“We have come to an age where a core product — recorded music — is no longer differentiated by price.”

Alicia Yaffe argues in a recent article that music industry suffers because everything is a commodity.  Established bands and first timers all charge the same amount for their music, regardless of quality. Breaking free from the abundance of music, and creating something truly unique will create value in this product, and in turn, make people interested in buying it.
Kickstarter is a great example of a place where value can be added. There, fans are asked to preorder albums, often before it is recorded. Bands can have multiple price points by inserting merchandise, videos, or personalized messages, all of which create value by adding something unique to the buying process.

The same idea can be applied to a band’s live shows. If a group has the same show, night after night, their performances are a commodity. Making each one different will create a unique product, one that must be seen now, or it will never be seen again. Bands that do this will have fans who want to see them more often than those who have a regular routine or setlist.

Read the full article here

“The time of the Record Label has passed. Artists do not need a record label to survive, and in fact, most artists would be better off as a hot indie group than one desperate to sign with any label.”
This and other great advice comes from an article by Simon Tam outlining “The Most Overrated Thing’s In A Musician’s Career”.
Simon goes on to describe other “overrated” things, like paid Electronic Press Kit or EPK services, booking agents, and professional music gear. Especially overrated are big music industry festivals like SXSW, which just finished in Austin, Texas. Bands who get asked to play these festivals are already on their way up, and do not come with any guarantee that you will be noticed by the right people.
Simon also takes aim at Kickstarter, which has been in the news recently for large sums paid out to artists. Without an existing fanbase already willing to pay for your music, your campaign will not be funded as we recently blogged about here.

Read Simon’s full article here on Music Think Tank

Amanda Palmer made another big splash in the discussion of the new music industry this month when one of her talks aired on the site TED.com. TED Talks often feature celebrities or notable people discussing technology and music. Amanda’s speech has been widely shared because of some of the extraordinary remarks she made on piracy, record labels, and how she makes money.

Amanda is known for being close to her fans. She has over 800,000 twitter followers, a well-read blog, and “couch surfs” on many of her tours, often staying at fans houses rather than hotels. And, despite her popularity in recent years, she has held on to her Indie title.

Her talk highlighted how she uses this closeness to earn money. Every dollar she makes is the result of a personal connection with each fan. At the beginning of her career, this meant walking around in the crowd with a hat asking for money. Now, she uses twitter to ask for rehearsal space, a room to sleep in, and anything she needs on the road. And, to this day, she has people in public come to her with cash, saying, “I burned your CD from a friend”.

Getting paid directly from her fans proved to be incredibly fruitful after she left her record label. In April 2012, she began a Kickstarter campaign, asking fans to preorder her album, donating money before she recorded it. Although she asked for $100,000 for the project, her fans rewarded her with almost $1.2 Million, the largest amount ever given for a music project.

Through that story and many others, Amanda’s talk outlines how, in the midst of a decline in record sales combined with booming online piracy, she gets all the money she needs from her fans, simply by asking for it.

I highly recommend watching Amanda’s full talk, you can watch the video online or download it for free here.

Guest post by Kyle M. Bagley

Artists, labels, venues, websites, pretty much anyone in the music business these days is involved in social media to some extent. Everyone knows it’s important, but knowing what the best parts are can save you hours, achieve better results, and streamline what you do online.

Set Goals

In order to decide where to focus your energy, you need to focus on what you expect from a social media campaign. “I just want to get my name out there.” is not enough anymore. You should have specific goals, ideally centered on making money.

What makes the most money for your band or company? Is it selling CD’s or music downloads? Selling merch? Ticket sales for your shows? Whatever it is, exploiting it should be the focus of your online presence, and will make the most effective use for your time. Expanding in the areas you are lacking should be a secondary goal.

If exposure is your goal, not money, try narrowing it down further. Who do you want exposure with? More fans? Labels or company executives? And what will this exposure lead to?

Know Your Networks

Once your goals are in place, knowing the differences between social media sites can tell you exactly where to go to achieve them. It is also important to respond to what is working differently on each site, and not waste time with things that aren’t. Understand, I am not suggesting that all your posts should be “buy this!” or “share this!”, but keep your goals in mind as you craft each page and persona.

Facebook

Facebook is a good place to start; it is the most popular network in most parts of the world. Facebook’s best asset is that it is the most likely to have all the people you actually know. First of all, this means building an initial fan base should relatively easy. Also, having a network of people you are already friends with and that live nearby gives you a great crowd to advertise shows to. Other sites that are more likely to include people from across the country may not help you much selling tickets to your shows. Facebook is also becoming the standard for informational, “like”-able pages, perhaps the first place someone might look that hears of your band or company.

Twitter

Twitter is a much harder place to build your network, but that network can be very rewarding. It is full of music industry people, and no matter how small your genre or specialty, they are easy to find. However, unlike other sites, you will only get followers by having good content, and saying truly interesting things. Your profile does not have the same fluff of the other sites, such as a bank of photos, a place to have your music, etc., but Twitter users are very active and like to share what others like them are involved with.

Your followers on Twitter will be all over the country, and more likely, all over the world, so don’t expect to gain a lot in ticket sales. On the other hand, tweets about new products, music, and especially press and blogs you are featured in will get a great response.

YouTube

YouTube is the best way to get lots of plays for your songs and people listening to your music. More and more big names started by doing frequent cover songs to sell their own original music. An embedded link in a video can be seen thousands of times if a video has enough plays, whereas reaching that amount in one post on Facebook and Twitter can be almost impossible.

YouTube’s major drawback is that it is not as good for conveying information. You would never click on a band’s YouTube profile to find out if they had shows coming up, read their biography, or see their past discography. But it’s a great way to be discovered by random stumblers or old fans who just want to listen to your latest music.

Balance

In all, one social media site will not accomplish all of your needs as an artist or company. And any social media site, listening service, blog, or network can have a benefit. But it is a better use of your time to have clear purpose for each one you become involved in, and limit what you do, rather than try to use all of them for everything, and end up with not enough.

Guest post by Kyle M. Bagley

“I started my career in the late eighties, where the template was: sign on with a record label. That’s you’re ticket to admission.  You have to have distribution, they have it tied up – promotion, all the team in place. And then just try to work as hard as you can, and over time, what I was hearing when we were first getting signed was, by your third or fourth album if you get your audience, that’s what we’re aiming for, and we look at you as a Prince type character, with a career like The Cure, or Depeche Mode or bands that’ve been around for a long time and that will continue to be around. Ok, all right, I’m ready. I’m in for the long haul; I’m ready to do this.

Then you start to learn as you see contracts. Wow, whoever went along with this contract originally, it’s not a very fair contract. Let’s see, you as a record label lend me some money to make a record, and then I have to pay you back all that money. And after I pay it back, you own it forever. Wow. And then I get to make this little sliver on top of that, if I’ve recouped (expenses). But you get to control how much I spend on marketing and other things I have to pay you back for. So, wait a minute. I could sell this many records and still never recoup? And you do all the accounting?  And then when you don’t pay me, ever, then I have to spend twenty-five grand to audit you, for you to then tell me “Oh, yeah, we do owe you this much.” That kinda sucks. And then [there’s] the mysterious, purposefully convoluted and tangled world of publishing, and how confusing that is. And a lot of musicians, myself included, that just wanted to work on music, and hoped someone had figured that out.
And you realize – some of the unfair business practices and precedence that’s been established.   And I’m not saying that no one should benefit from songs I write, or that I do all the work and I should make all the money. But I should make SOME money, and I should be able to clearly see where that money is coming from, if I did all the work, essentially. I wrote the song, I came up with the idea.

But then when you see the industry start to collapse, which means you’re kinda happy to see some of it collapse, but then you’re sad because also my livelihood is in danger, and I think how am I going to support myself and a family in an industry where we’re essentially making typewriters, you know? Nobody wants typewriters anymore. Everybody will read, and everyone still writes, but they don’t use these clunky machines…

I think the promise, and what I would hope more than anything, is that when we get to this new business model, whatever that is, on the record label side and also on the publishing side, [is] that somebody is strongly speaking up for artists’ rights when that starts to get figured out. And that in an age of potential transparency, that the actual content creator has a seat at the table…

What I consider, from a consumer point of view, the next good business model, the next thing that makes sense, is if there were mass adoption of music subscription services, like Spotify. I think in an age of broadband connection being everywhere, everyone having powerful computers in their pockets, this sense of feeling-  normal people feeling comfortable with the idea of the cloud, and their data’s somewhere but it’s is secure, it’s somewhere, and they have access to it, having all the music available in the world available to you at your fingertips, anywhere you want it all the time, that’s pretty cool.  That requires some education on the part of those companies, to help people to understand what that is. But is it fair to the artist? Not really. Look at the checks you’re getting paid from those services. It’s not an inspiring amount, and it certainly doesn’t replace lost revenue.

In my case several year ago, sitting around realizing “Hey, that kind of hazy dream I had, of sitting around getting checks for record royalties for the rest of my life? From work I did years ago?” You know, Eagles style, “Hey, Hotel California, another billion dollar check shows up.” It’s not gonna happen. Being able to make a sizeable amount of money from selling a record. It’s not gonna happen anymore. That’s a bitter pill to swallow. Music is free. I don’t think it should be free, but music is free. I can right now search in Google for any music that there is, and find it free. And so can anyone else with above-rudimentary searching ability. That’s a fact. That’s what you’re competing with.”

- Trent Reznor, Nine Inch Nails

More on Trent Reznors proven solution to these issues in the music business:
The new music business model: Connect With Fans!

Many artists these days are using Kickstarter or similar services to raise funds for their next album, which is a great idea.
But they often fail. Why?

According to veteran music industry consultant Tim Sweeney, one simple reason: You don’t know your fans.

One strategy Tim has taught artists he mentors for the last 30 years is the following: “Whether you want more fans at your shows, greater sales or want to raise money for your new project start having social events with your fans. Instead of only inviting them to your shows, invite them to come hang out with you at a movie, a festival, another artist show or some other event based upon on a common interest. Too often artists want people to blindly support them because they wrote a good song. As we wrote in our last post, it’s not about the music.

“Give fans what they really want, a chance to talk with you and build a bond.”
Would you do that with your fans? Well, maybe that’s why you have to work so hard to promote and sell your music.

While social events offer you a chance to get to know your fans, they more importantly create an opportunity for your fans to get to know each other and develop friendships. That way when your future shows come up, they will call each other and come together so they can hang out with their new friends. This is why Facebook is so popular: it allows people to do this online.

Tim’s Artists have sold millions of CDs and downloads with this strategy with selective fans and have found it the best way to sell out shows in advance. He says, “Think of it this way, if your favorite artist invited you to an event where you can hang out with them and make new friends would you go?”

Invest your time into your fans instead of only social media campaigns and your show money and sales will increase along with “pre-sales” of your next project where you may not need to do a Kickstarter campaign.

And then when your ready, you may want to try Pledge Music, the Kickstarter for music that we really like.