It's Always Been About Engagement.

I’ve been thinking lately about what consumers really want. My conclusion is that they want experiences; in fact, they are even willing to pay for them.

What provoked this was a reply I read from Nick Bilton, NY Times technology reporter and lead writer for the Bits blog, during a Twitter conversation about his piece on internet piracy. Here’s his comment:

New music business models are about monetizing the experiences that consumers actually want, whereas old models were about the opposite: getting people to pay for content that allowed them to have those experiences.

The difference here is important. Old models forced consumers to purchase a substitute for what they wanted. New models allow consumers to purchase what they wanted in the first place. This change results from the democratization created by the internet and has wreaked havoc on many industries. We are all aware of how the internet has eliminated the middleman; this is just another case.

This is not solely music-related. The 2012 London Olympics will be remembered in part because of the Twitter hashtag, #NBCFail. This meme emerged out of the dissatisfaction of viewers who felt they were prevented from engaging with the Olympics in ways they wanted to. People watch the Olympics because they want to take part in a special, worldwide spectacle, and are fascinated by the emotional stories surrounding those with abilities that they don't have. However, many felt that they were limited by NBC’s schedule and unable to participate in real time with what was taking place worldwide. Woe to any company unable to provide the experience their consumers now expect. NBC paid a price for this dissatisfaction.

The same is true of musicians. Part of what attracts fans is that they want to feel an emotional connection to activities that are not commonplace. Like Olympic athletes, musicians have highly specialized skills most people don’t have. Not only are they revered for the qualities they embody, but their music and lyrics allow fans to identify with them on multiple levels. Fans are only able to experience these traits vicariously, so feeling that connection is what is most important.

Music has always been a medium where the relationship between the audience and the musician is an important experience. Since the dawn of time, music has been a means of communication. It is used to express emotion, to tell stories, to relive history. It's how we learn, how we share our ideas, and how we build communities. Shared experiences are the underpinnings of all of these actions, needs, and desires, and they are possible because of the relationships that music creates.

In modern times, many of the experiences that fans expect have been enabled through the use of technology. Devices have been developed through which we connect to each other, and of course, our connections through music have changed as a result.

Major labels perfected mass marketing and distribution of music because of their ability to control all the channels and pay the high cost of music-making at this level. Despite being able to purchase only what was offered, consumers longed for something else: the experience. However, the scale of these businesses obscured this fact. But when given the opportunity to vote, consumers did so with their wallets, leveling the record business.

What Nick Bilton says is true. What the 2012 Olympics teaches us about consumer behavior is true. What we have always known about music is true. Consumers never wanted just content, it was a means to an end, and they paid for it because they had no other choice. What consumers actually want is engagement, and successful businesses will learn how to bring those experiences to market.