0. Why djs and festivals should change

The entertainment industry has been fundamentally transformed by the digital revolution. Music professionals and festival organizers face new challenges and are able to exploit new opportunities.

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With this publication EDM and the Digital Domain, author and consultant Denis Doeland details how to digitize your music business, in order to thrive in the global entertainment industry.

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Transformation

The digital domain is an ecosystem that connects numerous sub-ecosystems: online communities of end-users (fans and clients), developers, suppliers, distributors and many more. They use one another’s strengths; complement and boost one another in order to jointly create value for other end-users. This is the basis of the digital economy, of which the contemporary creative industry – and therefore the entertainment industry – is an integral part.

The music industry has been fundamentally transformed by the digital revolution. The production, distribution, marketing, promotion and consumption of music, and electronic dance music (EDM) in particular, have been digitized. Music professionals and festival organizers face new challenges and are able exploit new opportunities.

New currency

Attention is the new currency and data are the new gold. In EDM and the Digital Domain, author Denis Doeland maps out a strategy how to make the transformation from the old analogue to the new digital business model. It explains why a sound digital strategy is a crucial step to lasting success and details how deejays and event producers can thrive by managing their social media presence.

Yet, social media are much more than a marketing tool. Data mining via digital platforms offers numerous opportunities for getting to know your audience better, which helps to cater to their needs and wishes in a more detailed manner, thus bolstering your market position. Even more importantly, data management and data analysis create opportunities for new products and new services, resulting in new streams of revenue.

EDM and the Digital Domain is a ‘must read’ for all music business professionals: deejays, artist managers, promotors, label managers, event and festival producers, publishers, distributors and vendors.

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  1. Author’s Note
  2. Preface: EDM and the digital domain
  3. Introduction: EDM and its revolutionary character
  4. The role of the internet ecosystem in EDM
  5. The business model examined
  6. How to organize your organization?
  7. Setting up a digital strategy
  8. Fan base information is the key
  9. Company value in the digital domain
  10. Transforming into a digital mature company
  11. Epilogue: Don’t be Hansje Brinker
  12. Extra: Have some DJs hit their ceiling?
  13. Extra: Measuring your digital maturity
  14. Extra: Spinnin’ Records: the digital network has been given a price
  15. Extra: How Paradiso becomes a smarter club

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1. Author’s note

The DJ, event or festival is a network. Content is the driving force that connects the DJ, event or festival to fans and clients. Data are the additional economic value.

Estimated reading time

This digital publication is my contribution to the entertainment industry, and the dance industry in particular. I have been actively involved in the world of dance music for some twenty years and this is my way of sharing insights and experiences regarding digitization.

Mind change

I started out in the entertainment industry in the early 1990s and have seen how the rise of the digital domain changed the field. Because of my passion for computers when I was young and inspired by Berthold Gunster’s book, ‘Ja, maar … Huh?!: de techniek van het omdenken’, and his flip-think technique, I reflected on the coming digital transformation and changed my mind about the accepted business model and earning models of the industry.

I realized that an entertainment company’s reason for existence is the content it produces and the fan base it builds. At the time, I have spread and articulated my thoughts regarding the rise of the digital domain in the first digital vision for ID&T: ‘The DJ, event or festival is a network. Content is the driving force that connects the DJ, event or festival to fans and clients. Data are the additional economic value.’

Digital domain

In the digital domain, the attention for and the relationship with the (future) fan or client has become the most important (economic) value. The most successful entertainment company is the one that succeeds in attaining the best position and the strongest relationships in the internet ecosystem. The Holy Grail is the personalization of the relationship with the fan. Fans want a direct and personal relationship with their favorite DJs, events or festivals. Entertainment companies in denial of this new reality will miss opportunities and eventually turnover, and see their value decrease. Organizations and artists that do pay attention will finally overtake them.

Data primarily provide direction and have gained in economic value. You solidify your reason for existence by investing in a digital strategy. By definition, a company increases its value by harvesting information and contextualization. That became apparent when SFX purchased ID&T.

It is my hope that you, the dance entrepreneur, feel like making the next step with your company and will integrate the digital domain into your business management. One thing is crystal clear: the entertainment industry is doing better than ever before, due to the digital domain. Now that the air is clear, it is time to transform from analogue to digital and to step it up.

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All chapters

  1. Authors Note
  2. Preface: EDM and the digital domain
  3. Introduction: EDM and its revolutionary character
  4. The role of the internet ecosystem in EDM
  5. The business model examined
  6. How to organize your organization?
  7. Setting up a digital strategy
  8. Fan base information is the key
  9. Company value in the digital domain
  10. Transforming into a digital mature company
  11. Epilogue: Dont be Hansje Brinker
  12. Extra: Have some DJs hit their ceiling?
  13. Extra: Measuring your digital maturity

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2. Preface: EDM and the digital domain

You, the DJ, the manager and the event or festival producer, must address the context of the digital domain.

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In the mid-1990s, the internet surfaces in mainstream culture. It is the start of the digital revolution. Or rather, it is the beginning of a chain reaction that seems to be unstoppable. It has fundamentally changed the way we spend money and save money, relax, work, start and conserve relationships, shop, study, even how we date.

Generation Z

Older generations stubbornly try to adapt to this new reality. In their book, Generatie Z (Generation Z), René Boender and Jos Ahlers maintain that youngsters who are growing up in this new reality do not know a world without the world wide web and its prominent presence in daily life, a world that is shaped by swiftly developing technology. They belong to a generation that cannot remember nor imagine a world without online communication, according to Boender and Ahlers. In that respect, they are the first generation in the history of mankind: they are digital natives. Boenders and Ahlers use the term Generation Z for this generation of digital natives, born from 1992 onward. In American professional literature, older generations, born before 1992, are often referred to as digital immigrants. These generations have often against their will migrated to the digitized world, yet sometimes find it hard to acclimatize. On the blog Omni, Ahlers writes: Digital immigrants feel the need for a user guide, digital natives dont.

Not too long ago it became apparent that the internet has become part of lifes basic necessities. Meanwhile, in most parts of the world the internet has become a commodity, for digital natives in particular. The largest population that has grown up with EDM are digital natives. It is exactly this group that naturally depends on the internet ecosystem, the digital domain. These days, EDM is an integral part of a digital domain that became available to the mainstream audience some twenty years ago. It is therefore obvious to state that EDM and the digital domain go hand in hand.

Ecosystem

The digital domain is an ecosystem of thousands and thousands sub-ecosystems: online communities of end-users (fans and clients), developers, suppliers and distributors. They use each anothers strong points, complement and strengthen one another in order to jointly create value for other end-users. This is the basis of the digital economy, of which the contemporary creative industry and therefore the entertainment industry is an integral part.

In its broadest sense, the internet is often defined as the total system of interaction between industry, brand, product, data and people. It includes all stakeholders: partners, suppliers, competitors, clients, analysts, commentators, journalists, bloggers, prospects, and individual fans and clients. The technical infrastructure and the networks functions are part of the internet ecosystem. By viewing the internet ecosystem as a business ecosystem, one actually sees the emergence of new value models in the relationships of all the internet ecosystems stakeholders.

The internet is an ecosystem; it comprises a micro-ecosystem, which is your bit, and the macro-ecosystem directed by operating systems and search engines, of which your bit is a part. The internet infiltrates through all layers of companies, organizations and brands. It functions as a fluid entity that envelops companies, organizations and brands, and touches upon almost any discipline of a company, organization or brand. You, as a DJ or event/festival producer, need to adapt to it.

Context

It is all about the various devices and platforms we connect to, the digital landscapes we go to and the mutual relationships between individuals, companies, organizations and brands. Meanwhile, the internet and its (social) ecosystem is everyones 24/7/365 concern. The DJ and event producer have to meet this new reality. You should make available time, people and resources (know-how, money and tools); develop an adequate policy; and create a solid action plan that clarifies your ambition and objectives, based on proper insight, relevant content, and the realization and maintenance of connections. The ecosystems user, i.e. fan or client of a DJ or event producer, is the focus of this policy.

The digital transformation is primarily about rapidly embracing the technology that will profoundly change processes and performance of companies and organizations. It profoundly changes the business model as well. The internet ecosystem, the business model, the organization, the data, the DJ, the event, the festival, the fan and the content are all part of the digital domain of which EDM has become an element.

DJs and event producers currently build an enormous fan-base via social platforms. The emergence of advanced tools for the management of fans and clients opens up the opportunity to build relationships that lead to transactions. This publication describes the context the wider framework that attaches significance and meaning of EDM and the digital domain. You, the DJ, the manager and the event or festival producer, must address the context of the digital domain. You have to transform, invest in transformation, and formulate a digital strategy, as the digital train will not wait for laggards. This publication will inform you of how the coherence of content, connection and currency functions, and how (potential) fans and clients fit in it.

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3. Introduction: EDM and its revolutionary character

Artist and event producers must take control of their future. They have to understand intellectual property rights, including copyrights, patents and hallmarks that protect their assets.

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Dance is the catch-all term for all types of electronic dance music. Currently, the terms EDM (Electronic Dance Music)and EMC (Electronic Music Culture)are in use. The most outstanding attribute of this type of music is its digital origin, using computers and samples. Most dance styles use four-to-the-floor beats that carry a plain melody. The music is arranged in repetitive patterns and most records are driven by a prominent bass line. Occasionally, pop songs are recreated in dance style, or acoustic instruments enhance the digital production.

In its early stages, dance was the exclusive style of music played at many clubs or events, initially called house parties. Media coverage of dance events often focused (and focuses) on the alleged use of drugs and outbreaks of violence, although it has never been established that drug use and violence occur more frequently at dance events in comparison to non-dance events.

The first, embryonic dance styles evolved in the United States in the early 1980s, an outgrowth of Italo disco, new age and synth pop/new wave, the popular sounds at that time. In the mid to late 1980s, house and techno were established as the first stand-alone dance styles, spinning off into a clutch of subgenres. The Warehouse club in Chicago, one of dances breeding grounds, gave its name to house, while techno originated in Detroit parallel to the proceedings in Chicago. In the late 1980s, both styles ventured into the European club scene; the United Kingdom, Germany, The Netherlands, Belgium and the Mediterranean holiday island of Ibiza in particular. It was just a matter of time before the first dance records entered the charts.

Until 1992, all dance styles were called house in The Netherlands. While dance rose to prominence, more and more clubs started to focus exclusively on the new thing; Amsterdams RoXY club being one in a string of many. Outdoor events and festivals attracted visitors in their thousands: Mysteryland (since 1993) and Dance Vally (since 1995).The success of dance established an economic foothold and led to the further branching out of the music into new styles: trance, gabber, hardstyle, drum n bass.

Disruption means a breakdown of the established order. Old companies and business models make way for a newly organized market that caters to new players and develops a new dynamic. If ever a music style could be attributed of a disruptive i.e. revolutionary nature, it is dance. By the mid-1990s, the first cracks in the business model of the established music industry started to show. DJs were able to mix records in their boys room in the attic and play the tracks at parties and events. As simple as that. The technological evolution of the means of production meant that making records was becoming progressively cheaper.

About the same time, the distribution of music was going through rapid and revolutionary changes. Thousands of radio stations engaged the internet as their broadcasting system, by-passing the airwaves altogether. Some years later, internet was the locus of online services offering free and in some occasions, selling music to a worldwide audience. Services like Napster and Pirate Bay hosted banks of music and movies available for free and illegalstreaming or downloading. The new digital reality made the music industrys business model next to redundant.

Millennials, the people born between 1982 and 2001 a.k.a. generation Y, are the biggest consumers of music and the most vocal about their music of choice. Why is it important to share what we like? The music industry of old had its unique, effective way to measure success: chart action, the sales of single and album releases. However, record sales started to decline by the end of the millennium while online music services have become more and more accepted. The music industry has learned the hard way to face up to the new reality: their business is a digital economy. Success is no longer exclusively measured in terms of record sales. Attention is the new currency. A new generation of artists understands that attention is just as valuable as records sales, since it can lead to (paid) performances at festivals and events, merchandise and other sources of income.

Limited required investment

The digital technology is cheap and high-quality educational tools cost next to nothing. The result is artists have acquired a mass audience with having to invest in a traditionally expensive recording facility. All that is needed, in terms of production, to make a modern day record is a computer and affordable production software. Gotye produced the hit Somebody That I Used To Know at his parental home near Melbourne, Australia. The self-produced track was a #1 hit single in 23 national charts and a Top 10 hit in 30+ countries worldwide. In late 2012, the best-selling single that year became the best-selling digital single ever. It sold a mere 11.8 million copies.

A few months later, a young Dutch dance producer who goes by the name of Martin Garrix hit the top of the charts in over ten countries with his track Animals. He was 17 years of age when he recorded and released the track. Animalshit the #1 spot of the Beatport charts and Garrix became the youngest artist ever to claim that feat.

Dance turnover on the increase

Over the last ten years, the turnover of the Dutch dance industry has increased by at least 20 percent. In 2012, Dutch dance did business to the tune of over 586 million Euros, according to consultancy EVAR and Buma/Stemra, the Dutch organization for collecting music copyrights-related fees. The number of mass events is rising fast. The turnover of 3000+ visitor-events has increased by 70 percent over the last ten years. Strategist Kevin Watson estimates a 6.2 billion Euro turnover in 2014 for the dance industry worldwide. For 2013 that figure is 4.5 billion Euro. Others, such as John D. Landon of Massive Advisors, estimate the turnover of the global EDM industry at 15 to 20 billion Euro. EVAR-consultant Ap Reinders expects the industry to hit the 7 billion Euro mark in 2017 at the latest.

Gold Rush

Over the last five years a veritable race has emerged, with many an American company joining the playing field of the ever-increasing EDM market. This gold rush scaled new heights in 2013. SFX Entertainment bid successfully for controlling shares in ID&T and Beatport, at that time the biggest online record store and DJ community. Moreover, 20th Century Fox and EDM producer Diplo announced the first EDM-related movie that year.

SFX, that trades its shares at the (American) Nasdaq stock market quoted as SFXE, was established in 2011 by media entrepreneur Robert F.X. Sillerman. The company produces festivals such as Electric Zoo in New York and TomorrowWorld, which attracted 140,000 US fans in 2013. The American entertainment company fetched 260 million dollars when it went public in October 2013. Incidentally, its share price nosedived afterwards. At that time SFX is of tremendous importance to the US market and the foremost competitor of Live Nation. Both companies, by the way, were founded by Sillerman.

Since 2012, SFX produces over 1,400 events via its subsidiaries Disco Donnie Presents, ID&T (Sensation, Tomorrowland, Q-Dance, Defqon1), I-Motion, Miami Music Group (LIV & Story) and Life In Color, claiming the lead for the dance event market. Currently, Live Nation controls HARD and Insomniac, and includes various promoters in rock and other music and entertainment sectors.

Going public is part of Sillermans goal to establish an EDM company with a multi-billion dollar turnover from ticket sales and radio airplay. SFXs strategy is focused on acquiring quality companies and creating a multi-faceted, all-round dance company. It procured the Netherlands-based ID&T and has strengthened its position with the acquisition of Awakenings (techno events and festival) and ALDA Events.

In February 2016, SFXs market value hit an all-time low due to a chapter 11 bankruptcy the company’s shares are withdrawn from the stock exchange. SFX is expected to become private again sometime in 2015.  

The music industrys shift towards live events and festivals has whetted the appetite of its major players for a piece of the fresh and tasty EDM pie. A recent listing of the most powerful persons in the EDM industry includes Joel Zimmerman (of the new electronic division of William Morris Endeavor), James Barton (Live Nation), Robert Sillerman (SFX Entertainment) and Pete Tong (BBC 1 Radio). Leading the list is Pasquale Rotella of Insomniac, the production company of the Electric Daisy Carnival and the EDMbiz conference in Las Vegas. Duncan Stutterheim, one of Hollands best-known dance entrepreneurs, announced his departure from both SFX and the EDM industry in February 2015.

EDM and the Digital Domain

Festivals and events

Since 2007, the attendance of EDM events in the United States has increased over 46%. In Europe, events like Tomorrowland and Time Warp attract more visitors as well. Emerging events, such as Serbias Exit festival and BPM in Mexico, appeal to a growing number of visitors, while established dance festivals, like Ultra and Sonar, currently roll out their brands on to the global playing field, catering to the markets in Northern America, Europe, Latin America and Asia. SFX is primarily focused on large-scale dance events that attract fans in their tens of thousands.

Since it went public in October 2013, SFX is facing the fresh challenge to profit its shareholders. Consolidation of its position has yet to result in profitability. In SFXs first quarter of 2014 report, Sillerman stated that great strides have been made in realizing the worlds biggest production company of EDM live events and leading digital entertainment content. For 2014, he predicted a 30% increase of SFX-produced festivals, totaling some 70 events (in 2013, SFX produced 54 events).

The majority of this growth will be realized in North America, where the company has introduced popular festivals to new territories: Mysteryland (originally from the Netherlands) in the States and Electric Zoo (New York) in Mexico. Moreover, SFX initiated new festivals, such as Dont Let Daddy Know in The Netherlands and The Hudson Project in Saugerties, New York. In 2015, further expansion was expected for North America, Latin America and Asia.

Although no longer a public company, SFX was working hard on revolutionizing the production of EDM live events, concentrating on promoting the facilitation of total marketing solutions for brands. The FX-1 platform supposed to serve as the framework for the integration of artist management, social media positioning and digital technology. Pioneering marketing and content partnerships aimed at achieving Millennials were fundamentally important to SFXs strategy, since it is the way to link EDM fans to prominent brands.

In the opening quarter of 2014, SFX announced deals with four top brands, including Anheuser Busch-InBev and Clear Channel. Later that year, the DJ project with Simon Cowells Syco Entertainment was launched, in partnership with T-Mobile, the Statesfastest growing telecom provider. The unique partnership of T-Mobile, Syco and SFX enables Ultimate DJ, a new concept in TV programming. It will stimulate the adoption of EDM as a mainstream genre.

Underground vs. Mainstream

EDM is quickly gaining mainstream status, leading to sponsor deals, company takeovers, fusions, strategic partnerships and brand affiliations. All of a sudden, DJs are the new rock stars or, to quote US magazine Forbes, the Electronic Cash Kings. The annual list of the trades biggest earners is headed by Calvin Harris and runner-up David Guetta; their earnings over 2014 are estimated at 66 million and 30 million dollars respectively. Harris is a bigger earner than Jay-Z or Kate Perry. His pole position is a career first. In February 2014, he signed a contract with Las Vegas mega club Hakkasan for 70+ gigs in a two-year period. He enhances his income by writing and producing songs for pop stars like Rihanna. The rise of dance over the last three years has been astronomical,he told Forbes magazine. I happened to be at the right place at the right time.

The majority of the dance music festivals operates a standard line-up of a select few big name DJs and acts. In some circles, this practice is regarded as a rapeof the electronic music genres essence. For example, Carl Cox, David Guetta and Tiësto represent various subgenres and associated audiences, while many fans opinion that these artists dont comply to EDMs expectations. The underground’ vs. ‘mainstream conflict is battled out continuously on Twitter and other social media by any number of DJs and producers.

Some of the DJs authenticity is questionable, for that matter. It conjures up shades of the hip hop battles of the 1990s. Reports on Paris Hilton and Kim Kardashian behind the wheels of steel or the announcement of an Ibiza club-residency for Justin Bieber fuel the flaming debates. Some believe EDM to be a pop trend, a bubble about to burst. For the time being the global trend persists and dance music gradually becomes a mature global industry.

Progress

Since its beginnings in the early 1970s, the evolution of electronic music is intimately linked to the progress of technology. The advance of online Do It Yourself platforms had made life easier than ever before for the music aficionado. The closing of the gap between the fan and the artist feeds the believe that anybody can be the next big time DJ or producer. Studio gear has become far more affordable over the last ten or twenty years. Recently, Skrillex pointed out that he produced his Grammy Award-winning tracks on his laptop with the aid of some generic software.

The single biggest problem of todays EDM industry is its lack of professionalism and expertise. This doesnt come as a surprise since it is driven by technology that has been practiced for two decades or less. On every level, thousands of online courses, specialized schools and business conferences are added to the knowledge structure. With it’s flowering, the industry helps to redefine the concept of education. Of special importance are educational institutions dedicated to the training of novice producers, artists and business professionals, like Richie Hawtins CNTRL: Beyond EDM.

Hawtin and a team of stand-out DJ-producers lecture and host workshops on various aspects of technology and music production; in turn, they learn from interaction with students and professionals. In the Netherlands youngsters are educated to feel comfortable in an entertainment and lifestyle environment, and to be aware that the music business is not just about music; it is a business too. At the institutions, the new commercial and creative professionals will conceptualize the tools for the global industry that is involved in events, lifestyle and entertainment, an industry worth billions that keeps on growing – and growing bigger due to technological and socio-cultural developments.

EDM and the Digital Domain

Technology and the digital age

The growth of the festival and event market was facilitated and markedly affected by digital technology. This is all the more remarkable since attendance rates of non-dance music festivals and events are in decline. EDM festivals pull more people; moreover, the number of EDM festival has grown by a third. EDM events appeal to the 18-35 age bracket, which represents the most affluent cohort in all of the entertainment industrys history, one that has money to spend like no generation before.

The success of social media and digital technology feeds and supports the popularity of dance. Digital technology asserts low threshold interaction between artist and fan, access to and sharing of audio files, and enables online audio and video services such as Soundcloud and YouTube. The fear of missing out (FOMO) drives fans to elevate EDM-related topics to trending status on social media and the internet. Public companies like SFX Entertainment invest serious money in digital technology and, by consequence, the artist-fan relationship.

The aspects of the industry

The record label or music company is responsible for the distribution of the music and the support of the artist who is trying to establish his name. At the same time, they connect artists by maintaining relations to management companies, booking agencies and other artists. It is often said that the record label is deleted from the business equation. Over the last ten years the labels role has become more oblique and shifted, or so it seems, to online marketing and distribution. It is becoming a service-centered business as the artist is becoming a network, as opposed to a product.

Most record labels operate in a particular niche and thus create immensely popular subgenres. Play Me Records, for instance, has become synonymous with the aggressive dub step sound since its inception in 2009. SpinninRecords, on the other hand, releases many a pop crossover EDM hit single, while other labels concentrate on a non-traditional sound. Labels are as numerous as stars in the sky, however, most barely manage to cover their operational costs and can only survive by breaking new artists and acts.

Many labels are run by people who are passionate about the music and will move mountains to support their artists. One of the most interesting aspects of the EDM revolution is the rapid evolution of the record label over the last ten years and the drastic change of its part in artist development. The digital music landscape has been transformed, and so has the music industry of old, including the role of what used to be known as the record company.

Chances are, you, the reader, will have bought new music at Beatport or iTunes. Both platforms distribute (digital) music; Beatport hosts a library of some 1,110,000 tracks on 8,000+ labels. Thus they enable fans to support artists via the purchase of their music. In EDM, labels function as middle menwho market the artists output.

Beatport, iTunes and Spotify are, simply put, hubs that connect music and its audience. Due to the ever increasing demand for digital distribution they have encountered various challenges. Piracy and the rise of peer-to-peer file sharing have resulted in unlimited access to any commercially produced track or album. iTunes, Beatport and Spotify had therefore to win over the consumer who had grown accustomed to a free for all frenzyto pay for his or her music. Gradually, the balance is shifting in favor of legal music consumption.

Beatport, for instance, ensures fans pay for a track of guaranteed sound quality, offering 320 kbps (the industry standard) downloads in WAV format. iTunes uses lower bit rates, so their tracks are cheaper. The 192 kbps downloads are fine for iPods and iPhones, but are unsuitable for use by working DJs. Record companies sell music via a delivery platform or aggregator, that offers the music for sale through the hubs mentioned. These take their cut from the sale; a certain percentage from the hubs cut is paid out to the label.

The manager still has an important role in the artists business model. He finds opportunities for networking, gives career advice, sets up interviews and media interaction, and helps out on the road. A good manager has his sights firmly set on the artists goals. The artist is the focus of attention for a team of supporting professionals. A dedicated plan and transparent communication assist the effort of achieving the artists objectives. The manager constantly counsels the artist on his way to the top, unburdening his artist wherever and whenever he can. The managers efforts are aimed at extending and expanding the artists career, attaining the highest possible level of success and creating plus guarding the artists public image. Likewise, managers must be aware of the manner in which the digital revolution has transformed their role.

EDM and the Digital Domain

The way ahead

Dance keeps on swaying the world. Meanwhile, a new generation of music fans that appreciates a strong link between music and technology is coming of age. The EDM fan is deeply involved in digital technology, more so than fans of other types of music; this involvement applies to live events as well as communication with fellow fans. The online behavior and the focus on digital technology of the new generation of EDM fans directly affect the growth of the EDM industry.

Evidently, EDM fans are totally nuts about their music and love to discuss it. Eventbrite, a leading online ticketing and registration platform, has looked into fan behavior in conjunction with Mashwork. The study showed that fans (pun intended) fan the flames utilizing social media.

The studys objective was to understand the conversational topics of EDM fans, such as the difference between fans of the various EDM (sub)genres. Over 70 million messages were analyzed. The results showed that, on average, EDM fans daily tweet 11 times, a markedly higher number than the 1,85 tweets per day of the average Twitter user. EDM fans are used to discussing concerts and events via social media and over 30 percent of the fans discuss various EDM (sub)genres. One in three tweets is EDM-related. However, not all conversations were about music per se; 14 percent was subculture-related, like PLUR lifestyle, rave communities and certain dance steps.

The quantity of EDM-related messages is simply bewildering,Martina Wang, Eventbrites Head of Marketing, states in Billboard. EDM fans are the most social of music fans, both on and offline. It offers an outstanding opportunity for EDM brands to catalyze dance by connecting them online.

Mobile

The use of mobile phones at EDM events has always been stigmatized, however, festival and event producers can apply this tool to create a communal awareness at their events. One in four EDM-related postings were actually posted during an event. It tallies with some 42 million online impressions for EDM events per year.

EDM fans are really passionate about their music and express it in a positive manner. Two out of five conversations about EDM on social media address the adoration of the genre. EDM fans are constantly sharing photos and videos of past events, and share music of newly discovered artists. Their ardor seems to be inexhaustible.

Dance lovers are super-fans. They really create the success of EDM events by their passion for live experiences and their behavior on social networks,Wang elaborates. The EDM industry has a unique opportunity to connect to this group of very social, passionate people.

EDM and the Digital Domain

Content

The emergence of the internet has completely transformed the way we do business in the music and entertainment industry. Technological progress and social media tools have induced a revolution in the way we consume, produce, distribute and discover music. Artists have created vast pools of new fans via the internet because they understand the power of the new technology. EDM is inherently linked to technology and can therefore be labeled as disruptive. Artists often start out by filling up their laptops with music and subsequently integrate new technology in their productions. Innovative software assists live shows in stadiums and arenas.

DJs have used modern technology to build a personal and intimate relationship with their fans. Social media are supremely equipped to focus on the individual in an authentic and meaningful fashion, in shrill contrast with analogue media like television and radio that renders the consumer a passive receptor of information broadcasted by brands via commercials. Socials media are personal, intimate and interactive. It enables users to participate. By these means, music and stories can disperse via Facebook, Twitter and other types of social media platforms.

Many DJs and event and festival producers acknowledge the potency of social media. Increasingly, they mobilize social media to enter the fansdigital habitat in order to communicate one on one. They react to tweets, comment on music and content of fellow artists, and customarily post personal videos of their creative endeavors. The fans have direct access to the artists and feel they belong and are part of an inner circle. The result is a multitude of fans, both online and offline.

Many DJs were early adopters of the free music-model and decide to the dismay of their record companies to continue the practice of making their music available for free via social media. On channels like Soundcloud they offer their music for remixing, so it can be re-used. Thereupon they utilize social media to comment on the new remixes and share them. To many fans, it feels like being part of the creative process. An artist is not just a nice song that is consumed and forgotten. He is in non-stop interaction with his fan base. It compels EDM artists to be fresh and innovative.

Binding agent

Music connects and is uniquely able to stir up emotions, even rapture. The power of music does not change and nor does the demand for music. Nevertheless, the music industry is changing, at an astonishingly fast rate. If anywhere disruptive forces are at play, it is in the music industry. We are on the cusp of the third disruptive spell. Again, the dance scene is leading the way.

Social media bring about direct relationships between the artist and the listener. Artists no longer generate the bulk of their revenues through sales of CDs or downloads. It is from performing that they earn the money. This transforms music from a physical product to an experience. Free downloads and file sharing have made music common property. Scarce supply is no longer relevant; it is all about grabbing the listeners attention. Ownership makes way for access. In the music industry selling physical products is replaced by downloads and streaming. These days, fans have access to immense data banks of new songs and older material (the so-called back catalog). It is no longer a must to physically own the music, that attitude appears to have become obsolete.

Market socialism

The music industry and the part that deals with EDM in particular, must accept that we live in an era of market socialism. Market socialism is what happens when a capitalist society is confronted with a market value that has been redefined. Money is no longer the approved way to express market value. Connections and artist contacts are the new value indicators, as expressed in YouTube-plays, Soundcloud-plays, Facebook-likes and Twitter-followers.

Consumer research points out repeatedly that the majority of the marketing messages miss their target, connecting to the interests and needs of the customer, by a mile. More importantly, nowadays anyone is able to control what marketing messages are presented to him or her. Telemarketing, direct mail and email can be blocked from our daily info diet; we zap TV channels to dodge commercials or simply skip them when we watch TV at our time of preference via a digital service.

Red Bull is a company that has understood this new reality and it offers a great example of how to deal with it. Red Bull creates more content than Disney and publishes it in an environment not just media environment, by the way where the brand identity comes into its own. None of its messages sell Red Bull, or anything for that manner. What the company does, media-wise, is publish and distribute content that appeals to a group of users, connects them and makes them part of a certain lifestyle. It helps them to express an identity.

Transition

This exposes a new and, to some, uncomfortable reality: album sales are no longer the bedrock of an artists career. Nor are downloads, whose sales figures are slipping. The old schoolmusic industry clings desperately to its business model, the sale of physical product. However, that model is obsolete and has been for some time. Even the superstars are struggling. Pittbull sold less than 10 million albums in his career, in spite of 54 million Facebook fans and millions of YouTube-views at one point in 2013. This is the reality of the new music industry. It is built on fluid attention, not on direct music sales.

Festival and event producers make money by adding meaningful content to the fansexperience, raising their profile and, hopefully, gaining influence. On Twitter masses of loyal and responsive followers become active, which act as ambassadors and brand advocates. They spread the brands mission to their followers. On Facebook, festivals and events can create dynamic and loyal communities; interaction inspires and creates an increase of reactions.

Freedom of publication

Meerkat, Periscope, Ustream and YouTube offer opportunities to reach a worldwide audience and communicate to a live community that spills over to various social networks. Blogging is more important than most people realize. This stream of messages enables festival and event producers to learn from their fans and participate in the discussion about the future of the festival or event.

Since anyone is free to publish and has his or her say, artist and festival producers can reach parts of the public that is not their target audience via their content. It all starts with a mission and is reinforced by the content artists and event producers create. One of the most valuable means that the artist or the festival producer attains is influence, goodwill and social capital. Obviously, it has a price: the costs of production, distribution and maintenance. But in the end, the payoff is handsome. It justifies the investment of time, money, creativity and passion. This way artists and event producers not just build their profile via media, they become prominent through content and complicity.

Level playing field

These days, artists and event producers can reach a bigger audience through digital channels than before, when they had to rely on the traditional gatekeepers of media platforms. The opportunities to impact have been leveled and this affects programming events; the business model of artist, event producers and the music industry; and media participation. It is through the interplay between media and interaction that we establish the basis of affinity. People connect to movements they can believe in. It is the human, intellectual and financial investments in genuine content that give meaning to experiences, and in this way, hopefully, one day your brand will become meaningful too.

Artist and event producers must take control of their future. They have to understand intellectual property rights, including copyrights, patents and hallmarks that protect their assets. They have to learn to understand the core principles of the digital world in order to align the strategic partnerships for the distribution of music, content, touring, merchandising and branding. They have to learn how to build an effective team that can exploit the potency of their creativity and content in a business-sound way. Only by self-education are artists and event producers capable of survival and being responsible for their success in the digital world.

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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

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?

Digital world

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 practicestranslate to sector-wide innovations? This e-book will discuss ideas and insights that have an important bearing on the artists and event producers 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.

EDM and the Digital Domain

Ecosystem

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 webs 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 conversationsand 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 mans 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 dont 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.

EDM and the Digital Domain

New paradigm

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 worldthey 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 successor 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 schoolcontacts, 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 artists position in the DJ Mag Top 100, the annual list that ranks the worlds 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. YoungDJs 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 youngerDJs do better in both tallies. It appears that social media are becoming predictivewhen 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.

Rankingzs 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 fans ideas and discussing their input is the platforms 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 festivals 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.

Business ecosystem

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 companys 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 companys 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.

EDM and the Digital Domain

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 artists and event producers objective is very plain: the artist or event producer who has direct access to the most relevant data wins the struggle for the fans and customers 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 turnoverand coverageare becoming less relevant. The value of your company can only grow by stepping off the trodden path.

Analysis and research

How to use ones 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 Facebooks 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

Conversation prism

Conversation prism

The conversation prism is a neat tool for mapping the artists 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 Facebooks 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 socialis 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 channelmarketing 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 imageof 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 degreesprofile 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 datahas 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 managers 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 couponprograms.
  • 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.

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 DLCCIprinciple:

  • Devices
  • Landscape
  • Content
  • Connection
  • Information

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.

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5. The business model examined

What is the (new) business model of the entertainment and music industry? What does this entail? What is the artist’s value proposition in the world of EDM?

Estimated reading time

Presently, internet and social media are often viewed as the new remedy to win fans and clients, to increase turnover and to raise the brand awareness. In recent years many companies, organizations and brands have increasingly invested in digital presence. Many of those promptly point out that this presence delivered low yields at high costs, except possibly brand awareness. The business model is not addressed at all.

As pointed out in the previous chapter, the music and entertainment industry has changed dramatically in recent years due to the introduction of digital tools. A new dynamic has evolved, resulting in new paradigms that determine whether an artist, festival or event is successful or not. One of those critical new rules is the application of direct digital media. Within EDM and its industry, the disruption of marketing, communication, sales and innovation happens at a staggering pace.

The reality of 24/7/365 connectivityenables artists and festival/event producers, more so than ever before, to maintain a direct relationship with the fans or client. Digital channels, like websites, online campaigns, blogs, social media and mobile devices offer the most flexible, effective and scalable means to establish these relations. However, artists and festival/event producers have to uphold this new paradigm. The business model really has changed.

In old stylecontact, artists and producers concentrate on getting exposure at a limited number of key channels (i.e. certain magazines or radio stations); they opt for a selective presence. The new paradigm demands continuous presence on all relevant channels. After all, fans and clients determine when, to what extent and in what manner they contact you, the artist or event producer. For the record, in this chapter as pointed out earlier artists are perceived as companies. What is the (new) business model of the entertainment and music industry? What does this entail? What is the artists value proposition (his added value) in the world of EDM?

Business model

The right business model focuses on the products value to the fan or client; not on the product as such. For example, a fan or client is not interested in solar panels, but in the benefits they bring.

The book Business Model Generation describes the term business model as follows: a business model describes the central idea of how an organization creates, delivers and retains value. Its concept must be relevant to and easy to grasp by consumers, without oversimplifying the manner in which the company functions.

The book introduces the business model Canvas. This model takes up one page and describes in nine modules the logic of a companys business strategy. Central to the Canvas model is the value proposition: a description of the cluster of products and services that create value to a specific segment of clients. The value proposition is the solution to a problem of the client or provides for a requirement of the client. They are the benefits the company supplies to its clients. Some value propositions are of an innovative nature. Others align to what the market has to offer, albeit with added characteristics and attributes. Subsequently, the eight remaining aspects are filled out and typified around the central aspect, the value proposition.

Value proposition

Many artist or producers of festivals and events use a value proposition which essence is: We provide music, a festival or an event, and we add a bit of support, in exchange for a slightly better margin. They often lack genuine interest in their supporters or clients. All was well, until the internet reared its head and social media became established. New competitors have entered the market, bringing new and lean business models. Moreover, a new type of fan or client has emerged: always connected, well informed, and more able to select and choose. Fans and clients have become more assertive and less gullible. They demand transparency and claim personal contact with their idol or provider.

On Marketing Online (a Dutch marketing blog), Mark Hedema expounds four challenges to companies in formulating an appealing proposition that has actual value for their clients. He suggests that:

  • Companies have insufficient understanding of what a value proposition is, let alone use an adequate value proposition;
  • Companies have insufficient understanding of the clients value and his (or her) needs;
  • Companies work from an outdated proposition that used to be successful yet is no longer fitting;
  • Companies completely reject formulating an all-encompassing and clear-cut value proposition.

In todays digital realm, your value proposition as an artist or an event/festival producer must include and express the fans (or clients) complete experience. It implies that a value proposition can no longer be limited to marketing or sales, but has to be supported by the entire organization, both management as well as shop floor. An adequate value proposition is based on detailed knowledge of the fan or client. Besides businesslike and rational knowledge, this includes knowledge of a personal and emotional nature. Who are the decision makers and the arbiters of taste? What catches their attention? What excites them? What lights their fire?

The value proposition is often confused with a unique selling point; a mission and vision statement; an elevator pitch; a marketing message; or simply used as a different word for product or service. However, a value proposition is much more than any of these. A properly formulated value proposition includes the following aspects:

  • Why? What do I believe in? What sets me apart?
  • How? Experiences and perceptions that are delivered to fans and clients;
  • What? The sum total of content, product and/or services on offer;
  • When? Manner and moment of company-induced interaction between you and your fans or clients.

Outside in

The foundation of every business strategy is looking and thinking outside in: empathize with the fan or client. Step into the fans or clients shoes and see the world from his (or her) perspective. Who is your client really and what are his or her values? Thinking about the client from the clients point of view helps to formulate client values, which can be used to assess what differentiates you from the competition.

The Business Model Canvas, developed by Businessmodels Inc. is also known as Osterwalders business model. It is a tool that helps to establish a value proposition. Adding the selected business strategy, in order to differentiate your company from the competition, completes the model.

The canvas is predominantly focused on what: the materialization of the strategy, the reason why a company, organization or brand exists. In the outside inapproach, the whatis what it is all about for the fan or client.

Every enterprise has a business model, even if it is not aware of having one. A companys business model includes a number of essential functions:

  • Who are the potential clients? What is the intended group of customers?
  • What do we offer the clients? What is the proposition?
  • How will we deliver the proposition? What is our marketing strategy? This accomplishes the proposition!
  • How much? How are we making money via the proposition? What are the costs and how much will we sell?

The business model lays out this idea: who(i.e. the intended group of clients) provides the turnover, how(i.e. the accomplishment) determines cost, and what(i.e. the marketing strategy and proposition) makes for the profit (turnover minus cost). The business model denotes what value the company creates for the fan or client, how it creates that value, and to what extent it can corner the market and claim its share of the value, formulating a projection of its profitability.

Income (revenue) model

The income model is part of the business model. A software supplier can charge for items sold, per time unit of use, or simply hand-out his product for free and generate revenue from advertising or consultancy. A generic product offers many ways to raise profit, so you have to decide how you will differentiate from the competition. The income model is nothing more and nothing less than the way the revenues are structured.

The simplest example of an income model comes from the sale of goods. Entering the local supermarket, dropping stuff in your shopping cart and paying at the check-out counter is an example of the sale of goods. You pay money and in return you get goods right away.

Here is another example. Interested parties are frequently offered the option of subscription at a lower rate per item as opposed to regular one-off purchases. An annual subscription means a steady source of revenue for the seller and a discount for the buyer, plus guaranteed supply and convenience as added benefits.

And here is one more example of an income model, the consume model. In the consume model, the user is charged a smaller price as he consumes more of the product or service. It usually entails a starting rate that decreases with increased use, in order to encourage consumption. Some examples are the use of water, gas and electricity at home, and calling from a phone box.

Offering advertising space is an example of the advertising model. It is a well-known source of income for daily papers and magazines, and for sporting clubs that display billboards around the grounds. The advertising model is frequently applied in the media sector.

For a festival or event, the most important revenue streams are:

  • Ticket sales
  • Merchandising
  • Content licensing (radio, TV, internet, IP-TV, (subscription) video on demand, music services, video services)
  • Media value (advertising, sponsoring, endorsements, brand integrations)
  • Additional services (membership, lockers, etc.)
  • Data

A business model must be plain and simple. It should take no more than 20 minutes to write all key elements down. These key elements are:

  • The problem that is being tackled
  • Intended groups of fans, clients and users
  • The unique value proposition
  • The solution
  • Distribution and communication channels
  • Streams of revenue
  • Cost structure
  • Numbers, metrics and analytics
  • The unfair advantage (which cannot be copied or bought)

Content is vital strength

Text, audio, video and illustrations are the life blood of internet and may even determine its vital strength. Without content, internet would be an emptytechnology. Blogs and online magazines, streaming services for music and video, download services, online radio, applications, social channels and so on, it is impossible to separate the internet from its content.

The artist or event/festival producer is actually a content creator. Every day, a mass of content is produced, often unsolicited. This content can be curated and (re)distributed in limitless ways via the internet.

The content generated by artists and event producers, whether or not live, gives them a unique and distinctive capacity. This content is mostly entertainment, infotainment and music. Apart from the festival program, artists and event producers can create more unique and relevant content that can be distributed online. Because fans are able to consume the content via multiple channels, the content message is amplified and thus strengthens the bond with the fan. Moreover, the content is available for cross-media exploitation and can be applied to a new income model. The information that can be distilled from the fanssocial media behavior leads to an understanding that in turn inspires new products and income models.

Content is available everywhere, anytime, in many different forms. It is an integral part of the digital economy and generates significant revenues for all sorts of internet companies (search engines, social media, online retail and distribution) and providers. The data collected by these companies must be stored, analyzed and related to the artists or event producers data (i.e. information). Content thus generates supplementary data about your fan and helps to better understand him or her.

Everything is a timeline

Social media are websites (networks) where people communicate freely, share and discuss information and talk about their lives, aided by a multimedia mix of text, photos, video and audio. Individuals and groups create the content of these websites. Its distribution is dependent on the relationship between the individuals, which determines the degree of interaction and the type of conversation.

Over the last two decades a densely populated and multi-varied social media landscape has emerged. It includes, among other things, blogs and micro blogs, forums and message boards, communities of digital friends (Facebook, Google+), wikis (Wikipedia), virtual Worlds (Second Life), social bookmarking (Reddit, Digg), digital storytelling and scrapbooking, sites for sharing music and video (Pinterest, Instagram, YouTube), and podcast portals.

Many of these sites have become household names, like Facebook, Instagram, Snapchat, Twitter, YouTube, and more. All these networks comprise a timeline. In fact, they are a timeline. The most current and relevant item is shown first. The online domain of the artist or event producer, his website, is also beginning to show network characteristics via the multimedia mix of test, photos, video and audio. Moreover, the domain exhibits an increased use for interaction and fan dialog. It creates a timeline.

EDM and the Digital Domain

From product to network

The trend is for social media and the internet to merge and become more and more intertwined. It is no longer social media, it is the social web. Smartphones are taking over as the first choice-device for communication, whether it is email, text messages or messaging via an WhatsApp-type service.

In terms of activities employed by users, social networks break down roughly into four main categories:

  • Publishing (blog platforms)
  • Sharing (platforms for music, video and photos)
  • Communicating (the various platform for digital friends and communities)
  • Networking (the business equivalent of the social network)

Here are some examples:

  • Publishing: Blogs (such as Blogger, Live Journal, TypePad, Tumblr and WordPress) and wikis (such as Wikipedia and Wikia)
  • Sharing: Music, photos and videos (Flickr,Pinterest, YouTube, Vimeo, Dailymotion, Deezer, Spotify, SoundCloud), apps (Instagram, Vine) and communities (Behance, TheFancy)
  • Communicating: desktop-based platforms (Quora, Reddit, Github, Disqus, Skype, Sina Weibo, Tencent Weibo) and mobile apps (WhatsApp, Snapchat, Facebook Messenger, BlackBerry Messenger, Kik, MessageMe, Telegram, Pheed, Viber, Nimbuzz, Hike)
  • Networking: business-to-consumer (Tagged, Nextdoor, Qzone, vKontakte, RenRen, Mixi), business-to-business (LinkedIn, Viadeo, Xing), dating (Badoo, OKcupid) and the mobile equivalents (Happn and Tinder)

In an overcrowded market of DJs, artists, festivals and events, innovative (original and unique) and authentic content is crucial for grabbing and maintaining the attention of fans who linger in the social web.

The artist or event producer is a brand. He wants to catch the fans and clients attention in an organic fashion. This is achieved by feeding, on a daily basis, the fans insatiable appetite for relevant content, like news updates, up-to-date features, social media and video. A sports brand for example no longer has a need for advertising. When the brand produces relevant content on nutrition, physical exercise and health and shares this content on social media, the intended group of customers will try it out and come back for more advice. Possibly, it will follow it up by purchasing one (or more) of the brands products. In this way, the focus shifts from your product to your network.

Brands need to create their own content

Brands that have some knowledge of and experience with the digital realm realize that relevant and authentic content is the future of advertising and marketing. That is why leading brands organize content creation in-house, as opposed to outsourcing it to outside parties. Their aim is to win the consumers of their content over as future clients.

Red Bull is fine example of this trend. The soft drink producer has redefined itself as a media company and in the process created its own network. Why? To express the quality and depth of the brand. Red Bulls content varies, from attempts at breaking records for bikes, mopeds, motors, cars, planes to skydiving from space. Red Bull is virtually a media company, creator of its own network within the internet ecosystem, that competes with various traditional radio and TV broadcasters. It has shifted its attention from its product to its network.

Profit center

In order to win over the fan and connect him (or her) to your company, all in the digital realm, one has to set up a new business unit. This unit is flat, small and aimed at creating new opportunities for sources of income for the company, organization or brand. It should actually be managed like a start-up company; it should have time to learn how to deal with digital interaction with fans and clients. How to connect to someone living in the app economy? How to connect to someone living his (or her) life on the internet and social media? Are they the same people? Or different? In what way are they different? What is the plan to integrate these kinds of contacts into your network?

The data generated by your own internet ecosystem can be regarded as a business model, applicable to Osterwalders Business Model Canvas. Since this business unit is run like a free-standing company, it should work with its own profit & loss calculation. It has to be managed like a profit center. In the next chapter more will follow on how to organize the business unit for content creation.

The artist or DJ

So far we have discussed the new business model for producers of events and festivals. What about artists and DJs? Experience learns that in the entertainment industry and the music business in particular, innovations take a long time to land. One of the reasons is that challengers of the status quo are ever dependent on the establishment. This state of affairs is illustrated by the lack of urgency to re-evaluate content or asses the vitality of current business practices.

Not too long ago, record companies and music publishers dominated the world of music and dictated its practice. Musicians were reliant on them for financing, marketing and distribution. Those days are over. Self-published content is more powerful than many realize. It can be the launching pad for a career in music (or writing, or cinema, etc.). The key issue is to create a fan base, which is more important than making money from the self-published content. In the music industry of today it is still not clear who is responsible for, or has to invest time and money in the internet strategy of the artist. All parties involved record companies, music publishers, booking agencies point at their neighbor, so nothing really happens. So what is the artists or DJs new business model?

  • Start a house of copyrights. A house of copyrights is a legal entity (private limited company or foundation) that owns, administers and exploits the artists intellectual properties. It makes it easier to negotiate deals with organizations in the music business, such as record companies, music publishers, booking agents and the like. It simplifies the application and management of the artists internet ecosystem.
  • One of the house of copyrights objectives is the exploitation of the artists rights. At the close of the financial year, the organization will take stock of the results – what the rights have yielded and pay out the share in profits according to agreements with parties involved, for example manager, record company or music publisher.

A house of copyrights is a veritable 360-degrees cooperation; after all, it represents a common interest. Moreover, and this is contrary to the situation of old, it is not a defensive collaboration. Before, the standard contract implied that the record company owned the copyrights. It limited its risk and protected its investment.

This new 360-degrees cooperation is currently the juridical solution for the changes internet has pressed upon the music business. Decreasing revenues from record sales and pay-per-downloads oblige the artist or DJ to look for new income models within the business model. Furthermore, the value proposition must be the focus, not the income model. Artists are aware that internet gives them endless opportunities to connect with their fans. They want to adopt to the new dynamic of the music business.

This dynamic sees borderlines dissolve and music companies entering a territory that used to be the professional area of complementary businesses. In other words, the record company is no longer in pole position. The booking agency is on the rise, since the bulk of the artists revenues come from live performing. However, the 360-degrees contract frequently fails to deliver on its promise. Record labels, as well as many booking agencies, are simply not able to fully exploit the copyrights or work in tandem with outside parties. Releasing and marketing music which is an income model, not a value proposition is the record labels core business and top priority.

Fans want to be close to an artist or DJ. They want to decide whether, and how much, they pay for music, a live performance or merchandise. Who ownsthe artists or DJs fans? Not the record company nor the booking agency; not the management nor Facebook, actually. Obviously, its the artist or DJ. The fan connection is his only tangible asset.

Although the DJ or artist has more data on his (potential) fans and followers than ever before, the vast majority of these data is not stored or valued. As a result, the artist or DJ misses out on opportunities to extend his fan scope. And lets not forget, the direct contact with the fan. Thus, the artist overlooks what could very well be the crux of the matter, which is the monetary value his fans represent. After all, the fan base represents financial value, which can be added to the balance sheet. This is the new paradigm.

The artist or DJ should collect only data that really produce relevant knowledge or result into transactions. Only then can the data be added to the balance sheet as monetary value. Often, these data are at the artists or DJs disposal, yet he or his management has not figured out how to exploit the information. Indeed, the present day artist or event producer collects, without realizing it, an extensive volume of fan-related data, produced by his email data base, Facebook friends, and friends and followers on various channels like Twitter.

The artist or DJ can start a direct relation with friends and followers, who, in turn, can be recruited to raise new friends and followers. This helps to expand the scope of news items on upcoming performances, merchandise and music. Moreover, the connections provide endorsement and sponsor options, due to the links that will emerge from cross-referencing the data base: the data base is a map of the artists audience. Information of this kind will help to negotiate a favorable contract with record labels, music publishers, booking agencies, event producers, brands, organizations and companies.

For fans, the cement that holds the artist-fan relation together is the music, the story and the personality of the artist or DJ. In fact, the artist or DJ himself is the intellectual property via his music. He (she) makes the connection with the fans, which subsequently results in the data that the artist or DJ can capitalize on. In the right 360-degrees collaboration, the manager is the artists business partner who operates in a full rights management business model that supposes the artist or DJ as a brand.

All the artists or DJs rights, like personality rights, trademark rights, related rights, copyrights and other rights, are the access in the managers arsenal in negotiating a favorable contract for his client or business partner. These rights are part of the house of rights that is administered by the artists or DJs management. From this house of rights-construction, you can license the rights per area to an operator who is best at his chosen field. In this way, records labels, music publishers, booking agencies, event producers, commercial sponsor raisers and merchandisers have become service providers.

Business Model Artist (DJ)

In the new business model, the most important revenue streams for the artist or DJ are:

  • Content licensing to radio, TV, internet, IP-TV, video-on-demand, subscription video-on-demand, music services, video services;
  • Concert ticket sales;
  • Sale of merchandise;
  • Media value (advertising, sponsoring, endorsements, brand integrations);
  • Data

Obviously, many additional income models are conceivable. For inspiration, the blog of the Future of Music Coalition offers a selection. The Future of Music Coalition explains the routing of the cash flow; it does not describe in detail the finesse of the income models.

Content = relation = information

The content = relation = informationprinciple is the foundation of the value proposition of the entertainment and music industrys business model. The parties (i.e. artists and producers) that furnish the optimum 24/7/365 experience for the fans or client, and are able to read out the data and use these data to strengthen the relationship, will eventually reap the rewards. The paper Radio will never be the same again explains the principle very precisely.

Wilbert Mutsaers, director broadcasting of Dutch public radio station 3FM, writes in 2012 on Dutch public radio-affiliated music blog, 3voor12:

Radio = Visual radio = Social radio = Social audio = Social video stream = trans-media platform = Media brand. The user can choose. These assorted options enable the content producer who works with a potent and transparent radio proposition to profile himself as a well-rounded media brand, can go anywhere his audience is, and transpose his content to trans-media platforms.

Mutsaers confirms my thesis that the content of radio broadcasting stations must be distributed in a decentralized manner; the connection with fans or clients (in Mutsaerscase the listener) comes first and foremost. Paraphrasing Mutsaerspostulation, we can state that the artist or event producer who has a potent and transparent value proposition is enabled by the endless opportunities of the digital world to profile himself (or his event, in case of the event producer) as a well-rounded media brand. This implies it has to be wherever his audience is.

In its broadest sense, an internet ecosystem is often depicted as the sum total of interaction between industry, brand, product, data and people. It incorporates all stakeholders: partners, suppliers, competitors, clients, analysts, commentators, journalists, bloggers, prospects and individual fans or clients. The technical infrastructure and the functions supported by the network are also part of the internet ecosystem. By regarding the internet ecosystem as a business ecosystem, one actually sees the emergence of new value models in the relationships of all stakeholders in the internet ecosystem.

Up to now, your greatest value as an artist or event producer was probably your brand. According to Wikipedia, brand value (or brand equity) is the monetary value that the brand itself represents. Usually, brand value is identified with future cash flow generated by the brand. Your brand is not (yet) included on the balance sheet. However, it represents a hidden value, the goodwill.

The literal meaning of goodwill is sympathyor benevolence. It is used in the world of finance to indicate the companiesimmaterial assets. Goodwill usually only becomes relevant in situations such as sale or take-over of the company and is regarded in the world of finance as the added value of a company, on top of its net value. Thus goodwill represents future revenues of companies, organizations or brands; it has to be added to the balance sheet, yet exists in terms of know-how, customers, brands, human resources and such like.

So content cements the relationship with fans or clients. It supplies the information that enables you to make strategic decisions and help to capitalize on various income models. The business model of the entertainment and music business, content = relation = informationplus its matching income models, has thus taken shape and will be the starting point. Next is the challenge of how to structure the team that supports you, the artist or event producer. This is the topic of the following chapter.

Go to the next chapter

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6. How to organize your organization?

In establishing an organization, questions like: Why are we doing what we do? How are we realizing our aims? What exactly is it that we want to do? will be addressed.

Estimated reading time

In this chapter we view the organization in wide screen. It is a form of collaboration in which the participants deliberately perform certain actions, using various tools. An organization is not the same as a company. A company is an organization that provides (digital) products or services to third parties, persons or companies. So, a company is an organization, but an organization is not always a company. This can muddy the water. In establishing an organization, questions like: Why are we doing what we do? How are we realizing our aims? What exactly is it that we want to do? will be addressed. By restructuring their organization, DJs and event producers have to evaluate their business model as discussed in the previous chapter.

The digital world is the world

The world is what it is. It is both off and online. The digital world is just part of the world. Brands can only be a success when they add value to the daily lives of fans or clients, establish a relationship with fans or clients, and win the trust of fans or clients. The internet ecosystem is the place where this trust is won or lost.

The digital world facilitates a slew of new options for DJs and event/festival producers; its importance to their success will increase with time. Amsterdam is an example of this phenomenon, its conglomerate of creative industry, gaming industry, music industry and festival industry thrives. Its working environment is profoundly shaped by the digital world. Expertise is exchanged, common ground is developed. More examples: the graphic industry in relation to 3D-printing; big data creating new opportunities.

The up-to-date organization of the DJ or event producer must adapt to profit from these new opportunities. This does not come easy. In establishing an organization, questions like: Why are we doing what we do? How are we realizing our aims? What exactly is it that we want to do? will be addressed. By restructuring their organization, DJs and event producers have to evaluate their business model as discussed in the previous chapter.

Organization

In this chapter we view the organization in wide screen. It is a form of collaboration in which the participants deliberately perform certain actions, using various tools. An organization is not the same as a company. A company is an organization that provides (digital) products or services to third parties, persons or companies. Both the DJ plus his management as well as the event producer are a company. An organization is not always a company, yet a company is an organization by definition.

An organization is by name an entity that functions as an organizer. In this sense, the organization is an activity. For example, in this context: He is in charge of the organization of such and such festival or event. Or: He is in charge of setting up the DJ tour of so and so.

There are many ways in which an organization can operate and that is the topic of this chapter. Often, the modus operandiof an organization has come about in an organic, non-deliberate way, not as the result of a well thought-out plan of operation. Both the specific accommodation of human and non-human resources, as well as the specific realization of business management, is often ill considered when the organization of a DJ or event producer is established. It is the organization that is transformed in the adaptation to the new business model. The way to go about it is to view the organization as a platform.

EDM and the Digital Domain

Business unit

It is vital for the DJ or event producer to create a business unit that is dedicated to the organizations involvement with the internet ecosystem; this business unit regards the internet ecosystem as a business ecosystem. Operating separately, it enables the creation of new value models and new income models.

When a DJ or event producer becomes actively involved with the internet ecosystem, he or she does best to regard his or herself like he or she is a platform. This platform comprises of his (her) web environment i.e. the website, social channels, service channels (such as iTunes, Spotify, Soundcloud, ticketing and assorted e-commerce channels) plus the offline context in which the DJ performs or the event occurs. The business unit that is responsible for the platform and its interaction with the internet ecosystem must be self-supporting via earnings generated. In fact, it must function as a profit center. To achieve this, an action plan must be formulated.

The action plan is an extensive elemental document that formulates the crucial issues in the development of a digital strategy. The action plan details various aspects:

  • Elaboration of the research results, plus calculation of the effort to achieve these results, measured in time units;
  • The requisite level of quality, plus the required measures to safeguard the quality (quality control);
  • The organization, including the people directly involved and their time behavior;
  • The communication required;
  • The dependencies and risks, and how to deal with them;
  • The projects budget;
  • The to-do list.

What plan is a good plan?

What is the secret of a good plan? How do you make a feasible plan? A plan that really works? A good plan delivers and energizes. A good plan that works can have a powerful effect on the people who make it happen, its like a drug

What is the purpose of a plan?

A good plan will have lost its function when the project is finalized. Its digital version will repeatedly be revised and adjusted. Why? Because it is put into action! The plan is not a swiftly drafted memo, it requires serious preparation and ditto dedication. After all, it plots the course the organization will follow for the foreseeable future.

Realizing the plan

The benefit of a good plan is that it enables you to turn ambition into reality. That is the project. And this is where the secret of a good plan lies. Two invisible, yet powerful forces are more important than whatever the plan entails: the reason for existence and the involvement. Only when the reason of existence of the fundamental concept and the involvement of the team is warranted, will it be possible to make the plan work for an organization. Collaboration and mutual trust are at the core of success.

Without a valid reason for existence and lacking the unadulterated involvement of all participants, the best of plans will fail to become reality. Both are fundamental for the plan to succeed.

Content

Text, audio, video and illustrations (photos, infographics) are the internets lifeblood and may even determine its vitality. Without content, the internet would be an empty, superfluous technology. Blogs and online magazines, streaming services for video and audio, download services, online radio, applications, social channels, and so on, constitute content. Internet and content have become inseparable.

DJs and event producers are content producers. Apart from the music and videos they create, the event itself produces a barrage of new (at times not-commissioned) content before, during and after the occasion. This content can be curated and redistributed via the internet in numerous ways, thus creating an income model.

The content produced by a DJ, in a live situation or otherwise, is unique to the DJ and makes him distinct from the rest or stand out. This content usually entails entertainment, infotainment and music. Apart from festival programs, artists and event producers can generate other forms of relevant and unique content to be distributed online. By offering this content via multiple channels, the content message becomes more powerful and thus will intensify the fan relation.

Furthermore, the content can be exploited cross-medially and commissioned for a new income model. The information supplied by the fanssocial media behavior may result in perceptions that allow for new content products and new income models. Content nurtures the fan (or client) relation.

Content is available at anytime, anywhere, in various forms. It is an integral part of the digital economy and generates crucial information for all sorts of internet companies (search engines, social media, online retail and distribution) and technology suppliers. The data collected by these companies must be stored, analyzed and referenced with the data (i.e. information) owned by the organization. Content generates additional fan data and thus a more complete fan profile.

In the future, fans and clients will require more fan (or event) related experiences and inspirations; it propels them to the DJs (or events) online environment. The younger generations of fans and clients, in particular, expect more than a handful of posts or an austere e-commerce functionality. In order to serve both todays and tomorrows fan (or client), the DJ has to smarten up his online promotion and sales channels.

Most DJ online environments are still stand-alone silos that do not cross reference the generated data. After (re)structuring all online activities in order to create coherence, effects will be easier to gauge. The results are: more peace for the organization and all its business relations, plus a more flexible organization that is better equipped to adapt to future changes that will surely come. It will improve the results of the internet strategy and secure the value proposition.

Brand

Each DJ and every event and festival as well is actually a brand, that is, a platform. What to do in order to realize striking online presence and ditto value? For the DJ operating in the digital world, proper branding entails:

  • The DJs website must be detached from the record companys website; it serves as a central hub for all information and content.
  • The DJs website must include ordinary e-commerce facilities, for example a basic web shop offering music, merchandise, downloads and tickets for sale.
  • The DJs website, social channels, apps and additional platforms must be interconnected.
  • Pre-orders are the key to maximizing digital turnover. All digital and/or physical albums and singles must be available as pre-order items.
  • The distribution of single and album releases via all relevant online retail channels must have global coverage.
  • Leaking WAVs, MP3s and mixes (DJ sets) to bloggers, podcasters, DJs, radio and journalists.
  • A digital PR team that contacts internet radio, podcasters, bloggers, journalists and DJs and compiles online promotion packages.
  • Images of all MP3 and mix releases. These are present in the search engine directories of Google, Yahoo, Bing and DuckDuckGo in order to generate traffic.
  • Photos and/or videos of performances and concerts; documentaries on the DJ and his (her) career; clips of tours; and interactive web activity must be used to engage (the relationship with) the fan.
  • Provide mobile convenience. Create a mobile app (for all operating systems: iOS, Android, Windows and BlackBerry) that is frequently updated, or remodel the website and make it responsive, i.e. indiscriminate functionality for laptop, tablet and mobile phone.
  • Open accounts on Facebook, Twitter and YouTube to bolster fan engagement. Consider accounts on more recent channels such as Pinterest and Vimeo.
  • Customized banners on various social networks that link to the DJs website.
  • Publish an Electronic Press Kit (EPK) with biography, photos and videos (for example, MP3s, clips, mini documentary, release information of the complete discography, buy-button, info on airplay, performing highlights, upcoming events, potential audiences), that include links to the DJs primary channels (website, Facebook, Twitter, iTunes, Spotify) and the correct contact information.
  • Create a fan base. Publish a sign on field or include a sign on button for example, for a newsletter and invite fans and visitors to subscribe.
  • Use the email list for frequent mail outs; the mail out service is equipped with an autoresponder
  • An event calendar is included on the DJs website; it can be copy-pasted by third parties.
  • Information on collaborations vis-à-vis strategic partnerships and sponsoring for cross-promotion releases and client recruitment.
  • 24/7 digital radio dedicated to priority releases. It should be available to the website of the record company, the DJ, high traffic internet radio directories, plus music channels of cable and satellite services. This radio station is the DJs official radio station.
  • A basic digital platform for licensing user rights and copyrights for movies, TV, multimedia and advertising agencies. Applying and approval should take up a minimum of time. Study operational music license platforms for reference and research basics and best practices.

Connected

DJs must be and stay connected to fans and clients. To effect the set of recommendations listed above the DJ must be encouraged to engage proactively in the marketing of his digital brand. That requires a camcorder, or a smartphone with an accurate lens, external hard drive for video storage, plus tablet or laptop. These gadgets are imperative for DJs who aspire to a credible career in the digital music business. The costs are negligible in relation to the profits that can be generated via personal content.

For each DJ, creativity in order to create and distribute content, and personal commitment to the fan, are the top priorities. Musicians will have to tune their strategy to the fan relation. This relation is rooted in the DJs personality, his (her) image and the extent to which he or she is partial to sharing their inner secrets. The Holy Grail is to personalize the fan relation. After all, fans crave a personal relation with the object of their adoration, so it is up to the DJ (and his management) to build that relation, in any shape or form. Disregarding the fans appetite for any idol-related content will result in loss of turnover and missed opportunities.

Anything that applies to the DJ is relevant to the event and festival producers as well. To fans and clients, the event or the festival is a brand. Simply substitute the festival or event name for the word DJin the list of recommendations outlined above.

Network organization

If the event producer or the DJ manager sticks with an outdated strategy and continues to be self-centered, he will run into problems: he is not able to adapt in a swift and pro-active fashion to the shifting dynamics of the music market. A mistake frequently made by self-centered organizations is to focus exclusively on cost reduction when sales are dwindling. This practice will provide only temporary relief that delays the sales slump. In the long run, the company will languish when it refuses to refashion its business model and its organizational structure.

Rigidly hierarchical organizations are fading from the business playing field, there is no future for them in the digital world. Pillars, cocoons, silos, power games in the board room, and self-occupied management layers that stifle innovation are increasingly a thing of the past. The DJ and event producer must structure their organization horizontally. A solution that can work miracles, increasingly practiced by companies, is simply to cut the ties between the directors and the board. The general director and a hand-picked team of company representatives manage the departments. This will only work by delegating trust and responsibility to middle management and project managers.

An alternative to the hierarchical organization is the network organization. It is made up of semi-independent entities (modules) that connect in a non-hierarchical fashion; every module has its personal relation to the surroundings. This set-up comes with benefits: it can quickly respond to changes in these surroundings and questions from clients. The modules operate independently, and are facilitated, more so than managed. Network organizations are characterized by clear-cut relationships between the bidder and the contractor; (self-managing) teams; facilitating management; and more know-how at employee level.  Network organizations make do with fewer managers. Employees manage themselves, whether in (self-managing) teams or not.

The DJ and his management must set-up their team as a network organization, foregoing hierarchical arrangements. Networks ask for a different management style without formalized links. Not he is the boss, but I accept his or her leadershipor I accept that he or she is responsible for a specific task or part of the job. It is about shared leadership. In fact, the team identifies its informal leader. His (or her) main objective is the peace and harmony of the team. The struggle for power is irrelevant.

The DJs management must evolve from a humiliating machine into a flexible and horizontally structured value creating network. The creativity, dedication and problem-solving qualities of the people that comprise the DJs organization make his or her position in the music business sturdier.

The DJs management and its first-line partners (records companies, music publishers, booking agencies and the like) must co-operate on equal terms, realizing goals by exploring options in close collaboration.

Co-operation, complementing competitions, trust and shared ambitions are fundamental characteristics of the new organizational form. The people that comprise the network organization work independently, and are facilitated rather than managed. The very same applies to the event or festival producer. The organization and its various in-house modules and outside partners (creation, production, communication, sales, legal and bookings) must work as equals towards a common end. The formation of a steering group is imperative, an organicconsequence of the process.

Steering group

The DJs management or management of the festival producer should cultivate a steering group. Its mission is this:

  • The steering group gives advice to the network organization on its policy, its strategy and its tactical approach.
  • The steering group assists the network organization in word and deed at realizing its aims.
  • The steering group is focused on raising support for the network organizations policy and strategy; it functions as its sparring partner.

Remember, in order to function properly the steering group requires expert advice from outside parties. In essence, the steering group will have to be steered in turn. Most directors would feel a latent sense of desperation without the advice and support by experts. It is horrifying to imagine managers who intervene in processes without having any understanding of the practice.

Conclusion

DJs and event producers are compelled to reinvent their business model in order to become part of the internet ecosystem. The traditionally organized company with its hierarchical structure is not in sync with the digital reality. The market develops its own dynamic; it is hardly impossible to identify how things came about.

A success factor of the new business model for DJs and event producers working in EDM is the restructuring of their organization. The organization must be designed in the form of a collaboration, a so-called network organization, an often informal collection of co-operating modules that signals practices, developments and current plus future bottlenecks regarding awareness, knowledge, policy, implementation and regulations; arranges who tackles these issues and how; and communicates these matters to all parties concerned.

A network organization must be regarded as a an organizational format in which members of organizations (so-called nodes in the network) collaborate to realize both common and individual targets.

The proper project aligns congenial energy towards an ambition or theme, and thus strengthens all contacts and relations between the various persons and organizations that are part of the network. The structure of a network organization appears to be informal, yet the set-up functions in a compelling fashion due to the give and takeprinciple, mutual dependencies and bilateral agreements. The organization comprises non-hierarchical modules and teams that have their personal relation to the surroundings and are able to respond quickly to changes in the surroundings or questions from fans and clients. The modules operate independently; they are facilitated rather than managed.

What other conditions must be met?

The rules of the game by which the new organization plays must be crystal clear (great communication skills for both internal and external communication);

  • There must be a convincing and substantive future vision regarding the new business model, so all involved are working towards the same goal;
  • Keen assessment of all members of the network organization and their achievements;
  • Member of the network organization must be coached on professional abilities and skills, intensively so if necessary.

Network organizations make up an important part of our daily lives. Without realizing it, we are part of various networks, consisting of a variety of goals and people who we interact with in order to make more of our lives. In the future, these organizational formats will have an even greater influence on society than they already have today. The arrival of the internet has made the potential of information service seemingly limitless and there will be initiatives that are completely different from the hierarchical structures that have been the dominant formatand to an extent, still are. It is necessary to adapt to this new reality and restructure your organization so it services that brand that you, the DJ or the event you produce, are.

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7. Setting up a digital strategy

The digital strategy enables the creation of new value models and income models from the social media and the relations of all parties concerned.

Estimated reading time

A proper digital strategy is an integral part of the business strategy and leads to sub-strategies concerning content, networks and data. It is crucial to view the internet ecosystem as a business ecosystem. The digital strategy enables the creation of new value models and income models from the social media and the relations of all parties concerned. Your digital strategy must approach the internet ecosystem as a self-supporting platform (domain, social networks, and third party online services), which functions as a profit center and realizes goals and targets. Content functions as the social medias cement. Information (data) is the propellant that drives the system and, via the earning models, generates cash flow.

Good is not good enough

When you, the DJ or event/festival producer, know your online position, you need to outline the goals of your organization. When you view the online world as a business opportunity, you have to base your digital strategy on the business strategy. When linking up with fans and clients is the primary focus, there are no excuses for not recognizing your online fans and clients.

It is often suggested that the offlineworld and its online equivalent are two separate entities. Another way of looking at it is: the world is the world, and the world is both online and offline. The virtual world is an integrated part of reality, i.e. the real world. For now and the near future, inspiring DJs and event producers who are approachable both offline and online, are de rigueur. In the end, it all revolves around the story as told by you, together with the story of the fan or client. The knowledge mentioned above will help you to make your organization future-proof, so it can inspire your (future) fans and clients.

Just a good plan is not enough these days. Your organization is only able to realize your plans with the assistance of your employees and contributing outside parties. Therefore, defining a strategy requires the information about, and input from, your internal and external environments. Moreover, the process of shaping your digital strategy is not possible without mobilizing those who must execute the plan or those who are involved in it. Mapping out a new digital course is an adventurous process. It takes confidence in those involved, what are the right choices? Is the plan favored by all and will they support it?

Business strategy

There is no such thing as an univocal definition of business strategy. This one, formulated by Chandler is frequently used:

Strategy is the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.

Many organizations think of strategy as theoryand the execution of the strategy as practice. Therefore, in their minds execution is more important than strategy and as a result they neglect their strategy. Michael Porter stresses the difference between strategy and operational effectiveness. Various management tools help to improve operational effectiveness, such as Total Quality Management; it monitors company performance in terms of leadership, quality control of suppliers, documenting vision and planning, evaluation, process control and process improvement, product, design, employee participation, credit and reward, training and education, and customer focus. This tool aims at continual improvement of the company performance in general and focuses on satisfying fans and clients demands. Total Quality Management is a free-standing method of change. However, it deals with achieving results and attaining targets; not with mapping out the companys course.

So, company strategy is not an isolated management process. Strategic planning directs all decisions an organization will make for the present and the future. A sound strategy is vital and imperative in order to function (and keep on functioning) effectively. For the formulation of a sound business strategy, the DJ or event / festival producer must have clarity about four aspects:

  • Mission The mission describes the identity of your organization: who you are, what you do and what you want to achieve.  A mission exists out of time, yet can be applied at any moment.
  • Vision A vision is the inspiration of your organization. It is the ambition that formulates what your organization wants to be. You review the current situation and assess future opportunities: what is the desired perfect set-up?
  • Objectives These are the concrete results you pursue in order to realize mission and vision of your organization. How to accomplish this? In order to achieve your goals, you have to make them SMART: Specific, Measurable, Acceptable, Realistic and Time-phased.
  • Strategic plan The strategic plan describes how the objectives will be achieved. The plan numbers a series of interrelated steps, so that long-term continuity is feasible. A sound plan sees to the right coordination, control and transfer of tasks concerning all activities that relate to content, connection, domain, networks, equipment and data.

The complete process to implement a strategy successfully requires five steps, according to Robert Kaplan and David Norton in their article, Mastering The Management System:

  • Develop The strategy must be the consequence of the companys vision, mission and core values. Only when these are clear-cut, the strategy can be stipulated.
  • Translate The strategy must be translated to measurable targets.
  • Plan In order to realize strategic goals, plans must be developed, including monetary and capacity estimates.
  • Analyze When the strategy is implemented, the performance must be reported. Learn from analyzing the initial results.
  • Test In order to remain competitive, the strategy must be evaluated habitually. Adjust the strategy when necessary. Develop a new strategy if need be.

Content

For publishers, content strategy is the order of business. In fact, content is their core business: binding target groups to their brand(s) via content production. That is what it is all about: long-term relationships. For marketing and communication professionals, content usually is not a strategic tool; just fillerin the campaign. You, the DJ or event producer, are publisher as well as marketer and communicator.

People tell stories, in the digital world as well as the physical world. Stories express how people think and learn. Stories design authenticity, make things palpable and nearby. Stories expose the soul and turn the distant and the abstract into something that is personal, comprehensible and, above all, human. On top of that all: stories bind. Any marketer can tell what his organization does. Some explain how they do it, but only a few can unequivocally explain why they do it. This is what you, the DJ or event producer, have to do.

Storytelling is the foundation of a sound content strategy. The whyis the starting point. We all know the story of Simon Sineks Golden Circles and the power of the simplest, yet complex question for many organizations: why? The answer to that question provides the framework for the content strategy and all forms of inside and outside communication.

The content strategy does not deal with putting the organization and its processes in order; that is content governance. The content strategy also does not deal with content planning, content development, content control, content distribution, content evaluation or content archiving, for all that is part of content management. The content strategy helps to translate the objectives into a course of action that will accomplish the goals with the help of content.

A sound content strategy helps you to create and curate content that is relevant for target groups at the right time. This creates strong relations and binds your fans and clients to your product. Moreover, good content helps to set you apart from the competition in your corner of the market.

The content strategy helps to establish who needs what information at which time in order to achieve your goal. Plus the best form and the optimum fashion to present this information. Linking the content strategy to the organizations objectives and the assessment of the end result helps to account for the added value of content. So the end is to bind, and content is the binding agent. By consistently disclosing content, and keeping it going in a disciplined fashion, you will bind more and more fans to your brand and product. Thus it opens the way to the fans or clients trust.

From connection to trust

Initially organizations are quickly disappointed when they get to work with internet and social media. Pretty soon it transpires that digital presence does not result in the Return on Investment (ROI: volume of money) or Return of Engagement (ROE: volume of attention) one had hoped for. Most organizations have yet to make the transition from presence to connection; and from connection to trust. This must be echoed the organizations mission. By focusing on the fan or client in regard to the internet ecosystem, and considering this as a business ecosystem, you will actually see new value models and income models emerge from the relations of all parties concerned in the internet ecosystem.

Central to the digital strategy are three phases. Phase 1 is just contact without much bonding. In Phase 2, actual relationship has developed. In Phase 3, this relationship has deepened into a relationship of trust. Why do you pass through these phases? You really try to evolve from being a sender with its network of receivers to the situation in which you are part of a network as a confidant; in this network, each participant is confidant of all other participants. If you engage with your fans or clients in a significant manner, the following model will be generated. It is important to go through the subsequent phases, in order to be competitive and remain so for the future. This is reflected in the vision of your organization. The value of the network you are building increases by bringing the fans from Phase 1 to Phase 3.

Domain

Fans and clients of DJs and event producers have a need for likable companies, organizations or brands they want to belong to. Moreover, they feel a need for trustworthiness. For the foreseeable future we will only engage with domains and social channels that fulfill our needs; that listen to us, that we can trust. Remember this: a domain (your website or app) is the only site where a fan or client can verify the reliability of online information. It is the only site administered by you.

Although it should be self-evident, many DJs and event producers do not focus on their actual proposition and their most important objectives.

Some questions you need to ask yourself continuously:

  • What is my proposition? What is my vision and mission?
  • What are the objectives of my website and my app?
  • What are the crown jewels (content) of my website and my app?
  • Do I produce or curate content that benefits my visitors?
  • What does conversion mean to me?
  • Do I want people just to visit my site or do I want them to direct to a certain section?

Remember that your companys strategy is leading your digital strategy. The proposition and objectives can be related as stories (textual and/or audio-visual content) in your domain (website and/or app) and social networks. The fans or clients experience is leading in this respect.

EDM and the Digital Domain

Networks

Every day, various social networks are the locus of interaction and communication on a massive scale. Central to all this activity are the fan and the client. One of the most important conditions of the implementation of social networks is the evident match with the targeted audience, your fans and clients. They are the focus of your effort; they are the reason to implement a digital strategy. Knowledge of your fans and clients is therefore essential: what social networks they frequent and what social networks they ignore. How do they use them, in a professional or in a personal manner? Your network strategy is tailored to meet these specifics.

There is a multitude of social networks used by (potential) fans and clients, but is simply too time-consuming, too energy-draining and too little cost-effective to monitor all these spots and engage in relevant conversations or produce specific content for them. So we do not use hail for ammunition, we target the channels that offer the best chances of success. On that note it is convenient to know the potential impact of various social networks. Who uses them? What is going on there? How do people use them?

For instance, the average LinkedIn user is more professionally attuned than the average Facebook user. When you use social media for strictly business purposes, it is a waste of time and effort to maintain a Facebook page; LinkedIn is better suited to your aims. This example shows the importance of knowing (thus, researching) where your fans and clients are active and what they want. Chapter 2 gives an overview of social networks; select the platform(s) that offer(s) the coverage most relevant to you. Add these to your internet ecosystem and subsequently feed them content.

Multi-screen

For some time now, many have discussed a cross-platform strategy; however, it remained opaque how digital appliances are used on a global scale. An international survey by Millward Brown, concluded that mobile screens catch more eyeballs than television screens. Americans interact 151 minutes a day with their cell-phone and watch television for 147 minutes each day. In Asia, the cell-phone wins out even more. In China, the time spent on cell-phones is twice the time spent watching television. More than ever before, we use multiple screens for multiple purposes.

Originally, every device had its specific use. The traditional personal computer and laptop were used for work and research. The smartphone started out as a phone, a communication tool. Tablet, game consoles and interactive TV were devices for entertainment. That era has come to an end. We just as easily switch from one screen (or device) to the next; we use more than one device for the same purpose.

These days (nearly) all devices are screen-equipped for information and visual entertainment purposes. Web, mobile phones, tablet and even internet-connected devices (think of the energy monitor in your home) are part of the ecosystem. These devices are no longer stand-alone appliances, they are linked to and part of the digital world. This implies integration. The user must be enabled to consume content, irrelevant of the situation or the device. Therefore, content needs to presented in a way that adapts to the various platforms the fan or client uses; or, even more importantly, the users context. The fan or client does not use his smartphone because he prefers the small screen, but simply because thats the screen that is available to him at that particular time and place. Think train travelers.

Multi-screen (shorthand for publication that is suited to various types of screens) is a given. We have to acknowledge the fact that the target group fans and clients into EDM consume content in this manner. We should stop focusing on stand-alone devices and integrate multi-screen in our digital strategy. Multi-screen is a fundamental aspect of the implementation of internet in your companys set-up and it is a crucial component of your digital strategy.

Data

Most DJs and event producers have been collecting various data concerning fans and clients for some time. Without being very much aware of it, they have compiled vast data bases. However, these data are used inadequately. Too much time and energy is invested in making choices based on the available tools, infrastructure and collected data. In order to make the next step, all this needs to be addressed and sorted. It requires a data strategy, which is indispensable. The alternative is the implementation of the limitless possibilities offered by various technological tools and solutions. A data strategy along these lines explicitly linked to improving the return on the companys business activities is what most DJs and event producers lack, as well as the right drive to arrive at this type of strategy.

Many DJs and event producers needlessly complicate and thwart the use of data as part of the current operating processes. It results in delays, or puts projects on hold. A DJ or event producer is best served by incremental improvements of existing and available sources of information provision, as opposed to radically and rashly remodeling his information landscape just for technological reasons. That approach scarcely results in a connection to the objectives determined.

It is best to first examine all in-house systems and outside data sources for fan or client-related information and to express in a strategy what one exactly wants to know about this fan or client. This reveals the holes in the info on the fan relation. Repeat this process until the profile is collated from various sources and, consequently, the objectives can be realized. In this process, it is essential to increase the pay-off of the existing company activities: more scope, more brand loyalty, more turnover, more client information, more options for differentiated and personalized communication, etc.

EDMs challenge lies in procuring data from sources outside the core industry, such as ticket providers and merchandisers, as well as information from iTunes, Spotify, Soundcloud and various other music and video services. Practice shows that these services periodically share partial information and often their info is incomplete, as far as they are willing to share in the first place. This means that your digital strategy directly touches upon the selection of outside parties for cooperation. The overriding principle in the selection of partners is the sharing of data, which must be made available in the right and useful manner.

Balancing act

To develop the data strategy is a balancing act between the innovative actions, already undertaken by an organization, and the available means and options. The point of mapping out a data strategy is to select the actions that:

  • Best complement existing objectives
  • Can be implemented most effectively in the existing organizational structure and its existing information provisions
  • Yield the best results

Designing a reliable data strategy centers on striking a balance between the available sources of information and the objectives identified via the Intelligence Maturity Model. This way, the implementation of data driven business and data driven work will be more focused; its progress more transparent. Pointer: make the data-intelligence stage itself data-driven and manageable.

The data are easier to readas the result of a few general tactical decisions: by focusing on a solid data strategy and by disconnecting the data strategy from any discussions vis-à-vis computerization issues, such as technical tools and the problems and solutions regarding manageability. This also helps to translate the data into efficiency, vision and results. Thus you are in control of as well as in business with both the available data and the data that will be generated.

Some handles for the successful implementation of the data strategy are:

  • Technology is not leading in the use of data. It is the people who use the technology, plus the translation of the objectives.
  • Apply any potentiality that is available, use what you already have. Focus on the team members who are keen by character, and ditto outside persons with extensive know-how of the issues at hand. They will clear the way to the success of the personnel who handle (will handle) the data.
  • You create knowledge by sharing knowledge. This is not a figure of speech, but the reality. It works both inside and outside the company. Cross-referencing datasets and the input of extra brains and eyes can generate surprising results.

From costs to earnings

Technology, internet and social media are frequently regarded to be expenses. Your online activities are aimed at raising your profile as DJ or event producer in the ecosystem of the fan. In order to achieve that result you have to create a special business unit. It is versatile in its actions and flexible in terms of structure and organization. It is targeting and creating (options for) new sources of revenue.

This unit should really be managed like it is a start-up company. You will have to learn how to cope, in a digital fashion, with the experiences of fans and clients. How to connect to and bond with a person who lives in the app-economy? Are they all the same and if so, in what way? Or are they all different, and if so, how different? How are we going to cultivate relationships of this type? The data generated by the cultivation of ones personal internet ecosystem can be seen as a business model. This allows you to apply, for instance, the Canvas business model by Osterwalder (see Chapter 3).

Since this unit is managed as a stand-alone entity, it produces its special balance sheet. It must be managed like it is a digital profit center that is self-sufficient in terms of budgeting. Its balance is used for accounting cost and profit in order to establish the Return of Platform Performance (ROPP).

Conclusion

The world is the world, both offline and online. The digital world is an integrated element of the physical world. DJs and event producers can only successfully operate in the internet ecosystem if they represent value in the daily lives of fans, enter into a relationship with the fans and win their trust. This is the focus of the digital strategy.

Formulating a strategy is not an easy thing to do. You have to find answers to questions like: Why? How? And What? Moreover, you have to keep an eye on the mechanisms of search engines, social networks, online services and operating systems; ditto for the various types of screens and interfaces. Content is the key to connection and connection the key to currency, as visualized by this overview.

Content is the cement. Social networks and your online domain are the sites where connections are made. You must always formulate your digital strategy with the fan or client in mind. What content, created by yourself or your fans and clients, will bind them to your ecosystem and, most importantly, will keep them coming back for more.

A sound digital strategy is an integrated element of the business strategy. To regard the internet ecosystem as a business system is an essential condition for success. The digital strategy opens up options to generate new value models and income models from the social networks; this works for the relationships of all parties concerned in the internet ecosystem. This means that your digital strategy must regard the internet ecosystem as a platform (domain, social networks, third party online services). This platform is self-sufficient and generates income while realizing the objectives of the digital strategy. Content is the cement of social networks. Data are the fuel that drive the system and capitalize on the income models.

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8. Fanbase information is the key

It is a given that for many the collection of information from a fan base is not the most sexy aspect in the world of EDM. However, this is a crucial chapter for DJs and event producers.

Estimated reading time

In 1958, Hans Peter Luhn coined the term Business Intelligence in his IBM-article, A Business Intelligence System. He defines business as a collection of activities that are carried out for a purpose in a broad sense, and views the business units that are involved in communication as an intelligence system.

Luhn describes intelligence as the ability to interpret the relation of facts presented in such a way that they lead to actions that result in a desired identifiable and measurable outcome; one or more objectives must be attained before a more or less fixed deadline expires. In 1989, information specialist Howard Dresner (who would become an analyst at the Gartner Group) proposed to use the concept of Business Intelligence as the catch-all phrase for concepts and methodsthat help to improve the process of business decision-making by implementing fact-based systems.

The term Business Intelligence (BI in short) is often used to describe the gathering, structuring and analysis of data in order to present these accessibly as information. This should result in knowledge and, if necessary, lead to action, such as decisions or changes in policy. The application of Business Intelligence helps to have a better understanding of the organization and its processes, and consequently of campaign results. The aim of Business Intelligence is to gain the upper hand in competition and to make the organization function at a more skillful level. Furthermore, Business Intelligence increases a companys value.

Presently, DJs and event producers will have to use data to further improve the clients or customers experience. Communication from context will be crucial. The better you understand the fan or customer as a person, the more relevant and efficient the interaction will be and the more valuable the company.

It is a given that for many the collection of information from a fan base is not the most sexy aspect in the world of EDM. Therefore, at first glance this chapter might be the least appealing to read. However, it is a crucial chapter for DJs and event producers. How to organize a platform a fan base so the collected data produce useful insights?

Three reasons for data collection

Personal contact with fans and listening to their hopes and wishes is what the music business is about these days. Fortunately, this is not hard to realize. Data no longer have to be purchased via a data broker, a company that collects data and sells it at a market price. It is easy to collect data yourself, for example via social opt-in, the large-scale collection and recording of data via email and/or text messages. It represents a vast (financial) value. Here are three reasons why the collection of data matters:

1.) Marketing and communication is changing

Just sending out messages via a small number of channels like traditional print media, television or even internet commercials is nearing its sell-by date. Multichannel and omnichannel marketing or multichannel communication is the name of the new game: various channels are used to send out a message, for instance by referring to a YouTube video in a Facebook post or on the website directing to the Facebook page.

2.) Data-analysis is available to all

New technology enables us to determine where, when and how frequently we request fan and client data; a social opt-in does the job very nicely. It is also possible to map out the online (shopping) behavior of your target audience. New technology allows you to do a comparative study and analyze online transactions. Moreover, it is possible to gain insight by analyzing queries and reviews on social media like Facebook and Twitter. Precision marketing, i.e. using known interests or the location of the fan for targeted promotional messages, will boost your success rate tremendously.

3.) It helps to play into the fans hopes and wishes as opposed to one message to all

Fans are no longer sensitive to one-way communication; they are more than just a receptacle for broadband messaging. They want to engage in a dialog. Analysis of social media conversations and interactions clarifies the wishes of the fan or client.

Dont lag behind the competition

Technological evolution compels DJs and event producers to adapt to the new times. More and more ways of connecting to a target audience are being developed, and DJs and event producers have to go along in order to stay ahead in the game. They have to keep their finger on the digital pulse and monitor the response to content, substituting failing messages for more successful ones. This state of affairs was exemplified at Eurosonic Noorderslag 2015. Students were polled on the dos and donts of online music consumption, data harvesting via the worldwide web and the willingness to pay (more) for music. The results: students appreciate technology, even when it comes to privacy issues. There is just one proviso: it should not be unnecessary or turn into a nuisance.

Business Intelligence and the incitement of communication, marketing and sales activities will have to get a greater role in the organization of the DJ or event producer. It is important to link hard and measurable data and thus create the proper context for outlining and testing the digital strategy. The fan base should be analyzed monthly or annually, depending on the volume of available data and the ambitions. Thus data will become the guide for the DJ’s or event producers marketing, communication and sales activities, or at least hint at the correct budgetary priorities.

An extensive analysis of the available information must be the first priority for the DJ and his management. Data analysis is the only next step that makes sense for, for instance, sales and marketing activities as well as booking agents, merchandisers and sponsor recruiters. Just aggregating hits in search engines, advertising and being visible to the target audience no longer suffices. Delving into data, connecting results and transforming these into a digital strategy that complements the marketing strategyits the new course the DJ and his organization should sail. It is obvious this new course requires a new mind frame. All this applies equally to event producers

EDM and the Digital Domain

Access is data

Record companies, music publishers and DJs are and will be dependent on target audiences. In the digital realm, these are smaller and more specific. Fragmentation and convergence are a threat on the one hand, however they provide new opportunities to connect to and create a bond with the very audience of the artist. Content owners such as the music business publish their content on all available platforms: print, radio, television and internet. The corresponding earning model displays a fragmentation of the sources of income. The function of data is increasingly clear. They are actually the new source of income for the music business. This impacts the business model as described in chapter 3.

For some time now it is evident that access to content is crucial. Looking at late 1990s online services such as Kazaa, LimeWire, Napster and many more, it is hard not to conclude that these services offer access to vast amounts of content and are in fact immense sources of data. All these services invoke the sense that all content (i.e. music, movies, photos and software) is available where they actually just provide access.

Access to digital content and online servicing are the keystone of future earning models for all who are involved in the exploitation of music, or, for that matter, books, daily papers and magazines. This outlook is relevant to many lines of business as well. Sales of physical products to fans, customers or aficionados will decrease drastically. Up-to-date digital fans no longer feel the need to own a hard-copy, as was de rigueur in the age of physical sound (and media) carriers. Take a closer look at portals such as Apple Music, Deezer and Spotify, but also DropBox, Google Drive and many more, and one thing catches the eye: they provide access. Access to music (or other content) replaces ownership of music (or other content) via hard-copy or in digital form. Access means user data. Data are crucial to EDMs business model.

Company value

Data sources of interest are social networks, business transactions, logbooks and journals, research reports and the findings of monitoring and analysis. Getting to work with data poses a series of issues regarding the recording, management, storage, processing and security of data. New opportunities arise, data analysis leads to ground-breaking insights. Data analysis results in added company value.

Goodwill is defined as willingness or favor. In the financial sector, goodwill stands for that part of a companys market value that is not accountable as assets or liabilities: the surplus value of a company on top of its net value. Thus viewed, goodwill represents future earnings of companies, organizations or brands; not yet expressed in the balance sheet, though present in the form of know-how, knowledge, clients, brands, human resources and the like.

The sale of (Dutch company) ID&T to (American business conglomerate) SFX constitutes a fair example of how in-house data can impact the price of a business in take-over situations. By looking at the aspects knowledgeand clientsof the concept goodwill, a new, additional value emerges; it is rooted in data. The introduction of social media seized by ID&T for the recording of all data generated by fans and followers via online interaction and conversation has obvious consequences for the valuation of companies and goodwill. SFX Entertainments valuation of ID&T clearly indicates that the data generated by fans and followers of ID&T events worldwide will add value to the organization.

One can wonder how big a deal the loss of a few data is. Does it really matter? And who will find out? However, the consequences can be disastrous. Remember the news stories on Sony Playstation and its loss of data. Users have dropped the brand and its product after worrying about privacy issues. And it does not stop there. Dissatisfied customers shared their stories, with friends, family, acquaintances and others, probably via social media. It shows how loss of data can result in a damaged image very hard to repair and subsequent financial damage. After all, the companys intellectual property is located in data. Leakage or loss of information will have serious consequences.

Business first

If we can point out one issue that has recently risen to the top of the agenda, it is the understanding that organizations, one way or the other, have to do somethingwith all the available data; both data within the organization as well as data accessible via outside sources. The latter can be used to enhance the profile of fans and clients.

Increasingly, funds are budgeted for the implementation of platforms that enable the contextualization of the data that are harvested from various and diverse sources. The companys business model (with its goals and targets) dictates the nature of the questions this platform must provide answers for. So the system has to be business-driven, not data-driven. This is important. Data for datas sake is not the future, it will lead to loss of focus and confusion. The rule of thumb for building a platform of this kind, a fan base, is business first.

Having data at ones disposal is the key. Having an insight in the current situation is one thing, however, it might be even more important to have at least some semblance of an idea of what the future will look like and how changes in the organizations strategy and policy will impact the organizations results. Data that really add value to the companys business model is not the result of harvesting and analysis, it is the data that help to formulate the companys business objectives and the strategy that will achieve these goals. How will we lead the process? What is it that we would like to know? What data do we need and how must we analyze these data?

EDM and the Digital Domain

How does data collecting work?

Data mean nothing without context. When put into context, meaningless data morph into useful information, suggesting lines of action. It can be used to conceptualize and design marketing campaigns that can be activated automatically or manually. So research what data are available, place them in the proper context so they turn into useful information and take action.

The next step is a full-grown reporting, analysis and dashboard environment. It is possible to execute more complex analyses, tap into new data sources and to link observations or phenomena that appeared to be unrelated. Insights will gain depth and become more valuable to the company. This is the process, but how does it work?

In order to turn data into information that can be used for decision-making, they must be processed via a series of operations. First of all, the data from various sources must be collated and integrated. Next step is the assessment of the data quality: do they warrant any conclusions?

When the data quality justifies further analysis, the search for patterns and links can start by retrieving the data from the database. Terms and names must be standardized, so that data from various sources can be processed as one batch. Furthermore, the information will be presented in a model. This is dedicated software, especially written for reporting and analysis purposes.

The process of improving your data utilization comprises four steps:

1.) Data collection

The first step includes the retrieval of data from various and diverse sources, the so-called data integration or data connection. Think of integrating data from systems like ERP and CRM. This step includes the link-up to outdoor data sets of, for example, ticket providers, merchandisers, music and video services, social media and mail-out lists. Data from all available sources are stored in a data warehouse.

2.) Data transformation

A data warehouse is the place where you store the data you have retrieved from various sources, including third parties. It has several functions: the data are available faster, better accessible, and more uniform. It helps to define entities like customer, turnover, etc.

Both in-house and third-party sources contribute to the data set. All data sources of the organization, think of in-house systems such as supply & delivery, accounting and CRM. Outside sources like social media and ticket providers supply additional data, that have to be integrated in the in-house data in order to produce a uniform (thus workable) data set. The transformation of diverse data sets into one unified collection of data is the second step.

3.) Data analysis

Data mining is an advanced method of data analysis. It involves complementary statistical analysis and sophisticated algorithms. It is a method of processing vast quantities of data that is used, for instance, by the meteorological office in weather forecasting and by insurance companies for risk analysis. It is important to prepare the data and make them available in a single format. This set is the source material for the analysis. Depending on the need for information, the analysis should produce practical information, and, ultimately, new insights.

4.) Presenting the information

The final step is the presentation of the information resulting from the analysis. Obviously, this can be done in a multitude of ways, depending on your needs and business practice. For instance, standardized reports are mailed out at fixed intervals. Dashboards make it possible to present in a dynamic, real time form. A series of reporting environments offer options for ad hoc info presentation and collection.

Tools

The world is more complex than it used to be. In the old days, a hard copy of a report was an export from an application; now front, middle and back offices, applications and link-ups, partners in a supply chain, social media, collaborations with ticket providers, e-commerce parties and shared service centers are all part of our daily business practice. The world is changing faster and faster, so reliable information becomes essential in order to quickly respond and adapt to new developments.

Data offer limitless options, or so it seems. It becomes easier to collect and manage data that become available via a central platform. Software for data analysis is getting more advanced in its application and easier to handle for the user. It helps to reduce time spent on data collection, so more time is available for analysis of the customer journey.

The customer journey is the route fans or clients travel in order to, for instance, access content on your website or do a purchase in your web shop. It exemplifies how fans or clients orientate, what information they use from which sources, and how they eventually select. When you know your fan or clients customer journey, you know how to service him.

In order to combine data from various different sources (clients data base, social media and web analytics), departments and suppliers have to look beyond the digital products that are their first responsibility. The customer journey of the fan or client is not a straight line from A to B. Customers use apps, websites and social channels, and switch between offline and online. All these digital tools have to be attuned to lead to a successful customer journey.

Are old-school analytic tools still viable in the current phase of digital evolution? The answer is no. DJs and event producers can no longer rely on traditional data storehouses. For more and more companies, the norm is an infrastructure that works with unambiguous definitions and fully exemplifies the customer journey. Nowadays, DJs and event producers assemble data from all channels (Google Analytics, ticket sales, merchandise sales, music services, social media, newsletter files, single sign-on modules and all other available relevant channels) and handle these in a unified fashion.

Handling in a unified fashion implies that you use unambiguous definitions, for instance for the moments of contact with a fan or client. One central dashboard displays the complete customer journey, which comprises multi-channel communication and the aggregate of moments of contact.

Traditional systems for web analytics, such as Google Analytics, are not designed to produce or contextualize raw data. It is a stand-alone service, which processes and optimizes data, resulting in a chart or graph. This speeds up the process of visualization, however part of the information is lost. This exposes two drawbacks. Firstly, the quality of the data that you want to be processed by your contextualizing platform is sub-optimal. Secondly, traditional systems are not designed for fast output. These drawbacks disqualify traditional web analytics systems for inclusion in your platform.

Layout and management

You have to focus on the following aspects regarding the layout and management of an adequate information platform.

  • Presentation
  • Manageability
  • Scalability

The presentation aspect looks at how easy and how quickly the information is available. Manageability looks at how easy it is to add new sources at affordable costs. Scalability looks at the volume of data that can be processed at fixed costs.

Setting up your information platform is not that complex anymore and, moreover, it can be done a lot cheaper than it used to be. This trend is the result of the arrival of reliable cloud services. The Platform as a Service (PaaS) concept offers options for data storage and data processing without having to manage the required hardware. Furthermore, you do not have to concern yourself with hosting the platform. Use of the platform is available at a fixed price, frequently a monthly fee.

Fanalists, is an example of a non-residential cloud platform. It stores data and processes data into useful information.

In practice

The use of data for marketing, communication or sales purposes opens up various possibilities. The necessary data will be supplied by the DJs or event producers ecosystem and even beyond. The use of tags or parameters can focus on socio-demographics, area code, or the individual. Focus on geographic tags is usually not related to an individual, but aims for a particular target group. Data enrichment with regard to the target group is generally used to improve the data set for marketing and sales activities. So what to do? The key words are: validation, enrichment, profiling, segmenting, matching, locating and decision making.

  • ValidationOne of the main problems in making contact with fans and clients is the quality of their data: are they up to date? Mutations that are not registered or recorded will quickly pollute a data set and make it obsolete. It is therefore important to safeguard the condition of the data set, it should be optimum. After all, it is the data that add value and control costs. Save money and operate more efficient by keeping the data clean, complete, accurate and up to date. Delete duplicate data, and enrich accurate data; try to complete missing data.
  • Enrichment If data are missing, it is often possible to complement (enrich) the data with information that is available via social media. Subsequently, you can start profiling.
  • ProfilingThe individual is the basis for the assembling and linking of all data that can be retrieved from the various sources: client files, newsletter files, social media, etc. This should make it possible to display all characteristics of an individual with just one click. Profiling is necessary for two reasons. Firstly, it makes it possible to compare all sorts of data. Secondly, it does not discriminate between what data sets could be useful and what not, so you will not narrow down your choice of data sets to use.
  • Segmenting There is no longer an average fan. Target groups often can be broken down in various clusters that ask for a varying approach. These can be pinpointed by way of segmenting: fans and clients are represented by easy-view charts or diagrams that break down the group into even segments.
  • MatchingThe perfect profile does not exist either, so dont define your query too narrow. For instance: when the profile of the target group reads like Female, 27 years of age, credit card, higher educated, interested in EDM and technology, it is possible that a 27-year old middle educated woman might be interesting too. It pays off to include in your search individuals that only partly match with the perfect profile.
  • LocatingIt is possible to visualize target groups for an area, say the Netherlands, and see where fans and clients are living. It can help an organization to set up an outdoor campaign, or attract fans or clients to a nearby event or festival.
  • Decision makingAn interesting insight is to what extent the fan base of real people matches with the supposedly perfect fan profile. Your fans could be females in the age bracket of 40+, not what you would have anticipated. You can apply decision trees to uncover characteristics of this type. A decision tree is a series of questions for the fan to complete. Each follow-up question is dependent on the answers to the previous questions. Applying the decision tree to the collected fan data will help you to categorize your fans. The resulting tree effectively shows the characteristics of your fans.

Summarized

Business Intelligence should be integrated in the daily business of a DJs or event producers company. It enables them to make better decisions and to search for new earning models. This can only be practical when data analysis is simple and feasible, not limited by technology.

Technology is not the starting point of data analysis. These are the people who do the analysis and the business objectives of the company. You should look for a method to collect data that fit your organization and its environment. There are various ways to store data collected from your website and social channels, and different companies use different methods. Third-party platforms are often appropriate, however, at times a do-it-yourself solution works as well, if not better.

Keep one thing in mind: your solution of choice should match with the existing infrastructure. Often, an infrastructure is capable of processing and storing data. If that is the case, it is relatively easy to extend your infrastructure. Next comes the choice between data hosting on your infrastructure or via a cloud service. The latter option is preferable, since it allows you to access the information wherever you are (and DJs often do their bit of globetrotting).

Use whatever you need in terms and analytics (tools), and add whatever is missing, step by step. The adoption will increase when your choice is implemented in the existing environment. It is often not necessary and even needless to build a new infrastructure. It makes more sense to invest in a data warehouse (the location of data storage: in the cloud); in data mining and the processing of raw data into useful information for reports; in dashboards and publishing tools.

The use of data for marketing, communication or sales purposes offers various possibilities. The required data are sourced from the DJs or event producers ecosystem and beyond. Used in this way, the data should be: validated, enriched, profiled, segmented, matched, located and supporting in the process of decision making. It creates the proper context and significantly increases the possibilities of relevance, reach, interaction and transaction.

After you have outlined the profile of your fans and clients, it is possible to engage in meaningful interactions and become relevant (again). The challenge is to work out the proper context by means of automated analyses. If adequately executed, it will avert, for instance, your fans and clients becoming annoyed by unseemly messages or content. Annoyance can undo the interaction and its value, the same as relevance can create value.

The data set of a DJ or an event producer is not a static entity, it is a dynamic environment. It is not a product, it is a process. It needs maintenance. It is open to continual optimization. The daily use of data requires the organization to function as an analytical company that views data as an asset, and considers analysis to be a core competition. The key to success is to organize the handling of data efficiently and effectively, and to select the right people within the organization who can improve this competence continually.

Go to the next chapter

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9. Company value in the digital domain

By regarding the internet ecosystem as a business ecosystem, one actually sees the emergence of new value models in the relationships of all parties that make up the internet ecosystem.

Estimated reading time

The internet ecosystem is in fact a business ecosystem as defined by James F. Moore in the 1990s. Moore compared business networks to biological ecosystems. He noticed that successful brands, companies or organizations used survival strategies that can be found in natural ecosystems. Moore defined the business ecosystem in his book, ‘The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems. By regarding the internet ecosystem as a business ecosystem, one actually sees the emergence of new value models in the relationships of all parties that make up the internet ecosystem.

Innovation really is only one way to realize an above average growth of value of the company, as opposed to turnover. It means you have to constantly find new and unique ways of identifying and satisfying the needs of fans and clients. This is the reason why successful internet companies such as Google, Apple and Amazon not just service the ever increasing internet population, but invest billions of dollars in fundamental innovation. It gives them room to maneuver before the law of diminishing returns kicks in, Annet Aris, who lectures at business school Insead, writes in Het Financieele Dagblad, the Dutch Financial Times.

Integral

The digital domain and social media offer the DJ excellent opportunities to monitor and analyze his reputation, how popular his music is in terms of clicks, likes and downloads, how popular his concerts are in terms of ticket sales and on-line views, and how the competition is doing. Every marketing and PR consultant will assent to the notion that reputation is everything. No matter how good your music or your concert is, negative reactions on socials networks will damage your reputation. It works the other way around too: an average track or gig that triggers a tremendous response can earn you big money.

By closely monitoring and managing your online reputation, it is possible to deflect negative reactions in time. For instance, a quick response to a comment can result in wide approval and, as a consequence, digital media value. Before you know it, you have a new fan who can promote your music or gig in his network; who either listens to your music online or downloads your music. Obviously, the same applies to festivals and events.

The DJs or event producers value growth comes from the integration of the digital strategy into the business operations. After all, the entertainment business has evolved into a digital business, now fan contact and client contact has moved predominantly into the digital domain. The companys value increases by identifying and fulfilling the needs of fans and clients of the DJ or event producer. The potential value of a DJ or event producer can be found in the internet ecosystem. The platform outlined in the previous chapter will map out the online behavior and the needs of your fans and clients, as well as your digital reputation. Currently, these insights to translate to media value, brand value and potential company valuein short, to currency.

Goodwill

So far, your biggest asset as an entrepreneur is probably your brand name. Brand value (or brand equity) is the financial value of the brand. Usually it is assumed that the brand value equals the future cash flow generated by the brand. Your brand is not (yet) part of the balance sheet, however it represents a hidden value: the so-called goodwill. In the financial world, the concept of goodwill is used to indicate the companys value that cant be expressed in terms of assets and liabilities.

Usually, goodwill becomes relevant in the case of a business takeover; accountants and bankers view goodwill as the surplus value of the companys net worth. In this view, goodwill represents future income for companies, organizations or brands; not written into the balance sheet, yet present as knowledge, clients, brands, personnel, etc.

In regard of the aspects knowledgeand clientsof the goodwill concept, a new and important added value emerges. It is based on data. The arrival of the latest social media trends and technologies creating opportunities for DJs and event producers to store all data generated by online connections and conversations creates a new perspective on the matter of how to value your company. The discounted cash flow calculation will remain relevant. However, valuators, ‘EDP-auditorsand transaction managerswill increasingly investigate the structure and operating procedures of social networks, as business consultant Pim van Berkel poses on Doelands Digitale Wereld.

Top of mind

The digital domain is all about creating content and sharing content. It demands the creation of appealing and interesting content, which is shared via social media such as Facebook and Twitter, and by publishing posts on your website. Pro-active social media behaviorwhat can it mean to you, the DJ or event producer? Publishing a non-stop stream of messages that show up in the followerstimeline is an option. Your name will be published above these messages, so followers will see it time and time again. This creates brand awareness, which increases your profile (top of mind awareness) among followers. They will think of you, rather than the competition, when they are looking for a DJ or an event.

You probably learned in school that it is easier to remember foreign words when you repeat them several times. It is the way our brains work, how it processes information and stores it in our recollection. Your sensory memory registers visual or audio impressions. Relevant impressions, for instance a word, are stored in the short-term memory, which holds it without rehearsal for just a few second to up to a minute at most. By repeatedly hearing or seeing the word rehearsing it it will be held longer by your short-term memory. When it is repeated more often and for longer periods, the better the chances are it will be transferred from your short-term memory to your long-term memory.

The very same process applies to the (brand) names of DJs, festivals and events. You see a name, it is held in your short-term memory for a brief while, but without repeating (rehearsing) it will disappear. Social media can ensure that the (brand) name will be seen by the fan or client time and time again. It is rehearsed by the fan or client, so to speak, which makes the transfer from short-term memory to long-term memory possible. This, in return, makes it easier to remember the name and retrieve it from memory.

Brand awareness is important to every DJ and all event producers. Lets imagine DJ X. He is active on Twitter, so his (brand) name shows up on the timeline. One day, an upcoming event is looking for DJs. The event producer thinks of DJ X, whose name he knows from Twitter, for the (brand) name DJ X is stored in his long-term memory and thus top of mind.

Big brands advertise their (brand) name almost on a daily basis, mindful as they are of the old saying: repetition is the power of advertising. It enables brands to become top of mind.

Commitment

Currently, top of mind is best rendered by engagement via the social media on offer. Engagement is what Facebook is all about. But what is engagement? Engagement can be best described as involvement. A fans every interaction with a message published on a DJs Facebook page, can be seen as involvement. Clicking on a link to view a photo, liking a message, posting a reaction or a comment, or sharing a messageall these responses indicate the interest in a message.

Interaction is important to the majority of the DJs fans. They like a message on his Facebook page and show an explicit preference. After interaction follows activation, this is the next step for the DJ. This group of (activated) fans wants more interaction than just liking a DJ on Facebook. They want to react to postings. This type of fan wants to commit to the DJ and is ready for action. You can trigger their response, thus activating the fan.

American research makes clear that involved fans are more transaction-prone. Consumers who connect to companies via social media and become followers, turn out to be loyal customers, The study shows a correlation between social media and turnover. On the basis of research, the University of Buffalo (NY) School of Management maintains that consumers who participate in a companys social media activities visit the (physical) shop more frequently. Based on the same research, Ram Bezawada, assisting professor at Buffalo University, poses that these customers spend on average 56% more money than customers who do not engage in social media-interaction.

Moreover, the study prompts Bezawada to conclude that companies should aim (on social media) for personal interaction with customers and encourage him or her to contribute (to the interaction). This is labeled customer engagement. The analysis of customer behavior generates keynotes for customer relations, which enable the company to timely respond to signs that the customer is ready to make a purchase. Ultimately, this leads to a higher conversion. The same effect has been demonstrated for the correlation between social media buzz and music purchases: social engaged fans buy more music of the artist they follow. Mapping this involvement will increase the value of brand and company.

Ratios

The aim of being distinctive, from the road to the top, is to seize a top of mind-position and to maintain it. Presently, it is possible for the DJ or the event producer to observe online what the competition does and how well (or ill) they do. Top of mind is demonstrated very acutely by fan and client behavior on social channels such as Facebook, Twitter or Instagram. By using engagement and interaction ratios, it is possible to calculate how involved a fan or client is with a DJ or an event. These are the so-called new benchmarks.

The benchmark concept originates from the domain of quality control. In its literal meaning, it indicates a point of reference for land surveyors. Used figuratively, it refers to a procedure that makes it possible to compare the performance of equipment, systems of organizations. Organizations use benchmarking to improve their performance, to account for their actions and to facilitate inspection.

Basically, benchmarking entails three steps:

  1. Comparing in-house processes and performances with those of others;
  2. Analysis of the results of step 1: why do distinct processes produce different outcomes;
  3. The information that results from step 2 is the basis for improvement of the processes.

You, the DJ, should meet the challenge and benchmark yourself. View the competition as an imaginary enemy, striving for the number 1 position in popularity polls. It should be your aim to beat your competitors every day of the year. The way to achieve this, presently, is to bind fans and clients. Naturally, this is fully applicable to festival and event producers.

Binding

What is the answer to the question: How do I become top of mind? In other words, how to influence the subconscious in a deliberate, conscious manner? In practice, this means that your tweets or posts should contain relevant content. The fascinations of fans and clients are relevant as well. A fan or client who is interested does not need repeated messages the way a less interested fan or client might in order to bring the point across. Chapter 5 outlines a solid content strategy that will help to bind fans and clients.

The top of mind-position of a DJ or festival expresses to what extent the DJ or festival is bound with the environment. Successful DJs and festivals are in a position to significantly influence persons concerned via their personal communication tools, their products and their behavior.

Know who your fans are and create content that is interesting to them. Focus on interaction. Informing them and keeping them pleased is another priority. It is all about being committed to fans and clients. Know what is important to them and meet their cravings. Enter into conversations. Show them that you follow them too. This will lead to a higher conversion. In this way you will boost the commitment and thereby loyalty and therefore viability. Remember this: loyal fans are the lifeblood of your career, the very reason that you have a career at all. It is them who pay your bills.

Value

What is your value really? How many fans or clients would miss you if you were not around? Do you know what you really mean to your fans or clients? Have you loaded your DJ persona? What communication tools do you apply to become top of mind in the mindset of your fans and clientsand to keep that position? How do you employ social media? Have you freed budget for that purpose? In short, what are you doing to raise your brand value, and thus, your company value?

All the while a digital media value for digital (social) channels is beginning to emerge; it represents the value of messages, tweets, updates, retweets and interactions that include your business partners or sponsors. It is important to compare your media value of your personal digital channels to traditional media value. The unit of measurement for traditional media is circulation or GRPs. Until recently, new media used clicks, impressions and such as the unit of measurement to establish its circulation or reach.

In advertising, media expenditure is (slowly) shifting from television to the internet, however, the challenge is still how to value (in euros) the various digital channels, in particular when you want to measure all possible actions of fans and clients. Digital channels in this context mean all your personal channels: websites, email, all social channels such as Facebook, Instagram, Twitter, YouTube, and, for instance, personal digital radio channels.

A business model that relies on sponsoring does well to present the DJ or the event as a media platform that has a significant reach and a ditto impact; a platform that is proven to be an effective tool for communication. All this matters to partners who will benefit more from digital channels than from traditional media: radio, television and print.

Own media

The term owned media is self-explanatory: media you manage yourself, such as your website or Facebook page. There is no third party that tells you what you can or cannot do: you are in charge. An excellent example of owned media is the DJs or event producers Facebook page. This Facebook page represents media value. Advertising a brand via paid media still carves a large slice off any marketing budget.

Conventionally, advertising value for radio and television is calculated by using Gross Rating Points (GRPs). 1 GRP is 1 percent of the viewer (or listener) ratings for that target audience. GRP gives the relative number of viewers (listeners); the absolute number depends on the size of the target audience group. The aggregate of GRPs equals the gross reach of an advertising campaign. GPRs are calculated by multiplying the net reach with the Average Contact Frequency (ACF). The ACF of a television campaign represents the average number of times a viewer has seen the commercial. You can reverse calculatethe Average Contact Frequency by dividing the GRPs (gross reach) by the percentage of the net reach. The net reach is the percentage of viewers that has seen the campaign (channel, show) at least once.

The digital domain is the home of various other advertising values. Pay Per Click (PPC) is an advertising model that is used for search engines, advertising networks, and content-driven websites and ditto blogs: the advertiser pays only when the visitor clicks on the ad and visits the advertisers website or homepage. The advertiser pays a minimal fee per click, the Cost Per Click (CPC).

Cost Per Mille (CPM) is the fee the advertiser pays per thousand views of his ad. Furthermore, Cost Per Action (CPA) is the fee for the owner of the website that publishes the ad; the fee is paid for every sale or information request the ad produces. Cost Per Action aims at the highest conversion possible. Cost Per Click generates traffic.

When it comes to getting a message out to a target audience, company managers usually have a better understanding of value in terms money than of value in terms of clicksor actions. There is no clear-cut answer to the question: What is the value of a target audience that can be reached via a Facebook page? It is still not easy to fix the value of the target group and the direct link to fans on a Facebook page.

Several well-known approaches of traditional marketing are applicable to social media. One of those is the advertising value. It is possible to estimate the number of people that can be reached via a Facebook page. What would the costs be if you want to reach as many users as possible via traditional advertising, say banner advertising? The answer is: multiply the number of individuals you want to reach with an average CPM. This method allows you to calculate and to compare the advertising value of messages published on a Facebook-page. It works for other networks too.

New media-value

The advantage of working with a digital medium is that it is relatively easy to value specific behavior of fans or clients. This is a big step beyond the current reports on visiting and buying behavior that focus on service, inspiration, or sales. Their goals eventually are service, inspiration or sales derived from a consumer centric selling model. The Media Value Report focusses on explicating the fans interaction with your brand. This is diametrically opposed to passive media consumption, like noticing television commercials. It is a more relevant manner of measuring the effect of a digital campaign, helping to improve the collaboration with sponsors and partners with regard to digital media. You value and validate joint campaigns, in order to optimize the campaign by attuning it to the target audience.

Social media can be seen as a collection of engagement types: the degree of commitment, interaction and conversion. All these interactions and conversions are acted out by the participants via actions on various (social) channels, like clicks, likes, comments and posts. You can add them up, after assessing all interactions and conversions, normalizing these for the various (social) channels, and giving each its own value. This way the overall value of a campaign emerges, giving direct insight into how the value breaks down between the various channels.

The most important challenge is the assessment of a reliable media value per action. New parameters such as Click Per Comment(CPc), Click Per Fan Contact(CPFC) or Click Per Retweet(CPrt) come into being and have to be (re)calibrated. You can do this by using known advertising costs of other platforms and social media. IAB-sanctioned standard rates, plus reports from various agencies, are useful too. The table below gives a clear example.

Valuing the company

Like any company, a digital networks corporate valuation is determined by its ability to generate revenue from the network. Many networks receive money from advertisers, yet other networks rely on unique models based on functionality or the value of virtual commodities and services. The final value is established by issues such as: how much do advertisers pay per user; how much users are prepared to pay for premium services; and how much turnover is generated through third party-platforms, like e-commerce (tickets and merchandise), streams and downloads.

You, the DJ, are a company. The arrival of the latest technologies and trends offering DJs the opportunity to collect and store all data generated by online connections and interactions makes it obvious that the notion of corporate valuation, and therefore, your DJ company, is changing. With a little effort it is possible to determine the fans value. What is it that you want to value? There is more than one way to do so, and from various perspectives. Valuation in the digital domain must be looked at from the financial, marketing, media, (e)commerce, or customer service point of view.

In a business model that relies for an increasingly important part on sponsoring and advertising, it is vital that you, the DJ, show that you are in effect a platform or network that boasts a significant reach and impact, available for effective campaigning. We have already seen what content development yields in terms of earned media (i.e. your personal networks within your ecosystem) in relation to the purchase of reach and paid media (i.e. traditional media, plus the rest of the internet). This gives you, the DJ, the accurate input to determine your value for the near future, and thus your market potential.

It really all comes down to fan behavior. When private companies, like Facebook and Twitter, go public, investors are keen to know the value of each user in relation to certain brands. The information users leave behind in the digital networks is of enormous value. Before, it might have taken years to collect and analyze this information, while some information was not available at all. Researchers and marketing managers meanwhile have come to realize that preferences and behavior are detrimental factors for understanding the consumer, and they are willing to pay for this information. In this way Facebooks and Twitters stock value was stipulated.

New way of valuation

Financial advisors have to evaluate why fans and advertisers spend this amount of  time and that kind of money in your network, before they are able to stipulate the proper parameters for the networks valuation. Remember this: you, the DJ or event producer, are a network, even if the fans originate from beyond your website. Current technology makes the value of owned and earned media (i.e. your personal internet ecosystem, your personal channels, in short, your personal network) much more transparent and much easier to map and measure than in days of old.

This new way of valuing a company implies a new policy for you, the DJ or event producer. Much more than before, data from various sources and various linked applications will be reviewed. When you are able to convert these data into digital media value and direct transactions (such as ticket sales and merchandise sales, paid-for music downloads and music listening via streams), these data can be included in the corporate valuation.

Digital networks are networks which users rely on recommendations for products, music, sport, and other topics they are interested in. The DJs network is one of those topics. As more and more platforms begin to publish photos and link these photos to various options, it becomes possible to measure and value the visual content as a kind of word-to-mouth advertising. It is clear that eventually the digital networks of DJs will be used more and more for content marketing; advertisers will deploy these networks for their marketing efforts.

So each fan is more than just a potential new visitor to your gigs or a new set of ears for your music. You can offer direct access to the fan in your network to a wide range of companies, brands and media. As soon as you realize that your personal digital network (i.e. your ecosystem) is a hotbed of information a very special and rare volume of market and consumer data it becomes easier to value your networks, that is, your ecosystem, which, at first glance, appears to be a time-consuming pursuit. Thus you learn your net worth as a DJ.

EDM and the Digital Domain

SpinninRecords and ID&T

In 2014, DDMCA reviewed the data generated by the various social media channels used by SpinninRecords. It is evident that SpinninRecords has built a multitude of fans and followers on several social media networks. However, the collected SpinninRecords data, as published in the report, show that the label has no relationship with its supporters. The SpinninRecords organization is mainly active in terms of receiving messages and data, yet it appears to be reactive in building a relationship with its supporters. Fans actually want to be engaged with the brand. They long for a relationship.

Creation of value by means of the internet and social media comes down to being able to start, disperse, maintain and optimize current and new digital relations on various internet platforms where (in)directly and in a provable manner additional and prospective net cash flows will be generated.

The words start, disperse, maintainand optimizerefer to the costs of labor and means. Moreover, it all revolves around digital relationson various platforms. The operative word is digital, it sets these efforts apart from mailing lists or other traditional marketing activities. Obviously, as is the case with offline marketing, various digital platforms may overlap and some followers may drop out, the so-called churn rates. People on Twitter may be active on Facebook too, and vice versa.

By improving the recording, structuring and analyzing of the collected data, it is possible to deploy these data more purposefully. Thus an additional earning model can be realized for SpinninRecords, which will further increase the value of the brand. DDMCA has examined and determined that an additional 7.5 million Euro (estimate for 2013) and 40 million Euro for 2016 (see appendices). could be generated from the data of SpinninRecordsdigital platforms. The additional earning models originate from making the context of the data available to commercial parties eager to be present in SpinninRecordsecosystem. This increases SpinninRecordscash flow. Moreover, it benefits the value of the concept by creating potential goodwill.

Integration of brands occurs in the networks of ID&T festivals and brands. By using ones personal domain and social media networks in an advanced and thoughtful manner, it is possible to create new and digital profiles from the data of ID&Ts supporters. In addition to demographic data, interest data originate, as outlined in the paper, The Voice an additional earning model. By simply listening to the supporters, it is possible to establish what ID&T fan or follower is interested in what product group.

The paper Does data finally have a price?’ points out that data can be valued and linked to a price. The paper delves deeper into the acquisition of ID&T by SFX Entertainment. The valuation of ID&T by SFX Entertainment anticipates clearly on the notion that the data generated by future ID&T festivals and events will benefit, i.e. create value for, the organization, worldwide. The acquisition fee, rather steep at first glance, could in theory be recouped in 2.5 years, as long as a thorough and accurate social media and digital strategy is secured for the whole company.

The next step ID&T should take is to collect and to analyze the data in order to formulate a follow-up strategy or a completely new strategy that aims to increase future revenue. Fashion brands like Diesel, Replay, Levis, Denham and Dolce & Gabbana can be linked to ID&Ts supporters. This applies as well to telecom providers such as Vodaphone and T-Mobile; beer brands like Heineken and Budweiser; soft drinks such as Coca-Cola and Pepsi; and tech brands like Apple and Microsoft.

In fact, it is moderately easy to distil from the relationships with its supporters which brands could be interested in the integration with ID&Ts supporters (see: The matching of artists and brands on #D2W as well). Obviously, this comes at a price. A quick glance at some numbers published in the paper, it can be established that the visibility on Tomorrowlands Facebook page represents a monthly advertising value of some 350,000 Euros. Just imagine what Tomorrowlands total ecosystem could be valued at.

Data are the new gold

So data are the new gold. Data are the new revenue generator for DJs and event producers. Fans and clients are the biggest trump. The challenge is to stay in touch and maintain the relation. The data thus generated are invaluable. You lose value by not being able to record and store data, data you therefore cannot use. Presently, the biggest barrier for DJs and event producers is a lack of insight.

Without decent and trustworthy information, a company is ill prepared for proper decision-making. However, the tempo of the current business competition and internet ecosystem demand agile responses. Data are an inexhaustible source and offer enormous opportunities for gaining (critical) insights. In fact, this is the moment to tap into, cultivate and refine the powerful possibilities of this essential, valuable source. In this respect, it compares to an equally important economic resourcecrude oil.

DJs and event producers will have to map out and validate the data traffic of the inside and outside digital highways. An important aspect is: will the digital strategy produce a direct cash flow or direct financial gain?

It is clear that online marketing via the internet ecosystem will produce cash flows that are easier and better to monitor than offline marketing can, for instance by direct mail or utilizing the connection to a fan or client). Moreover, it is quite possible that the reach will increase since fans and clients share their social lives via social media, so you get through to not just the user but his (or her) friends and networks as well. This significantly increases the potential profitability. Furthermore, current digital technology makes online marketing more transparent and more measurable than before. The advanced tools and platforms that will support your online marketing efforts are described in the previous chapter.

We are in the midst of a digital revolution, sometimes called the second industrial revolution. Although discounted cash flow will remain the basis for company valuation, it is clear that current business practices of company valuation are under review. Past results and yesterdays figures are no guarantee for future results, increasingly less so. The DJ or event producer who has his internet ecosystem in order can strike gold. He has to care for his fan and clients relations, and secure and capitalize on data.

A solid digital strategy adds value

In The Netherlands, over nine out of ten people (92 %) have at least one social media account. Worldwide, the numbers are staggering: Facebook alone has 1.393 billion users (March 2015). Your fan base i.e. the platform outlined in the previous chapter will enable you to reach fans, clients, members, subscribers and entrants, who can be separated on the basis of geography, gender, age, interest and more in-depth profile characteristics. The better the profile, the more valuable your network is. The more fan and client data, the more value your network can generate.

The more relevant your networkscontent, the more appealing it will be to the users. Its most important aspects are engagement, interaction, and functionality; these have to be up to par. We all are familiar with examples of click-and-win, like-and-win, comment-and-win-nothing, share-and-get, and similar campaigns that help to spread the content among the fans or the clients friends in order to optimize the reach. Unfortunately, this type of activities corrodes the quality as well. The networksrelevance, fun and entertainment value decreases and will eventually disappear. After all, the less fun a networks becomes, the quicker the current fan or client opts for an alternative network.

It is the objective of the digital strategy to lift your organization to a digitally mature level by which value is added. Surely you, the DJ or event producer, are a business. By growing to a digitally mature level you strengthen your competitiveness because:

  • Revenue increases through higher and better conversions;
  • Efficiency cuts costs, so profit increases;
  • Risks are diminished via a better relation with (more control over) fans and clients;
  • A new reality is created

These results are pillars in the creation of company value, according to Dave Chaffey (professor and author of the paper Business Information Management – Improving Performance Using Information Systems, with co-author Steve Wood) and Don Marchand (professor and author of Making the Invisible Visible How Companies Win with the Right Information.

The business world is increasingly becoming aware of the understanding that it is not physical capital, but knowledge, insights and ideas that really determine the value of a company. Apparently, it is still not obvious for DJs and event producers to make the fan or client relation via various contacts (including direct contact), sources of data, interactions, all sorts of scores or whatever you have central to the company value. Yet it is the only way to realize an above average growth in value (as opposed to growth of turnover): constantly finding new and unique ways to identify and fulfill the fans and clients needs. This is the new business model for DJs and event producers.

Knowledge is the foundation of present-day business conduct. In the past, a companys value was determined primarily by physical capital, such as machinery, hardware and means of transport, presently data-generated knowledge is becoming the most important asset of many a company.

Data that are not stored in your personal fan base, but is saved in the networks and services of third parties, is crucial; to many organizations, however, it is not easy to get your hands on these data. This means that your company loses part of its value when a network is lost to the ecosystem, like the demise of Hyves, the local equivalent of Facebook in the Netherlands. That is a waste and a pity. By investing in the obtaining, reserving and utilization of data you can secure the base of your company and underwrite its continuity.

Go to the next chapter

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