Music Marketing

I am a fan of artists and managers A) starting off by doing what they can themselves to help market and sell their own music, and B) seeking out partnerships with companies that can help them to do more than they are able to do themselves, for a fair price, and C) building up, communicating, and monetizing their own list in a meaningful way, using best practices with direct-to-fan marketing. I think direct-to-fan not only has the potential of generating more margin for artists now, but if done properly, DTF (direct-to-fan) can also help to ensure that artists are building a passionate base for the future. It’s not the only marketing segment that matters, but it is a segment that all musicians and managers should be paying close attention to, and integrating into their other traditional marketing and sales campaigns.

I’ve been working with Shamal, Gary, Ian, Adam and others at Topspin for the past 8 months or so creating a course dedicated to outlining the best practices that folks should be aware of in terms of online DTF (and traditional) marketing, and how Topspin’s software can be used to help facilitate these best practices. I’ve had the good fortune of not only taking a look inside Topspin’s platform to analyze their key features – a content management system that hosts your media assets, a fan management system that collects, organizes, and analyzes fan data, detailed reporting features, e-mail management system, widget creation and viral tracking, and more – but also to see the best practices and real data that Topspin has generated from the 150+ campaigns they have run over the past couple of years. While every marketing and sales campaign is different, this course presents folks with a unique opportunity to “look behind the curtain” to see exactly what has worked for some bands, how they set up their offers, the income they generated from these offers, and how they went about acquiring new fans. I think it’s helpful information.

I sat down with Ian here at Berklee in August to do a quick overview of the course, which turned into a bit of an online marketing clinic. Below is one of the clips from our conversation. To see them all, click here.

Online Music Marketing with Topspin is enrolling now, and begins on January 11th. If you are interested in learning more about the course, feel free to connect with one of our Admissions Advisors at 1.866.BERKLEE (US) or 617.747.2146 (International).

It’s likely that you’ve heard of Jonathan Coulton. Profiled by NPR and the New York Times, Coulton has been a full time independent musician since he quit his computer programming gig in 2005. After initiating an ambitious project of releasing a new song a week, Coulton started to gain momentum, making what he described as “a reasonable middle-class living” — between $3,000 and $5,000 a month — by selling CDs and digital downloads of his work on his own site and iTunes.

Coulton is prolific in his conversations with his fans online, spending time each day personally answering every email he receives. While his direct to fan approach to sales and marketing includes a partnership with CD Baby (who warehouse and ship his physical CD, as well as get his music to the online retailers like iTunes and Amazon), Coulton’s most lucrative source of income is selling online from his Website.

Check out an audio interview that Scott Kirsner, author of the new book, Fans, Friends & Followers, did with Jonathan Coulton. Interesting ideas on communicating with fans, how Jonathan is using Creative Commons, his primary sources of revenue, his trepidation about signing to a label, and more.

Pay particular attention to Coulton’s recipe for success:

• Solo artist = low overhead when touring
• Records in a home studio = low production costs
• Distributes most of his music digitally = no co-op fees at retail, lower distribution fee
• Fosters a direct connection to his fans = fans are more emotionally involved in what he does
• Few middlemen involved in the chain = most of his income is his alone

Check out the audio interview here:

Love this idea! Quick recordings with an immediate payout for fans over the course of one week. I’d subscribe to this effort for my favorite artists…

Via Pitchfork:

“When most of us have extra spare time on our hands, we end up zoning out in front of “Daisy of Love” reruns or rereading Watchmen for the billionth time. Beck, on the other hand, challenges himself to record cover versions of entire albums as quickly as possible. Different strokes, I guess.

Over the next month, Beck will be overhauling his website, and one of the features will be something called Record Club, in which Beck ropes in various musician friends to record an entire album in a day. For the purposes of scrappy immediacy, nobody will rehearse or arrange anything beforehand.

After that day of furious recording, Beck will slowly let the record out into the world via his website (as well as the websites of the other musicians involved), uploading a new song once a week. He’ll kick this party off with The Velvet Underground and Nico. That’s an ambitious start! Will Beck attempt the Nico vocal parts himself? We’ll find out!

Future Record Clubs will involve friends-of-Beck like Devendra Banhart, MGMT, Jamie Lidell, and producer Nigel Godrich. Here’s hoping they give 8Ball & MJG’s In Our Lifetime a shot.”

Dear Steven Van Zandt,

I just read your interview in CNN, and I wanted to offer an alternative view to your thoughts, particularly related to this quote: “The reason nobody wants to talk about it is because it mostly sucks! Who are we kidding here? Nobody’s buying records? Because they suck!”

You also suggest that if bands learned more cover songs and listened to more “great records” (i.e. classic records) the record industry would be saved, which I think it is a slightly myopic view of what is happening in the business. I think you are missing two key points:

1. THERE IS AN AMAZING AMOUNT OF GREAT MUSIC OUT THERE, but I think you are looking in the wrong places for it. I suggest you take a look at eMusic – the largest online retailer for independent music. Find an artist you like, look at recommendations by eMusic and other consumers, and you can easily fall down the rabbit hole for hours experimenting with new, and in many cases, amazing music you have never heard before. Like Psych Rock? Check out Wooden Shjips. Sign up for newsletters from forward thinking physical retailers like Other Music, a store run by music geniuses who can connect the music dots between Grizzly Bear and Erlend Øye in three steps or less. And of course there are dozens of music blogs, from aggregators like the Hype Machine, live music session and editorial blogs like Daytrotter, old school outlets like Pitchforkmedia, and a million in between. Not to mention the myriad of online radio stations that are not hamstrung by the tight-playlists the consolidated commercial radio business has given us over the past 10 years. Widen your net, Steven, and you’ll find tons of music that will knock your socks off.

2. THE OLD MODEL OF A PHYSICAL RECORD-BASED MUSIC ECONOMY IS DEAD. It is not coming back. Dead. Dead. Dead. You can have a million bands covering “Working on a Dream” for a million years and you will not bring traditional physical record sales anywhere close to where they were at their height in 2000. The infrastructure has shifted forever. Some details you should consider:

Less Outlets for Traditional Music: Tower Records shut down their U.S. operation in 2006; Circuit City (9th largest music retailer in 2008) ceased operations in 2009; Virgin Megastore announced in 2009 that they will close all of their U.S. stores; Borders (the 6th largest retailer of music) has cut back their in-store floor space by 30% to 7% of their total floor space; and Transworld closed 101 stores in 2008, after losing $69 million dollars, including a 24% drop in total sales during the nine weeks leading up to the end of the year – traditionally the best music retail time of year. Taken together, there are simply less outlets and less floor space available to the labels to merchandise and sell their music. It is not a matter of buyers not taking in records because “they suck.” The space that had existed for music is now filled with DVDs and other media, or is gone.

Consolidated Commercial Radio is Ineffective: The number of artists that terrestrial radio “breaks,” in terms of converting radio play to mechanical royalty sales is smaller with each passing year. Although radio is still the primary method that folks hear about new music (49% of consumers list radio as the #1 way they find new music, according to a 2008 Edison Media Research survey), radio is quickly losing ground to the Internet, with 25% of consumers hearing about new music online.

The Replacement Cycle: Technological innovations have been shaping how, where, and when folks listen to (and purchase) music for years, beginning with improved production processes with vinyl, and then moving onto 8-track, cassette, CD, and finally digital music. Along the way, major labels have been able to monetize these technological innovations through a process called the replacement cycle – basically a repackaging of existing content in the newest format.

With consumers being able to convert files to digital themselves from existing CDs (not to mention sharing digital files for free online), the labels have been unable to find a way to monetize this format shift effectively. The end of the replacement cycle, coupled with the complete decentralization of the industry brought on by the Internet and the change in consumer habits, makes for a very tough time for the record business.

I know it’s a tough to find new music, particularly when you are on tour. Perhaps you don’t have regular access to the Internet. But I assure you; the issue is not that that music sucks. Spend some time doing your research on finding new bands, find some tastemakers you can depend on to turn you onto new music. The old industry that you grew up with is gone; but the phoenix is rising from the ashes with new models and new revenue streams. Whatever you do, please don’t blame what is happening on a lack of good music – it really makes you sound out of touch.

Mike

“Talking gross numbers that come directly to the band, we have made more money already than we have on the last record in four years,” said Mathieu Drouin, the band’s co-manager.

Great piece in the L.A. Times today on Metric. The band is forgoing a traditional record deal and focusing on alternative income sources and direct to fan sales and marketing techniques for their most recent release “Fantasties.” Direct to fan has been a proven model for megastars like Radiohead and Trent Reznor, and it’s encouraging to see a “middle class” musician (Metric’s 2005 release “Live It Out,” sold 45,000 copies) having success using a similar template.

Some takeaways from the effort:

1) Without the distribution fee and record royalties that a major label and distributor would charge, Metric is able to net $.77 per iTunes track as opposed to something closer to the $.22 per track a label would pay (this figure includes international downloads, which could pay the artist more than the US standard of $.70 per track by going direct)
2) As distribution follows marketing, Metric has hooked up with Topspin to handle the online direct to fan marketing and sales efforts. Take a look at their Website, here. Fantastic way to leverage “free” to acquire names for the mailing list, they have an active blog area, and most importantly, they are engaging in variable product and pricing which everyone from the hard core fan to the curious potential fan can engage in. Again, because the band is selling direct, their profit margin is much higher. Metric sold out of an initial allotment of 500 deluxe packages in 48 hours, said Drouin, who estimated a profit of $13 to $15 per unit. “We can never offer a fan that much value at that price if we had to go through a record company, distributor and a retailer. We cut out three rungs.”
3) The band made the entire record available for free as a stream a month before release, creating widgets that could be embedded in fans Websites (provided by Topspin). Folks were able to become familiar with the new record, they liked what they heard, and they paid for the record when it was released commercially. This is the “emotional connection” theory in action.
4) The band worked with independent distributor Redeye for the physical CD. Because Metric has a track record and had analytics that proved people were into the record, Redeye had an easier time shipping the record to physical independent record stores.
5) Canada supports the arts. The Foundation to Assist Canadian Talent on Recordings provided the band with $50,000 to cover recording costs, as well as a smaller federal grant.

Major labels are traditionally known for A) financing, B) marketing, C) distribution. I think Metric is a great example of a band that not only accomplishing all of these things outside of the traditional model, but is making more money because of it. Check out a cool Elliott Smith cover by the band:

It just got a whole lot harder for online music retailers to compete with iTunes. Although I stop purchasing music from iTunes years ago to buy only DRM-free music (I settled on a monthly subscription with eMusic – which will still be my jam for more obscure left-of-the-dial music for the time being), the announcement by Apple on Tuesday that they are immediately dropping DRM (Digital Rights Management) from 8 million tracks changes things slightly.

Here’s what this announcement means to me:

A) Labels are continuing to relinquish more control over their product (which is a good thing).
B) It’s likely that iTunes market share will increase over and above their already commanding 70%+ of the legal online download market (which is not a good thing for competition).
C) Other players (like the leap year bug plagued Zune) will be able to play music from the Apple store (but only after it is converted from AAC to MP3, which iTunes can do, but is not ideal).

The truth is, aside from folks that are deep in the music business, how many consumers are really going to notice a difference? Do many casual music fans with an iPod know that iTunes had DRM files to start with?

Overall, the fact that Apple is removing DRM is definitely a step forward for the music industry. But I do tend to think that the real game changer for online music will be some sort of collective licensing model along the lines of what the EFF proposes. According to the IFPI, the ratio of unlicensed tracks downloaded to legal tracks sold is about 20 to 1. There are extreme opinions on both sides of the very complex collective licensing model discussion, but finding a way to monetize this traffic in a way that positively affects artists will have a much greater impact to the music industry than Apple’s DRM announcement. Baby steps!

It only takes a couple hours for a musician to get started with basic online marketing. Setting up an account with MySpace, Facebook, Twitter, uStream, Flickr, Reverbnation, OurStage, Fanbridge, and the dozens of other options is simple, and an excellent first step. But I tend to think that some bands lose sight of the fact that online marketing is not an end on to itself. The most effective online marketing campaigns support the physical marketing efforts as well.

Two examples from this week:

1) Don Bartlett, manager of Joe Pug (via the Lefsetz letter):

“We decided to put an offer up on Joe’s website and MySpace. We told any fan that if they knew anyone who might be interested in Joe’s music that they could send us an email and we send them as many copies of a two-song sampler CD as they wanted. Free. We even cover the postage. To keep costs down, we invested in a cd publishing system that burns and prints them robotically. Each CD has two songs, contact info, MySpace, and a reminder that the full cd was at iTunes. If someone lived near a place where a show was scheduled, we printed that show info on there as well. People requested as few as 2 and as many as 50. We sent all of them. Requests continued to pour in, and the more we sent out the faster the new requests came in. We’re at the point now where we get about 15 a day. Joe writes a thank you in each and every one. And almost instantly, sales took off. [Show] attendance jumped noticeably and MySpace/website action began a steady upward arc. More importantly, we built an incredible database of his most hardcore fans. And after receiving a mailbox full of cds for free, they are willing to do anything to help forward the cause. And it is the ultimate in target marketing…you have people who already like your music passing it on to their friends, whose tastes they presumably know.”

2) Rock/Jam band Umphrey’s McGee

The band is organizing an online pre-sale campaign that gives their fans a reason to encourage others to buy the record pre-sale. They’re announcing it on their Website, as well as using banner ads on their social networking properties. Here are the details from their site:

Much like an Umphrey’s show, no one is exactly sure what will happen with Mantis, the upcoming release from Umphrey’s McGee. The more fans that pre-order the release, the more bonus content we’ll unlock for everyone. We are leaving the amount of additional content and the makeup of some of that content entirely up to you. There are 8 total levels of material that could be unlocked containing over 45 unique & unreleased audio tracks, including behind-the-scenes perspectives, videos, and plenty of quirky surprises. Bonus Material Part I available EXCLUSIVELY to those who pre-order.

Great to see both of these bands nailing the online campaign to affect tangible change offline and facilitate a personal connection directly with their fans.

I’ve talked at length about the fact that it’s certainly easier (and cheaper!) than ever to sell your music online using CD Baby or TuneCore as a digital distributor. And while I think it makes all the sense in the world to get your music out to iTunes, AmazonMP3, and the other online retailers, it’s also important to sell directly to the fans that are visiting your own site or blog. Selling from your own site not only provides you with the opportunity for a higher percentage of income than selling through a third party site, but it also affords you the ability to creatively price your music, offer higher quality FLAC or lossless files, put songs up for a limited period of time, or engage in other subscription pricing models (like what Ari Hest is doing) that is not easily possible with third party online retailers.

Where do you sign up, right? Well, that’s the catch. The process of setting up an e-commerce store on your site is not necessarily the most straightforward thing to do. Andrew Dubber, whom I first heard about when he published his free e-book 20 Things You Music Know About Music Online, has a great post on his blog outlining his research on selling music online. He outlines several options from straight up outsourcing it (easiest option of course, but also most expensive), to open-source e-commerce platforms and plug-ins (the most interesting being this free Wordpress plug in).

Check out Dubber’s complete post here.

Following hot on the heels of No Depression’s announcement that they were closing up shop, Harp Magazine, another one of my favorites, announced this AM that they too were ceasing publication.

From my old contact there, Jake Flack:

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I am very sorry to tell you that, effective March 20, 2008, I will no longer be the Associate Publisher of Harp. Because of the declining revenues and increasing costs related to print publishing, Harp is discontinuing publishing as of that date. The March/April issue (with Dave Grohl on the cover) will be the last issue printed and distributed. The company is shutting down operations and will not be publishing the May issue.

It’s been my distinct pleasure to work with all of you. For the past five years I’ve been very fortunate to work with so many wonderful people who are dedicated to putting out and promoting great music. I’ve always felt that Harp provided a first class platform for giving independent music a voice that otherwise might not have been heard. We were able to do that because our advertisers shared that vision.

I apologize for the mass email but time dictates this rather impersonal notice. Best of luck to everyone and thank you so much for everything!

Jake

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It’s always a drag to see another positive entity in the music business go down, but I suppose I am not incredibly surprised. When I think of the parties and folks at SXSW that made an impression on me, much of it was online focused: Ioda’s party on 6th and Red River, Imeem’s event, the Ourstage folks, and so on. Similar to mid-level indie labels, I think mid-level music print mags are in for a tough haul, in particular those that are not making a serious push for online business. Online businesses with marketing dollars prefer to spend it on online advertising: certainly keyword buys, but also newsletter affiliation, banner ads, and contextual marketing. With online marketing, you can pinpoint exactly how successful a particular campaign is, and more importantly, online marketing folks know that it is easier to attract someone that is already online than it is to to attract someone that is offline. To survive these days, Harp and others need to monetize their online efforts by creating an online community, that A) folks want to be part of, and B) advertisers see value in.

Those that are not evolving are going to be left behind…

Ten months after Warner Music head Edgar Bronfman said that Apple’s Steve Jobs suggestion that dropping DRM copy protection from digital music was “completely without logic or merit,” Bronfman reversed direction last Thursday by licensing its catalog, DRM free, to the Amazon MP3 music store. Warner joins EMI and Universal in offering higher quality (256 kbps), DRM free mp3s through Amazon’s online store, leaving Sony as the odd man out in the major label circle.

On the surface it would appear that the majors are simply responding to consumer demand and giving music fans what they want. But the fact is, the majors hate the digital monopoly that Steve Jobs has with iPod/iTunes. They understand that the only way to increase their margins on digital music and regain some of the control that Apple has taken from them is to reach the billions of iPods floating around. Their endgame is almost certainly to get customers in the habit of purchasing mp3 files from a place other than iTunes (which currently accounts for 70% of all digital music sold).

DRM (digital rights management) is technology that copyright holders place on a digital file to restrict its usage. It’s a flawed, user-unfriendly tactic, and it will go away. But while it exists, I will continue to do my online music buying with DRM-free retailers emusic and Amazon.