unknown local band to fill a massive venue like Mandela Hall and gain a massive group of hardcore fans, all from a free resource such as Myspace.