No Line on the Horizon: U2 As a Case Study for Leveraging Free

[Posted by Mark Mulligan]

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This week, ahead of their forthcoming release ‘No Line on the Horizon’, U2’s label Universal Music streamed the album for free on MySpace in the US and on Spotify in the UK. That’s right, the world’s largest record label gave away the new album by one of its biggest artists, for free, before you could even buy it in the shops. This sort of thing would have been unimaginable a few years ago. What has changed is that the record labels are rapidly realizing the power that lies in harnessing free.

This was no scattergun strategy: Universal selected two of the highest profile streaming music destinations available and granted them exclusive, fixed time streaming access. The exclusivity ensured that the partners would heavily promote the deal and with their marketing clout and user support would ensure that this would in itself become an event. A lot of those listeners will now go and buy the album or tracks off it. But Universal know that a very large chunk (possibly the majority) of U2’s fans aren’t on either MySpace or Spotify. The streaming initiative reaches those other U2 fans via the great media coverage of the streaming initiative and at the same time directly engages with an audience which is largely complementary to the core album buyers.

But Universal are astute digital strategists and know that albums sales is only part of the equation. They’ll see the other key benefit being leveraging some revenue out of listeners who are unlikely to buy the album or even pay to download single tracks off it. Streaming services like MySpace Music and Spotify are among the label’s better available tools to monetize consumers’ shift away from purchasing units, to on demand consumption. They aren’t yet a direct alternative to illegal file sharing, but they certainly strike a blow in the right direction. Right now, they are a means of monetizing file sharers: streaming music fans are more than twice as likely as other Internet users to use file sharing networks.

So the equation is simple: as many MySpace and Spotify users are never going to buy the album, at least get some revenue from them listening to it over streaming before they can download it from Bit Torrent. Heck, some of them might even decide to go out and buy it.

Universal are showing here that sometimes the best way to fight fire is with fire. Free is what file sharers understand, and right now it’s the only large scale viable way of making money out of them.

Comments

[Mark Freedman]

That would be great if it wasn't already being shared on BitTorrent for over a week. They're on the right track, but need to pull the trigger a bit earlier.