“The Power of Social Media”
                            MidemNet, 18th January 2008, 11am


                  Jeremy Phill...
Why Are We Here?

    To look at the competitive landscape for social networks
      – Different types of social networks
...
Social Media and the Digital Media Value Chain
    The end to end value chain ...




Jeremy Phillips                     ...
Social Media and the Digital Media Value Chain
    ... content production ...




Jeremy Phillips                         ...
Social Media and the Digital Media Value Chain
    ... distribution ...




Jeremy Phillips                               ...
Social Media and the Digital Media Value Chain
    ... and consumption




Jeremy Phillips                                ...
Social Media and the Digital Media Value Chain
    Social Networks are at the heart of the value chain




Jeremy Phillips...
Social Media and the Digital Media Value Chain
    Different types of social networks ..

           Broad-based          ...
Social Media and the Digital Media Value Chain
    Different types of social networks ..

           Broad-based          ...
Social Media and the Digital Media Value Chain
    Different types of social networks ..

           Broad-based          ...
Why do people use Social Networks?


                              Making new 
                               friends
    ...
Why do you want to use Social Networks




                    Building 
                   Customer          Making Money...
And there’s the rub


                                                         Giving Stuff 
                             ...
How much content should be free?

                                                                                        ...
Which marketing strategies are most effective?

    Artist‐                    Label‐
                    Viral           ...
The Social Media landscape
    Social Networks, Tools & Services




Jeremy Phillips                                 www.s...
Notable players – Broad Social Networks
                                                     MySpace
                     ...
Notable players – Music-Focussed Social Networks

                                                  Imeem
                ...
Notable players – Mobile Social Networks
                                                      Mocospace
                 ...
Notable players – Label Sites
                                                    EMI
                                    ...
Notable players – Artist Sites
                                                       Kyle Minogue
                       ...
Notable players – Retailer Sites
                                                    iTunes
                              ...
Notable players – Music Blogs
                                                      Buzznet
                              ...
Notable players – Music Virtual Worlds
                                                       vSide
                      ...
Tools and Services – Social Network Engines

                                                    KickApps
                ...
Tools and Services – Artist Admin Tools

                                               ArtistData
                       ...
Tools and Services – Mashup Tools

                                             Synchro Arts
                             ...
Trends for 2009 – Content and Demographics

                           Current:                      Future:

            ...
Trends for 2009 – Site Wars

                              Current:                          Future:

                    ...
Trends for 2009 – New Frontiers

                             Current:                     Future:




                   ...
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The Power of Social Media

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By Jeremy Phillips,COO & Co-Founder, StrategyEye (UK)
In association with StrategyEye
Social media have proven powerful when it comes to building lasting fan relationships.Find out how consumers are interacting with them, what revenue streams they can offer to artists & how artists and the music industry should best use such social tools and services.

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The Power of Social Media

  1. 1. “The Power of Social Media” MidemNet, 18th January 2008, 11am Jeremy Phillips - Co-Founder and COO, StrategyEye Jeremy Phillips www.strategyeye.com
  2. 2. Why Are We Here? To look at the competitive landscape for social networks – Different types of social networks – Tools and services – 2008 investments – 2009 predictions To look at why fans use social networks, and what value social media brings to you StrategyEye’s intelligence service tracks hot companies and all corporate activity (VC, M&A, Partnerships) right across the Digital Media value chain – 16,000+ Digital Media companies, 400+ categories, 4,000+ sources Jeremy Phillips www.strategyeye.com
  3. 3. Social Media and the Digital Media Value Chain The end to end value chain ... Jeremy Phillips www.strategyeye.com
  4. 4. Social Media and the Digital Media Value Chain ... content production ... Jeremy Phillips www.strategyeye.com
  5. 5. Social Media and the Digital Media Value Chain ... distribution ... Jeremy Phillips www.strategyeye.com
  6. 6. Social Media and the Digital Media Value Chain ... and consumption Jeremy Phillips www.strategyeye.com
  7. 7. Social Media and the Digital Media Value Chain Social Networks are at the heart of the value chain Jeremy Phillips www.strategyeye.com
  8. 8. Social Media and the Digital Media Value Chain Different types of social networks .. Broad-based Music-focussed Mobile-specific Label Artist Retailer (Also other types of search to find content: ) Jeremy Phillips www.strategyeye.com
  9. 9. Social Media and the Digital Media Value Chain Different types of social networks .. Broad-based Music-focussed Mobile-specific Label Artist Retailer (Also other types of search to find content: ) Jeremy Phillips www.strategyeye.com
  10. 10. Social Media and the Digital Media Value Chain Different types of social networks .. Broad-based Music-focussed Mobile-specific Label Artist Retailer We are focussing today on sites with a strong social media focus Jeremy Phillips www.strategyeye.com
  11. 11. Why do people use Social Networks? Making new  friends Meeting the  stars Finding some  new music “Being myself” online Chatting with  Finding  my friends something to  watch Sharing with my  friends Playing games Jeremy Phillips www.strategyeye.com
  12. 12. Why do you want to use Social Networks Building  Customer  Making Money Relationships Jeremy Phillips www.strategyeye.com
  13. 13. And there’s the rub Giving Stuff  Away Building  Finding  Meeting the  stars Customer  Making Money something to  Relationships watch Making new  Playing games friends “Being myself” online Chatting with  my friends Finding some  Sharing with my  new music friends Jeremy Phillips www.strategyeye.com
  14. 14. How much content should be free? Mashup Mashup Partial Partial Full Full with  without  Tracks Videos Videos Tracks Permission Permission Distribute for Free? 82% 81% 75% 75% 44% 38% 6% Opportunity or Threat 100% 100% 93% 87% to Revenues? 56% 38% Source: StrategyEye-Midem Survey, Dec 08 Jeremy Phillips www.strategyeye.com
  15. 15. Which marketing strategies are most effective? Artist‐ Label‐ Viral  Direct  Direct Branded  Branded  Marketing Advertising Retail Channels Channels Source: StrategyEye-Midem Survey, Dec 08 Jeremy Phillips www.strategyeye.com
  16. 16. The Social Media landscape Social Networks, Tools & Services Jeremy Phillips www.strategyeye.com
  17. 17. Notable players – Broad Social Networks MySpace – Sep 08: MySpace Music in US, partnering with major labels. 1bn tracks streamed in first week – Trialled new ad solutions to increase revenues: self service, video ad system Bebo – Aug 08: Produced web series “The Secret World of Sam King” with Universal Music – Hosts increasing number of professional content videos such as ESPN Facebook Key Characteristics – Dec 08: Extended Facebook Connect data portability tool to sites including Hulu and Digg Increasingly broad demographic; new “broad purpose – niche audience” networks emerging – Q4 08: Rumors - Facebook Music to rival MySpace Music – stalled? Ad-supported business models, from typical – Increasingly appealing to content owners - CBS display ads to web series sponsorships distributing long-form content on the platform Personal profile, IM and email features, micro- blogging, photo uploading facilities, games and MyYearBook social applications, as well as professional – Targets high school students video and audio content – Jul 08: 3rd biggest social network in US (Hitwise) – Feb 08, Jul 08: Raised $4m + $13m funding – No music-specific applications or channels yet Jeremy Phillips www.strategyeye.com
  18. 18. Notable players – Music-Focussed Social Networks Imeem – Playlist-sharing community for artists and fans, also supports embedding of tracks on other social sites and blogs – Partnerships with major labels to stream music online for free – H1 2008: $15m investment by Warner Music iLike – Users can organize music, share music tastes, and discover new artists through friends – Popular widget streams music on Facebook, MySpace, Bebo, hi5 and Orkut Key Characteristics – Jul 08: Partnership with Rhapsody: streaming of full length tracks 25 times for free Music fan audience, looking to discover new – Oct 08: Partnership with TuneCore: indie bands music and find friends with similar tastes earn royalties when played on sites including Facebook and Bebo as well as iLike Most music-focused social networks are ad- supported; some generating revenues from playout / subscription / ecommerce fees Last.fm Features include music streaming, music news – Tracks which music a user listens to and recommends related new music and information, personal profiles, playlist creation and sharing, music discovery and – Includes artist profiles, meeting other people with similar music taste and discovering local gigs recommendation tools, as well as ability to – Jun 08: Music video streaming deal with Universal interact with artists Music. Problems with majors – in June, ended deal with Warner Music Jeremy Phillips www.strategyeye.com
  19. 19. Notable players – Mobile Social Networks Mocospace – Network features include photo, video, chat, and microblogging. Ad-supported downloadable multimedia content section – Partners with Universal Music and Def Jam to help promote new albums – Nov 08: Most popular mobile entertainment site (Hitwise) Twango – Media sharing service: combines online storage with social networking, allowing users to organize and share photos, videos and personal media – Conversion and synchronization of all iPod- Key Characteristics compatible files Mostly a tech-savvy audience that uses mobile – Jun 07: Acquired by Nokia web extensively Business models strongly ad-supported, MyStrands although revenues can also come from sale of – Mobile music discovery service: offers personalized mobile content and licencing of core technology radio stations and ability to find clubs and parties with specific music Varied features: messaging and presence – Licenses core recommendation technology to other services, location-based features (eg finding businesses nearby friends), sharing and storing content and – Data portability feature with other social networks mobile blogging (cf Facebook Connect) Jeremy Phillips www.strategyeye.com
  20. 20. Notable players – Label Sites EMI – Dec 08: Relaunched home page as social music site, allowing fans to create profiles, stream whole albums and watch music videos – Includes music discovery, personalised playlist creation, artist profile pages with playable songs and videos – Partnership with 7Digital to download non-EMI acts that are searched for on the website. EMI offers information on tracks outside its label Warner Music – No multimedia content on site but redirects to artists’ websites (Sean Paul, Laura Izibor) Key Characteristics – Jan 08: Partnership with Cisco Systems to power artists’ websites with social networking features Music fan audience, looking for direct information on labels and artists Universal Music Marketing focussed, early moves towards direct – Offers news, tour information, video content but no revenue generation free streaming or social networking features Increasingly including video content, free – Nov 08: Meebo messaging services integrated into streaming, artists pages, instant-messaging Universal's official artist pages to offer real-time chat among fans features, and other social networking features Sony BMG – Basic artist information and some multimedia content, no free streaming or social networking Jeremy Phillips www.strategyeye.com
  21. 21. Notable players – Artist Sites Kyle Minogue – Kylie Konnect social network for Kylie fans – Users can meet friends, upload pictures, send messages, participate in forums Sean Paul – Powered by Cisco System’s Eos social networking platform (Warner deal) – Includes IM feature (powered by Meebo), forums and personal profiles Key Characteristics Fan audience, looking for exclusive content, gig Radiohead dates, as well as interacting with the artist and – Limited message board on band’s website meeting other fans – Interesting viral distribution strategy through widgets: partnered with Clearspring to launch a Most artist sites include an online store widget for latest album Inrainbows featuring albums and merchandising, with – Widget contains a menu of video and music external links to ticket resellers content, along with tour dates, news articles and a link to purchase the album Social networking features are still limited on popular artist sites, offering basic IM features, message boards, forums and profiles Jeremy Phillips www.strategyeye.com
  22. 22. Notable players – Retailer Sites iTunes – Launched in 2003 – Few social features: ability to ‘tell a friend’ about a product and to share playlists on local networks – iTunes 8 focuses on Genius recommendation engine using collaborative filtering. Does not provide access to other people Amazon MP3 – Basic social features: consumer discussion board for the site, customer reviews and ratings, product Key Characteristics forums Broad audience, as buying digital music becomes increasingly mainstream Pay-per-downloads as well as monthly Best Buy subscriptions (Napster, iTunes) – Oct 08: Acquired Napster. Typical music discovery Typically feature product details, consumer features through playlists. reviews, and product recommendation tools. – Napster focuses on playlist-based music discovery Limited social networking features, keeping to and artist information, no chat or further interaction retail basics rather than trying to build consumer communities. Jeremy Phillips www.strategyeye.com
  23. 23. Notable players – Music Blogs Buzznet – Popular music community built around blog ‘journals’, with news, videos, photos and member profiles – Users can create groups of interest, contribute to posts and ‘buzz’ other content – Apr 08: $25m funding including Universal – 2008: Acquired several music sites: Qloud, Idolator, Stereogum and Absolute Punk MOG – Blog-centric music community. “Mog” user pages Key Characteristics built around songs and artists, with music recommendation technology Music fan audience wishing to actively – Apr 08: $2.8m funding including Sony BMG and contribute with posts and reviews Universal Ad-supported business model: music blog – Integration with Rhapsody’s music service that communities are free and generate revenues allows users to stream full songs and albums from advertising through MOG itself Include strong social networking elements such – Jun 08: deal with Gracenote to provide song lyrics as matching with music tastes, ability to create – To launch a free ad-supported streaming service. fan clubs and groups, UGC content upload and Deals in place with Sony and Universal to date social tagging Jeremy Phillips www.strategyeye.com
  24. 24. Notable players – Music Virtual Worlds vSide – Music-focused virtual world targetting teens – Public and private virtual clubs with avatar-based IM chat while listening to music and dancing – Partners with DoubleFusion to provide 3D in-world advertising – In-world and real currency micro-transaction systems IMVU – Initially a “standard” virtual world, users create avatars and custom rooms. 25m registered users – Nov 08: Launch of IMVU Music: users can buy songs, create playlists and listen to them with other Key Characteristics avatars. Songs can also be transferred to iPod and Young music fan audience other digital music players – Deals in place with major labels, as well as IODA, Several sources of revenues: in-world Redeye, CDBaby and other indie labels advertising and sponsorship, micro-payments and subscription fees (Music Mogul) Music Mogul Features include virtual chat rooms and – Expected to launch Feb 2009 customized avatars, also music-focused activities e.g. music streaming and online store, – To feature social networking functions, online games and live performances that users can watch music-related events, dancing areas in streaming video – Allows musicians to stage fee-based album release parties and sell real and virtual merchandise Jeremy Phillips www.strategyeye.com
  25. 25. Tools and Services – Social Network Engines KickApps – Nov 08: $13m fundraising – KickApps Social Graph Engine clients include Indie 97.9 (Hearst) Pluck (Demand Media) – Dec 08: Pluck on Demand launched – Clients include RollingStone.com Telligent Key Characteristics – Sep 08: $20m fundraising High growth market attractive to VCs – Community Server clients include Universal Music Individual widgets and bundled platforms Some niche social networks converting to white label model e.g. Wasabi, Ning, SocialGo Buddy Media – Sep 08: BuddyBrain monitors ad campaigns on social networks Jeremy Phillips www.strategyeye.com
  26. 26. Tools and Services – Artist Admin Tools ArtistData – Update multiple social networks and other sites simultaneously SoundCloud – Manage your music library – rough cuts, pro recordings, condensed files – Sell selected outputs via widgets Key Characteristics Startups providing wide range of niche utilities to artists and copyright holders Scriggle-it – Fan mailing list and campaign management utilities Jeremy Phillips www.strategyeye.com
  27. 27. Tools and Services – Mashup Tools Synchro Arts – Singtones service aligns user vocals musically with professional content to make custom ringtones Mimovi – Mashup toolkit to mix professional and UGC audio and video – Syncs low quality UGC material with broadcast- quality timecodes Key Characteristics Very attractive content for users, very contentious for industry High failure rate (e.g. Mixwit, Muxtape) where professional content used without permission Emerging services working more closely with the industry Jeremy Phillips www.strategyeye.com
  28. 28. Trends for 2009 – Content and Demographics Current: Future: Industry still engaging More long form content on Professional cautiously networks Content Seen as a threat – regular Rights issue cleared?? Mashup closedowns Probably will take a while – industry should not worry Social networkers are Continuing older Demographics getting older! demographic and associated artist promotion Jeremy Phillips www.strategyeye.com
  29. 29. Trends for 2009 – Site Wars Current: Future: Dominated by broad major More niches – by Broad vs Niche social network sites demographic, by music type / artist Early stages “Corporate” social networks Label Sites have a history of failure Valuable if the star is really Requires commitment and Artist Sites there tech-savvy from artists – not all have the right skillset Has started – Facebook Ongoing. Possible rise of Interoperability Connect, ArtistData further aggregators e.g. Power.com Jeremy Phillips www.strategyeye.com
  30. 30. Trends for 2009 – New Frontiers Current: Future: Currently niche, proof of Enhanced location based Mobile concept services. Likely acquisition of niche players Early stages, some Continuing development. Virtual Worlds interesting niche players Increasingly immersive emerging (3DTV, haptic controllers) Jeremy Phillips www.strategyeye.com

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