Digital & social technology are reshaping the music business. Here’s your guide to succeeding in a brave, new Music 2.0 world.

1. Connect or Die.
Digital & social technology are reshaping the music business.
Here’s your guide to succeeding in a brave, new Music 2.0 world.
PHOTO BY EMAYOH ON FLICKR.COM

2. SOUND CHECK.
It’s no understatement that digital and social For this reason, we’ve created Connect or Die, one
technologies have dramatically and permanently of a series of publications that examines the
altered the music landscape. A decade ago, few in challenges and opportunities inherent in a 2.0
the industry foresaw the enormous shift that began world, and offers one central theory about the
with the introduction of simple file-sharing future of the music business:
technology. Over the past ten years, MySpace,
iPods, a slew of social networks, music blogs, and To survive and thrive in a brave, new Music
digital music retailers have all played their part in a 2.0 world, artists must embrace and utilize
radical shift that is continuing to transform the way the very technology that has caused such
fans discover, acquire, and experience music. This
turmoil in recent years. Through it, they must
is truly a whole new kind of revolution.
cultivate and nurture deep, direct relationships
with their fans, engaging them consistently and
As the marketing agency that coined the term
genuinely.
brand infiltration™, Espresso is acutely interested
in understanding how evolving technology,
Those that do so will discover unprecedented
demographic shifts, economic factors, and cultural
opportunities to generate revenue and grow their
phenomena like those impacting the music industry fan base. Those that do not, well... the title says it
are reshaping consumer expectations—and helping
simply: Connect or Die.
our clients rise to the challenges that unfold along
the way.
Jacquelyn Cyr
Chief Executive Officer
Espresso
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3. Sound Check
Welcome to Music 2.0
Bands Getting it Right
Infiltration How-Tos
Encore
Credits
3

4. “
They say the music business
is in trouble. No!
The business of selling CDs
is in trouble. This is a religion.”
Michael Rapino
Chief Executive Officer
Live Nation
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5. THIS IS NOT THE ‘RECORD’ BUSINESS.
Once upon a time, the music business was simple: the confines of the old record label system behind
talent + record label + plastic discs = dollars. and eagerly experimenting with new business
models and revenue strategies.
Over the past decade, however, digital and social
technology have exploded that formula. As the From some of the world's biggest performing acts
media landscape has fragmented, CD sales have to small indie bands, music creators are realizing
fallen off precipitously, and the backbone of the more than ever the future of their business hinges
record business—the ability to charge consumers on the relationship they have with their fans. In a
for access to music—has crumbled before our very Music 2.0 world, fans are not just consumers;
eyes. they are producers, participants, members,
promoters, and more. They—not any kind of discs
—are the lifeblood of the music industry.
Sheer copyright enforcement is no longer the path
to financial success and professional longevity.
These days, artists all across the board are leaving Music, after all, is a social business.
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PHOTO BY WILLIAM.K ON FLICKR.COM

6. ALIVE AND WELL…
In 2007, after 25 years at Warner Brothers Records,
which had released all of her albums up till then,
Madonna left the label to sign a $120 million
“360 degree” deal with Live Nation. In addition
to operating the world’s highest-earning female
singer’s tours, which it had already been doing,
Live Nation would now also be handling her albums,
merchandising, film, and TV projects, DVD releases,
music-licensing agreements, and more, and getting
a cut of all of it. In the three years since, U2, Jay-Z,
Shakira, and Nickelback have all followed suit,
eschewing the traditional record label route for
similar kinds of deals with Live Nation. No doubt
more are to come.
In January 2010, the Department of Justice approved
the first big merger of the Obama administration,
between Live Nation and Ticketmaster, giving the
newly formed Live Nation Entertainment the ability
to book its own concerts, sell its own tickets, and
merchandise and manage its exclusive artists all
under one roof. This entirely unprecedented model
within the music industry is centered around not any
one revenue stream, but rather on one guiding
principle:
From tickets to trinkets, success in the new
Music 2.0 landscape means owning the PHOTO BY ANIRUDH KOUL ON FLICKR.COM
complete fan relationship. 66
PHOTO: Live Nation

7. “
In a statement issued at the time
of her deal with Live Nation,
Madonna said:
The paradigm in the music
business has shifted, and I
have to move with that shift.
For the first time in my career,
the way that my music can
reach my fans is unlimited.
The possibilities are endless.
Who knows how my albums
will be distributed in the
future?”
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PHOTO: MADONNA.COM

8. PHOTO: GETTY IMAGES
RIGHT NOW, YOUR FANS ARE...
Hanging out on Facebook. Tweeting about their Every day, music fans are discovering new ways
favorite song. Discovering new music on LastFM. to find, share, enjoy, and even remix their favorite
Leaving comments for their friends on MySpace. music, and then broadcasting their findings and
Sharing playlists on iLike. Posting concert photos favorites, their complaints, and their compliments
on Flickr. Loving your new release on Hype Machine to a global audience that is listening 24/7.
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—or trashing your latest video on YouTube.
PHOTO: GETTY IMAGES

9. PHOTO: PEDESTRIANREX ON FLICKR
SOURCE: ROYAL.PINGDOM.COM
THIS IS THE CONNECTED ERA.
As a species, we are consuming and creating media via social technology
at an unprecedented rate. In February 2010 alone, we collectively:
• Watched 12.2 billion videos on YouTube
• Posted over 1.5 billion Tweets on Twitter
• Shared more than 20 billion pieces of content on Facebook
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10. According to new research in the
THIS Razorfish FEED report, Americans
now spend, on average, about the
same amount of time online as they
IS
do watching television.
In fact, according to Forrester,
those under the age of 45 spend
THE more time
significantly
using the Internet
than watching television.
NEW
MAINSTREAM.
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PHOTO: HTTP://WWW.BANDLEM.COM/XMAS/2006/

11. THIS IS MUSIC 2.0.
In the U.S., 62% of us are listening to music This year, for the first time
online through services like iTunes and Pandora.
in history, revenue from digital
We’re spending 15–20% more each year music will eclipse CD sales
on digital music, while spending less on CDs
in equal proportion.
in the U.S.
Meanwhile, 95% of digitally-downloaded music By 2016, this will be the reality worldwide.
is not paid for.
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SOURCES: RAZORFISH FEED STUDY & NPD GROUP
PHOTO: BETA KAREL ON FLICKR.COM

12. 70%
OF 16-19 YEAR OLDS
WOULD RATHER GO A WEEK WITHOUT SEX
THAN A WEEK WITHOUT MUSIC.
SOURCE: MARRAKESH RECORDS AND HUMAN CAPITA, UK 12
PHOTO: LOVE, KIRA ON FLICKR.COM

13. “
In the past, people
would tour to promote
their albums; today they
put out albums to
promote their tours.
The pendulum
has swung.”
Guy Oseary
Madonna’s manager
PHOTO: GREENPLASTIC875 ON FLICKR 13

14. Sound Check
Welcome to Music 2.0
Bands Getting it Right
Infiltration How-Tos
Encore
Credits
14

15. RADIOHEAD FINDS A $10,000,000 POT OF GOLD.
In 2007, Radiohead blazed new trails with the 2003’s Hail to the Thief, which sold 300,000
independent online release of their seventh copies in its first week.
album, In Rainbows. In a groundbreaking move,
Radiohead let fans choose to pay as much or as The band later released a CD version of In
little as they liked to download the entire album. Rainbows, which sold 1,750,000 units, and
An astonishing 1.2 million copies were sold in an $80 boxed set which sold an additional
the first week at an average price of $8*. Up 100,000 units.
until then, the group’s biggest success had been
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PHOTO: KRUDO ON FLICKR.COM
* IN US DOLLARS

16. NINE INCH NAILS TURNS A FREE ALBUM
INTO $2,350,000 IN REVENUE.
In 2008, Nine Inch Nails released Ghosts I-IV
in a number of different formats. Ghost I was
released under a Creative Commons license,
and was made available at no cost on
numerous file-sharing sites across the web.
Ghosts I-IV was also made available for $5 on
Amazon.com through a distribution deal that
cost them a mere $38.
In its first week, the album sold 800,000 units,
generating $1,600,000 in revenue and hitting
#1 on Billboard’s Electronic charts. A Deluxe
Limited Edition version of Ghost I was later
released and sold out in three days, grossing
over $750,000.
Ghosts I-IV went on to become the top-selling
MP3 album on Amazon.com for all of 2008
and the fourth-most-listened to album of the
year on Last.fm.
NIN continue to experiment with creative
packaging and distribution models such as
USB flash drives with “leaked” music left in
concert bathrooms for fans to discover,
iPhone applications, and more.
PHOTO: EDVILL ON FLICKR 16

17. JIMMY EAT WORLD GETS 20% OF RECORD SALES
STRAIGHT FROM TWITTER.
That’s right, Twitter, the micro-blogging service that enables its users to post and read text-based status
updates of up to 140 characters in length. The band gained 200,000 followers on Twitter in its first 30
days of using the service. According to TopSpin, within a month of the release of 2009’s Clarity Live,
Twitter had delivered more than 22% of all traffic to the Jimmy Eat World site and resulted in more than
20% of the album sales.
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PHOTO: BURKAZOID ON FLICKR

18. AMANDA PALMER
GIVES HER FANS
CONTROL OF MERCH.
Launched in 2008, Amanda Palmer’s groundbreaking
merchandising concept allows fans to not only
support the musician, but one another as well.
Postwartrade.com is Palmer’s platform for fans and
artists the world over to sell their custom-made,
band-inspired “merch.” Offering everything from
toothbrushes to pillowcases, each designed and
handmade by a fan/artist who shares profits with
Post War Trade, this approach not only blows the
tired band T-shirt out of the water, it takes the
creative possibilities of fan community engagement
to the next level.
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PHOTO: VONLOHMANN ON FLICKR

19. SOCIAL MEDIA HELPS EMINEM BREAK RECORDS.
Never one to shy away from controversy,
Eminem turned a 5-year hiatus and a
real-life struggle with addiction into a
buzz-building campaign that made
The Relapse arguably the most highly-
anticipated hip-hop release of last year,
and led the first single, Crack A Bottle,
to a record-breaking first week of
downloads (418,000).
Leaning on Twitter and other digital
channels to provide a mix of behind-the-
scenes and “in character” updates that
suggested Eminem was in a fictional
mental hospital called Popsomp Hills,
Slim Shady created an audacious
connection with fans that blurred the
lines between his alter ego, his real-life
struggle, and his latest commercial work.
PHOTO: EMINEM.COM
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20. OK GO GO FOR FREEDOM.
In February 2010, Damian Kulash, lead singer impediment to greater exposure for the band. A
of OK Go, wrote in a New York Times op-ed month later OK Go announced their split from EMI
that the band’s label, EMI, had tried to increase —via a YouTube video, of course. The group plans
its streaming royalties from YouTube by preventing to release all future material, including a re-release
users from embedding the band’s videos on other of their new album Of the Color of Blue Sky on their
websites. Kulash saw the policy as a serious own Paracadute Recordings label.
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PHOTO BY OK GO ON FLICKR

21. QUEEN OF THE INTERNET.
In 2010, there is arguably no greater example of an
artist getting “it” right than Lady Gaga. With the clout
of a label backing her serious social media savvy, she
has garnered over five million Facebook fans, three
million Twitter followers, and become the top-selling
digital artist of 2009. With a niche-busting sound [and
look] that cuts across subcultures and pushes
boundaries without crossing them, and a relentless
commitment to staying in touch with her fans—
sometimes even tweeting from backstage at concerts—
Gaga has created a devoted community that eagerly
embraces her pet name for them: “little monsters.”
From product partnerships with Polaroid, Estée Lauder,
and MAC, to her Haus of Gaga iPhone app, Gaga’s
investment in her fan community fuels the success of
everything her brand touches. Proof positive: the music
video for “Telephone” (co-starring Beyoncé) had been
viewed over 7,000,000 times within just three days of its
March 11, 2010, release.
Is Lady Gaga a master of the tools and strategies of the
digital age? Absolutely. You might even say she is the
embodiment of its spirit.
PHOTO: LADYGAGA.COM 21

22. “
She's tapped into one of
the primary obsessions of
our age—the changing
nature of the self in relation
to technology, the ever-
expanding media sphere,
and that sense of always
being in character and
publicly visible that Gaga
calls ‘the fame’—and made
it her own obsession, the
subject of her songs and
the basis of her persona.”
Ann Powers
LA Times
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PHOTO: LADYGAGA.COM

23. Sound Check
Welcome to Music 2.0
Bands Getting it Right
Infiltration How-Tos
Encore
Credits
23

24. “
The internet opens
a world of limitless
possibility, where
the only boundaries
are the
boundaries
of your own
imagination.”
Adam Duritz
Counting Crows
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PHOTO: BATINTHERAIN ON FLICKR

25. HERE’S TO YOUR FUTURE.
As many within the music industry
struggle to find their footing in this
new landscape, one thing is clear:
There is no going back.
To succeed in the Music 2.0 economy,
the only way to go is forward.
Bands that are exploring and embracing
the opportunities of the digital medium
are discovering new ways to connect
and build relationships with their fans.
On the following pages, we present
the Cliff’s Notes to doing just that.
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PHOTO: MUSE.MU

26. 1. LISTEN TO YOUR FANS.
Social and digital technology is helping your fans
to connect to each other in more places than you
can imagine. They’re talking, sharing, praising,
trashing, remixing, discovering, complimenting,
complaining, gossiping, speculating,
collaborating… and more. You should be part of
the conversation.
And what’s the first step to being a good
conversationalist? Being a good listener.
Start ‘listening’ in the most obvious places:
MySpace, Last.fm, Twitter, Facebook, YouTube,
Flickr, Imeem, Hype Machine, Vimeo, qik.
Try one of the many easy-to-use tools to help
manage and monitor the conversations, such as
Google Alerts, TweetDeck, Addictomatic,
SocialMention.com, or Radian6.
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PHOTO BY ANIRUDH KOUL ON FLICKR.COM

27. 2. ENGAGE & EMPOWER
THE AUDIENCE.
Your fans like to show off their love, so make it
easy for them.
Some artists—like Mariah Carey, John Legend,
and The Roots—are deliberately encouraging
remixes of songs from their new albums by
providing fans with the track stems and source
files. Others, like Third Eye Blind, are asking fans
to participate in their creative process by
posting unmixed instrument stems of tracks and
inviting fans to tweak, shape, and edit them
through a series of contests.
The bottom line? Your fans are your lifeblood.
Feed their passion for your music. Make it easy
for them to share that passion by providing
resources to do so both online and off.
There is no better promotion strategy.
PHOTO: JOHNLEGEND.COM 27

28. 3. INVEST IN THE
LONG-TERM
RELATIONSHIP.
Your fans want to know EVERYTHING. From what
you’re recording to what you’re wearing, to what’s
keeping you up at night. Cultivate your connection
to the fan community by sharing your stories and
personality through blogs, tweets, videos, photos,
and more.
Yes, it’s okay for band members, managers,
and other members of your marketing and public
relations team to post things on your behalf—some
of the time. But there’s no substitute for
authenticity.
In the Music 2.0 era, it’s the relationship with
your fans that drives success. Cultivating a direct
connection with your fan base is a long-term
investment, but it’s an investment into the
sustainability of your own band.
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PHOTO: ANIRUDH KOUL ON FLICKR.COM

29. 4. USE THE NEW TOOLS.
From Topspin to Bandcamp to Fan Mail exactly how the relationship with their fans is
Marketing, the past few years have seen the managed.
emergence of a slew of tools aimed
at empowering artists to gather, communicate, Three years after its launch, the artists utilizing
and sell to their fans directly. These tools are Topspin run the gamut from music industry
not only allowing artists to elegantly tackle the veterans who have literally defined the very
functions for which they were once dependent history of rock and roll, to indie newcomers
on record labels, they are offering artists who have never been signed to a label. The
unprecedented access to information about breadth of this roster alone is indicative of how
their fans and, most importantly, control over equally appealing these tools are to artists at
literally every stage of their careers.
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30. 5. EXPERIMENT.
The digital revolution has changed the way your fans
discover, share, and purchase music—forever. The good
news? This shift to digital consumption has created the
potential for virtually limitless new revenue streams.
Instead of charging for “access” to your music, let
the access be your marketing. Charge instead for
above-and-beyond-access: immediacy (priority access
or immediate delivery), accessibility (wherever and
whenever they want it), and syndication rights (pay-
per-use versus pay-per-sale).
Imagine the dozens of new revenue streams that could
be created if the gateway to transactions was moved
downstream—away from the initial discovery and deep
into the premium services that fans are growing used to
paying for, like personalization, interpretation, unique
experiences, curation, immediacy, and accessibility.
At the end of the day, the music business is a business.
Digital and social technology are opening new worlds
of opportunity for artists to get creative about their
merchandising, product, and distribution strategies.
Now is truly the time to “think outside the [CD] box”.
PHOTO BY ANIRUDH KOUL ON FLICKR.COM 30
30

31. Sound Check
Welcome to Music 2.0
Bands Getting it Right
Infiltration How-Tos
Encore
Credits
31

32. ENCORE.
A decade after Napster, the relationship Together with our fans, the Music 2.0
with music fans is the music business. revolution is pushing us to rewrite the rules
of engagement, the rules of commerce, and
Music 2.0 isn’t some flash-in-the-pan fad the rules of ownership.
that will pass like a spring storm; it’s a
legitimate revolution. And while it’s hard to Those of us who embrace the shift will not
predict what the future of music will hold, only survive, but thrive, by gaining new
one thing is clear: this ain’t business as fans, unlocking new revenue, and
usual. discovering new joy in the unfettered ability
to share our art with the world.
The time has come.
Connect or die.
PHOTO ON FLICKR.COM BY BITZCELT
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33. Sound Check
Welcome to Music 2.0
Bands Getting it Right
Infiltration How-Tos
Encore
Credits
33

34. Connect or Die was researched, written, and produced by a team of music-lovers and avid fans who also
happen to work for a marketing agency called Espresso (www.brandinfiltration.com). Espresso uses the
new art of brand infiltration to help brands (and bands) use digital and social technologies to get
connected with their fan communities, promote their products, and unlock new ways to generate
revenue.
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35. Say hello, why don’t you?
ESPRESSO TORONTO
Jacquelyn Cyr | Chief Executive Officer
jacquelyn@brandinfiltration.com
twitter.com/infiltrators
416 620 6773 ext. 0214
ESPRESSO BOSTON
Marta Kagan | Managing Director, US
marta@brandinfiltration.com
twitter.com/mzkagan
617 477 5811 ext. 3
ESPRESSO WWW
brandinfiltration.com
slideshare.net/infiltrators
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