The One Fatal Pricing Error

It's no secret that every artist wants to be able to make a living of their art.

Yet it's also no secret that many developing artists are reluctant to raise prices, especially since the idea of fan backlash like this can be terrifying for an artist to even imagine.

Let's talk about Price-o-phobia.

Price-o-phobia a highly prevalent, ambition-killing fear of raising prices that prevents people from getting paid what they are actually worth. Artists are highly succeptable since, unlike a hot dog stand at a state fair, there's no easy guideline for what the generally acceptable price would be for their work.

The first step is figuring out the underlying causes of our Price-o-phobia.

There's a tangle of roots often feeding this fear:
   -"I only spent X on materials, there's no way I would charge someone more than 2X!"
   -"If I raise prices, I might not sell every piece. It's safer to keep prices low so I'll move pieces."
   -"It's not that great. I can't charge that much."
   -"It's vulgar to raise prices for my work. I couldn't do that to my fans!"
   -'What if my fans rebel and I lose everything I've worked for?"

These are quite common fears amongst artists and musicians alike. Some fears are productive, like being afraid to jump off a thirty story building into a pit of rusty spikes. Other fears, like being afraid to eat food, are clearly counter productive. Price-o-phobia falls into the latter category.

Let's unpack some of these fears.

"I only spent X on materials, there's no way I would charge someone more than 2X!"
   Materials aren't the only consideration. Your time and musical talent have value that is just as real as the materials involved. Lawyers and doctors charge for their time and effort because what they do requires special skills that not many possess. As an artist, you should be no different.

"If I raise prices, I might not sell every piece. It's safer to keep prices low so I'll move pieces."
   Everybody loves a deal. Sure, I'd love Kobe ribeye steak for $5 too, but prices like that would cause the restaurant to go out of business in months if not weeks. Now nobody gets steaks anymore. Not. Cool.

"It's not that great. I can't charge that much."
   a) Sometimes modesty is a virture. Sometimes modesty is a vice. If you're regularly selling pieces, chances are you might be too modest to support yourself.
   b) If it's actually not that great, stop reading right now and go practice.

"It's vulgar to raise prices for my work. My fans are my friends!"
   Your fans want more art than they want a deal. If that's not true, they're not fans. (Remember, I'm assuming you've got an extraordinary product. If you don't have that, then you should be practicing instead of reading this.)

'What if my fans rebel and I lose everything I've worked for?"
  Let's dig deep into this one.

In December 2010, Jack White caught flak from fans for selling his limited edition vinyl on eBay. As the prices rose to eventually reach $510, fans became outraged at this price saying it was "exploitation".

At what price is it exploitive for a fan to pay for a work of art?

Or better yet, how do we know the true value of art?

Jack White explains:

"We sell a Wanda Jackson split record for 10 bucks, the eBay flipper turns around and sells it for 300," he explained. "If 300 is what it's worth, then why doesn't Third Man Records sell it for 300? If we sell them for more, the artist gets more, the flipper gets nothing. We're not in the business of making flippers a living. We're in the business of giving fans what they want." 

Is this exploitation?

Let's put it another way: If someone loves your art so much they're willing to give you $500 for it, should you let them?

If you actually care about becoming a self-sufficent artist, the answer is clear.

The songs we associate with our first drive in our first car (Groove Armada - Superstylin') or an amazing road trip with friends (Snoop Dogg - Ain't Nuthin but A G Thang), they're the memories that define our lives. Music is a link to our history and our identity.

Creating music is creating love for our fans.

It's your duty to allow your fans to return the favor.

Fans want to support you! If your lucky, some of your fans may have connections that help you book better clubs or tour with bigger bands. Fanastic! Most fans, however, are normal people who just dig your art. Buying art is the one way anyone can help support their favorite artist. When we buy from our favorite artist, we actively say "I love your vision so much that the world is a better place because of your creations. Let me help you on your quest!"

Some fans will complain when you raise prices and that's perfectly ok. You shouldn't always listen to your fans. In fact, fans that care only about price aren't really fans at all.(Provided you're not raising the price waaaaay outside of traditional market value, such as raising prices on a t shirt from $10 to $80. That's a little silly.)

As of May 2012, Jack White's new solo album Blunderbuss hit number on on the Billboard 200. The man makes great art, is it any surprise fans still love his work?

The one fatal pricing error is pricing yourself too low to continue making art.

In order to be a full-time artist, your prices must be high enough to support yourself comfortably. Anything less is unsustainable in the long term. Even if you're moving a million paintings, if you're not capable of keeping the electricity bills paid there's a good chance you'll eventually burn out on art altogether. Ramen every night should be a choice, not the choice.
 
The only way to get paid what people truly feel your art is worth is to start out high and negotiate price down. If you do price too high, you can always adjust downwards as needed. But fans will never say "Hey, I really liked your show last night. Here's an extra forty bucks because it was worth that." No, they walk away thinking "Wow, what a deal!"

Think about all your sales for last year. What if you had charged as little as 5% more? For an artist, this is an easy task since you set the prices, but you'd have to be really lucky at a traditional job to get a raise of 5% in today's market.

In either case, you won't get a raise if you don't ask.

Your mission, should you choose to accept it, is to make brilliant art. Getting paid what you're worth is vital to this mission.

Dare You Bite the Forbidden Fruit of Promotion?

Desipite your relentless hustle, your last release was a flop. With no energy and limited funds left, you begin to accept that there may be nothing else you can do.

A siren song begins to pierce through the static hum of the internet.
Glaring, the offer dares you.

"For $75, This Guy Will Sell you 1,000 Facebook Likes"

Considering how hard we've worked for the Likes you have, this is a pretty fantastic deal. Previous ad campaigns have been measured in Likes and email list sign ups so this seems like a more direct method of getting the results you want.

"But wait, there's more!"

How about buying profiles in bulk?

BEN ZHAO: Right now on the black market, you can actually buy and sell bundles of Facebook account credentials, tens of dollars or hundreds of dollars for hundreds of thousands of Facebook accounts.

So you could buy a legitimate Facebook ad for $240 and get 240 Likes, as Pizza Delicious did. Or you could drop the same amount of cash and get 10,000 "Likes" from fake profiles. Seems simples, but there's much more to this than meets the eye.

CHACE: For example, one company that sells likes showed me this Nashville country singer who was a client. She had a lot of likes. But then I check what city the fans are from, and they were primarily from Cairo.

What would you do if you found your your favorite band was buying Likes? How would this change you opinion of the band? Would you still listen to them?

How would this change your opinion of a local band you've never heard of?

...

With Facebook's initial stock offering coming tomorrow, the $100 billion dollar value of Facebook rests on the value of Likes and the profiles.

But the value of Likes is shaky at best. Pizza Delilcious got a $10 return on 240 likes, so in this case each Like is worth $.04. Not worth it. But if we were to pay the same $240 for the 10,000 fake facebook credentials would we earn $400?

No.

This is a smokescreen. Fake profiles don't buy tickets to your show, nor do they force their friends to listen to your new EP. Only true fans do.

You can't buy loyalty in bulk.

When the cash runs out, the only people left are your true fans. Even with a couple million dollars, the mercenaries will only be as loyal to you as you pay them.

But fans will always be loyal to Motorhead as long as Motorhead is loyal to them.

"Likes" and followers are are only as valuable as the fans behind the numbers.

Integrity, attention and quality are the currency of artists.

Are you investing or spending?

Are Contracts Good or Evil?

The media is full of juicy contract dispute stories. Cases such as Chuck D having his royalties syphoned off catch our eye because they're so emotionally charge. (Here's a running list of outstanding court cases artists have filed against their labels.) Being quite skepitcal of the value major labels offer for artists, I know I've contributed to this phenomenon as well.

But we shouldn't dismiss contracts altogether. In fact most of the time I'd say they're largely benficial for the simple fact that they set expectations.

When people aren't sure exactly what you want/offer, they fill in the gaps with their best guesses.

Say you offer to help a young band start their merch table by going through the ordering process and having it ready for their next show. You were smart and got paid up front, right?. Great. So you go to their show, drop the merch off and leave to scamper on your merry way. As you head for the door, the other guitarist grabs you by the shoulder, "Whoa dude, where are you going? You can't leave the table unattended!"

After a short bout of confusion, you realize the other band expects you to run their merch booth from now on. Apparently the phrase "help out with merch" had very different meanings between both parties and now everyone is pissed off.

Had there been a contract, everyone would be happy now.

Contracts are how you make sure everyone gets what they wanted. Or at least it makes sure no one is angry enough to stab you.

When money or (extensive) service changes hands, it's important that both parties understand exactly what they're getting. Sometimes it's ok to just take people at their word, especially for small things like offering to help pass out fliers. But for any substantial deal, it's wise to get at least some writing to add clarity to everyone's desires.

If you get a contract for a big deal like a signing or tour, and you don't understand even one phrase, get a lawyer. Paying a hundred bucks is a whole lot cheaper than losing a lifetime of revenue by giving up your masters. Remember, contracts are about clearly setting expectations. If you don't understand what's being expected of you, don't sign it.

Maybe You Shouldn't Tour

"I'm going on tour!"

Those words burst with coolness. The romantic ideal of hitting the road with your best buddies to see the world and play your music strikes a lovely chord in our hearts. And the hearts of our other friends, tied to a their less-creative lives. It'll be a trial, for sure, a marathon. But you'll have the stories of comradery forever.

But beyond the adventure aspect, do you actually have a compelling reason to tour?

Tours cost money. Lots of it.

Every day you spend on the road your band is bleeding cash. Hotels, food, gas, merch and money foregone from missing days at work, everything adds . As nice as it feels to have a day off, a tour day without a show at night means a large hit to your overall cost as you drain your bank account without any show to offset this drain.

You need to think about:
   -How big of an audience will we be playing in front of? The logic of touring looks much different when you're opening for a national headline act that pulls 500+ fans than when you'd be touring with another local band from your town.

  -Will we be able to play this location again within 6 months to 1 year? The more recognizable you are the more highly you are rewarded and the more "famous" people perceive your band. Since we build our love for music largely through repetition of the hits we love, there's a strong multiplicative effect on the number of times you can expose a fan to your music. Ideally a fan will see you the first time and love your show so much they drag two more friends to the next show. If you won't be able to hit the region in the foreseeable future, you miss out on this huge boost to your fan base.

      -How well do the other bands fit your sound? Not all exposure is created equal. You may well be touring with a substantially larger band, but if their fan base probably wouldn't like you than you're wasting your time.

   -How much do you expect to make at each tour stop? Are there guarantees for the show or is it based on head count? How many shirts, tickets and CDs do you expect to sling?

   -What kind of promotional effort can I put into this tour? Do you have time / energy / talent to put together a marketing push for these shows? Are the towns you'd be visiting friendly to your genre?

   -How well is your current lineup of merch selling? Do we need fresh gear? What would you estimate the percentage of people at a show who buy your merch would be?

   -Do you have enough merch to last through the week or month that you'll be gone? If we sold everything, what's the most money we could make from merch?

   -How much gas will we need? Use google maps and your vans' MPG to estimate. Then figure out the cost.

   -How many nights at a hotel / hostel will we need? Do you have any friends / fans who would let you crash at their place? You'd be surprised how helpful fans can be. This'll make a big difference on the overall cost of your tour.

   -How much mental energy / sanity do I have to spend? Cash isn't your only limited resource. Being away from home takes a mental toll on everyone. If your bassist is already having a terrible run of luck lately, he'll be more likely to have issues throughout the tour. For your working members, taking time off from work means more stress when they return. Make sure everyone has enough willpower to spend that they won't come after you with a chainsaw before the end of the tour.

   -What's your budget? Can your band afford to lose a few grand without breaking a sweat or would that money be better spent on recording a few extra songs on your album?

After all this we're left with the question of "Will we actually make money going on tour?" There's a limit to the number times a business can undertake a large project without any positive return. Simple as that.

In no way am I saying that you shouldn't tour. Far from it. Live shows and merch are becoming the primary means for independent musicians to make cold cash money. And I'm all for traveling, too. It makes you more creative and gives you great perspective on the world. But if the only compelling argument you can make for touring is the adventure, take a roadtrip with your friends instead. It'll be cheaper and much less stressful when you're not carring trailers full of gears and watching a dwindling bank account.

If you're going to tour, make sure it'll feed your band's energy more than it drains it.

Bob Lefsetz on Music vs. Social Networking

The excellent Bob Lefsetz once again drops some serious knowledge:

One thing Dick Clark had right, about the most people can say about music is it had a good beat and I could dance to it. We know when something impacts us, when we believe it’s great. And when we find something this good, we want to get closer, we want to tell everybody we know. Come on, do you want to screw movie stars because they called you at home or because they’re beautiful and in great flicks?

Social network if you must.

But it’s no substitute for incredible music. At all.