The "Pay What You Can" Music Label

I always thought that Radiohead had the best idea when they asked their fans to pay whatever they wanted for their 2007 online release of In Rainbows. By all reports, In Rainbows ended up being far more successful than the band ever believed it could be, and didn't dent their traditional CD sales one bit when they released it about six months later.

This, I believe, is a great model for an artist or band just starting out. Ask your fans to pay whatever they want for online downloads. Ask them to pay whatever they want for CDs at your gig. They might surprise you with how generous they are, and even if they don't pay anything, it still means there's more of your product out in the marketplace. Remember, your music is your marketing in Music 3.0!

That being said, a new music label out of Detroit has popped up called BeeHive Recording, where people can pay whatever they want for the releases of artists on their roster. While this might work for an individual artist or band, I'm not quite sure how viable it is for a record label. Still, you have to hand it to them for at least trying something different.

Here's a video about what they're doing. I don't know where Steven of BeeHive gets his figures about what an artist gets paid from a traditional record contract, because they're just flat-out wrong (way too low). Even so, let that part of it go and listen to the rest.

The site has 600 site members and between 3,500 and 4,000 downloads have occurred so far.


Beehive Recording Company from Alec on Vimeo.

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Who Controls The Music Business

Here's an excerpt from the Music 3.0 guidebook that illustrates who controls the infrastructure of what's left of the old music business. At least to some degree, this structure will always remain to some degree, especially at the superstar level, but the times they are a changin' and that influence is waning by the day.
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Although it may not be readily apparent, Wall Street and Madison Avenue indirectly control the remaining M2.5 music industry through their tremendous influence on the financial bottom line of record labels, record stores, concert promotion, radio, and television. If you’re owned by a publicly traded conglomerate (as all major labels, major concert promoters, and radio and television stations are), then you’re in the business of selling stock, not servicing the consumer. What that means is that nothing matters more than quarterly earnings. To keep those earnings as high as possible, Wall Street turns to Madison Avenue to devise the best marketing strategy for keeping the profits high. Madison Avenue (in the form of the major advertising agencies) can bring in the big ad dollars, but only under certain content conditions (like programming that is tailored around the advertising), and the process repeats itself over and over. The advertising industry (Madison Avenue), not the music industry, therefore drives the music cycle in the United States. 

In Music 2.5, it’s all about passing focus-group tests, which have separated listeners into the distinct demographic groups that advertisers are then able to tell stock analysts they have micromarketed their products to. As a result, radio, television, and live performances are no longer about aggregating and entertaining large audiences, but rather just a group of market niches. The bright side to this fact is that there’s one heck of an opportunity opening up for folks who don’t get hung up on trying to sell advertising.

Wall Street and Madison Avenue have tried to redefine what music means to people, but most people are voting with their wallets by refusing to buy any new recordings. The view of the vast majority of consumers is that very few new recordings are worth buying compared to those released a couple decades ago, and this has become the dilemma of the industry. You have to sell product to survive, but it’s impossible to develop that product while trying to please your corporate masters. It might work when selling soap or clothing or any other consumer product, but a creative endeavor like music just doesn’t work that way. It’s too personal, both to the artist and the consumer, to be a mass-market product.

Control In Music 2.5

Wall Street and Madison Avenue control the media

Record labels need to keep stock price and quarterly profits high

Radio and television only play what appeals to advertisers

Consumers divided into demographic groups

Music becomes devalued

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An Artist Subscription Model That Works

Recently Jill Havercamp wrote an interesting article over at Music Think Tank called "6 Case Studies On Successful Online Music Marketing." Although all of the examples are good (some I've written about here before), one jumped out at me.

Matthew Ebel runs a subscription site for his super fans that he says provides him 26% of his income - all from just 40 fans! His packages range from $5/month to $15/month, but he has annual options that go for as much as $499, and that one's sold out.

So what do you get as a subscriber?
   * Members-only parties
   * VIP seating at shows
   * Access to new music as soon as he creates it
   * New live concert recordings every month
   * Sessions with individual tracks for remixing
   * Behind-the-scene sketches, drafts, and ideas, and more.

Now 40 fans isn't a huge number, and 26% of his income may or may not amount to much, but I think that just the fact that Matthew was willing to try subscription validates that this model is viable even for an artist without a huge amount of national attention. Most artist's would normally be afraid of subscription because you really need dedicated fans to make it work, and it takes a lot of work to make the subscription worthwhile to keep the fans happy.

Good work, Matthew. You're a great example of what can happen for an artist in Music 3.0.

You can view Matthew's site here and view his subscription page here.

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Stones Sell Their Catalog Online In Hi-Res

Considering that hi-definition downloads was just something I touched on in a recent post, it's interesting to see that the Rolling Stones are offering their entire catalog of 27 albums digitally online for the first time. What's different is that the albums will be available in full 176.4 or 88.2kHz/24 bit uncompressed form at HDtracks.

The price for these downloads are a premium $19.95 for the 88.2k version, and 29.95 for the 176.4k version, which is quite a jump from the normal $9.99 that you pay for an MP3/AAC download on iTunes or Amazon MP3. HDtracks is no startup in that it already has 5,400 albums and 100,000 customers, but the Stones will be the biggest act in their stable so far.

This is all well and good and it will be an interesting experiment to see just what the sales and revenue will be from this venture, but until a current major artist signs on, we probably really won't know what the appetite is for hi-res tracks. The problem is that not that many artists today actually record at extended sample rates like 88.2, 96, 176.4 or 192k. For artists that recorded their work on analog tape, transfer to any of these digital formats is easy, but that format all but went away about a decade ago.

While it's true that a small contingent of artists still record on tape, it's a dying breed. Tape costs are high, and machine maintenance is higher, which is a limitation to the so-called "audiophile" downloads. But even 44.1kHz/16bit CD quality would be a vast improvement than what we're now used to online. With bandwidth and storage costs going lower all the time, this just might be an idea who's time will soon come.

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Turning Radio Airplay Into Sales

Any artist or band that has gotten radio airplay knows that it doesn't necessarily translate into sales. Once upon a time before Music 3.0 maybe more so, but certainly not today. The biggest problem in the past was having the product available in the local stores to coincide with airplay, but that's not necessary or even possible today when most music is purchased online.

That being said, getting people to pull the trigger to purchase isn't easy. Here's a video from Nimbit's co-founder Phil Antoniades that outlines a way of using station ID's and promo codes to help turn airplay into sales.

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The 8 Keys To Fan Communication

It's great to have fans, but in order to keep them, you've got to communicate with them. They want it. They crave it. And the interaction is vitally important to maintaining your fan base. That being said, if you're not careful, you can lose a fan just as easily as you've gained one. Here's an excerpt from Music 3.0: A Survival Guide To Making Music In The Internet Age outlining the 8 keys to fan communication, to keep your interaction with your fans both healthy and satisfying.
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There is a tipping point where the fan goes from being informed to feeling intruded upon. The leader of the tribe must have a feel for where that point is and be sure to never cross it.

1. Talk to your fans, not at them. Don’t try to sell them, but keep them informed. Anything that reads like ad copy might be counterproductive. Always treat them with respect and never talk down to them.

2. Engage in communication. Communication is a two-way street. Fans want to know that they’re being listened to. You don’t have to answer every email, but you have to acknowledge that you heard it. The more questions you ask, polls you supply, and advice you seek, the more your fans will feel connected to you.

3. Keep your promises. If you say you’re going to do something, do it in a timely fashion. Don’t let your fans wait. If you promise you’re going to email a link and post a song, sooner is always better.

4. Stay engaged. Even if you’re only sending something simple like a link, take the time to engage the fan. Tell her about upcoming gigs, events, or releases. Take a poll. Ask for advice. This is a great opportunity for communication, so take advantage of it.

5. Utilize preorders. If you have a release coming out soon, take preorders as soon as you announce it, even if it’s free. It’s best to get people to act while their interest is high, and it gives the fan something to look forward to. To motivate the fan for a preorder, it sometimes helps to include exclusive content or merchandise.

6. Appearance means a lot. Style counts when talking to fans. Make sure everything looks good and is readable. Spelling or grammar mistakes reflect badly on you. Try to keep it simple but stylish, but if you or your team don’t have the design chops to make it look good, then it’s better to just keep things simple and readable.

7. Cater to überfans. All of the members of your tribe are passionate, but some are more passionate than others. Fans have different needs and wants, and it’s to everyone’s benefit if you can cater to them all. Try always to include a premium or deluxe tier for every offering, such as a free T-shirt or backstage pass as a reward for posting, a free ticket to an upcoming show, some signed artwork, some extra songs—anything to satiate the überfan’s interest.

8. Give them a choice. Give fans numerous ways to opt-in, since not everyone wants to receive information in the same way. Ask if they would rather receive info by email, SMS, or even snail mail. Ask if they’d like to receive info on upcoming shows, song releases, video content, or contests. And ask how often they’d like be contacted. 


You can read other excerpts on the Music 3.0 pages on my website.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

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Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

Radiohead And The Quest For Higher Quality Audio

Radiohead's last release, In Rainbows, was a watershed moment in Music 3.0 in that they asked their fans to pay whatever amount they wanted, and were rewarded with more sales for more money than they ever anticipated.

This time around for their new album The King Of Limbs, the band is taking a different approach, this time charging a fixed price, but with a twist.

1) There are two distinct products - a digital only product, and what they call the world's first "Newspaper Album," which consists of two clear vinyl records, a CD, large and small pieces of artwork, plus the digital downloads.

2) The digital downloads only are available in two flavors - MP3 for $9 and WAV for $14. The digital portion of Newspaper Album also dictates the price, with the MP3 price set at $48 and the WAV price at $53.

It will be very interesting to see just what portion of the buying public opts for the higher resolution product. Hopefully, their fans will surprise us all and go for the quality, but don't hold your breath. Whatever the result, Radiohead is once again on the cutting edge of Music 3.0.

Visit the Radiohead King Of Limbs site for more information.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

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Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

For Warner Music - Let The Bidding Begin

While everyone is aware that EMI Records is virtually down the tubes thanks to their recent default on their Citibank loan, now it looks like Warner Music Group might go before them. According to a report in Reuters, several parties have already started to put in bids for the once venerable company, including private equity firm KKR (who now owns BMG Rights Management), Russian billionaire Len Blavatnik (who already owns 2% of Warners), as well as Universal Music and Sony Music.

There's a lot of intrigue around the issue in that Warner Music CEO Edgar Bronfman is telling everyone that they may spin off their Warner/Chappel publishing arm so that they (WMG) can buy EMI, but because of the huge debt load of WMG, that looks unlikely to happen.

There are a lot of other strategic plays possible, but whatever happens, it looks like the Big 4 major record labels will soon be down to the Big 3, and maybe even the Big 2, very soon.

As I said before, I see this as a good thing, since we're nearing the end of the old music business and starting the new one based on Music 3.0. By the end of the year, our industry may look very different than what we see today.

Read the entire Reuters article here.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

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Facebook Usage By The Numbers

Here's a very short, yet well-done video about Facebook's staggering usage stats. If you're not using this app for your marketing, you're really missing out, since the possibilities are amazing. Take a look.


The World Is Obsessed With Facebook from Alex Trimpe on Vimeo.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter for daily news and updates on production and the music business.

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Swag Is Your Friend

It's time for another excerpt from Music 3.0: A Survival Guide For Making Music In The Internet Age. This time it's from the chapter called "How To Make Money In Today's Music World" and deals specifically with swag, which is another word for merchandise.

You can read more about the book as well as a few more excerpts on my website page that's dedicated to the Music 3.0 guidebook.
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Performing live is only one ingredient of the recipe however. You’ve got to have merchandise (other terms include “swag” or “merch”) to supplement your income. It’s always been a huge part of the income of an artist, but until recently was considered just an ancillary revenue stream. Today it’s an essential part of most artist’s earnings.

It used to be that merch required a sizable capital outlay in order to get in the game. You had to buy enough to get some sort of economy of scale, but then you also had to worry about storing the inventory as well. And what if the item didn’t sell? What do you do with 4,835 custom keychains or 492 pairs of branded underwear? Luckily, there are now alternatives to make the buy-in easier on the pocketbook than ever.

Today both Cafe Press (cafepress.com) and Zazzle (zazzle.com) make it easy to provide quality merch of all kinds without worrying either about the upfront money or inventory. Both companies provide a host of items that they’ll manufacture to order, and they’ll even allow you to show examples of merch on your website or store. In other words, whenever an order is placed, that’s when they’ll make it. They’ll even drop-ship it to the customer for you so you don’t have to worry about shipping and inventory. All this comes at a cost so your profit won’t be as high, but it’s an easy and inexpensive way to get into the merch business.

So what kind of merch should you have? You can now get a huge variety of items branded with your logo, but typical merch items are:

   T-shirts (probably the #1 item ever for a musical artist)

   Hats

   Lighters

   Sweatshirts

   Coffee cups

   Posters

   Bumper stickers

   Mousepads

   Bags (timely now since people use them instead of paper or plastic at the supermarket)

Just about anything you can think of can now have your logo on it. Of course, that doesn’t necessarily mean that just because you can make it available, it’s a good idea. It’s still best to narrow things down as too many choices can actually prevent a willing customer from buying anything because he can’t make up his mind. Keep the number of items to a maximum of 2 at first until you’re sure they sell before adding more options.

Another interesting idea is a tour book of photos available from blurb.com such as the Grateful Dead did on their recent tour. Once again, it’s on-demand printing, and they offer a number of professional templates to make the design easy.

Don’t forget that, in the end, branded items such as T-shirts, hats, beach towels and frizbees are for marketing you as an artist, so be sure that the design is professional. If you’re going to spend hard cash, this is the place to do it. Find a pro or an advanced hobbyist to design it for you. Don’t forget the true reason for merch is that if enough people see your intriguing logo on a T-shirt, coffee mug or bumper sticker, some of them will be at least interested enough to check you out.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

Is There A Market For Used MP3s?

Hypebot had a post recently about ReDigi, who've announced that "the world's first online marketplace to legally recycle, buy and sell, used digital music files" will go online later this year. OK, listen to these words as you read them - "used digital music files."

The way I see it, there are so many things wrong with this business model that I'd be shocked if it ever got off the ground.

• When you upload one of your tracks, you get a coupon that you use to to discount the next song that you buy from, guess who, Redigi. This is virtual cash. Unlike CDs or LPs of old, you can't sell them for real dollars that you can use on anything else later.

• If people would rather steal new digital music files, why do they think that they'll buy used ones instead?

• The rights owners have to get paid. The overhead required for the virtual paperwork seems overwhelming, although ReDigi states that they have some proprietary software that will take care of it.

• They'll still have to get license agreements from the labels, if the labels have anything to say about it. This will go to court before it's settled, I bet, which may sink the company before it gets out of the gate.

I can foresee a scenario when there might be a market for used digital files, so that makes ReDigi is worth watching. I just don't think we're there yet.

Go to the ReDigi site to watch their intro movie.

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Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

Understanding The Like Button

There's a great article over at Music Think Tank by Robin Davey about how to successfully grow your fan base using Facebook. One of the parts that I really liked is about how to react when one of your posts is "liked." Take a look.
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"UNDERSTAND THE LIKE. When a post of yours is liked, it is important to take a step back from that. Don’t think too highly of yourself for saying something that enticed a click on the “Like” button. Instead, understand that they have clicked that button because, in some way, they feel your post defines them. They are endorsing you, putting their name to your comments. If you get an above average number of likes, it’s not just because you said something clever, it’s because your fans are responding to something they want to associate with. Look for patterns in this and hone in on them.

Was it something funny, meaningful, or controversial?

This is important because you want to get fans coming back to your page. You can reel them in with something that interests them, and when they are there, they will want to look deeper. Maybe even download an MP3, or go one further and purchase something.

For instance, if you were outraged by the Prop 8 result, or thought an SNL skit was funny, you can bet that a portion of your fan base does too. If you are passionate about something, people will relate and interact."

There's a lot more great advice in the article How To Successfully Grow Your Fan Base Using Facebook (And Not Spend A Dime). It's worth checking out.

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You should follow me on Twitter for daily news and updates on production and the music business.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.