Anatomy of a Promotion

Offering a key component of a well-orchestrated online promotion, LiveConcerts.com launched in August 1996 specializing in webcasting music events. At its inception, the online outlet featured one or two webcast concerts per week before hitting its current weekly stride of five, with each show often featuring more than one artist.

Attendance for LiveConcerts events has increased proportionately with the Internet's growth in usage. According to Chris Otto, who oversees LiveConcerts as executive producer of RealNetworks' Music Services, "The pull of the artist and promotional efforts surrounding the event still have the greatest impact on the attendance of an event."

But while Otto maintains that a successful webcast event requires promotion, he agrees that the event itself offers promotional value:

"They are great marketing tools for [artists] and the hosting web site because they initiate interaction with users. They offer a good opportunity to email interested people, to notify them of the event but also to include appropriate marketing messages and hopefully encourage a visit to the host and participant sites -- often prior to, or after the event itself. Regular events also drive habituation by encouraging regular visits and building a sense of activity and change within the site."

But do webcasts increase album sales? Should any band looking for exposure start pumping its live appearances through a rented ISDN line? And is this kind of promotion significantly more expensive than the kinds of things labels did prior to mainstream proliferation of the Web?

"It's certainly much cheaper than spending $200,000 on a music video," says Jon Luini of Evolve Internet Solutions, which produces webcasts. "For $10,000 to $15,000, you can webcast a live event to fans on the Internet, send a live feed to a radio station for terrestrial broadcast, record the audio to 24-track digital and release it as a CD, and archive a multicamera shoot of the event for use in other contexts later."

Luini recently oversaw execution of a particularly high-profile event, a live chat/performance by the Other Ones, former members of the Grateful Dead (including Bob Weir, Phil Lesh and Mickey Hart). As the two discs of the first Other Ones album, The Strange Remain, were prepared for February 9 release, the band conceived a multi-faceted multimedia promotion, the likes of which the Grateful Dead could never have launched prior to its 1995 end, following the death of Jerry Garcia.

On January 28, an outtake from the Other Ones album, titled "Mississippi Half-Step," became available as a free downloadable audio file, simultaneously attracting fans to the site to promote the upcoming live event, and offering a taste of what to expect from the new album. On February 8, Hart, Weir and others gathered at Sy Klopps Studio in San Francisco for a live chat with fans, to perform, and to encourage sales of the record. A streaming audio soundbite of Bob Weir and Mickey Hart welcoming site visitors added a personal touch to the experience.

It was built, and people came. Attendance made the event one of the top five ever served by LiveConcerts.com, alongside concerts by Marilyn Manson, the Deftones, the Cure, and Deep Purple. The Dead organization added 3,000 to its mailing list, more than 2,000 participated in the live chat, and at the event's peak, 1,226 concurrent audio/video streams were being delivered. Since the launch of the event web site, fans have downloaded about 30,000 free song files, with fans preferring the MP3 format over the Liquid Audio format about four to one.

According to Dennis McNally, official publicist and biographer of the Grateful Dead, sales of The Strange Remain through traditional retail outlets have been adequate.

"Sales to this point have been okay, but not fabulous. According to SoundScan, 25,000 were sold in stores in the first couple of weeks. Respectable but not stunning."

Yet, consider the action online. As a band that has released most of its albums privately, for the first time ever, direct online sales of a Grateful Dead-related record exceeded those generated through the band's telephone-order center. According to Luini, 3,000 were ordered online from the time the event site launched (one week before the event), up until the event itself.

If these figures are accurate, the ratio of album sales likely generated from the promotion represent a comparably impressive contrast to the 1% of total music sales currently attributed to online sales -- and that's without adding any post-event sales, figures for which were unavailable.

Based on the $16 the Dead organization charges for the release (retailers typically charge more, for example, CDnow sells The Strange Remain for $17.82), gross sales through traditional retail should have hit $400,000, while online sales likely topped $50,000. But measuring units shipped and gross dollar amounts is hardly as significant as examining profit margins.

After deducting estimated production and promotional costs -- those incurred when selling through traditional retail channels versus those incurred in this online promotional/retail model -- selling the release over the Internet meant the copyright holder, in this case the Other Ones, enjoyed a near 25% jump in take-home revenue. Of course, many variables could impact these estimates, but the boost in profit margin this scenario demonstrates should be enough to get any label or artist excited.

Comparing the Other Ones' online promotion to past Dead promotions is difficult, since the Dead rarely did them. The success of the group's breakthrough hit single, 1987's "Touch of Grey," could certainly be attributed in part to a witty video that received heavy airplay on MTV, but coming 22 years into the group's existence, the awesome increase in the Dead's popularity that followed was more a cultural phenomenon than the product of savvy marketing.

As a result, a percentage-to-percentage comparison to sales generated during the promotional heyday of the rock video is difficult to nail down, but overall, it's safe to say webcast events demand immediate attention as viable promotional tools.

The linchpin for a successful promotion is an effective event producer. Luini, best known as the co-founder/creator of venerable web legacies such as Addicted To Noise and the Internet Underground Music Archive, is one of the most respected and experienced webcast producers in the biz.

For the event, Luini's company, Evolve, coordinated more than a dozen separate entities, each supplying a different piece to the total puzzle. They included: Nocturne Productions (A/V and set production), Sy Klopps Studio (Internet-wired studio space), ISP Networks (T1-speed data interchange for serving the web site), SRA Networks (operates Dead.net and online store), Ice Nine Publishing (clearances), LiveConcerts.com (served webcast media streams), Liquid Audio (served free Liquid Audio music files), MP3.com (served free MP3 music files), America Online (chat hosting), Rolling Stone Network (online promotion), Cutting Edge ("Omnia" audio compression technology that Luini swears by) and Netopia (ISDN hardware).

When bringing together a number of parties to make an event happen, the producer becomes a hub of communications traffic, and a diplomat of sorts.

"The challenge is not just making sure you get all of the necessary information from everyone involved, to everyone involved, all the while keeping everything on schedule, but also making sure that everyone working on the project is getting out of it what they feel they need," Luini says.

Wouldn't it be easier to work with a "one-stop shop," a single party equipped to satisfy every necessary element of the job?

"I'm a big believer in trying to get the best people possible to meet each need at hand, and in the course of doing that, finding ways to make the different shapes fit into the right holes. Particularly in this case, I felt it should be a premium media event -- not exclusively a performance -- more an activity, by adding the chat," explains Luini.

"Just getting the people together who can make the event happen constitute the basic cost. After that -- a couple more cameras, an engineer in charge of making sure a high-quality multi-track audio master is made from the event -- these are elements that do not astronomically increase costs."

According to Luini, only San Francisco's Nocturne and Evolve were actually written checks for what they brought to the table. Parties such as RollingStone.com, LiveConcerts and America Online are interested in such events because they supply content for their respective sites; technology companies are often eager to participate in high-profile events in exchange for promotional consideration.

For MP3.com, which served the free MP3 files, the event was a traffic attraction; for Liquid Audio it was a worthwhile opportunity to show off a popular artist using the company's proprietary music delivery format.

Luini himself accepted about 25% of what he would ordinarily charge for this sort of job.

"For corporate stuff, one might charge as much as $200 per hour, but for a cool band that you want to work with, you might accept as little as one quarter of that."

McNally says the Dead organization would "absolutely" do another web event:

"It was fun for the guys to sit around and talk in an environment that had the feel of television, yet we controlled it. The questions came from our audience, we selected Steve Silberman [author of "Skeleton Key: A Dictionary for Deadheads"] to do the interview. The band had fun playing a tune that came completely out of left field. I have a very distinct sense of satisfaction from doing this because anything that serves to connect you more closely with your audience is good."

Having pulled off such a successful event in the San Francisco studio, Luini says plans may be in the works for Evolve, Nocturne and Sy Klopps to work together to establish the studio as a premiere location for high-quality online promotional webcasts.

Luini is a founding member of the Bay Area Streaming Media Organization (BASMO). While the group's first meeting (in February) included a champagne toast, Luini says that its next, in April, is likely to feature a more educational agenda. For more information, email: info@basmo.org