Monday, October 30, 2006

Text messaging catches on in music business
Mon Oct 30, 2006 6:34 AM ET

By Antony Bruno and Chris M. Walsh

LOS ANGELES/NEW YORK (Billboard) - Students at Chula Vista (Calif.) High School near San Diego were treated to a particularly nice surprise on a recent Tuesday.

Rather than the standard fare of reading, writing and arithmetic, the school doled out a healthy dose of Diddy, who made a guest appearance courtesy of local hip-hop station XMOR-FM (Blazin 98).

The student body won the visit by sending the most text messages to the radio station as part of a campaign to promote his new album, "Press Play." The station opened the contest to all high schools in the area, asking students to send a text message with the word "Diddy" during a four-day period.

Chula Vista won the contest, logging 34,000 messages. Some students reported sending in hundreds of messages each. In all, the station received more than 170,000 text messages. The Diddy campaign is just one implementation of many that show how record companies and radio stations use text messaging as a promotional tool.

Once considered a service used only in Europe and Asia, text messaging is emerging as an important form of communication in the United States, with 40% of the nation's 220 million mobile phone users sending text messages regularly, according to research from NPD Group.

By comparison, about 21 percent of U.S. subscribers have downloaded a ringtone (although only about 10% can be considered "active" downloaders), while about 9% have downloaded a mobile game.

According to CTIA-The Wireless Assn., U.S. subscribers sent close to 65 billion text messages through the first half of this year. That's about double the number sent in the first half of 2005.

Record labels have latched onto this trend to sell ringtones and other mobile content directly to fans, rather than relying solely on wireless operators to generate sales.

"Every artist with every track, and all the merchandising and all the advertising, we're using (text messaging) to try and drive business," says David Ellner, executive VP of operations for Universal Motown/Republic Group. "The consumers, from a texting standpoint, are completely literate with this."

Typically, this takes the form of a CD insert listing a special "short code" to which fans can send a text message to buy ringtones and other content.

"I don't think you will see a (marketing) tool coming out of Atlantic Records -- anything from an album, flier or advertisement -- that doesn't have some sort of mobile promotion," says Cyndi Allnot, Atlantic Records' mobile marketing manager.

Labels also are incorporating text-message responses in their TV, radio and print advertising as sort of a mobile URL, and consumers are responding. According to October figures from mobile traffic measurement firm M:Metrics, 7% of the U.S. mobile subscriber base has used text messaging to respond to such ads. Compared with Spain and the United Kingdom, which boast a 29% and 18.5% response rate respectively, that number may seem low. But it's on par with the 10% reported in France and actually beats the 3.5% reported in Germany.

Of that 7% who responded to ads using text messaging, 38% did so to download some type of content, while 36% replied to a contest or promotion. TV ads were the most successful at generating a response, at 64%, while radio came in a distant second at 15%.

"Brands are intrigued by this medium, particularly those trying to reach 18- to 34-year-olds who are media-literate and tech-savvy," M:Metrics founder Seamus McAteer says.

Compared with other entertainment industries, like film or TV, the music industry is more sophisticated in its usage of text messaging as a promotional tool, according to Dov Cohn, VP of product management and strategy at Motricity, which helps operate text-message campaigns on behalf of such labels as Universal Music Group and Wind-up Records.

"The music industry is more progressive because they are able to immediately see the financial gain" through ringtone sales, he says, "and they're looking to take more control over it and build their brands more directly."

Labels are also using text messaging as a push marketing tool, sending messages directly to the mobile phones of fans who have opted in to receive alerts about their favorite artists.

"It's a huge priority for us because kids are moving off of e-mail and onto text messaging and instant messaging," Atlantic's Allnot says. "It basically has a 100% open rate."

In some cases, labels can even charge a fee for the text messages sent in response to recoup their marketing costs, without selling a thing.

For instance, RCA Group ran a sweepstakes in conjunction with the launch of Monica's new album earlier this month. With Adidas as a sponsor, RCA invited fans to enter to win a $5,000 online shopping spree by texting the word "Monica" to a short code. At 99 cents per message, RCA is able to put that money back against other marketing costs.

"This is probably the first promotion we ever ran where we didn't lose money on prizing, advertising and things like that," says Sean Rosenberg, director of mobile marketing at RCA Music Group.