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Timofey Kozlov
Timofey Kozlov

Nettwerk: The Challenges and Opportunities of Digital Marketing in the Music Industry


Nettwerk Digital Marketing In The Music Industry Pdf Downloadl




Music is one of the most popular and influential forms of art and entertainment in the world. But how is music marketed in the digital era? How do music marketers adapt to the changing preferences and behaviors of music consumers? How do they use the power and potential of the Internet and social media to promote their artists and reach their fans?




Nettwerk Digital Marketing In The Music Industry Pdf Downloadl



In this article, we will explore the case of Nettwerk Music Group, a Canadian independent record label and management company that built on its foundation as a social, grassroots marketer of music and artists, and emerged as a leader in the Internet-enabled social media environment. We will examine how Nettwerk faced the challenges and opportunities of digital marketing in the music industry, how it launched innovative projects to provide an alternative to the major labels, and how it followed a set of principles and strategies that made it successful in the digital music marketplace.


If you are interested in learning more about Nettwerk's story and its implications for the music industry, you can download a PDF version of this article here.


The Evolution of Nettwerk




Nettwerk Music Group was founded in 1984 by Terry McBride, Mark Jowett, Ric Arboit, and Dan Fraser in Vancouver, Canada. The company started as a small independent record label that focused on alternative rock bands, such as Skinny Puppy, Sarah McLachlan, Barenaked Ladies, Avril Lavigne, Coldplay, Dido, and many others. Nettwerk's philosophy was to give its artists creative freedom and artistic control over their music. It also aimed to create a direct relationship between its artists and their fans by using grassroots marketing techniques.


As technology evolved, so did Nettwerk. The company embraced the Internet as a new medium for distributing and promoting music. It created its own ecommerce platform called Nutone.com in 1996 to sell CDs directly to consumers. It also used email newsletters, online forums, fan clubs, websites, blogs, podcasts, and other digital tools to communicate with its fans and generate word-of-mouth. Nettwerk was one of the first record labels to use digital downloads as a marketing tool, offering free MP3s of its artists' songs on its website and other online platforms.


Nettwerk also recognized the power and potential of social media as a way to engage and empower its fans. It encouraged file-sharing, the remixing of its artists' songs and videos, and an environment in which "the audience is the record company". Nettwerk CEO Terry McBride said, "We don't sell music; we sell the artist's relationship with the fan. The fan is the filter, not us. We let them consume music on their own terms." Nettwerk also supported its artists' rights to express themselves freely and creatively, even if it meant going against the industry norms and regulations. For example, in 2005, Nettwerk paid the legal fees of a 15-year-old girl who was sued by the Recording Industry Association of America (RIAA) for downloading songs by Nettwerk's artist Avril Lavigne.


The Challenges of Nettwerk




However, Nettwerk's approach to digital marketing in the music industry was not without challenges. The company had to deal with the issues of file-sharing, remixing, and new artist-label contracts in the digital era.


File-sharing was a controversial topic in the music industry, as it was seen as a threat to the traditional business model of selling CDs and generating revenues. Many record labels and artists opposed file-sharing and sued their fans for piracy and copyright infringement. Nettwerk, on the other hand, embraced file-sharing as a way to expose its artists to a wider audience and create a loyal fan base. Nettwerk believed that file-sharing did not hurt its sales, but rather increased them by creating more demand for live shows, merchandise, and other sources of income.


Remixing was another issue that Nettwerk had to face in the digital era. Remixing involved taking an original song or video and modifying it by adding, removing, or changing elements such as vocals, instruments, beats, effects, images, etc. Remixing was a popular activity among fans who wanted to express their creativity and share their work with others online. However, remixing also raised legal and ethical questions about the ownership and rights of the original content. Nettwerk supported remixing as a form of artistic expression and fan engagement. It allowed its fans to remix its artists' songs and videos without asking for permission or paying royalties. It also created contests and platforms for fans to submit their remixes and vote for their favorites.


New artist-label contracts were another challenge that Nettwerk had to overcome in the digital era. As the role and function of the record company changed in the digital marketplace, so did the relationship between artists and labels. Artists wanted more control over their careers and more share of their revenues. Labels wanted more rights over their artists' digital assets, such as song placement, ringtones, mixes, and community-created content. Nettwerk realized that new artist-label contracts were needed if digital assets were going to flow freely and create value for both parties. Nettwerk offered its artists flexible and fair contracts that gave them more freedom and ownership over their music and digital assets.


The Opportunities of Nettwerk




Despite the challenges that Nettwerk faced in the digital era, it also saw many opportunities to leverage digital assets and create value for its artists and fans.


Digital assets were the currency of the digital music marketplace, according to Nettwerk CEO Terry McBride. Digital assets were any form of content or data that could be used to promote or monetize music online. They included ad, television, movie, and videogame song placement, ringtones, mixes, community-created content, etc. Nettwerk used digital assets to generate exposure and income for its artists in various ways.


For example, Nettwerk used song placement as a way to introduce its artists' music to new audiences through different media channels. Song placement involved licensing an artist's song to be used in an advertisement, a television show, a movie, or a videogame. Song placement could increase an artist's popularity and sales by creating awareness and recognition among consumers. One of Nettwerk's most successful examples of song placement was Sarah McLachlan's song "Angel", which was used in an ad campaign by the American Society for the Prevention of Cruelty to Animals (ASPCA). The ad featured images of abused animals accompanied by McLachlan's song. The ad generated millions of dollars in donations for ASPCA and millions of downloads for McLachlan's song.


Ringtones were another form of digital asset that Nettwerk used to create value for its artists and fans. Ringtones were short clips of songs that could be used as personalized and customized ringtones for mobile phones. Ringtones were a lucrative source of income for artists and labels, as they could charge a fee for each download or subscription. Nettwerk used ringtones as a way to create value for its fans by offering them exclusive and customized ringtones of their favorite artists' songs. For example, Nettwerk created a ringtone service called "Tone This" that allowed fans to create their own ringtones by mixing different tracks and adding effects. Mixes and community-created content were another form of digital asset that Nettwerk used to create value for its artists and fans. Mixes were versions of songs that were altered or combined with other songs by DJs or producers. Community-created content was any form of content that was created by fans using an artist's music, such as videos, animations, games, etc. Nettwerk encouraged mixes and community-created content as a way to engage and empower its fans and let them participate in the creative process. Nettwerk also used mixes and community-created content as a way to promote its artists and generate buzz online. For example, Nettwerk launched a remix contest for its artist K-OS that invited fans to submit their remixes of his song "Crabbuckit". The winner received $5,000 and a chance to have their remix released by Nettwerk. The Innovations of Nettwerk




Nettwerk did not stop at using digital assets to create value for its artists and fans. It also launched innovative projects to provide an alternative to the major labels and empower artists.


One of these projects was Polyphonic, a venture capital fund that invested in emerging artists and gave them access to Nettwerk's resources and network. Polyphonic was founded in 2009 by Terry McBride, Brian Message (manager of Radiohead), Adam Driscoll (founder of MAMA Group), and Ian Montone (manager of Jack White). Polyphonic offered artists a new model of partnership that was different from the traditional record deal. Polyphonic gave artists $300,000 in exchange for 25% of their revenues from all sources, including music sales, touring, merchandising, licensing, etc. Polyphonic also gave artists full ownership and control over their music and digital assets. Polyphonic's goal was to help artists build their careers and fan bases without relying on the major labels.


Another project that Nettwerk launched was Fanbase, a social media platform that connected artists and fans directly. Fanbase was launched in 2010 as a beta version with 15 artists, including Sarah McLachlan, Barenaked Ladies, Guster, and Ladytron. Fanbase allowed artists to create their own profiles and pages where they could share their music, videos, photos, blogs, tour dates, etc. with their fans. Fans could also create their own profiles and pages where they could follow their favorite artists, interact with them and other fans, create playlists, join groups, etc. Fanbase's aim was to create a more intimate and interactive relationship between artists and fans.


The Lessons of Nettwerk




Nettwerk's story is not only inspiring but also instructive for other music marketers who want to succeed in the digital era. Nettwerk's experience and success in the digital music marketplace can teach us some valuable lessons about the principles, strategies, and implications of digital marketing in the music industry.


The Principles of Nettwerk




Nettwerk followed a set of core values that guided its actions and decisions in the digital era. These values were:



  • Letting fans consume music on their own terms: Nettwerk respected its fans' preferences and behaviors regarding how they wanted to access and enjoy music. It did not impose any restrictions or limitations on its fans' choices. It allowed them to download, stream, share, remix, create content with its artists' music.



  • Creating a direct relationship between artists and fans: Nettwerk facilitated a direct communication and interaction between its artists and their fans. It did not act as a gatekeeper or intermediary between them. It enabled them to connect with each other through various platforms and channels.



  • Embracing the long tail of niche markets: Nettwerk recognized the diversity and fragmentation of the music market in the digital era. It did not focus on the mass market or the mainstream genres. It catered to the niche markets and the alternative genres. It served the needs and wants of the different segments and subcultures of music fans.



The Strategies of Nettwerk




Nettwerk used a combination of traditional and new media tools to market its music in a social and viral way. These tools included:



  • Ecommerce: Nettwerk used ecommerce as a way to sell its music directly to its fans. It created its own ecommerce platform, Nutone.com, where it offered CDs, digital downloads, and other products of its artists. It also used other ecommerce platforms, such as iTunes, Amazon, etc., to distribute its music online.



  • Promotion: Nettwerk used promotion as a way to create awareness and interest for its music among its fans. It used various promotional techniques, such as email newsletters, online forums, fan clubs, contests, giveaways, etc., to communicate with its fans and generate word-of-mouth.



  • Blogs: Nettwerk used blogs as a way to share information and opinions about its music with its fans. It created its own blog, Nettwerk Music Group Blog, where it posted news, updates, reviews, interviews, etc., about its artists and their music. It also used other blogs, such as Hype Machine, Pitchfork, etc., to reach out to new audiences and influencers.



  • YouTube: Nettwerk used YouTube as a way to showcase its music visually with its fans. It created its own YouTube channel, Nettwerk Music Group Channel, where it uploaded videos of its artists' songs, performances, behind-the-scenes, etc. It also used other YouTube channels, such as Vevo, etc., to expose its music to wider viewers.



  • Facebook: Nettwerk used Facebook as a way to connect with its fans socially and personally. It created its own Facebook page, Nettwerk Music Group Page, where it posted updates, photos, videos, events, etc., about its artists and their music. It also encouraged its artists to create their own Facebook pages where they could interact with their fans directly.



  • MySpace: Nettwerk used MySpace as a way to introduce its music to new fans and communities. It created its own MySpace page, Nettwerk Music Group Page where they could showcase their music, videos, photos, blogs, etc., to their fans and other users. It also used other MySpace pages, such as MySpace Music, etc., to discover and connect with new fans and communities.



  • User/fan-based activities: Nettwerk used user/fan-based activities as a way to involve its fans in the creative process and let them contribute to its music. It used various user/fan-based activities, such as file-sharing, remixing, creating content, voting, commenting, etc., to engage and empower its fans and let them participate in the music making and marketing.



The Implications of Nettwerk




Nettwerk's approach to digital marketing in the music industry had significant implications for the role and function of the record company in the digital era. Nettwerk created a new model for the music industry that was different from the traditional model of the major labels.


The traditional model of the major labels was based on the following assumptions:



  • The record company was the gatekeeper and intermediary between artists and fans. It controlled the production, distribution, and promotion of music. It decided what music was made and how it was marketed.



  • The record company owned the rights and revenues of the artists' music and digital assets. It offered artists a standard record deal that gave them a small percentage of their royalties and a large amount of debt.



  • The record company focused on the mass market and the mainstream genres. It aimed to sell as many CDs as possible and generate revenues from music sales. It ignored or neglected the niche markets and the alternative genres.



The new model of Nettwerk was based on the following assumptions:



  • The record company was the facilitator and partner of artists and fans. It enabled the production, distribution, and promotion of music. It supported what music was made and how it was marketed.



  • The record company shared the rights and revenues of the artists' music and digital assets. It offered artists flexible and fair contracts that gave them more ownership and control over their music and digital assets.



  • The record company embraced the long tail of niche markets and alternative genres. It aimed to create value for its artists and fans from various sources of income. It served the needs and wants of the different segments and subcultures of music fans.



Conclusion




Nettwerk Music Group is a remarkable example of how to market music in the digital era. The company built on its foundation as a social, grassroots marketer of music and artists, and emerged as a leader in the Internet-enabled social media environment. The company faced the challenges and opportunities of digital marketing in the music industry, launched innovative projects to provide an alternative to the major labels, and followed a set of principles and strategies that made it successful in the digital music marketplace.


If you are a music marketer who wants to learn from Nettwerk's experience and success, you can download a PDF version of this article here. You can also check out Nettwerk's website, blog, YouTube channel, Facebook page, MySpace page, etc., to see how they market their music online.


Thank you for reading this article. We hope you found it informative and useful. If you have any questions or comments, please feel free to share them below.


FAQs




Here are some frequently asked questions about Nettwerk and their answers:



  • Q: How can I contact Nettwerk?



  • A: You can contact Nettwerk through their website contact form here.



  • Q: How can I submit my music to Nettwerk?



  • A: You can submit your music to Nettwerk through their website submission form here.



  • Q: How can I work for Nettwerk?



  • A: You can check out Nettwerk's career opportunities here.



  • Q: How can I buy Nettwerk's music?



  • A: You can buy Nettwerk's music through their ecommerce platform Nutone.com here.



  • Q: How can I download Nettwerk's PDF article?



  • A: You can download Nettwerk's PDF article here.



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