Making Money In The Music Biz

[john]

Hey

With various different ideas developing relating to marketing and selling music I thought it was a debate we should have. Not just a little debate either.

Here we are a bunch of musicians creating music, some with the hope of making it a career, many who would love to pursue it as a career but do not see it as a pragmatic option. As such most artists on these boards will not have tracks available as a paid download or as a physical CD, or if they do they are likely to have decided that it is not a get rich quick scheme.

The Music biz is awash with ideas and schemes on just how musicians can make a living from their music we find ourselves at a crossroads. The old mechanisms are somewhat undermined and the pragmatic side of the biz is experimenting with ways to secure at least some residual income for musicians, shifting emphasis from selling the music towards merchandise and live performance.

But where does that leave the online artist? Out in the cold?

So.... what I'd be really interest in is pooling and discussing ideas, working out some strategies to make the most of all the ideas out there, maybe come up with a few of our own. There are strategies where say music is given away free and income comes from live shows and merchandise, or home users get music for free but income comes from licensing to various media.

I'd like to include not just musicians but also the label owners we have here on the boards... just how do we make money in this ever changing industry?

As part of that I thought drawing up a list of tangible assets and possible income streams would be good, then discussing exactly how we can all make those assets work for us. Perhaps even recommendations for different levels of artists/labels/publishers?

Truly a weighty tome!

So a very simple asset list to start:

• artist
  
• material
  
• merchandise
  

There are various different possible income streams attached to each of these assets.

In truth the list is longer, especially as we look at it in detail and break these assets into "aspects" that are in fact distinct products in that it can be sold or licensed creating an income stream.

A very simple "material" income stream list could be:

• Broadcast rights
  
• Use in film/video/tv
  
• Physical product (CD etc)
  
• Digital downloads
  

I'm thinking in the end we could edit the topic up and post it in a community knowledge base for reference, update it as the business develops.

It is better not to be complacent. Rather than wait for things to settle and use a model exploited by others, if we use adaptive strategies we learn and improve, incorporating the best of ideas, growing and developing our market.

There is way too much protectionism. The music biz is a vast place with many, many different artists. You can view those artists as competitors. In some ways they are. But within other context they are allies. A collection of artists can establish new ways of working, new ways of making a living, in the same way that several artists can create "a scene". Collectively they are stronger.

With that in mind, why not build our collective strength?

Your thoughts, ideas and comments are truly welcome!

Cheers

John

[Lazz]

Making Money In The Music Biz ?

Alright.

I give up.

[john]

Hey Lazz

Not a subject worth exploring with board members? Worthy of some attention? i am quite sure that it is a subject you have dwelt on a lot of the years, but then we didn't all get to chat about it now did we? Pool our ideas blah blah.

Cheers

John

[Lazz]

Amusement was my intention.

There was an abject 'sob!' of terminal frustration in there too.

Sorry - I'm feeling pretty desperate and income deprived.

[john]

Aaaah.

Yeah I understand the sentiment.

Do you follow a more or less traditional music business model Lazz? Have you tried any alternative strategies? Considered any and ruled them out?

Cheers

John

[Lazz]

Do you follow a more or less traditional music business model Lazz? Have you tried any alternative strategies? Considered any and ruled them out?

Retrospectively, it seems I was an ‘indie’ pioneer a quarter of a century ago. We operated outside of the normal model. Did everything in-house. We produced our own independent recordings and booked our own gigs. A week or so prior to each gig (determined by lead-times), I would send a small crew of musicians ahead to do guerilla street performances and cause trouble – providing photo opportunities and a news focus for local media and doing radio interviews and such to promote the impending show. We had independent distribution into specialist retail but (of course) did our biggest sales volumes at gigs. This income basically covered all the office and administration costs while gigs provided our wages. There were twenty-five happy people on the pay-roll.

When we eventually moved into the big-boys arena of the established music industry and started gambling with larger label deals, we in effect surrendered control of merchandise, lost that cash-flow, and things started to go wobbly – it marked the beginning of the end.

I noticed too that the media who were generally very supportive and generous because of our renegade status became much less so once professional publicists became involved.

Back then, that had all been what was considered alternative strategy.

At the turn of the millenium, when I arrived at MIDEM to discover the leading key-note conference issue was ring-tones, I realised even the traditional business models were becoming very strange and weirdly desperate for cash.

Now that I still persist in producing independent art-music rather than pandering to popular tastes, and the market generally has been shrivelling, I am struggling to sell what I have and attempting to focus more on income streams issuing from third-party placements – which is about as normal and traditional an area of business as you can get, relatively new to me and, because of the low dime situation everywhere else, increasingly crowded with competition. I have also become more jealous and mean about getting my shake of royalty income - and increasingly grumpy about efforts on all sides to restrict my entitlements.

I don’t have any kind of effective or sustained internet strategy because I can’t afford the full-time commitment and maintenance it requires to be of real value. But I do have a plan if and when it becomes possible.

On one hand, my energy is definitely flagging for the constant up-hill struggle.

On the other hand – as far as song-writing goes – I am doing my best work as an old git.

Ultimately my strategy is to die and become posthumously successful.

[Donna]

Wow...

[john]

Hi

I guess my concern with recent developments is the move towards streaming with sites like Spotify... it must be said that my concerns come from lack of knowledge of exactly what the artist gets out of it other than exposure. With the rise of streaming it really does impact sales and as streaming moves firmly into mobile communications the notion of "sales" could disappear completely.

As a musician that can't play live, and I don't see anyone buying merchandise (if I made any), I'm guessing I'm stuffed!

Cheers

John

[Lazz]

as streaming moves firmly into mobile communications the notion of "sales" could disappear completely.

.............I'm guessing I'm stuffed!

I share this sad perspective.

and keep a packet of rusty razor-blades to hand at all times.

[Steve]

I think those that play live regularly are the ones most likely to succeed. Gathering a fan base and loyal following appear to me to be the likeliest option of 'selling' your music/merchandise! Having an online presence and mailing list to inform fans of upcoming gigs etc should help. If you are a songwriter but not a performer, then the best option might be to ally yourself with a promising band/performer that is interested in using your songs!

[Chokai]

Streaming revenue is frankly rubbish, on a site i wont name we got 22,000 streams in one quarter which only returned £10. Generating any kind of good money in music is nigh-on impossible without a huge marketing budget to back it, or a bit of luck on the review front.

It would really help if people did not file share your latest releases the day it comes out - great of spreading the music, but a lot of lost revenue.

I would suggest, don't even focus on the money making aspect.

[john]

lol

So much positivity in one topic!

[john]

hey

Just a question....

is there anything constructive that you think musicians, labels, publishers etc could do to improve things? Lets not kid ourselves that it is a down turn so much as a crossroads that the music industry is at. Old earning mechanisms have collapsed to the point where many artists, labels etc cannot continue, or at least not continue in the current form.

Do you see a way ahead? Are we now talking a main stream industry full of amateurs and semi pro musicians?

More than anything I detect resignation in the replies so far.

Cheers

John

[Steve]

I think there will always be 'stars' but not like we've seen in the past. The world has changed, not just the music business. Gone are the days when you would 'save up' to buy a record. In my younger days, buying a record was a big event! It would be planned ahead. Then a trip into town, a listen to a few tracks in a booth! Then a bus ride home and the rest of the weekend pouring over the sleeve notes whilst listening to the tracks on a little mono record player! If you bought the right record, it got invited to parties with you as a courier! Now, you just download it from somebody that bought it!

[Retrosaurus Rex]

Now, you just download it from somebody that bought it!

Or didn't...

Not to be a downer, because I think there will be ways to make money going forward, but I haven't seen around that corner yet...

Right now a lot of traditional media is still based around selling a physical product, whilst the market has pretty much moved to conceiving of music as a virtual product. The movies are not far behind, BTW, with the expansion of broadband and torrent. This has kind of been the case for a long time, my friends and I would loan records and CDs and make tapes for each other (later burning CDs) but there was still a dependence on the physical item. And the big record companies get royalties from the sale of blank media, so it wasn't a big problem. But, like Steve said, there will always be stars, because people want them. And even tho the market is fragmented, people who like music will be willing to pay for music that's (perceived as) better...

[roxhythe]

Jes' a thought (and not very well thought out yet). You may have hit something on the head with the remark about no longer selling a product. (Hopefully, whatever it was was not badly injured.) What if we don't?

What if we said (or admitted) that what we're selling is an *experience*? This may work better for those that perform (I perform), but it follows Madonna's prediction a year or so ago that the way to make money in the music business in the future was going to be to perform.

It follows that the "merch"--not just the T-shirts and buttons, but the CDs as well--are simply *icons*, that we obtain, keep, give away, &c., as memories of the *experience*. Does that--or would that--work as a model?

Joe

[Retrosaurus Rex]

Jes' a thought (and not very well thought out yet). You may have hit something on the head with the remark about no longer selling a product. (Hopefully, whatever it was was not badly injured.) What if we don't?

(If not, next time I'll use a bigger hammer...)

What if we said (or admitted) that what we're selling is an *experience*? This may work better for those that perform (I perform), but it follows Madonna's prediction a year or so ago that the way to make money in the music business in the future was going to be to perform.

And everybody (in the business) thought it was crazy to sign a 360 deal with Live Nation, now they're all on the bandwagon, seeing more avenues to rip off the artist and keep the repo man from driving off with their Escalade and glove-box full of coke...

It's true that the live experience is something that can't really be replicated (or delivered online). This could even be an avenue for electronic artists and others who don't or can't perform their music live, but could still create an audio-visual live experience that people would actually pay money for. But getting asses in the seats is still a problem with the proliferation of entertainment options. And with rare and surprising exceptions, the bigger and more memorable the show the greater the cost to produce and the more (and more expensive) tix you have to sell to make a profit.

It follows that the "merch"--not just the T-shirts and buttons, but the CDs as well--are simply *icons*, that we obtain, keep, give away, &c., as memories of the *experience*. Does that--or would that--work as a model?

I suppose it depends on the thrill and memorability of the experience... the bigger and more hyped the easier it will be to get all the "merch" income. I guess that's another way of saying it will be hard... like it's always been...

Edited April 22, 2009 by Retrosaurus Rex

[john]

hey

i just posted up a blog entry ranting a bit...

http://forums.songstuff.com/index.php?auto...p;showentry=497

Cheers

John

[Retrosaurus Rex]

Good stuff John. We're entering an era where not only the major labels, but in effect the whole world, are ripping off the artist... But while you take the situation to its' extreme logical conclusion, I contend that there are still enough people who like good music, and will be willing to pay to get it and support it, that will produce the countervailing force that will keep the situation you describe from materializing

[roxhythe]

Nice rant, John. It is too bad virtually no file-sharer is likely to read it.

I would dispute the claim that you need production to put on a show for any kind of crowd. I don't. I can put on a show of three hours of my stuff easy--solo--and have the audience thoroughly entertained all the way through. It does sound better with a band--and the last 2 shows I did were with a band, and the next 2 shows will be, too. But I'd let the Big Boys--the ones on the verge of going bankrupt--do the fancy shows with huge production. I can get by with a small, competent band and nothing fancy. People will pay to hear good writing.

And there, I think, is an opportunity the Big Boys can't take advantage of. (They may not even be aware it exists.) We have a Depression on, and one of the hallmarks of the last Depression was a public craving for cheap entertainment. And there had to be a lot of it. I see folks not going any more to the $50-to-$200-a-head concerts in the Big City--but they will (and did) pack a $5-a-head concert by local musicians at the local Arts Center. I intend to ride that trend as far as I can.

Joe