The Real Value Of 7 Million Facebook Fans
Once upon a time, being a "diehard fan" meant buying a band's album, show ticket, T-shirt, limited edition signed LP - anything your earnings would allow. Today the term can have a very different meaning. You can be a "diehard" by blogging about everything the band puts out, posting links to your Facebook wall, re-Tweeting the band's messages, and commenting on its Soundcloud page, all without paying a dime.
Engaging with music in this way doesn't mean you're hurting your favorite band, either. Recent studies suggest quite the opposite: they show that fans who actively engage in social media bring more cash to the artists they love. Liking something on Facebook or re-Tweeting a favorite song can generate real world dollars.
Branded partnerships can offer things that record labels cannot offer, both financially and in terms of promotion.
"We used to create mixtapes and give to our best friends and now we have a means of doing that which sort of can spread word of mouth much faster and maybe reach a broader audience," says Jui Ramaprasad, a professor at McGill University in Montreal specializing in Information Systems and their effects on the music industry. In 2009, she and Professor Sanjeev Dewan conducted a study that examined the relationship between levels of social media activity (or blog buzz) and album sales.
"For several weeks I got album sales from Nielsen SoundScan for a set of albums, and then for a set of weeks I collected data using Google blog search on the number of blogs that had mentioned that album," Ramaprasad says. She and Dewan then ran these data through a regression, called the Granger causality model, and found a link: "Blog buzz did predict album sales."
Read full article: NPR Music, March 7, 2011