By Carolyn Heneghan
Facebook, the demigod of social networks and class-favorite of online marketers, is taking one step closer to—gasp!—mobile shopping and e-commerce. Even better? They’re doing it via your shopping history and credit card information.
Last week, AllThingsD broke the story that Facebook would indeed be testing out its own mobile shopping platform, and the headlines flooded with rumors and assumptions that Facebook would be pitting itself directly against online transaction giants like PayPal. That, however, is not quite the case.
First, let’s examine exactly what this new feature is and does, then we’ll move on to how musicians specifically stand to benefit.
What They Really, Really Want
In essence, all Facebook is trying to do is to find a way to automatically populate credit card information into the checkout form of a mobile app. This can be difficult to enter on such a tiny screen and potentially annoying if you have to do it multiple times.
What Facebook is not trying to do is process payments, which is what PayPal does. In actuality, Facebook wants to make it simpler for customers to checkout with PayPal and other e-commerce services by making it one step easier for customers to enter the credit card information needed to make a purchase. So in actuality, PayPal should be thanking Facebook for the new feature instead.
The way Facebook plans to do this is by using credit card information stored in Facebook’s goliath mines of data, which the service procured when users either purchased Gifts for others or when users made in-game purchases—Farmville, for example.
So what’s in it for Facebook? Instead of vying against PayPal for top-dog e-commerce service, which it is not at all interested in, what Facebook really wants is data, data, data. And what kind of data? Shopping data that proves the worth, influence and ROI of Facebook in e-commerce transactions to its beloved advertisers. Yep, that explains a lot.
What This Means for Music
How can a service like this bring musicians and their music closer to their fans? The most obvious way is that music fans can more easily engage in online credit card transactions with whichever e-commerce service the band or musician chooses to use.
Even Facebook’s scramble for more ad dollars might affect musicians. If more advertisers in the music industry see for themselves data that demonstrates the success of this feature, they will likely pump more money into Facebook, which can improve the technology for any bands that use this new feature. This can also help any bands represented by those marketing companies, who will advertise how the service is a new way to reach all of their clients, giving those musicians more exposure.
Why Facebook Is Already Great for Musicians
When fans check out or purchase a song via the iTunes Store, they are not getting the full media package; they are only getting that individual song or album sent to their iTunes client. When fans access a musician’s song on Facebook, they are also surrounded by that musicians’ photos, videos and updates on bands news and upcoming gigs and events. If a potential fan hears a band at one of their gigs and wants to listen to more, Facebook, particularly with their latest feature, will make it easy for them to buy the musicians’ tracks from right there within the service and from their mobile devices.
This is why many musicians have turned to Facebook as a marketplace to sell their music online. There are already companies such as Nimbit and CD Baby who provide this service to musicians, and now Facebook is making that checkout process that much easier for fans to purchase and connect to musicians’ music. Think about the aggravation saved by not having to enter in credit card information every time a fan wants to buy a few individual songs rather than a whole album—even from their mobile devices.
GIG-IT as New Revenue Stream
Another revenue stream that should be mentioned in this context is GIG-IT, a social Facebook game wherein players can create customized 3D concerts using virtual adaptations of more than 60 concerts and share that creation with friends. They control nearly every aspect of the concert from set placements and lighting to the city, venue and even wardrobe. The current price for the game ranges from $20 for one ticket to $250 for 10,000 tickets.
Besides being a cool and fun new game, artists stand to benefit from the gameplay itself.
The way musicians make money through this app is three-fold. For one, players generate revenue for the musicians each time the players use the musicians in their concert creations. Artists in the platform share the revenue, and each concert makes money for an artist across the entire platform. Musicians can sell tickets and merchandise, such as virtual T-shirts that fans will receive in real life. Finally, musicians can also sell their music directly through the platform.
All in all, GIG-IT, according to CEO John Acunto, is essentially the first artist-supported music game where in artists are represented and can get behind the app’s capabilities as new ways to support their musical endeavors. And of course, with Facebook’s latest mobile commerce feature, players could interact with this game and its purchasing capabilities with ease and quickness, even from their mobile devices.
The potential for musicians online, particularly now with Facebook’s latest tested feature, grows by the day. As more opportunities arise, musicians will grow still closer to their fanbase by being able to reach them more easily than ever, and this will help to evolve the musician-fan experience and help the industry keep up in an age of quickly advancing technology.
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