Category Archives: Long Tail

Unilever discovers, then embraces, the power of online social media

As a marketer I read too many cases about companies who do one of the following:

  1. Ignore the power of online social media, in spite of their brand being ideal for its careful use
  2. Run headlong at this Web 2.0 phenomenon, throwing caution to the wind, only to do more harm than good to their brand

danah boyd [sic], the well-known anthropologist and “youth and technology” expert, gives a very personal account of the spread of Unilever’s Dove Evolution campaign. It’s a case study for how an exceptional marketing idea can gain legs through sites such as YouTube.

In the post she recounts how she was acting out of what she perceived as the public good, and not as some shill for the brand. Truly inadvertently, she says that she became “a marketer’s dream.”

I agree. But what still amazes me is that similar efforts for less savvy brands would be viewed by their stewards as unacceptable — nothing more than the unauthorized spread of their content.

These folks would look at the Danah Boyds of the world as more of a nightmare than a dream. Go figure.

OK Computer: What is this CD worth?

One thing you have to say about the changing business model for the music industry: It gets people talking! My post a while back about how this change is bringing musicians back to their “roots” as street corner buskers generated a lot of great comments. This post on the Freakonomics blog last month has generated 81 comments and counting! Now Radiohead, the popular alternative (oxymoron?) recording act has upped the ante, and in doing so has kicked discussion into high gear. They’re asking fans to determine the cost of their new downloadable CD.

According to this piece in Music News, Radiohead is releasing their DRM-free CD online and letting fans determine its monetary worth:

Radiohead said its seventh studio album “In Rainbows” would be available from Radiohead.com from October 10 in MP3 format, meaning it can be played on all digital devices. In the latest twist in the move to digital music, fans can choose how much to pay, or can pay nothing if they prefer.

If this scares you, you’re probably a record label, or some other member of the entrenched (many would say hidebound) music industry. Conversely, if you’re smiling, you’re probably like me: A fascinated observer of how technology is shattering pricing constraints and distribution barriers between artists and those who appreciate them. And did I mention I’m also a huge Radiohead fan? My smile just grew into broad grin.

Maybe, as a show of support, I’ll pay more than the cost of their physical CD (which will be distributed through conventional channels).

For instance, I might pay as much as I’ve ever paid for one of those glorified coasters. I’m guessing that was $18, ponied up sometime in the late 1990s. The CD that 18 bucks got me was, I’m sure, packaged in a crack-prone jewel case, and came complete with booklet featuring unreadable mousetype lyrics and liner notes. I’ll certainly miss that royal treatment.

For once I’ll be opening my wallet without feeling fleeced. That sounds pretty terrific.

Boost web conversions by greeting search engine visitors with unique content

How often do you come across an account of the same new, breakthrough idea from two different sources within 24 hours? That happened to me this weekend, and even if I had just seen it once I would have found the idea extraordinary. First, I read how Offermatica provides a content management solution that helps with multivariate testing of offers and copy. From what is learned, customized content can be delivered in real-time, based on behaviors. Offermatica CEO Matt Roche describes a novel application of this tool in a MediaPost blog interview:

[With the client site, MusicFriend.com] when someone comes to the home page [from a search engine] we know nothing about them, so they get the home page. What if we repeat the keyword that they searched on to get there, just show similar information? That increased the conversions. We repeat your keyword so you have a connection. Then we install affinity targeting that says when you go to the drums section and come back to the home page it will show you more drum offers. It increased the conversion rate in double digits on all the categories where we did category affinity.

The emphasis was my own. Double digit conversions?!? What a great trick.

Then I read Todd Friesen’s piece describing the same technique, in the July, 2007, print edition of Online Media, Marketing and Advertising (OMMA — and yes, it’s also a MediaPost publication). Phrased a different way, it suggests the same brilliant strategy:

… Did you ever notice how most brand traffic lands on your home page? Even product terms that contain branded verbiage often get a home page ranking ahead of a product page. Most home pages are pretty generic and usually run creative speaking to a straight brand message or weekly deal. How do you refine that on the fly to positively impact conversion? With a good multivariate tool, it’s relatively simple.

Some tools have the ability to recognize a search engine referral and identify the search term to define the creative displayed in the marketing modules on the home page. SEO managers then populate the “hero image” with a product related to the search and then load the complimentary products into the secondary marketing modules.

It is standard practice to do something like this with pay-per-click ads. We create customized landing pages that repeat the keyword phrase used in the search. This idea extends that landing page mentality to organic search results.

There is conjecture that the radio was invented in several places around the world at the same time. I suspect there will be similar arguments as to whom originated this simple and elegant way to improve the user experience for people arriving from search engines. All I can say is, I’ll glad I learned about it at all, so I can begin testing it with some of my clients.

Any readers who are already using this technique?

Is Second Life real estate another bubble ready to burst?

Chris Anderson, author of The Long Tail, recently posted his reservations about the commercial potential of Linden Lab’s metaverse, Second Life. (Check out the many comments, by the way. I praise him for his willingness to stir a hornet’s nest.) The main reason for Anderson’s pessimism: Lack of traffic to the virtual storefronts and office spaces. Chris Anderson’s Avatar on Second LifeDoes this mean we should all forget the Second Life “land rush” ever happened? I don’t think so.

Yesterday I heard Steve Ennen, VP, Digital Business Strategies at American Business Media, speak at an online marketing summit. He pointed out that we should look at the potential for marketers in a “Third Life, Fourth Life or even Fifth Life.” I would agree. Especially if the next platform can be one that doesn’t require special plug-ins or players. Online, experiential marketing is here to stay. And a whole generation is growing up having spent a significant portion of their young lives on gaming platforms very similar to Second Life.

In the future, favorite online communities may well become these consumers’ first lives.

You’ll find more information on Second Life in this and associated entries.

Networks are personalizing our sense of place after depersonalizing time

There was yet another piece in the New York Times last week about the disintermediation of established businesses as a result of our new, networked world. In this case, it was about how new map mash-ups are growing in popularity, to the chagrin of many professional cartographers. Here’s an excerpt:

With the help of simple tools introduced by Internet companies recently, millions of people are trying their hand at cartography, drawing on digital maps and annotating them with text, images, sound and videos.

In the process, they are reshaping the world of map-making and collectively creating a new kind of atlas that is likely to be both richer and messier than any other.

They are also turning the Web into a medium where maps will play a more central role in how information is organized and found.

Initially, I thought this article was further proof that networks automatically disintermediate. It’s just their nature. They cut out that faceless “middleman,” whether this “man” is a travel agent, a realtor, or — in the case of Wikipedia — a traditional encyclopedia editor. But then I heard a story that showed me how networks can cut both ways.

This shows a the path through the Midwest of a TravelBug (think Geocaching)

But first, a word about how place, as defined as our physical world, has always been subjective — that mash-ups are simply expressing this reality in another demonstration of The Long Tail. The above example from Google Earth is the path that a friend’s Travel Bug (lovingly named Tatoo Bug) took as it passed through Midwestern geocaches. This portion was the first leg in a worldwide, 15,951-mile trip that he and other enthusiasts continue to follow on the dedicated Geocaching site.

Just as blogging has shown what happens when you remove the high cost of entry to publishing, these new rich, personalized maps are what you get when you hand mapping tools to the masses. Think about what maps have been in recent history. And I define recent history as the time since researching and printing maps was only available to the chosen few.

When I was a child, living in the hinterlands of the Upper Peninsula of Michigan (also known at “The U.P.”), I was surrounded by towns that were too small for most maps to even acknowledge.

To cartographers, they didn’t exist. The commercial effects were devastating. 

Smack in the middle of a breathtakingly beautiful part of the country, with much to offer visitors, these tiny hamlets withered on the vine because tourists drove right past. These towns were achingly close to the tourist dollars they needed to survive. In some cases they were separated from major U.P. roads by nothing more than a stand of pine trees. So close and yet so far away.

That is all changing.

I’m a rock climbing enthusiast. The last time I climbed at Devil’s Lake, a spectacular set of quartzite climbing faces, I and my fellow climbers found the right place to set our gear based on an old, dog-eared book. The book was far from current, but it was the best we had. I’m expecting, within the year, to make my selection based on one or more Google Map mash-ups, enhanced with Flickr.com photos and user-generated raves, rants and warnings. My guide book will stay on the shelf, more a relic than reference.

And who knows? Maybe, armed with more personal — and personalized — knowledge of the area around Devil’s Lake, I’ll discover an ideal place to eat. One that I didn’t even know existed. A new perspective will reveal a physical world I didn’t realize was right there all the time.

Networks Can Intermediate Too

Is it inevitable that a networked world eliminates the middleman, shifting from an objective, imposed experience to a more subjective one? I thought so.

But on the same day that I read that Times article, I heard a wonderful NPR podcast. It was one of a series of programs called RadioLab, and this episode was about time. The program reminded me that there was an era in this county when small communities like my hometown had a very personal — and personalized — view of time. Up until about 200 years ago, these places had no official “time.” Noon was simply when the sun was directly overhead. You set your watch to that moment, and that was good enough.

Back then you could walk into a room and ask for the time, and get as many different answers as there were people answering. Some would even, quite sincerely, answer with something like “It’s nearly time for me to harvest the corn.” Because what was time, after all, but something you experienced subjectively?

One day that all changed, and everyone followed the same timeclock.

And the intermediary that created this change? None other than a network: The railroad.

With much at stake for both the train and the towns along its path, someone had to agree to exactly when the 12:07 train would pull up to the stop. The network wiped away all personal “maps” of time and replaced them with one that was objective and unyielding.

All of this is a reminder to me that two of the most agree-upon truths — Time and Space — which keep us moored to this harbor called Reality, are more open to interpretation that we would care to admit.

We all know that retail’s mantra and battle cry is Location, Location, Location. But the spread of map mash-ups helps us realize that what makes a location good is in the eye of the beholder. Take it from me: If what you want is a really good smelt fry, I know a place in Rapid River, Michigan that is worth seeking out.

Serving SUPERVALU customers one niche at a time

I really like the direction that Kevin Hillstrom’s One Positive Day blogging concept is taking. While I used the occasion this month to share a favorite work tool, Kevin was inviting many of his social networking and database colleagues to speculate on how to improve the online presence of SUPERVALU, a grocery and pharmaceutical retail and supply chain company.

I’ve had the luxury of a week since that July 1 post to think about my response. I started with the question of corporate mission. There are many ways to drive consumers to your site, such as an online version of the old “Green Stamps” promotion, but as Kevin states at the end of his post, you ultimately have to show something beyond raw page views. You have to add to the stores’ bottom lines, either by saving money by automating something that is now labor-intensive, or generating greater sales totals, or both.

In the comments, Ron Shevlin and another contributor mentioned how helpful it would be to create an aisle-by-aisle shopping list of items. I can understand the logistical challenge of this, since every store floor plan seems to be at least a little different, something exacerbated by the thousands of new products introduced (and pulled!) every year. This last point was made another contributor to the dialog — 10-year food business veteran Harry Joiner.

A Store-generated Shopping List

I had even wondered if something could be done with a mobile-enabled service. For instance, from your cell phone, you call or text a list to a SUPERVALU short code. Then, either through voice recognition (in the case of a voice call) or standard database look-up, you get back a list in your email box, ordered in the walking pattern of the store and complete with related specials and exclusive couponing.

Perhaps something could even be done with a WiFi-enabled version of this voice-activated shopping list device. This device would take your family’s accumulated voice lists of groceries, digitize the list into text using its native voice-recognition system, and — after it is sent via a wireless internet connection to SUPERVALU computers — the device receives and prints the final list with coupons.

This certainly would align itself with SUPERVALU’s Mission  Statement: “To serve our customers better than anyone else … provide our customers with value through our products and services, committing ourselves to providing the quality, variety and convenience they expect.” The mission statement goes on to talk about building strong communities surrounding its stores, which is the other theme of how to help this web site become a greater contributor to the store’s success.

Harry Joiner mentioned creating Ning-like online communities surrounding each of the most significant lifestyle and demographic categories. He gave some examples of how other product marketers have succeeded with this tactic.

A few community examples for SUPERVALU that spring to mind are the following: Young, growing families, single adults looking for tips on cooking for one (and perhaps even place-based events specifically for singles), and of course cooking enthusiasts.

Some value-creating tactics could be things like product-related cooking demonstrations or give-aways, or tie-ins with non-profits that the SUPERVALU business supports through its foundation. Only online community members would be privy to them, of course. One thing is clear. These communities would need to find a great deal of value on the sites.

Many companies have tried to build a critical mass among their “wired niches.” Most have failed.

And speaking of long tale strategies, here’s one that my friend Steve Ward had cooked up well over 10 years ago, and I think still has promise: An online database of all nutritional information for every product on the shelves (or as many as possible)!

Those who are striving to reduce their sodium or fat consumption, or improve their nutrient intake, could create shopping lists that tell them the exact nutritional values of what they eat.

Would this, or any of the above ideas, fundamentally change the way SUPERVALU returns shareholder value? No. Would it help the company fulfill its mission? Absolutely. But like so many online endeavors, this would be accomplished slowly and at a significant investment, one niche at a time.

RiffTrax delivers DIY laughs and a promising business model

As promised in a prior post, I did indeed throw a RiffTrax party. It was Sunday. My wife and I hosted three people, and we screened the latest James Bond movie, Casino Royale. The party was a success, and the highlight was undeniably the movie heckling supplied by our virtual guests of honor, Mike Nelson and Kevin Murphy.

For those who aren’t familiar with RiffTrax, Nelson and Murphy are two of the comics who record funny commentary distributed by this new online business. For $2.99, I was able to download a podcast that ran the length of the movie. I synchronized the podcast (played through our stereo system) to the action from the rented DVD. Hilarity ensued.

It should go without saying that Daniel Craig, the dead-serious star of Casino Royale, was never the source of so much mirth.

This type of movie “riffing” had been a staple of the cult television show of the 1990’s, Mystery Science Theater 3000, where Nelson and Murphy had contributed as both writers and performers. They have lost none of their edge. (This distinctively Midwestern style proves that jokes don’t have to be demeaning or obscene to be lacerating — and often hilarious).

Whether you’ll find their brand of satire funny I cannot predict. They can get a little esoteric at times — sometimes veering dangerously close to Dennis Miller territory. But what I wanted to be able to tell you with confidence was whether this way of selling laughter, one podcast at a time, is a viable business model.

I think it is, for these reasons:

It’s Easy To Get the Hang Of

Although it’s a little more Do-It-Yourself (DIY) than some people will likely tolerate, the majority will get past the challenge of synchronizing the sound and DVD tracks. I certainly did. To help, a ReadMe file shows time codes that can be visually monitored. Or, like me, you can wait for key lines of movie dialog to be mentioned on the podcast by a robotic voice (called DisembAudio, of course). If the movie and podcast line readings overlap, you know that the comedy will be properly timed to the action.

A Great Excuse for a Party

RiffTrax is a surprisingly fun way to enliven a standard “movie night” with friends and family — and a way to justify another viewing of a DVD you already own.

It Has Mild Cult Appeal

The humor is often extremely bright, and that makes you feel like you are part of an insider’s group when you watch it. It’s the same appeal that helped make Monty Python and Saturday Night Live a success when those shows first burst onto the scene, as well as the more contemporary Daily Show and Colbert Report.

It’s Habit Forming

Mid-way through the film we mentioned to our guests that RiffTrax had just released a take on the first season DVD of Grey’s Anatomy. The reaction: “When can we see it!?”

The answer is soon. I’m pleased to see the technology of podcasts getting mainstream enough to actually justify repeat purchase. And since I was a huge Mystery Science Theater fan, I’m pleased that Mike Nelson and his team will be part of this new media revolution.

Important disclaimer: Although a wonderfully helpful RiffTrax publicist offered to comp me for the movie, I decided to use my own money, both to deny any accusations of patronage and to get a feel for the complete purchase-and-play experience. I have been compensated in no way for this assessment.

Good news for two lucky readers: Use my contact form to email me. The first two to say “Free RiffTrax” in the message will receive a one-time credit for a RiffTrax movie. I think you’ll enjoy the experience.

Mix bad movies and funny commentaries to create the first truly profitable podcasts

It’s been almost a year since I marveled over the ingenuity of director Kevin Smith. As part of the theatrical release of his movie Clerks II, Smith released a free director’s commentary on iTunes, in Podcast form.* Back then I called it a smart way to get his core audience back in the theaters. I considered it one of the most innovative ways yet to monetize the podcast. Television comedian Mike Nelson has taken a more direct approach. He has created what I can only describe as the first ever movie/podcast mash-up. And it promises to make him and his partners rich.

The mash-up, which was first coined to describe what DJs create when they mix extremely divergent musical tracks, has moved to the “Web 2.0 blending” of different programs, such as Google Maps and Craigslist in this real estate mash-up. Now, with RiffTrax, Mike Nelson and his fellow satirists are creating podcasts that you can buy and blend in your living room, with the DVD they are lambasting.

Think of a RiffTrax podcast as a commentary track, as you’d find on a DVD, featuring the director and a few actors, and maybe the script writer. Now imagine the film they’re talking over (as in a voice-over) is worthy of ridicule, and all parties are very witty and have been injected with sodium pentathol to loosen their tongues.

Okay, that’s not very helpful analogy. Actually, what could help me explain this idea is if you, like me, were a fan of the long-running, now-defunct Mystery Science Theater 3000 television show. That’s because most of the RiffTrax cast members are from that show.

A low-budget, low-margin production, Mystery Science Theater 3000 (lovingly known as MST3K to fans) never made Nelson or his cohorts much money. RiffTrax is also low-budget, but selling for $.99 to $3.99 each, these podcasts will become very profitable very quickly. I also admire the fact that the venture side-steps any copyright problems, because of its do-it-yourself nature. You must download them to your MP3-player, and play them on a stereo, simultaneous to viewing the movie. You make the mash-up, not them. Brilliant.

I was incorrect a year ago when I predicted that Kevin Smith would sell a lot more popcorn by driving his audiences back to the theaters, earbuds firmly in place, to listen to his commentary as they watch the film for a second time. So you’d think I would be a little less free with my wild predictions. But hey, I know MST3K fans. Heck, I am one.

Fans like me will try this, and some will get hooked. Just as happened with the series, RiffTrax will inspire parties, formed around televisions in dorm rooms and family rooms across America. Word will spread, and this Long Tail sensation will become a mainstay for those with a wide streak of geek and a taste for droll humor — mostly G-rated at that.

RiffTrax will deliver the Holy Grail: A truly profitable podcast. It will also spur spin-offs, to appeal to other niches, such as satires to popular television series, now on DVD. But that’s well down the road. As for the short term, I can only say with certainty that my first RiffTrax party will take place within weeks.


* A half-century before the inventiveness of Kevin Smith, William Castle found similar ways to add new dimensions to the film-going experience, in the cheapie thrillers he cranked out. For instance, for The Tingler, Castle placed electric buzzers under theater seats, and zapped people’s butts during scenes where the audience was supposed to jump in horror. I’m sure it produced screams, but directors of the time, like Alfred Hitchcock, were using less convoluted techniques.

You’re it: Tagging, social bookmarking and marketing

If the internet is getting smarter, it is only because we are being carefully watched. The video Web 2.0: The Machine is Us/ing Us brilliantly demonstrates what I mean. It shows an internet that has become more valuable by connecting us through observed preferences.

A link to the Web 2.0 videoThose preferences are observed through our past behavior — always the best predictor of future action. The video explains: “100 billion times per day, humans are clicking on a web page … teaching the Machine what we think is important.”

I recommend you follow this video, by Michael Wesch of Kansas State University, through to its completion. The payoff is fascinating and sobering.

Some of this behavior is passive.

Merely clicking on a web page, for example, is something that even my mother does. She needs no special training or instruction. Yet systems such as the recently unveiled Google Personalized Search are improving her browsing experience by customizing content based on her past searches — and even her web browsing history.

Don’t think this has gone unnoticed by those in the search engine optimization business. Google Personalized Search is a major shift in the optimization game, a phenomenon that’s sending us all back to our playbooks.

Other behavior is more active.

Specifically I’m talking about the type of tagging that takes place in online social networks. According to a recent Pew research study, “28% of internet users have tagged or categorized content online such as photos, news stories or blog posts.” On any given day, this report says that 7% of internet users have tagged or categorized online content. To put that in perspective, that’s seven times the number of people who on that day have listened to a podcast.

So who is doing all of this tagging? Not surprisingly, they’re more likely to be under 40, with higher than average incomes and education levels.

Pew has no way to report on whether this tagging behavior is growing in popularity. This was the organization’s first ever research on tagging. But Hitwise reports that sites that enable tagging, such as Del.icio.us and Flickr, are gaining in popularity.

In just three months, according to Hitwise, Flickr grew in popularity by 140%. By that I mean that visits to this photo sharing site accounted for .029% of visits a week in January, up from less than .012% three months earlier.

In the same time span, Del.ic.ious traffic grew by over 600%. Visits to that online recommendation site increased to .0036%, up from .0005% in October, 2006. (Thanks for your help on these stats, Wendy Davis of MediaPost.)

Here’s a Wired rundown of some of the best tagging and social bookmarking sites. Tag, you’re it!

Should your brand spawn an online community?

Some brands are clearly benefiting from their own online communities. Nike’s community is quite active, with over 57,000 members. The largest Blackberry community has nearly twice that number. Marc Andreessen is betting that more niche brands — as well as sports teams, community groups and hobbyists — will want to reap the same benefits.

I’m thinking he’s onto something, due to the new ways that consumers are interacting with brands, as well as the power of search engines to fuel these connections. It wouldn’t be the first time Andreessen has a winning hunch.

You may recall that in mid-’90, the sweetheart of the internet was Netscape. Marc Andreessen was co-developer of this free web browser. During Netscape’s zenith, he was on the cover of every magazine from Business 2.0 to Time. That’s before Microsoft moved into the browser business, and its Internet Explorer did to Netscape what its Word did to WordPerfect and Excel to SuperCalc. Microsoft has rained on a lot of parades. Andreessen got drenched. But also quite rich.

As reports these past few weeks have declared, he has invested his money in Ning, a way to “launch a social network with a few mouse clicks.”

Ning would take much of the pain out of testing an online community surrounding your brand. But is it a wise decision? Let’s put aside for a moment the legal considerations (liability for bad advice shared on your forum, for instance), as well as the logistics of moderating the thing.

Does this marketing tactic support your brand? I say yes, for the following three reasons:

  1. Your customers experience your brand but could not care less for your company. As David Raab eloquently put it, “Brands are movie stars. Companies own the theater.” An online community becomes a place in that theater to congregate.
  2. People will trash talk your brand regardless of whether you host a community sounding board. Sam Decker of Bazaar Voice contends, and I agree, that it’s better to have them do it on your forum than someone else’s. I’ve quoted him speaking about negative user-generated content (UGC) in an earlier post.
  3. Search engines can’t get enough of the UGC that these forum sites generate. They just love ’em. Isn’t it better for people searching on generic brand features to find content about your brand as opposed to a competitor’s?

Does the prospect of an online forum about your brand scare you? It should. But you need to know more about online communities, and what better way than to launch a simple test? If not for your brand, how about for your church group? Marc Andreessen is preparing a well-stocked marketing laboratory just for you.

Want to check out a sample Ning-driven community? Here’s one on the evolution of broadcast and personal media.

Is the music industry returning to street corner busking?

The headline in the February 22, 2007 edition of Rolling Stone was ominous: Labels in Free-fall. It certainly looks that way. It reported that total sales of the top five CDs in January, 1997 was 865,144 units. This January sales fell short of that by 67% — only 285,702 units sold. Yes, that’s a free-fall alright. It’s also just the top five albums. Total album sales for the same two months was a drop of much less, 38%. That is, a drop from 55 million CDs sold in January, 1997 to 34 million this January.

So is the sky really falling? Or are these figures simply showing shifts in how people are buying music? The answer, I think, is both. There will definitely be winners and losers. And a lot of the losers are Rolling Stone advertisers.

Let’s look again at the numbers.

First, consider the affect that the long tail phenomenon is having on sales. Although the top five CDs have dropped by two-thirds, the drop was far less severe if you add up all CDs purchased. A drop of 38% is pretty horrific, but it’s a long way from 67%. Why weren’t they closer in magnitude? The answer is exactly what Chris Anderson describes in his book. The masses are buying a greater variety of music, stealing unit sales from the blockbuster CDs. The superstars are far less super than they were in ’97.

The article ignores that fact, because it is too busy bemoaning the imminent death of the album, and consequently, the death of the record label. I don’t argue that both are evolving fast. But dying? It’s all in how you define things.

Now let’s look at the CD. The numbers cited combine online and bricks-and-mortar CD sales. But they are deceptive, because they look at a CD, or “album,” as something that is sold unbroken. Buying individual songs is not included. What’s more, small retailers are also ignored by the source of this data, Nielsen SoundScan. Retailers can only participate if they have “Internet access and a Point Of Sales (POS) Inventory System.” My favorite independent record store has one but not both. What’s more, labels can report sales of their CDs, but must pay $500 per year for the privilege.

Single-artist labels are also disqualified. That means Ani Difranco was off the radar in 1997, when her Righteous Babe Records sold her CDs only (and sold them by the tens of thousands). This year there’s no telling what self-publishing artists are being ignored by Nielsen sales figures. And admittedly they’re the best we’ve got at the moment.

Now let’s look closer at what a record label is good for (here’s a hint to their post-millennium relevance: A record “label” literally is the donut-shaped paper glued to the middle of a vinyl 45 RPM single or a 33 RPM “long-playing record”). There was a time when artists needed a label, both literal and figurative. They needed help producing and distributing their music. Much has changed.

A co-worker, who is a niche recording artist in his spare time, describes a very different time not very long ago. Back then his home recording studio was a room with many expensive pieces of hardware, all wired together. When everything was fired up, the room became an oven. Voltage coursing through the system produced a perceptible signal hum, which itself had to be eliminated during the production process by — you guessed it — another costly gadget. All of this required money and ingenuity. My friend had enough of both to produce his albums, but most artists didn’t back then, and still don’t today.

Luckily, a musician can record and produce albums today with nothing more than the processing power contained in a notebook computer. Buy-in, in terms of both money and intellect, is much lower. As for distribution, deals can be cut directly with sites such as iTunes (are you listening, Freedy Johnston, you neo-Luddite, you?).

My friend is even considering placing a Paypal option on his music site. The site would accept donations, from anyone, regardless of whether they ever buy one of his songs. He tells me that others he knows can make an average of $20 a day, from total strangers, who just like what they’re doing and want to support their art.

It sounds a lot to me like busking. That’s what musicians used to do — and still do today on busy street corners — to earn a living or a little beer money. They strum their guitars, leaving their guitar boxes open for passersby to drop donations into. The kindness and charitable nature of music lovers has always been the lifeblood of musicians. I’m seeing things come full-circle, in an era of improved access to the music that touches our souls.

This was the meta message of Steve Jobs, in his essay last week that seemed to bite the hand that feeds iTunes. The Apple Computing CEO suggested that everyone would sell more music if digital rights management (DRM) was removed from the recordings that he and competing online music stores sell. Removing DRM would be the ultimate honor system. It’s as though he’s proposing to stop charging people a formal admission to hear their favorite artists. Instead, the artists come outside, into the open air, and sing their hearts out for those who toss their coins into a guitar case. Purchases of songs will remain retail transactions, but purchases will be made out of ethics and generosity and not punitive DRM constraints. 

Representation and distribution were handled by official record labels, and not musicians themselves, out of necessity. Technology required it. This system worked for over 80 years but nothing lasts forever.

Jobs’ anti-DRM essay is a signal that there must be a redefinition of the record label as we know it. Although labels won’t go away, the change will be significant. Instead of the label holding all of the power with most musicians, it will be the musician who can decide which street corner will serve his or her art the best. The label will manage the street corner. That is all. They’ll keep it clean, and maybe help to draw a crowd.

In 2006, Time Magazine called the person of the year “You.” Is it possible that in 2007, Rolling Stone will be forced to crown, as its label of the year, “The Musician?”