Music Release Windows: The Product Innovation That The Music Business Can’t Do Without

Forrester has just published a report which lays out a radical vision of the future of music products.  In the report we suggest that a comprehensive programme a product innovation is necessary to save the music industry from the current Media Meltdown it finds itself in.  The CD is dying, the 99 cent download model clearly isn’t enough (nor is live), and ad supported and subsidized models all have much distance to go. 

 

The immense challenge is to persuade consumers that music is worth paying for again.  The scarcity that music value was built upon was disappeared with the rise of Napster.  Content scarcity can never be truly regained so value must be reestablished with the scarcity of convenient, compelling services operating within three broad music release windows.  These release windows will stagger content releases, with premium services getting releases first and ad supported services last (see chart below). 

 

Windows

 

But we believe that even more needs doing in addition to this, most pertinently a radical overhaul of the core music product.  The album has been with us for exactly 100 years and though formats have changed, the core product (i.e. a collection of linear songs) has remained largely unchanged. We propose that the straight jacket of album format can now be shaken off and in its place releases can become part of a continual artist-fan relationship with artists delivering a steady stream of creative output.

 

So where does all the extra content come from?  Well much of it is already here.  Artists have been creating a much wider range of creative assets for some time now (back stage footage, covers, remixes, mobile apps etc) and record labels now have access to this content via 360 deals.  We argue that this content should no longer be seen as a way of selling albums and gigs, but as an end in itself.

 

This is an MTV Moment in the digital age for the record labels.  They only realized that music videos were a value commodity in their own right rather than just a promotional tool by the time MTV had established a successful business.  Now it is time for them to learn the same lessons about added value content.

 

Finally, we also propose that music product innovation should be built around the 4 Cs of Digital Content: Content, Convenience, Cost and Community.  The more eagle eyed of you will have noticed that this idea has changed a little since my previous post on the 3 Cs of Digital Content.  Why?  Well we listened to your comments!  We’d always assumed that Community was an integral element of digital content services, but we took the advice on board that it needed to be more than a sub text.

 

If you are press and would like more information on this report then please email PRESS AT FORRESTER DOT COM.  If you are a Forrester client and would like to discuss it further then please get in touch with our Inquiry team.

Comments

re: Music Release Windows: The Product Innovation That The Musi

Good points. Where is the unofficial leak of the music on to BitTorrent and so on? That could be on the chart as a dotted line, e.g. minus 8 weeks.

re: Music Release Windows: The Product Innovation That The Musi

You make a very important point. Content scarcity cannot be recreated. Everything will make its way onto Bit Torrent et al. So the value has to be in the quality of the experience that builds around the services in each of these windows. They've got to be so much better than searching for torrents that it's actually worth paying for.Is this going to pull in the hardcore pirates into premium products? No, but these premium tiers are inherently not aimed at them. This is about creating enough value for would be paying customers to start paying again.

re: Music Release Windows: The Product Innovation That The Musi

As a musician and self-confessed music nerd, I have 2 points to make:1. Anyone who refers to music as 'content' deserves to be shot and possibly dangled by their nether regions into a vat of acid.2. To myself and many other people I know (I don't claim to speak for the majority, but I do think I speak for that element of society that the music industry actually continues to make money from in this day and age), the album is the definition of the 'value commodity' (seriously, I really want to hurt someone over that phrase) here. Individual songs, mobile uploads etc, these are the things I have no issue pirating. An album is different. It's a work of art, and as such deserves to be treated with respect. I buy albums, and pay to see gigs. I get everything else for free, wherever I can. If I can't get it for free, I don't bother.I envisage a quite different future model for the music industry, perhaps along similar lines to the television industry, whereby record companies deliver dedicated 'channels' similar to spotify et al, which are the only place you can get certain albums, in the same way that writers, directors etc. are commissioned by network programmers to produce 'content' (really, a quick, painless death is too good for you people). The artists get their share of the advertising revenue, everybody's happy. Except they're not, because no-one's happy with this model in TV either. But you have to admit, it's a hell of a lot better than the current model.

re: Music Release Windows: The Product Innovation That The Musi

I'm a musician too. I've played classical guitar since I was 5 (3rd generation of guitar players in my family) and I've had a few dance music singles released in my time. I also helped run a small record label and I have a recording studio. So I am fully sensitive to what music is all about from a creative perspective.The use of the term 'content' here is predominately used to refer to all music including the extra content. It's not appropriate to call, for example, back stage interviews and mobile phone logos, music, though they are music related content.Also, content is used here to describe all forms of media online. The term media is actually less flexible when you factor in items such as MMOGs etc. So I completely understand your concern about music being referred to as content. But that is, unfortunately the language of the digital world. And, many of the channel partners see music as explicitly content to fill their pipes, networks or devices. Like it or loathe it, that is the reality.With regards to your view of the album, the harsh reality is that the digital generation just don't share the same enthusiasm in numbers. Single track downloads massively dominate digital music sales and file sharing downloads. They're already dissecting the album. The on-demand digital world demands much more continuity than the stop start cycle of the album.I agree that the album has immense creative value. But in the same way many of the new digital formats open up new swathes of creative possibilities. Just look at what NIN are doing with mobile, what Radiohead do with making stems available for remixes etc etc.Will and should all artists shun the album? No, but plenty more will find new creative opportunities presented by digital.

re: Music Release Windows: The Product Innovation That The Musi

May I suggest that content quality might be a root cause for the industry's problems?By quality I mean both artistic and technical aspects.First, some music released today is so not-new, or ridiculously simple that I don't want to pay, even if I like it for a while. Take almost any top100 pop song.Second, some music is released so loud that even my pro-grade equipment cannot play it without heavy distortion of the sound. Play as an MP3 Metallica's latest album - Death Magnetic - for instance, you'll know what I mean. Consumer players and the mp3 format where not meant to handle content with so little dynamics. Result: ear fatigue, i.e. even if you like the songs from an artistic point of view, you don't want to hear it.

re: Music Release Windows: The Product Innovation That The Musi

the value of music content was not based on scarcity... at all. people could and STILL CAN buy any music they want whenever they want. Billboard Chart toppers used to soar above the multi million mark regularly.the value of music content was based on QUALITY of the music. the decline and fall of the music industry empire stems from their lack of ability to choose and then properly develop quality artists.also they allowed Steve Jobs to a-la-carte them to death b/c every music exec in the world was in love with Apple products so much that it clouded their business acumen. they just bent over and took the 99 cent single without a whimper.it's really important to drive this point home repeatedly b/c people tend to just accept the line given to them by those who still helm the music industry ship, but you have to understand they are STILL just as inept as ever, possibly more... as many of the QUALITY employees have been laid off in the past three years or so.additionally, it has now been proven via several nonpartisan studies that the people who use p2p services actually buy MORE physical media and consume MORE legal downloads b/c they use the 'free' content as a preview service, akin to listening stations of the past.the entire basis of this article and the Forrester report is faulty to the core. it's over johnny... there's no 'saving' the music industry. the middleman is dead. long live music. there's more QUALITY out there now than ever, it's just not in the approved label system.boom. head shot.

re: Music Release Windows: The Product Innovation That The Musi

Kudos on some great conclusions, as always.What's sad about your suggestions is that so much of what you write are conclusions that consumer marketers in other sectors realized years ago. Indie music artists and marketers have been applying much of it for more than a year, as well. Only the major labels have not learned:"Listen to the consumer (aka fan) or die."

re: Music Release Windows: The Product Innovation That The Musi

@ chak: The "quality debate" is a tough one. If sales are down because quality is down, that means 1999 had the best music of the recorded era (since album sales peaked that year). What was popular in 1999? Boy bands and rap-metal bands. So Backstreet Boys were the pinnacle of music, by your logic. When seen in that light, technological disruption is a much better explanation for the drop in recorded music revenue.I think there would be problems putting releases into this three-tiered release schedule. But the premium window makes the most sense and, in fact, already exists in many corners of the industry (Matador's album pre-orders are a good example). Making ad-supported services wait could be very problematic. The inability to sample is one important thing that would be lost.Now, I have not read the report and am going off what is on this page, but some of this is out of the hands of labels. They can provide the content (yes, it's content...no need to get into a pointless argument over semantics) but they cannot create the services that are going to add the convenience (though they can influence convenience through the terms of licensing agreements) that is so important. WMG's use of Cisco technology for artist websites is a great example. WMG did not buy or build the platform upon which WMG labels will build D2C relationships and sales channels (which, by the way, will better allow labels to escape the traditional album release cycle). Thus, content creators' desire for more convenience is limited by the ability of their service providers to offer that convenience.

re: Music Release Windows: The Product Innovation That The Musi

You can do what this Miami band The Awesome New Republic did: www.awesomenewrepublic.comInstead of a 5 week window, they took a 5 month window. Releasing mixtapes, demos, b-sides and early versions of songs as totally free downloads. Taking a banner ad out on isoHunt.com and encouraging fans (old/new) to 'pirate' their music. Create documentaries, music videos, other visual content... And touring with reasonably priced tickets!They are set to come out with the culmination full-length disc sometime this October which they will be selling. Who knows if people will buy it though...An interesting experiment!

re: Music Release Windows: The Product Innovation That The Musi

Thanks all for your great and insightful comments. Let me address a few points:- the comment about much being out of the hands of the record labels is very relevant. Firstly the report address this issue by specifying that this approach needs much closer cooperation between labels and artist managers and also the artists themselves. the artists and artist managers have been at the forefront of building these new assets and leveraging them. Secondly, the labels 360 deals give them access to many more assets than before. My take is that the true potential of these is becoming part of the music product, not trying to extract a small share of additional revenue from what the artist makes.- I think the quality angle is very interesting. Investing in an artist is always a risk. In the midst of the music industry's downturn, many labels become more risk averse so err towards the safer bets, which are typically less edgy and more mainstream. Hence the massive popularity of American Idol , XFactor starlets who each have a life cycle of 6 months.- And thanks for the info on The Awesome New Republic. I didn't know about them but will investigate.

re: Music Release Windows: The Product Innovation That The Musi

There is no doubt that the music industry is in much disarray. Something that will only get worse as time goes on. But there is hope. Procedures are in place to aid in its recovery, it's just whether people will take on this new ideals... Or stay holding onto their old invalid ones.