There have always been social networks, but until now there haven’t been any massive ones like Facebook with its 850-million-plus users. This is likely why we’re seeing a ton of new digital music startups that look like they could grow into real businesses, and with the blessing of the labels. Because word of mouth marketing at scale is priceless promotion for record labels.
The idea is that if their music isn’t pushed on people by advertisements or radio Djs, but recommended by their friends or someone who’s taste they trust, a sale is more likely. With the rapid growth of social media enabling real-time sharing of massive amounts of content, the music industry has found it’s holy grail – word of mouth marketing at scale.
Skeptics could easily say “here we go again” because social media driven digital music companies have launched before only to be crippled by label licenses that proved unprofitable for companies that couldn’t compile a very large number of users. We think it’s different this time around.
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