History Lessons

Posted by Pinky on Jan 20, 2010 in Blog | 4 comments

I had the privilege of watching Steve Balmer’s presentation this morning at the Nashville Technology Council’s annual membership breakfast.  With MacBook in hand, I arrived curious to know what “the other Steve” might have on his agenda for this geeked-up gathering.  The short answer is “future tech;” where Microsoft is and where we as a society are heading.  There were a few impressive technologies demonstrated, but most of us were just proud to be taken seriously by the big guy at Microsoft.

The appearance was in perfect contrast to yesterday’s flare-up between web-sensation Ok Go and their record label, EMI.  The band rose to prominence in 2007 with a mega-viral video called “Here It Goes Again,” which many people affectionately refer to as “The Treadmill Song.”  To date, it has been viewed over 100,000,000 times online.  (Look at all them zeros!)  The label, which has made a fortune selling the band’s music thanks to that video’s popularity, is now restricting all new videos from being embedded in websites such as this.  The logic is that they receive a royalty payment when videos are viewed directly on YouTube but not when they are embedded on other sites.  The fans are mad, the band is mad, but those savvy fellers made the ultra-cool gesture of explaining the ins and outs of label politics and strategy on their official website.  The irony of the situation being that the band is famous because of the resources they are no longer allowed to use.  Genius!

To cap things off, this is “History of Technology in the Entertainment Industry” week for my class at Belmont.  We start all the way back in 1040AD with the invention of Movable Type, and cover as many of the major technological breakthroughs as we can in the allotted time, culminating with Google’s new smartphone, Nexus One, which was released just two weeks ago.

The last 24 hours have been a vivid reminder of the forces at work between technological innovation, which is often driven by the need to solve problems and create new opportunities, and industry, which can not often absorb those new capabilities as rapidly as they become available.  The result can be summed up in one word: frustration, and believe me, it’s felt on both sides and everywhere in between.

The challenge for many organizations is in managing the public humiliation that so often accompanies this dissonance.  Once upon a time, they could deal with these growing pains in private, but in these modern times, they do not have that luxury.  So what’s a brand to do?

For starters, the band made exactly the right move by explaining exactly what was going on and why.  In so doing, they deflected the blame to the responsible parties, but they did so in a logical, professional manner that actually exonerates their label, at least in that there is a “logical” reason for the policy.  They also suggest a solution that allows their fans to embed video from alternative sources – BRILLIANT.  They actually solve the problem for their core audience, even while they miss the opportunity to be further exposed by passive fans that may have embedded a YouTube video but will not extend the effort to look elsewhere.

In my opinion, they could go one step farther.  I would have their fans make their own videos, which the band embeds on their site.  Cap that off with a Tshirt that says something like “Embedded by Ok Go,” and you’ve got a merchandising opportunity to squeeze a few more dollars out of the brew ha ha.  (Everyone that actually gets their video posted by the band might receive an autographed version.)  The trick is to turn lemons into lemonade.

And if you’re EMI?  Well, then you probably got used to public ridicule many moons ago – but you could use the situation as leverage to get YouTube to start paying royalties on their embedded streams.  Heck, maybe you just go crazy and (gasp!) make an exception to the rule.  For goodness sake, this band is the very definition of “viral success.”  Why not run your own pre-roll commercial, in-video ads or post-roll up-sells to justify the “lost revenue” of having people watch the video in the location of their choosing?  I assure you, they would, except for one thing.  This isn’t the only artist on their roster.  They don’t have time for it.  It would open the door to other artists complaining about their videos not having the same distribution potential.  And for some reason, they don’t have half the street smarts about online promotion as they used to with radio promotion, but that’s another post for another time.