4. The role of the internet ecosystem in EDM
This chapter will discuss the internet ecosystem. What is its role? And what does it entail for the EDM industry?
Estimated reading time 18 minutes
The start of digital technology, its initial use and subsequent broad penetration of internet-linked devices in tandem with the emergence of a supporting infrastructure are the drivers of the digital transformation. However, the possibilities and limitations of the digital realm are still explored every day, resulting in the conception and production of an ever increasing number of appliances, applications and networks. Their total sum constitutes the internet ecosystem. Any company, organization or brand is both part of the overall internet ecosystem and its specific internet ecosystem, the part of the overall structure in which it aims to be embraced by the end consumer, the future fan or customer.
Artists and producers have to continually adapt to new technology: new devices, new software and new interfaces. The further adjustments of the media and business landscape, supplying with the correct content, establishing the connection and reading out the resulting data, are all part of the transition you will endure. When you, as an artist or a producer, realize the phenomenal impact of the digital chain on the way business is conducted and the business culture in general, you should adjust to the rules and regulations of the internet ecosystem. This chapter will discuss the internet ecosystem. What is its role? And what does it entail for the EDM industry?
If you, the artist of the festival producer, still refuse to participate in the online world, chances are you are lagging behind. That creates an uncertain future. We live in an era of ever-increasing technological change. It impacts our work and our daily lives. Whether you like it or not: for artists and producers it is crucial to work out a digital strategy in order to optimize the opportunities the internet offers.
So what does digital mean? In practice, it breaks down to:
- The virtual world – the worldwide web, social networks, mobile applications, software and the content that is published in the virtual realm;
- The devices we use – think of computers, laptops, tablets, smartphones, television, radio, wearables and other connected items and devices;
- Our behavior and needs – the reasons why we use these devices and (social) networks and the opportunities they offer;
- The physical and wireless networks that link devices and people – Wi-Fi, broadband, cable, fiber, 3G/4G/5G, satellite, etc.
Today, we live in a digital world. Just about half the world population has access to the internet in one way or another. Internet has opened up a staggering amount of information. Moreover, social media enable us to communicate and share information effortlessly. The ultra-fast digitization of contemporary life has sweeping consequences for society and its economy, resulting in the gradual emergence of new ways of learning, working, doing business and making money.
In the digital world different rules and regulations apply to economic practice. It compares to a barter system. Social platforms such as Facebook, Google and Twitter offer unlimited (free) access to their services in exchange for our personal data and insight into our social (online) behavior. That insight represents value in terms of money. The artist or event producer is able to obtain these insights as well. Raw data like personal names or email addresses do not constitute much value in itself though. What you must do is: analyze the data and locate interconnections. These open up possible business models: a certain person can be validated as a fan so all his or her tweets and likes can be used to interpret the value of a company, organization or brand in terms of potential goodwill.
For the world of EDM it is time to develop a better understanding of its relation to the digital world. What does it mean to be an artist or an event/festival producer in the digital world? What are the challenges for artists and event/festival producers? What are the ‘best practices’? And how do these ‘best practices’ translate to sector-wide innovations? This e-book will discuss ideas and insights that have an important bearing on the artist’s and event producer’s performance in the digital world. In principle it focuses on the challenges facing EDM professionals. It will indicate how research, analysis and assessment can assist the EDM professional in facing these challenges.
The internet is a (macro) ecosystem of online connected communities of end users, developers, suppliers and distributors. These all use the fortitudes of one another, complement each other, improve and boost each other, together creating value for end users like customers or fans.
As an artist or a producer, as well as an individual, you are part of the internet ecosystem. All the more so when you want to be accepted by the end user i.e. your (future) fan or customer. Moreover, as an artist or producer you are part of a community within the ecosystem, centered around the content you create, the functionality you provide and the data you collect. Content is distributed via the web’s various user interfaces, social media, mobile apps and open ‘APIs’.
When you, the artist or producer, want to establish a multitude of fans around your community, you have to adapt a fundamentally different attitude towards the various entities in the ecosystem. This concerns not just your website and the social networks, it also applies to all connected individuals, companies, organizations and brands. Conditions used to favor alliances that focused on competition and protection; the emphasis, however, has shifted to transparency, collaboration and promptness. Be aware that fans and customers are able and willing to arrange their affairs online, when it suits them, quickly and without much ado. Listening, participating and anticipating the data that will be generated are important provisions in order to enter into ‘conversations’ and ‘interactions’. The data thus generated are saved, analyzed and related to the information already at your disposal.
Information-rich products and services are produced by and for the participants of an ‘ecosystem’. The most effective strategy is for the organization to position itself close to the center of the web or ecosystem in order to become a relay for essential transactions.
From analog to digital
We are in the midst of a conversion from analog to digital and, as an artist or a producer, you are part of an ecosystem. Whether you like it or not, your fans, customers, visitors, partners and suppliers are online. The diagram visualizes the web of connections. The internet is used by your fans, partners and visitors to benefit from each other, to share opinions and to complement and strengthen one another. Thus they add to your content, which benefits others in turn. And they do so with or without your active involvement. Together, they can make or break products or services. The EDM industry has gradually lost its grip on customers, fans and ambassadors as a result of technological evolution. Marketing has become an archipelago of offline and online activities that, for the most part, do not connect.
Artists and festival producers spend too little time pondering the question how internet and social media can help them to further their business. They focus solely on the traditional push principle and use the checklist attitude to send out messages. The silo mentality used to be part of the marketing man’s professional DNA. However, the playing field has been completely overhauled by the internet and social media, and the rules have changed accordingly. Fans, customers and visitors prefer to listen to one another over consuming commercials and advertising; they are more assertive and more powerful than ever before. Therefore, it is of crucial importance to (re)establish the emotional connection with fans and customers. Follow the route to a likable status. Conversation and connection are the key concepts.
From marketing to communication
Conditions that used to favor competition and protection of knowledge and information have made way for an environment that rewards openness, transparency and collaboration. It demands a different way of thinking and acting. The point is to view and listen, and to participate and smartly anticipate the huge pile of data that is generated by these conversations and interactions.
Marketing has changed almost overnight. It requires new practices by marketing specialists and a new design of the marketing process. Further on in this publication we will discuss these new requirements of process and practices, and detail the most important current challenges for artists and event producers.
Not too long ago, the marketing professional scored kudos for the development of an RTV campaign or a print/outdoor run. It was the era in which marketing professionals could hide behind the in-view: ‘Half of the marketing budget is money wasted, we just don’t know which half’. It was the very same era that numbered a select few communication channels; when communication professionals used jargon like ‘above’ and ‘below the line’; when groups of customers were broken down into brackets for age, gender, education and income. Those parameters covered it quite adequately. Meanwhile, customers have grown accustomed to this rough-hewn segmentation and according ‘one size fits all’ approach, and demand a more personalized outlook.
In science, paradigms represent a complex of related methods and notions about questions concerning reality and how to approach these questions; a frame of reference or a mind frame, so to speak. Paradigms define the board on which we play, not the rules; the landscape in which we operate, not the temperature or wind velocity. In this respect, they define (as opposed to influence) the dynamics of our actions. Change the paradigm (play on a different board) and you change the dynamics.
Paradigms are an abstract notion, however, in the ‘real world’ they do change. Science philosopher Thomas Kuhn has developed a model that describes the workings and change of paradigms as they function for the gathering of scientific facts and knowledge.
Models only describe part of reality; they fail to explain all phenomena. Every model has its holes, where exceptions to the rule and anomalies slip through the net of reason. By tweaking the model, on occasion it is possible to bring the anomaly ‘into order’. However, too many exceptions to the rule dilute the rule and the model loses its descriptive (and predictive) efficacy. This situation can lead to a new set of related theories – a new paradigm – that is better in explaining the current situation or circumstances. This has been the case for the EDM industry for a decade or so.
The introduction of digital tools has reshaped the EDM industry. It has created a new dynamic, a new paradigm that dictates the success—or lack of success. One aspect of the new paradigm concerns the application of direct digital channels. The disruption of the marketing, communication, sales and innovation of EDM-related products and services occurs at break-neck speed.
The reality of ‘always connected’ creates better-than-ever opportunities for artists and event producers to maintain a direct relationship with their fans and customers. Digital channels like websites, online campaigns, blogs, social media and mobile devices constitute the most flexible, effective and scalable way to develop these relations.
In order to do so, artists and event producers have to embrace the new paradigm. In their ‘old school’ contacts, artists and event producers focus on a few select key channels, with limited presence. The new paradigm asks for continuous presence in all relevant channels. Fans and customers decide when, in what way and to what extent they interact.
Changes are evident
The EDM monitor of Rankingz shows a correlation between Facebook ranking and the artist’s position in the DJ Mag Top 100, the annual list that ranks the world’s most popular DJs. Jocks born after 1987 perform better in the popularity poll than their older colleagues. This means that DJs with more fans on social networks (in absolute numbers) are not by definition capable of reaching more fans. The networks of DJs such as Nicky Romero and Hardwell are significantly more active and they are better administered. ‘Young’ DJs are better at, and display a more relaxed attitude in, using social media than the older, established generation, it appears. They are better at maintaining relations via social media. They are the first to understand the need to approach the fans in a different and a new way.
Compare the Facebook scores from the EDM monitor to the results of the DJ Mag Top 100 poll and it is obvious that the ‘younger’ DJs do better in both tallies. It appears that social media are becoming ‘predictive’ when it comes to the ranking of DJs in the Top 100, even hint at the time span of the ‘product life cycle’. At any rate, the data of the EDM monitor are a useful means to try and predict the results of the DJ Mag Top 100.
Rankingz’s survey confirms this. The analysis of the results of the EDM monitor displays a correlation between the age of a festival or event and the growth of the number of Twitter followers metered over that year. The age is related to the year the festival or event was first organized. The Twitter platform is preeminently suited to open up dialogue covering topics such as theme of the event, the artists on the bill and the set-up of the event itself. Co-opting the fan’s ideas and discussing their input is the platform’s forte. However, it appears that older organizations in particular employ social media for old school marketing. They send out information and shun interaction. Accounts of that nature do not show much digital word of mouth.
This means that older Dutch festivals and events with a bigger fan pool, such as Paaspop (since 1985), I Love Techno (established in 1995) and Emporium (2005), are not by definition better at involving their communities and connecting their fans to brands. Younger organizations use social media platforms like Twitter in a more natural and, above all, authentic manner. In this fashion, the Ultra Music festival is the youngest and also the fastest growing player on Twitter in 2013. One explanation is the festival’s origin: it is conceived and managed by digital natives. The younger generation is dominated by technology and adopts a more organic and hands-on approach to it than their older colleagues.
On vanAnaloognaarDigitaal.nu you have been able to read that you, the artist or event organizer, have to establish your very own ecosystem within the internet ecosystem in order to be successful. The internet ecosystem really is a business ecosystem, as defined in the 1990s by James F. Moore. He discovered that successful companies practice survival strategies that occur in natural ecosystems. Moore formulates his core definition in his book, ‘The Death of Competition: Leadership and Strategy in the age of Business Ecosystems’. In its broadest sense, an internet ecosystem is often described as “the aggregate interactions of an industry, brands, products, data and people”.
It includes all concerned: partners, suppliers, competitors, customers, analysts, commentators, journalists, bloggers, prospects and individual citizens. The technical infrastructure, as well as the functions the network fulfills, is part of the internet ecosystem too. By viewing the internet ecosystem as a business ecosystem, new value models in the relations of all parties concerned emerge.
Until now, your greatest value as an artist or event producer was probably your brand. It is often not (yet) included in the balance sheet, yet it represents a hidden value, also known as goodwill. Goodwill is an intangible asset, used in financial reports to indicate the part of a company’s market value that is not directly related to assets and liabilities. It is a fuzzy concept that in most cases is only used to represent a company’s added value in case of a takeover. In this view, goodwill represents future earnings that are not valued in the balance sheet, yet do exist in the form of knowledge, customers, brands, personnel and the like.
Personalization and information
The great promise of digital and interactive channels is personalization. At the right time, you can provide fans and customers with relevant offers and experiences, wherever they may be at that moment. Many artists and event organizers lack the know-how, technology, leadership and supporting infrastructure in order to respond to this important development. Without access to the right data at the right time, personalization via digital channels is not possible. The point is, contextual data on the background of the fan or customer, like location, personal interests and relevant communities, enable the artist and event organizer to modulate in real time the personal experience for fans and customers.
Artists and producers have to collect data and integrate them in their daily affairs. Subsequently, they can use the knowledge obtained in this way to support the fan or customer relation and offer him or her a personal relation. In that respect, the artist’s and event producer’s objective is very plain: the artist or event producer who has direct access to the most relevant data wins the struggle for the fan’s and customer’s attention. It is as simple as that. The execution of exhaustive of periodic analysis will not do. Employees must have access to relevant data on a daily basis. This information should not be hidden away in various silos within the organization or at non-resident (service) suppliers, such as merchandise sales channels, ticket vendors or music and video services. Employees and partners of the artist have to work with these data on a daily basis.
These developments require an integrated policy. However, silo-thinking is deeply embedded in our genes. That is why many artists and event producers address their online social channels separately, forgoing any form of integration of marketing, communication, service and sales. They persist in advertising via channels that fans and customers use for connectivity. From push to pull is the way to use internet in order to structure the organization and its network, and make it more efficient. Human resource, customer service and digital platform development are of the utmost relevance in this respect. Objectives like ‘turnover’ and ‘coverage’ are becoming less relevant. The value of your company can only grow by stepping off the trodden path.
Analysis and research
How to use one’s website and what social networks to apply? Tackling these questions requires an understanding of the function, relations, size and composition of the people that make up your ecosystem. These can be mapped pretty precisely with the help of surveys and reports by Nielsen, Global Web Index, Kleiner, Perkins, Caufield & Byers, Business Insider, eMarketer and Statista.
These various reports show that a social medium is a local phenomenon. A rather large hole in Facebook’s world dominance is China. The Chinese government has blocked access to Facebook and local Chinese social networks dominate the Chinese market. According to Statista’s latest figures’, Qzone takes the lead in China, followed by Weibo, SinaWeibo and Renren. In Russia, vKontakte and Odnoklassniki are the leading social media, rapidly expanding to other countries in Eastern Europe.
Also required is an analysis – a so-called ‘macro ecosystem analysis’ – of the digital realm. This is the first in a number of steps in the process of surveying the digital domain in which the artist or event producer operates.
The analysis breaks down into a number of steps:
- Development of the digital domain
- Size of the digital domain
- Segmentation of the digital domain
- Growth of the digital domain
The conversation prism is a neat tool for mapping the artist’s digital environment. The prism was designed by Brian Solis, in collaboration with design company JESS3, and published in 2008. It is a graphic representation of the internet, broken down into various social segments.
The graphic might be a bit confusing at first glance. The artist or event producer and his website are located at the center. The adjacent color clock represents a social media shell, ordered to the manner of interaction. The prism offers the option to decide what social media to utilize in regards to the type of interaction you want to engage with fans and followers. Moreover, it suggests which media to monitor.
The most important segments for artists and producers are:
- Comments: insert applications that facilitate reaction options or image elements, Disqus being the most prominent.
- Social Networks: the most widespread and commonly used networks. Apart from communicating with friends and adding friends, these networks are about profiling, sharing content, discussing, social gaming, marketplace features and many more activities. Well-known examples are Google+, Facebook and MySpace.
- Business: Social networks that started up after the introduction of Facebook, facilitating the professional user (as opposed to Facebook’s consumer users). The most prominent example is LinkedIn. Xing is an important business social network on the rise.
- Location: Location-based services. Users of these social networks log in depending on their physical location. These networks include game elements and discounts based on location. The most prominent example is Foursquare.
- Video: Social networks that facilitate the uploading, sharing and commenting of videos. These networks are social by character, they offer options like following members and making friends, and incorporate ratings and reactions. The most prominent examples are YouTube and Netflix.
- Events: websites that enable the planning of events (meetings, parties and such). The most prominent example is Meet.up
- Music: sharing musical favorites, new music, playlists, bands and artists. The most prominent examples are Soundcloud, Shazam and last.fm.
- Live casting (or live streaming): social websites that enable users to broadcast (stream) self-produced or recorded videos in real time. Other users can follow streams by logging in to channels. The most prominent examples are Ustream and Justin.tv.
- Pictures: social websites that enable the uploading of photos and visuals, for others users to rate and comment. Moreover, these sites offer options for integration with different (social) websites. The most prominent examples are Flickr, Instagram and Picasa.
- Blog/microblogs: one of the first conversion options of the web that can be labeled ‘social’ is webblogging, blogging in short. Installing a blogging application on your website obviates HTML expertise. Moreover, these blogging platforms facilitate free use of personalized pages. The most prominent examples are WordPress, Blogger, Posterous and TypePad.
- Social Curation: Curation is the selection of information, filtering the essence from a multitude of data, and presenting it in an accessible format. It applies to all types of information; text, audio and video. A prominent (iPad) application is Flipboard. Furthermore, Paper.li and Scoop.it are examples of this type of social network.
- Social Streams: The collection of information and content, plus publishing it in a concise manner. This category includes micro blogging, of which Twitter is the most prominent example.
360 degrees approach
The fan or customer decides what network to utilize in order to contact the artist or event producer. Furthermore, he uses various services, such as ticket providers, sales channels and music and/or video services. This asks for a ‘cross channel’ or 360 degrees approach.
Analysis of data generated by customers and fans is central to current and future digital ‘cross channel’ marketing campaigns. How can artists and event producers construct a ‘360 degrees image’ of their customers and fans? And what data are the most valuable in order to personalize messages? How to make the customer or fan the center of attention? Big data will help. Big data means ‘more data’, it spawns a much wider variety of data than the conventional database is able to handle.
In order to establish a proper ‘360 degrees image’ of the fan or customer, artist and event producers must create an understanding of the habits, preferences and real time behavior of the fan or customer. For instance, people who visit Starbucks on a daily basis can be identified by their check-ins (and maybe even by their orders). The ‘Facebook Open Graph’ data show their habits. Is he/she a regular jogger? Does he/she strictly read literature of the science fiction variety? What DJs or artists does he/she listen to via Spotify? It is these data that constitute a ‘360 degrees’ profile of the fan or customer.
We have been discussing a continuous stream of consumer data that keep piling up. How to utilize these data? Actually, they represent the digital equivalent of gold, the point is to apply them is a clever manner in order to benefit from them. So far, the concept of ‘big data’ has been rather abstract, so here follow various examples of business practices that illustrate the practical value of big data.
- Producers of fans and consumer commodities monitor social media such as Facebook and Twitter in order to gain insight into behavior, preferences and experiences of fans and customers.
- Manufactures monitor social media, however, their aims differ from the marketing manager’s objectives. They are after questions concerning customer support.
- Financial services use the data generated by the interaction with their clients to position their principals in better tuned segments. This enables financial services to create a continuously more relevant and refined tender.
- Advertising and marketing agencies follow conversations on social media in order to have a better understanding of campaigns and promotional activities.
- Insurance companies use data analysis to distinguish what requests for hazard insurance can be honored right away and which need to be validated.
- Hospitals analyze medical data and personal files of patients, so they can actively assist the individual in preventing ailment or disease, and in doing so limit the duration and costs of hospital accommodation.
- Companies are developing information products that collect and cross reference data in order to offer attractive suggestions and more successful ‘coupon’ programs.
- Governments use data to develop new services at national, provincial and municipal level.
- Sports clubs and event organizers use data to manage ticket sales and even strategy.
It is time to formulate a strategy. The strategy must accommodate the harvesting of all types of data. Select which groups you want to service, who you want as your collaborator and how you want to collaborate, and in which micro-ecosystems you want to be present. Develop new fitting products, online services and alluring tactics. All this requires creativity. Accommodate your business model (more on that in the following chapter) and add new sources of revenue. Thus you not just take the lead vis-à-vis the competition or different market factions, you stimulate your organization to innovate, and to reach and retain (new) fans or customers. The advice is: really build a relationship with fans and customers, and position them at the center of your attention.
Furthermore, the artist or event producer has to be aware that the content defines your existence; that you offer a function; and that your data is available online. Formulating a solid strategy you have to consider the ‘DLCCI’ principle:
The artists or event producers that develop a correct strategy have the upper hand. The correct strategy is based on the right user experience at the right time, on procuring a significant place within the ecosystem, on processes that fit seamlessly and extract from various sources. The parties that enable the fan or customer to have the optimum experience in relation to the utilized channel or device, and that are able to correlate and analyze the data in a relevant fashion, will maximize their profits. In the following chapters practical insights will help you get started and explain how to go about the semantic design of the network so it transforms into a micro ecosystem within the macro internet ecosystem.