by : Business, May 2013

Lessons from Karmin

Lessons from Karmin

Karmin, formed in November 2009, is the platinum-selling pop/hip hop duo of Amy Heidemann and Nick Noonan, two students of Berklee College of Music. The Boston connection runs deep for Karmin, as their business team was formed within the institution: manager Nils Gums, assistant manager Matt Maltese, executive assistant Katy Eggleton, sound engineer Andrew Maltese, and Grammy-nominated hit songwriter and producer Claude Kelly.

Two years ago Karmin’s cover of Chris Brown’s “Look At Me Now” (LAMN) went viral on YouTube exceeding 3-million views in five daysand propelled the band onto the global stage.1 This viral event led to a performance on The Ellen DeGeneres Show and a barrage of offers from all four major record labels, many of their imprints, foremost music publishers, and world-class producers.

Karmin emerged from a whirlwind six weeks later as the first act signed by L.A. Reid in his new role as Chairman and CEO of Epic Records, a division of Sony Music Entertainment.  They signed a publishing deal with Sony/ATV as well, an agency agreement with William Morris Endeavor (WME), and licensing deals with the National Basketball Association (NBA) and Jay Z’s Rocawear, all shortly thereafter.

They did not sign a 360 deal with any entity, thereby retaining all rights to their touring, merchandising, sponsorships, and other prospective revenue streams. The deliverables and financial terms of the recording and publishing agreements remain private. Gums generalizes their value at “over a million dollars each.”2

Since then, Karmin’s early career highlights are remarkable by any measure—from an American Music Award New Media Honor, two I Heart Radio/Jingle Ball tours, performing on Saturday Night Live, achieving platinum-selling status for the single “Brokenhearted”, appearing on the cover of Rolling Stone by fan vote, ad campaigns for Steve Madden, Rue21, and GAP, earning “more than the record deal”3 from luxury brand Coach for a holiday video of “Sleigh Ride”, to ringing in 2013 with a performance at a private New Year’s Eve party at the Viceroy resort in Anguilla with Paul McCartney seated in the front row.

While these extraordinary post-viral career highlights tell an exciting story, it is the eighteen-month pre-viral period encompassing Karmin’s professional development and launch phases that holds value in analyses by musicians and their managers seeking to extract actionable marketing strategies and tactics to consider in developing their own strategic marketing plans.

This period from inception to going viral divides in two nine-month segments—a professional development phase from November 2009 to early August 2010, and a launch phase from late August 2010 to mid-April 2011 when they went viral.

Professional Development Phase: November 2009 – August 2010

Post graduation, Heidemann worked as a wedding singer and student advisor at Berkleemusic, the college’s online school. Noonan worked the front desk at a boxing club.  They pursued musical opportunities separately and grew increasingly frustrated with scheduling conflicts and creative differences in failed attempts to join up with other musicians. In November 2009, eighteen months after graduating from college, Heidemann and Noonan formed Karmin to pursue a professional music career together as a pop duo. Heidemann soon resigned from her job to dedicate full time to the entrepreneurial endeavor. Noonan kept his job until the week after LAMN went viral nine months later.

Karmin’s development phase was fully an exercise in self-development recognizing every artistic decision they made had a business counterpart, with Gums providing branding and marketing strategy on an informal basis. Karmin’s management agreement with Gums was not formalized until late fall 2010, several months after their launch. The initial conceptual process they followed is common to all start-ups, requiring them to envision the look, feel, and voice of their offer with emphasis on singular differentiators that could resonate with a target market. Karmin’s branding efforts reflected shared aspirations, goals, core values, and musical preferences; the look and feel encompassed visual and tactile elements including design, imagery, color, and typography. Word choices eschewed profanity.

Much learning was involved.  In college, Heidemann was a voice principal and Noonan was a trombone principal. To become a pop music act, she learned how to play guitar and he learned how to play cajón and piano. They began writing songs together and staging their live show. They studied recording and editing audio and video, how to design, build, and maintain a website, and how to master the back end workings of social media networks, primarily YouTube, Facebook, and Twitter.

Gums’ marketing strategy derived from the convergence of several personal observations—the production values on YouTube for independent artists were generally low, despite readily available, inexpensive video and audio technologies; the clutter factor on YouTube was extremely high; search engine optimization (SEO) techniques were poorly used if at all, and popular music in general was moving away from its organic roots toward heavy reliance on elaborate arrangements and recording studio techniques, especially the use of Auto-Tune.

Gums’ counseled Karmin to cover currently charting popular songs to enable the use of titles, keywords, annotations, descriptions, and search engine optimization (SEO) techniques to land on the first page of a YouTube search for the original artist or song, and to do so in intimate, one-take, acoustic performances. From there, prospective fans could discover Karmin.

Launch Phase: August 2010 – April 2011

Karmin’s hard launch came in late August 2010 with karminmusic.com coming out of beta, and Twitter, Facebook, and YouTube accounts in place. They began a daily practice of promoting their music by communicating with early fans. By analyzing the data available to them as account administrators, they learned the longer the introduction to a song, the higher the bounce rate. To remedy this occurrence, they developed a short, video introduction—“Hi I’m Amy. And I’m Nick. And we’re Karmin. This is [name of tune].” Behind the scenes extra footage was added at the end of the videos like a gift for those who watched the whole video. They also incorporated a variety of sales promotions to engage fans from asking them to create captions to candid photos of the band, to covering their covers.

By the end of the year, they had uploaded 24 music videos—18 covers and six originals—a rate of nearly four videos per month for the five-month term. Their portfolio represented nearly one and one-half hours of proprietary music content in three and one-half minute songs. Some videos were one-take productions filmed in-studio, others were storylines requiring multi-location filming and longer production time. They had played 22 shows, eight of them busking in front of H&M or Best Buy in Boston’s Back Bay, plus uploaded two lifestyle videos and a mock T-shirt ad.

In January 2011, taking stock that the results of their efforts to date were marginal, Gums and Karmin refined their branding and marketing strategy by adding a key differentiator—Heidemann’s rapping skills. In addition, Gums recommended they open a new YouTube channel, Karmincovers, and focus on producing simplified, in-studio music videos that took less time to finish. He provided Karmin with a half dozen song suggestions he forecast would be rising the following week on Top 40 radio and sales charts, and asked for an accelerated production schedule of two covers and one original per week.

The same month, with compulsory licenses in place, they began selling digital singles of the cover tunes using a promotional offer of a free download in exchange for an email address for the first two weeks, then converted the links to a 99-cent iTunes sale. With 30-cents going to iTunes, 9.1-cents going to the original artists, and 16-cents going to InGroove and management fees, Karmin began earning an estimated 45-cents per cover download.4

When LAMN went viral in mid-April 2011, Karmin had 44 music videos on YouTube—33 covers and 11 originals—representing nearly two and one-half hours of music content. Their Karmincovers channel had just over one million video views5 and nearly 850,000 subscribers.6 When they entered final negotiations with Epic and Sony/AVT the following month, they brought 80,000 email addresses and an estimated $125,000 in retail sales of digital downloads with them.7

Conclusions

Beyond talent and hard work, Karmin’s early career success rests on their awareness of story, design, and differentiation as the lead drivers of a marketing campaign. They were willing to create and execute a direct-to-fan (D2F) marketing plan on a low cost, high sweat, do-it-yourself (DIY) basis, and embraced social media always as a two-way communication tool with which to engage fans.

Beyond that, of course, there seems to be a locational advantage. Much of Karmin’s quick progress was aided by connections and friendships made at the Berklee, the largest college of contemporary music in the U.S.  Legal and financial questions about covering other songwriters’ materials, for instance, could be quickly dealt with, and acted upon, drawing on the expertise of resident business experts. Fundamentally, Karmin found the right startup team there. Without the advice and involvement of Nils Gums and Matt Maltese, as well as others, it is unlikely that Karmin would have been able to capitalize on their early success. No one would argue that a presence in Silicon Valley is neutral to the success of a technology-based startup. Similarly, speaking of Karmin is, to an extent, speaking of the opportunities found at Berklee.

An extended version of the piece will be published under the title “Karmin: Marketing Music Using Social Media”, June 2013, by the Music Marketing Review

By Stephanie Kellar

 

Endnotes

1. The Ellen DeGeneres Show. NBC Television. 20 April 2011.

2. Gums, Nils. Phone interview. 18 January 2012.

3. Gums, Nils. Personal interview. 3 December 2012.

4. Gums, Nils. Phone interview. 1 March 2012.

5. Ibid.

6. Ibid.

7. Robehmed, Natalie. “The Model And The Money Behind Viral Hits.” Forbes. 3 May 2012.

8. Gums, Nils. Personal interview. 30 March 2013.

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