Last week Taylor Swift pulled her music catalogue from streaming service Spotify.
The merits of that decision are being debated in the media with regards to the future of the music industry, as well as the business brand of the artist, and of course, her fans.
It turns out there are important marketing lessons to be learned from this for mainstream businesses like yours and mine.
Lesson #1 – Grow Your Audience
If you are not familiar with Spotify, Rdio, and other music streaming services, they deliver popular music for free or a small monthly fee. This introduces the artists’ music to a broader audience that is willing to tolerate a few ads, or pay to make them go away.
Spotify is like Groupon for musicians. You are investing in an opportunity for expanding your audience by renting one that is ready-made. Taylor Swift fully recognizes she doesn’t need Spotify because she has already built a massive audience. Your business needs the same.
Any artist or business that fails to build its audience will forever be dependent on paying to rent the audience of another media company.
Therefore, use social media and every other channel for what it can do for your business, but develop the intention of building your own audience to control your destiny.
Lesson #2 – Fans Want to Be Owners
The criticism of streaming music services like Spotify is that they reduce music sales by allowing subscribers to rent the music, for free or nearly so. I disagree.
These days people have been conditioned to try before they buy. It’s actually a new way of positioning the money-back guarantee – without any strings attached.
There is a big difference between renters and buyers. True fans are buyers. Ownership gives them membership to a club of like-minded people. They are proud to be owners.
To be clear, even if one pays for a premium membership with Spotify, it does not own the music. Yes, it can download it, but that pseudo-ownership comes with a price: It can only be accessed by the Spotify app and will go away if the subscription is cancelled.
People want to own anything that gives them pleasure, so there is little risk in giving them an opportunity to try it before they buy.
Lessson #3 – Your Loyal Customers are Fans
One of my customers taught me to always be thinking of what I can do next to help all of my customers. He encouraged me to never stop sharing product or service ideas – anything that adds more value.
Imagine if Taylor Swift stopped creating new music. What then? My guess is it would change her tune about Spotify (OK, yes, pun intended). That’s not likely to happen soon, because she is intensely focused on the fans that are aligned with her brand.
Taylor Swift’s decision to remove her music from Spotify honors her relationship with the fans that value it enough to pay to own it.
That said, I believe there are ways Spotify could have been a valuable partner, such as offering an early release of selected music for a limited period of time.
Fans always buy. Remove the risk and grow that fanbase.
Note: Since this published, Spotify has defended its position as a supporter of paid media, as opposed to free and pirated media. Regardless, when all is said and done, the one thing that doesn’t change is media in all of its forms is in demand – and that includes what your business publishes.
About the Author: Jeff Korhan, MBA, is the author of Built-In Social: Essential Social Marketing Practices for Every Small Business and host of This Old New Business podcast.
He helps mainstream businesses adapt their traditional growth practices to a digital world. Connect with Jeff on LinkedIn, Twitter, Facebook, and Google+
John Lee Dumas is the Founder and Host of EntrepreneurOnFire, a top ranked podcast named “Best in iTunes 2013”.
