Sunday, June 27, 2010

5 Aspects Of The New Music Reality

During lunch with a friend today, he passed some scenarios by me for breaking a new act. One of the things he said seems to be what's now seems to be accepted industry knowledge, although I believe the logic is faulty.

"We're going to do vinyl and digital downloads but skip the CD. They're done." After discussing for a while what he was going to charge for the items, I told him my feelings on the matter.

1) Hoping to make money on any kind of music isn't living in reality, especially for a new artist that no one knows. That business model is dead and gone, even for all but the 1% (or less) of established artists.

2) Give your music away. That's what it's worth to most consumers - zero, nada - especially if they're not your fans. Music always has been a promotional tool for the artist, and the record label made most of the money anyway. Once you get over the idea that you can make money from the sale of your music, your mind will be free for other possibilities that can be monetized.

3) CD's aren't dead. They're a collectible, the same as a shirt or hat. The fact is that they're not the be all, end all to monetizing your brand the same we they used to be for because we've entered into the Music 3.0 era. It requires new thinking about what everything about an artist is worth.

4) But you can charge for a collectible. A collectible is a memento of a moment in time, and people will pay to relive that through an item that they'll buy. But you can't charge too much, especially in these troubled financial times.

One of the problems with most bands and artists is that they price their swag way too high. Who pays $10 dollars for a CD these days? Who's willing to pay $20 for a T-shirt? Even legacy artists with a really great brand and nicely designed merch have a problem at $35, which has become the norm at a concert.

Find out your costs, including tax, shipping, the commission you give to the swag salesman, and everything else that might be hidden, and mark it up by 20% - 25% at most. Especially if you're just starting out, think of these items as promotional. The fact that you might get someone to cover your costs and even make a little is a bonus. You can charge more later once you develop a rabid following that wants everything ever connected to you.

For CD's, either pull a Radiohead and let people pay what they want for them, or give them away. Once again, it's promotion. I'd rather people pay at least something because that way they've made a commitment to listening to it. A CD given away for free will most likely hit the garbage before it ever hits their ears.

As far as digital downloads, give them away for free on your website, and charge for them on iTunes, Amazon and all of the streaming networks too. Study after study has found that downloads sell better when they're available for free, as weird as that sounds.

5) Don't buy inventory. The days of order 500 or 1000 of anything are over. Get just enough to have a few on hand (like 10 or so), and order anything else on a as-needed basis. For CDs, you can order from 1 to 100,000 for a fixed fee of $1.75 from For all other merch, you can do the same at or

We're living in the age of Music 3.0. It's time to take advantage of it.

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Darren Landrum said...

Do you have any direct experience with Kunaki's product quality? I've been curious about them for some time, but I can't shake the idea that they're not really pressing CDs as they imply, but burning CD-Rs, which have a good bit shorter lifespan than a properly-pressed CD. (Glass masters cost a lot, so I can't believe they're really doing that.)

Bobby Owsinski said...

Yes, plenty. The discs look like a million bucks, provided that you've designed them well. Not a single problem on the playback side. Highly recommended.

FanaticFactory said...

We've been talking to a few artists while we build our new site. We're finding it amazing that some of them still hold onto the belief that selling recorded music is a viable means of income. "Once you get over the idea that you can make money from the sale of your music, your mind will be free for other possibilities that can be monetized." is probably the best sentence in the post. Artists are in the business of selling experiences.

Bobby Owsinski said...

And the best sentence in your post is "Artists are in the business of selling experiences." Thank you for that. It's so true.

KleerStreem Entertainment said...

Big difference in 'Replicated' and 'Burned' CD's in terms of consistency, shelf life, and for me sound. Most places that produce CD's have a burning service for those that need CD's in a few hours.

I teach all artist I work with to build their fan base daily by doing many different things. Then, when on stage they must entertain in a manner that connects with their fans and 'CREATES' memorable moments for them....failure to do so will see a reduction in your following and turn out for your gigs.


Perry Grinn said...

Hi Bobby,

You know I've been thinking about some of these points for some time. Is it really all about merchandising now? And if so is music just the non-visual commercial, that may or may not be artistically related to a product but used as a means to draw in buyers?

If so then, that is wack, for musicians because now all musicians no matter their artistic integrity, have been deemed jingle writers in one way or another.

-Perry Grinn

Bobby Owsinski said...

That's not the idea, Perry. If you haven't established your audience, it's the only way. It's been done since the beginning of the music business. You gave a song away to the public on the radio and via samplers.

As a demand builds, you're able to charge for your music, but you've got to get to that point first.

Anonymous said...

Hmmm ... very interesting post. I must, however, take exception to the line "Music has always been a promotional tool for the artist." I thought music was the actual product being promoted, and the object of those artistic endeavors. CDs, MP3s, T-shirts, even concerts are promotional tools; but the music is the whole point, in my view.

Bobby Owsinski said...

I think what the post should've said is "Recorded music has always been a promotional tool for the artist."


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