U2 innovating the business model and breathing fresh life into a tired brand

By | September 12, 2014

U2The more I think about it, the cleverer it is. It’s a marketing master stroke. By U2 that is. Apple is paying the band a king’s ransom to essentially control the distribution of their new album, Songs of Innocence for one month. How much of a king’s ransom, we don’t know exactly, but it’ll have lots of noughts in it (I have seen a figure of $100m bandied about on the internet). Apple’s decision to give it to 500 million iTunes account holders gratis is clearly a marketing ploy to push iPhone 6 sales and continue their drive for iTunes hegemony. They have made it super easy for their users to own U2’s new offering. Just download it from the Apple cloud. Basically, pretty much everyone reading this post can abandon their perusal right now, open their iTunes on whichever device they have it and download the album right now, for nothing. What’s not to like?

So there’s a potential market of 500 million listeners for U2. How many will download it? impossible to estimate, although no doubt Apple will know soon. U2’s 5th album from 1987, The Joshua Tree shifted 25 million copies, mostly in the first decade after release. Their next highest seller Actung Baby, their 1991 release, sold 18 million copies. Since then it has been a steady decline and their most recent release prior to this new offering, No Line on The Horizon from 2005, sold a relatively paltry (for them) 5 million. They’ve struggled to remain relevant, especially with a younger generation. Most of the reviews of the new offering have been kind but not ecstatic. No real innovation in the music – a bit rawer and harking back to previous motifs and approaches – but essentially a typical U2 album. In essence there is nothing there that would turn the indifferent to the desiring.

If the rate of decline has remained consistent then this album would probably have struggled to shift more than a couple of million copies. If Bono was disappointed with NLOTH, ’ listening habits for low sales, the band and its management certainly weren’t going to take chances with this one. By giving it to Apple to give away whilst getting a fat check in return, they are eliminating an obvious indicator of how good it is, the record sales figures. No-one will know what percentage of the 500m iTunes account holders will download it during the month. Even if it is only 1% then they will match the sales of their last album within 30 days. But perhaps it will be 5% – a whopping 10 million, which would make it instantly their 3rd best-selling album. We are unlikely to see the headline “disappointing sales of U2’s latest”. Brilliant. I can see it now, the Guinness book of World record entry forlargest sales of an album with an asterisk stating *not including U2 Songs of Innocence which may or not have that accolade. TBH we cannot tell”.

Even better, U2 may convert some previously indifferent listeners to fans. And that of course may help with sales of their back catalog. And of course when they embark on their highest grossing world tour in history next year (I am reasonably confident of that), most of the audience will know their current oeuvre.

But what is most interesting is the change of business model. Yes bands have given away their albums for free via download before: Radiohead are a well-known example. But this is on an altogether different scale. One could argue this is about total control being given to the distributor, in this case Apple, and maybe an invasion of privacy taking place. Whilst I appreciate I have to actually download the tracks to my device, they do appear in my purchased folder and that was unsolicited. I am a U2 fan so probably would have bought it anyway at some time, but if I found an album by Jonathan King or Garry Glitter in there, I would be far less sanguine. Others may feel the same about U2. After all, U2 are the most divisive band on the planet. Bono’s posturing and self-aggrandizement can grate for many.

In any event, no –one can doubt U2’s determination to appeal to the digital natives and millennials. If ‘Zeitgeist’ was appropriate to any band, U2 are it. U2 show no signs of being a tired band and they are doing all they can to avoid being a tired brand.

Personally I applaud their innovation in working out how to be relevant.  Sure there were pointers with the U2 iPod a decade ago but the idea of ensuring an average, easy-listening album that sounds like Coldplay doing The Killers is listened to by millions of people is genius. In fact, it is a master stroke.

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