Monday, March 11, 2013

Heavy industry, indie industry, and the new viral


For those new to this blog, a quick recap:

I'm interested in the new types of success that are attainable in the digital era.  There are market shifts in progress on both the production and the consumption side of things -- a demassification (hence the name of the blog) where large, established hierarchies once dominated, and on the consumption side, thanks to digital and social, we are seeing a large increase of media consumption outside of the the mass media and broadcast channels.

Macklemore excited at the prospect of poppin' tags at his local Goodwill
The last few posts have used the case of Seattle rapper Macklemore to illustrate the levels of success now attainable by independent artists. He is unsigned, meaning he has no affiliation with a major music label; therefore he has to fund and produce his own recordings, videos, and tours. Macklemore and his small admin and production team of four (of which he and his DJ Ryan Lewis constitute two) handle all tasks from graphic design to merchandising and marketing and beyond.

Digital media platforms are the new smokestacks
In the previous 'heavy industry' model of the entertainment business there were large companies, whether they were film studios, music labels, or agencies, that operated more like venture capitalists. They placed bets on artists and acts, knowing full well that they would not break even on 90 - 95% of them, but when one did break through with a hit, the hit was so large and lucrative that it carried the rest of the roster.  The other part of the deal on the music side of things was that funds were advanced for activities such as recording, touring, and video production, and these advances were to be later recouped, or paid back, by the artist, from (hopeful) revenues from sales and tours. Of course, this did not/does not happen much of the time, and so the system requires the existence of massive hits to subsidize the activities of the denizens on the roster.

I will examine the business side of Macklemore more closely in the next blog post, so that we may take a realistic look at what it now means to be an independent artist with access to a global audience, and how the artist has to be ready to cope with the success not just from the point of view of touring and recording but also as a person running his/her own business.

A quick review of the case of Macklemore, to provide a sense of what is now possible, in terms of global success and sales, as an independent artist. Granted, this is the extreme end of the spectrum, but it is still worth considering as a case in point.

The single Thrift Shop, by Macklemore & DJ Ryan Lewis, was released on October 9th, 2012. By January 2013 it had reached #1 in the US, Canada, Australia, Belgium, Denmark, Finland, France, Ireland, New Zealand, Norway, and Switzerland and went Top 10 in Austria, Czech Republic, Germany, Netherlands, Sweden, and Israel.

The chart below documents the iTunes sales of the Thrift Shop single:

iTunes sales of Thrift Shop

Date
iTunes sales
Cumulative Sales



First Week of Release: Oct 9th-16th 2012
78,000
78,000



January 4, 2013
Weekly Sales of 300,000+ per week begin; Week of January 21, 2013 Thrift Shop hits #1 on Billboard
1,000,000
End of January 2013

2,000,000
February 7, 2013

2,700,000
February 14, 2013

3,000,000
March 6, 2013

4,000,000




As opposed to being a massive hit 'out of the box', to use industry parlance, it took Thrift Shop three months to reach its first million in iTunes sales, three weeks to hit the second million in sales, two weeks to hit the third million in sales, and another two weeks to hit the fourth million in sales, which occurred in early March 2013.

We see a similar pattern, of incremental building, on the number of video views on YouTube. There Thrift Shop took 5 months to reach the first 70 million views, and then just 1 month after that to get the next 60 million views.  As I write the view count is at 155 million. Note that in the last 60 days (to 3/11/13) the video has been viewed over 65 million times on YouTube, and averages ~2 million views per day.

Compare these YouTube numbers with some of the viral video hits of recent years and note how the volume of views, and the time period in which they are achieved, has swelled in the past year or so. This speaks to a maturity of the self-serve entertainment market, but also to people's comfort with viewing and sharing videos via social networks and on mobile devices (which now provide YouTube with 25% of their view base, a quadrupling in the past 24 months.).


Viral hits 2007 - 2009 / Rate of Growth



Date posted to YouTube
View count after 2 days
View count
After 3 years
View count after 4 years
View count after 5 years
Current view rate (last 30 days to 3/11/13)
Sept. 10, 2007
/
/
/
45 million
163,723







Jan. 30, 2009
/
/
118 million
n/a
554,958







July 19, 2009
4 million
80 million
n/a
n/a
407,737


And a further comparison with Gangnam Style, the face of viral in 2012...


Date posted to YouTube
View count after 15 days
View count after 25 days
View count after 35 days
View count after 50 days
View count after 60 days

July 15, 2012
10 million
20 million
50 million
100 million
200 million

Note 1: After the 60-day mark the video was growing at a rate of between 5-10 million views per day, and five months after its posting Gangnam Style reached 1 billion views, the first YouTube video to achieve this milestone.  As of today (3/11/2013) the video is at 1.4 billion total views and in the last 30 days has netted 123.7 million views.

Note 2: In late April 2013 Psy set a YouTube record for most views in a single day when he clocked 38 million views for Gentlemen, his follow up to 2012's Gangnam Style


Stay tuned for the next installments in this series, which will break out the business side of the Macklemore phenomenon.



Related Post: When books go viral: How 50 Shades of Grey's E.L. James went from self-published to world's top earning author in just 2 years.