At a music marketing event in London a couple of days ago, Scott Cohen, Co-founder of The Orchard (and on the left in the collage), presented a nice thought experiment that demonstrates the importance of community and narrative in making sure that discoveries stick in the mind of audiences. What if Simon Cowell (on the right in the collage) just cut to the chase on The X Factor and presented only one show in each series, saying "we've done the research, we've done the auditions, we've consulted audiences, and here's the winner"? The result would be the same — a winner like Leona Lewis (middle of collage) — but would this winner sell as many records? Answer: No, because it's the backstage access, the community that grows around the competitors, and the story of the winner's rise that engages the audience interest. They make an emotional connection with the artist and the song, and buy it to help it succeed.
Yet, as Scott went on to say, record labels do all the research and auditioning that X Factor and its equivalents do, but they hide it from view, and just say, "here's the winner we've identified: please buy their records". The solution to this is not to create some contrived competition for every new signing (personally I hate it when art gets turned into sport), but it may be to find other ways to involve the audience and give them "backstage" glimpses of artists that help people engage with them. Even a simple blog is a start.