RECOMMENDATIONS vs CONSUMPTION

Chris Anderson, editor-in-chief of Wired Magazine published The Long Tail article in October 2004 to describe an statistic feature of some statistical distributions that affect to current and future business models. Since then, traditional marketing field has became totally desperate in order to adapt their marketing structures and thinking to this model that “promises new millions of consumers”.

The main idea of the “Long Tail” concept breaks the traditional 80-20 rule, also known as Pareto’s principle in which for example, music industry was based in the last years. This rule suggest that markets will create a certain degree of inequality by favoring the upper 20% of the items (the famous “hits” we had became saturated of) against the other 80% (which are the long tail). Now, in a digital environment, all those 80% items that had not demand in the past could be valuable again through the New Media Marketing. It suggest that traditional advertising is losing its influence on consumers because a growing trend of them make purchasing decisions off Internet research and referrals.

Social networks are the tool for extending the reach of marketing to the low-frequency, low-intensity consumer in a cost effective way.

A large number of microentrepreneurs around the world, particularly music industry entrepreneurs, use social networks like Facebook to communicate with their suppliers, clients or to gain visibility for and sell products and services. In response to this growing demand, Facebook for example, has launched a service to help small entrepreneurs promote their businesses through social networks. So, we can argue that while we are chatting with our friends or sharing some photos of the last weekend in Facebook, there are a lot of  anxious product strategists looking for videos and information like this in order to attract our attention to their products.

One of this product strategist, Adam Richardson, argues that: ” A large shift is going on in our connected society: we are leaving the Information Age and entering the Recommendation Age. Today information is ridiculously easy to  get; you practically trip over it on the street. Information gathering is no longer the issue -making smart decisions based on the information is now the trick… So recommendations act as shortcuts through the information mass, getting us to the right, or “right enough” answer.

The Long Tail concept is based on Amazon.com recommendations. On line bookseller software, notted patterns in buying behavior and suggested that readers who liked “X” also would like “Y”. As Chris Anderson claim in his article:”Forget squeezing millions from a few megahits at the top of the charts. The future of enter entertainment is in the millions of the niche markets at the shallow end of the bitstream”.

Therefore, there is a change in how digital cultural marketing is acting in the Social Network Environment. After all, it seems a good advantage for changing the traditional range of cultural products that people were used to receive from the traditional model. But, are we working (being part of the Social Network) for “them” (entrepreneurs with private interests)? and It is the recommendation system a good option to spread the sub-culture that has been hidden for so long?

In my opinion, there is a possibility for general matters social networks like Facebook, to became a place for mass media advertisement, considering the great effort they do looking for companies to join them because of their 100 millions of people enrolled, great excuse. But, only new networks that are aiming to be more niche and specialized have more chances of becoming a real social network for sharing information through recommendation. The crowds of customers, users, small business who inhabit the “long tail” distribution can perform collaborative work and now they are the new and shopisticated target for the sellers. And of course, they all are spending several hours a day on line inside of the their favourite social networks…

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Music Industry in Brazil: cases of study

Trama Virtual (TV):

This is a Brazilian net label founded in 2004 as part of Trama, one of the largest recording studios in Brazil. Trama Virtual is a web-based distributor for independent musicians. Trama Virtual allows free music downloads and pays artists directly through advertising revenue from different sponsors that change every two or three months; Ray- Ban Sunglasses, Banco Real or Sol Brazilian beer are some of them. Trama Virtual has uploaded more than 35,000 songs by 14,000 Brazilian artists. Its database is one of the biggest about Brazilian music. The web has around 150.000 downloads of songs or videos every month. The interesting thing is how they have created a business model that makes everyone win: users, artists, and sponsors. Every month the sponsor total sum is divided among the most popular artists who have been downloaded. The total amount of money earned by sponsorship and the download numbers are showed on the website permanently. The new model for music business is a good idea in order to pay the creators of the cultural product. It is not a great deal because the amount paid to them is not so much, but is a good option for independent musicians for distributing their works.

Techno Brega:

This Brazilian network brings together Brega-style DJs and musicians who perform at parties and weekly concerts to finance their operations. They distribute their music to make their network known and give street vendors the rights to sell their personalized CDs. At a mere US$1.50, the CDs are highly affordable by the local population, thus providing greater access to the music at a grassroots level. For independents, they enjoy widespread popularity. Techno Brega reflects the philosophy of Brazil’s Ex-Minister of Culture, Gilberto Gil, who supports new policies that have made copyright more flexible, such as the Creative Commons, a free tool for licensing intellectual property. Since Techno Brega does not have a Website, the network has not been able to expand further.

Tecno Brega and its alternative business model has emerged in the city of Belem in Brazil. This parallel music industry has been active for years and has achieved great success. Several hundred new Tecno Brega records are produced and released every year by local artists, with both the production and distribution-taking place outside of the mainstream music industry. The tecno brega model is simple: the music lies outside the realm of traditional copyright and is used as a method of marketing events. Every weekend the “sound system” parties attract thousands of people to the outskirts of Belem to listen to the Tecno Brega “sound system” weekly parties. The parties are advertised by the distribution of the music itself. The numbers are incomplete, but the Belem scene alone brings in yearly revenues of several million US dollars.

The goal is not for artists to make money on conventional CD sales. Instead, the price charged works exclusively as an incentive for the local vendors to sell the CDs and in effect market the tecno brega parties. The artists thus make money through innovative business models related to the sound system parties. One such example consists of artists recording their live concert sets at the parties in real time and then selling the recordings at the conclusion of the event. This enables the audience to go home with a souvenir of the concert they have just attended. Another technique utilized by the artists is to acknowledge the presence of various people and neighborhoods in the course of the live presentations. Hearing such acknowledgment is greatly valuable to the audience– naturally people want to hear a “shout out” to them, their friends, or their neighborhood. As a result, thousands of people buy copies of the live CDs to have a permanent memoir of this form of homage.

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