economic demands and community management: Emusic and Imeem’s Mistakes

By | July 9, 2009

Recently, three major music download and streaming sites underwent significant changes in their payment model and service offerings in response to revenue demands, causing a stir amongst their respective user-bases.While a simple logic of “give them what they want” when it comes to how to court communities would be nice, it doesn’t always hold in the reality of the marketplace, where these sites have to stay afloat abover operation costs and content-provider fees and so forth. The way they handled the changes they had to carry out, however, gives us insight into how to (and not to) address your customer base when getting ready to take away privileges and features while demanding that they fork over more money.

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What they did

Emusic started out as an indie music subscription site, charing users a monthly fee in exchange for a limited number of MP3 downloads and building a user-base of independent music fans. At the beginning of this month, the site signed its first major label deal with Sony and consequently enacted a series of changes that disrupted the value of the site: they raised subscription prices while getting rid of many features it’s users had become accustomed to, such as the ability to re-download songs they’d already purchased. While such changes might seem a reasonable response to the financial climate and changes in the market, the fact they coincided with the service signing it’s first deal with a major label resulted in what Mike Masnick at Techdirt dubbed a “PR Nightmare,” which the site reportedly tried to address by deleting negative comments.

Imeem pulled a similar stunt, announcing on June 25th that users would have 5 days before all of their uploaded content would be deleted, since Imeem was “simplyfying” the service to no longer include user-uploads. The move felt ironic for a site that claimed to be the world’s largest “social” music site, especially since it disrupted the activities of fanvidding, political remix, and other transformative/remix video communities that had been some of the most active proponents for the site.

What they did wrong

They weren’t transparent
As Masnick points out over at Techdirt, when making changes that take away features and increase cost, it’s probably not a good idea to pretend that you’re doing it for your customer’s benefit. But that’s exactly what both Imeem and Emusic did, sugar-coating the changes under the guise of “simplifying . . . to make it even easier for you” (Imeem) and making deals with major lables and raising prices to give customers “more of the good stuff” (Emusic). The old PR, let’s-spin-this-in-the-best-light tricks don’t work when all your customers have access to information about your practices and polities and, more importantly, are able to publically talk to one another about what you’re doing. PR like that works in an environment of media control, which the internet emphatically isn’t.

They had no idea who their users were and what they wanted
Due to the lack of transparency, many users on Emusic believed that the changes were a direct result of the new partnership with major label Sony. This made Emusic’s claim of “more of the good stuff” an even bigger blunder since most people using Emusic were interested in independent music, not major label material they could get elsewhere. Emusic did damage to its own street cred and brand value by not understanding their user-base’s tastes, while alienating them with their service changes. If you’re going to make a claim of changes that will make your service better for your users, you had better have a good idea of why and how they use your service. Otherwise, you look out of touch or — worse yet — like you don’t care.

They blatantly showed that they cared more about ROI than building solid customer relationships
That “worse yet” was what Imeem stumbled into, by justifying their changes saying, “simply put, there’s no ROI in UGV,” which showed quite unambiguously that they cared more about the bottom line than their actual users and customers. This lead the Elisa at Political Remix Video to respond: “We feel this is an insult to the vidding and other photo/video communities that helped build imeem as a service. We think that to simply jettison user generated creative works in this way due to profit margins is shameful and abhorrent.” Imeem blatantly ignored a significant (if not in numbers, then in visibility and activity) portion of their community, essentially calling their work worthless. Video remix communities may have not generated as much advertising revenue directly, but they certainly raised awareness and promoted the site, helping build the site’s user-base, the impressions that advertisers are paying for.

The bottom line is pretty simple, I think. Every company has to face the reality of generating sufficient revenue to move forward, and most users and customers understand that. Be transparent about your needs, but be respectful of theirs, paying close attention to which services they value. These socially-driven sites are not build just on content, they’re built on the users who provide labor, attention, reputation, and their own networks that make these sites viable. If you let your monetization model alienate your user-base, pretty soon, you won’t have all that much left to monetize.

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