Nickleback is Richer Than You (Why do you play music?)

Bloomberg Businessweek delves into the Nickelback money-printing machine::

As of May 2011, the rock-star-cum-business-mogul was earning $9.7 million a year from his various ventures, according to court records filed with the Supreme Court of British Columbia. He has a vacation home with friends in Cabo San Lucas, Mexico, a 20-acre farm with stables in British Columbia, and his own home recording studio. Chad Kroeger is not just a drunken rock god: He’s a kingmaker.

In an age of declining music industry profits, Chad is one of the few musicians who still lives "The Rockstar Lifestyle" as portrayed in the media. At the same time, they're one of the most maligned musicians today, especially by fellow musicians.

In 2010 skeptics set up a Facebook (FB) group that purposely misspelled the band’s name: “Can This Pickle Get More Fans Than Nickleback?” The pickle rallied about 1.5 million people in the single month it was live. Last Thanksgiving, an online petition to prevent the band from playing during halftime at a Detroit Lions game drew 50,000 signatures. In the fall, when Chicago’s teachers went on strike, a pro-union protester attacked the mayor with what was meant to be a devastating sign: “Rahm Emanuel likes Nickelback.” The mayor quickly denied the charge.

How is this possible?

It's about differing strategies and motivations towards the music industry.

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Why do you play music?

Your answer to this question has profound ramifications on your band's ideal strategy.

Lets think through some answers to get an idea for how this will effect your goals.

Be Nickelback-rich?
This is the major label game.

You'll need to play music with a very wide appeal. Your live show needs to be excellent. Your image will be groomed. You're going to be a performer, not a musician.

Read my previous guide on How to Sell Out Properly for a more in-depth treatment.

Be highly regarded among the music community?
This is a different, smaller clientele than the music listening public. Be aware of the nuances and limitations of this different market.

And you should probably be practicing while reading this post, too.
Be famous?
Making amazing music is the obvious method here, but there's a million different paths to this achieving this goal. It's about attention.

If you have video or choreography skills you could build a massive following through videos like OkGo did with that sweet treadmill video. Make music so out-there that you develop a cult following like Sunn O))).. You could even join The 27 Club (not advised).

Play music and have financial security?
This would be an argument for keeping a day job. Freedom for your art and you don't have to survive on ramen alone.

Play music for a living (no day job)?
Play a lot. Probably in a few different bands to diversify your income streams and ensure that you don't over-play a market. Network. Build up savings and get your costs down (rent, car, food, etc.)

Be attractive?
Let's be real here. Some of us only play to look good. If this is all you care about, invest in good photographers and videographers as a top priority.

Go on a world tour?
Start befriending larger bands in every location you'd want to hit. Look into finding fans in each city that would be willing to host you and help promote. Get everyone in the band's schedules and business straightened out. Figure out the math to make it profitable, or at least break even. 

Disgust and assault your fans?
GG Allin, you naaaaasty.

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This is only a cursory glance at all the reasons we play music. The list is effectively endless, but it's important to figure out what motivates you to keep pushing forward.

By the way, do you know why your bandmates play music?

You should.

Is the Album Really Dead?

I'm conflicted.

I love albums. That's how we've all grown up listening to and understanding music. It's a milestone upon which a band builds its mythology and expresses a grand vision. Albums allow for extended storytelling that couldn't fit in a single song. (Could you imagine The Wall being released as a series of singles?)

However, after I've given most albums a listen, I move the tracks I like to a genre/emotion-based playlist and move on to the next band. Very few albums get a complete repeat listen from me.

This is not uncommon.

The landscape of the music industry has irrevocably changed, and there are compelling arguments in favor of releasing singles instead of albums.

1. The number one listening platform for music among teens is YouTube.

More than radio, iTunes and CDs, YouTube is where the next generation of music obsessives (teens) get their music. It's free, streaming, and instant access to any song you could ever care to listen. With the prevalence of smart phones and 4G wireless, this a better service than CDs or MP3s for these listeners.

As Lefsetz puts it:

You want to know how they listen?

They pull up your track on YouTube. Whether in an authorized version on Vevo or a bootlegged take posted straight to YouTube. And they instantly decide whether they like it or not. And if they don’t, they forget about you. Just that fast. It’s like they’re carrying your album straight to the dumper. As if you walked into McDonald’s, sniffed and left and they threw all the food out and closed the doors. As for listening to all twelve of your tracks, are you nuts! Don’t tell me people have a short attention span, hell, they’re marathoning “Breaking Bad” as I write this. They just don’t have time for what is not exceptionally great, and if you can tell me ten albums from the last two years that are good from beginning to end, I’m all ears.

Listening has changed. It used to be entertainment options were limited. You bought little and played that which you owned. And it’s not only music, newspapers are competing with blogs, TV is competing with YouTube, everything’s changing, are you?

You’ve got to step up your game. You’ve got to focus on excellence.

The album isn't center stage on YouTube.There's no need to buy an album full of mediocre filler tracks anymore. Two clicks and you're listening to the song you want, for free. 

2. We're moving towards an access-based music model where owning albums is irrelevant.

Ownership isn't always best, and the music consumer is beginning to realize this.

Think about all the CDs & MP3s you have that sit around collecting dust. Other than earning "cool points" for having stacks of music lying around (guilty), is there any additional value to having piles of stuff? If it's about having access to your music, streaming beats owning. Streaming gives you an infinite collection that you can access instantly, without having to search through poorly labeled MP3s or polish scratched CDs. Streaming gives you all the access of ownership without any of the hassle.

We systematically over-value ownership for countless other knicknacks, too. The US spends $22.45 BILLION on storage space to keep all of our stuff that won't fit in our house. Everyone I know has a "crap room" that happily houses mountains of junk that "had" to be owned. How often do you dig around in your storage space / attic / crap room? Wouldn't it make more sense to skip the price tag of ownership and only pay when you actually need a Gene Simmons costume?

This is the direction businesses are heading.
 
Entertainment services like Spotify, Steam, and Netflix aren't alone in moving toward access-based services The software industry long since figured out the real value in Software-As-A-Service (SaaS) as a business model. Even items that traditionally were owned are moving to access-based services. Startups like car-sharing service Zipcar allow people all the benefits of having a car to get around without any of the annoying maintenance or registration.

Derek Thomson and Eric Weissmann at The Atlantic elaborate on the Millenial generation turning down ownership:

The typical new car costs $30,000 and sits in a garage or parking spot for 23 hours a day. Zipcar gives drivers access to cars they don’t have to own. Car ownership, meanwhile, has slipped down the hierarchy of status goods for many young adults. “Zipcar conducted a survey of Millennials,” Mark Norman, the company’s president and chief operating officer, told us. “And this generation said, ‘We don’t care about owning a car.’ Cars used to be what people aspired to own. Now it’s the smartphone.”

Expect access-based services to continue growing. Just don't expect people to understand how they work.

3. In an access-based marketplace, profit comes from utilization (listens) instead of album sales.

A Hypebot interview with D.A. Wallach explains how Spotify sets up it's payments:

We feel the metric of success should be based on how many people are listening to your music over a period of years, as opposed to looking at how many units are shipping in one week. People are used to seeing big numbers from a unit-based model, but that’s really front loading what is happening. Comparing iTunes sales with Spotify payments over a two month period of time is not a great way to look at things.

What we are trying to create is a system in which you earn royalties forever for good music, and the time horizon is simply different than what folks are familiar with now. One can actually think about a download sale as a down payment on all future listening that a fan will do. If you took the effective per play rate that I’ve paid for every time I’ve listened to my Dark Side of The Moon CD, it would be trivial compared to what I’d have generated if I’d done all that listening on Spotify. 

This is fascinating.

This new pay structure rewards musicians who create music with longevity over those who create one-off sales. Even if the band hasn't released new music in years, dedicated fans keep royalties flowing to the artists simply by continuing to listen. This is great news for bands making classic albums, not so much for bands relying on hype to make a splash with first week album sales.

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While I don't forsee the complete demise of the album format, I suspect that they may become a niche release strategy (like prog rock concept albums) as opposed to the dominant music paradigm.

Time will tell if this is good or bad.

(For more about new music strategies, see my previous post Electronic and Hip Hop Better Suited to the New Music Industry)

Artistic Disgrace and Sockpuppets

Jonah Lehrer, previously one of my favorite science writers, has been outed for widespread journalistic fraud including plagiarism, fake quotations and misstated facts. What began in mid-June with a firing at the New Yorker due to recycling articles led to a further review of his previous work for Wired. Not surprisingly, there were countless cases of fabrication in these articles as well.

I'm disappointed, but what surprises me is not the depth of the plagiarism as much as how long it took to discover this malfeasance.

Fact checking becomes easier every year thanks to the Internet. There are swarms of motivated individuals who love nothing more than ferreting out lies. Like an immune system, these fans filter through masses of information to protect the Internet from lies and inauthenticity.

Old-school methods of deceptive push marketing don't work as well as they did before the Internet. (Rhianna's Talk That Talk album sold only 10,000 copies in the UK and spent a million dollars on a previous flopped single.) If the product (music) is crap, no one will listen. 

Still, the major label model depends on smash hits to recoup costs from all the failed albums. They're venture capitalists. There is huge financial pressure to produce a "hit". Hence, we have sockpuppets.

The eqalitarian Internet is a double-edged sword. User-created content means that the ideas that dominate the conversation can come from anyone, whether they're a real person or not. A sockpuppet is a term used to describe a fake online profile used to manipulate public opinion and is often used in groups to simulate crowd approval. While the fake customer testimonial has been around for ages, sockpuppets are a comparitively new invention that came about with online forums and user reviews.

Ever notice how some products on Amazon have nothing but five-star ratings, describing how "earth-shattering" a new book is? There's a good possibility it's either the author themselves or a pay-for-review company.Yelp ratings alone can make or break a business.  (Amazon, thankfully, now shows "verified purchase" next to reviews.)

Sockpuppets aren't just for companies though, political groups and governments have been using them for quite some time. This tool isn't going anywhere, either. Sockpuppets are cheap and effective when undetected, ensuring that it will remain a staple in the online marketing toolkit.

But as previously mentioned, fake fans don't drag friends to concerts, tab out the songs on your album, or pick up new merch.

Fake fans cost you money. Real fans make you money.

When the cash runs out, the only people left are your true fans. 

There's no replacement for making amazing, timeless music.

When Should You Quit Your Job? (1 of 2)

Musicians I talk to seem to view being a full-time musician as the be-all, end-all metric of success.

I get that. Playing music all day is a big slab of groovy in my book.

But we're defining success in the wrong way.

Defining success as having music as your only job is dangerous. Going full-time as an artist before you're financially ready will wreck both your art and your sanity. What you've effectively done is given up a low-paying stressful job with a low-paying stressful job without benefits or stability. Music is not an easy living. Unless your creativity is fired solely through desperation  making yourself miserable because you didn't plan ahead is silly. Ask anyone who has let The Hunger consume them.

Real success is about being happy with your only job being music.

Before you decide to make the leap, consider a few things.

1) Stability allows you to be more experimental with your music.
Experimenting with new sounds and styles in inherently risky. Failure is a very real prospect. Once the band establishes a "sound" and becomes full time musicians, everyone's ability to pay the bills relies on that sound. Would it be easier or more difficult to completely revamp your sound if your rent depending on success? (This is strictly conjecture, but I suspect this may be one reason why some bands peak on their first album.)

2) Growth eats cash
This is a cardinal rule of business. Even if going on tour will score you a tasty lump of cash, you have to pay expenses like van rentals, merch, promoters, and venues before you're able to earn that cash. You've got to eat and pay for places to sleep while on tour. Will you burn all your cash before you can earn it? Yes, you can use credit cards to delay paying for a month, but mistake with credit cards are expensive and eat into your profits.

3) Burnout
Working at a restaurant can kill the joy of its food with boredom. The same could be said of playing your top 3 hits for years on end. For some, music is an escape from boring reality. Changing music from an escape to an obligation can have a profound effect on how you view your music. The life of a full time musician is about hustle. If you're not naturally inclined to that lifestyle in addition to the process of creating and performing music, it'll be easy to get burned out.

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Before making a big decision like this, you need to do serious soul searching into what you actually want out of your music.
   -Do you like writing and recording but hate performing?
   -Do you value stability over creativity?
   -How much am I wiling to cater to my fans?
   -Will I only be happy with a sold out stadium, or would I be happy having a few dedicated fans buying music through bandcamp?
   -Would I actually enjoy the musician lifestyle?

There are big questions.

Next week we'll talk about how to prepare.

(Part 2)

Zoe Keating Releases Her Actual Pay

Add another item to the growing list of why Zoe Keating is one of my favorite artists. Hypebot discusses the numbers with her:

During a six-month period from October 2011 to February 2012, Zoe earned $84,386.86 before taxes.

Here's a breakdown of where that money came from:

....

A good chunk of Zoe’s support comes from her regular and super fans, who she feels remain loyal to her due to their interest in her story.

“They seem interested in my DIY-story,” Zoe told Hypebot. “Or the mechanics-of-how-I-make-music-with-a-cello-and-computer-story; or the classical-musician-gone-rogue-story; or the radiolab-Amanda Palmer-Imogen Heap-Rasputina-connection; or the I'm-a-geek-too-story, etc. The casual listeners might not know my story or anything about me.”

“Casual listeners won't [support], but they never did anyway,” Zoe added in her Google Doc. “I don't buy ALL the music I listen to either, I never did, so why should I expect every single listener to make a purchase? I think that a subset of my listeners pay for my music, and that is a-ok because... and this is the key... there are few middlemen between us.”

As an artist, you are kept afloat by the connection you have with your fans. Nourish them and they'll nourish you.

The Presale Ticket Scam

Justin Herring dropped some knowledge over at Hypebot about how required ticket presales can be, and often are, a raw deal for bands. Personally, whenever we hear the words "presale tickets required" it's a good sign to pass on a show.

The simple math breakdown is my favorite part:

We’ve already established that the pre-sale tickets are $14 apiece, but the door price is $17 the night of said show. If you get a walk in that mentions they’re at the venue to see your band, you get $4 out of that $17 door charge. Which is obviously more than the $1 per ticket you sold, but remember, if you don’t sell all 40, you don’t get to play. And, since the venue is so thoughtful of your band, they tell you that you have to include a tally counter and keep track of every person who comes in and mentions your band name. (Wonder if the door guy is even told to ask?)...

...After all of that is said and done I pose these questions, why aren’t venues being told this practice is uncalled for, unfair, ridiculous, and a downright scam? Out of $560 you turn in you keep $40 dollars!? You put on a four band bill all selling 40 tickets that’s $2,240 the venue is collecting, minus the whopping $160 cut to all four bands the venue is collecting a total of $2,080 for every band's hard work. Not to mention the amount they make at the bar.

If four bands tossed in $100 each to rent a venue and each sold the same 40 tickets, each band would make $460.

Once again, the math for DIY look a whole lot better than established channels.

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.

Major Label Math

Recently, rapper Chuck D sued his label, Universal Music Group, for unpaid royalties. According to the federal documents filed by his lawyer, for each 99 cent download on iTunes, Chuck gets 8 cents.

For reference, if he were to distribute himself through TuneCore he'd get 70 cents. That'd be like giving himself a raise 8 times his current salary.

Now is the golden age of indie.

The Art of Public Relations

Remember when I talked about how a nerd hero was able to manage his response to a humiliating article so well that he got hundreds of offers for dates?

Today we're going to look at an ineffective response to bad PR and how we could improve things.Let's look at another bad response and how we could make things better.

Last week an executive director for Goldman Sachs wrote a public resignation letter in the New York Times describing how the company only cares about taking money from clients. Needless to say this was some bad news for a investment-services firm like Goldman. The company lost $2.2 BILLION in market value because of this letter.

Goldman's response was weak:

While I expect you find the words you read today foreign from your own day-to-day experiences, we wanted to remind you what we, as a firm – individually and collectively – think about Goldman Sachs and our client-driven culture.

First, 85 per cent of the firm responded to our recent People Survey, which provides the most detailed and comprehensive review to determine how our people feel about Goldman Sachs and the work they do.

And, what do our people think about how we interact with our clients? Across the firm at all levels, 89 per cent of you said that that the firm provides exceptional service to them. For the group of nearly 12,000 vice presidents, of which the author of today’s commentary was, that number was similarly high. 

Anyone who feels otherwise has available to him or her a mechanism for anonymously expressing their concerns. We are not aware that the writer of the opinion piece expressed misgivings through this avenue, however, if an individual expresses issues, we examine them carefully and we will be doing so in this case.

On a scale of 1 to 10, how effective would you rate this communcation?

Notice that this People Survey only asks employees about how client-centered they are. Do you think current employees would have any incentive to bad talk their current employer? How persuasive is this message considering its source?

Let's pretend we're the chefs at Goldman Sachs and we want to make a tastier PR sandwich.
For bread, we ask 1,000 of our clients to answer a survey about how satisfied they are with their advisor, not the company. People respond much more positively about individuals than faceless organizations, so this will nudge us towards a more favorable response. This bread gives us a good foundation of data that we'll lay the more important ingredients upon.

I'm feeling like black forest ham, so add some of that to our sandwich. Get a few op-ed pieces written by individual clients telling a heart-felt story about how Goldman Sachs has helped put their kids through college, saved them from financial ruin, saved a basket of cute kittens from a tree etc.

Add some caramelized red onions and lettuce for crunch. Take some of the better stories from clients and record them in a short video explaining how Goldman has helped them through life.

Delicious.

Add some avocados. No metaphor for this one, avocados are just delicious.

  
What should we use for secret sauce?

Back in 2011, Fox News was accused of hacking into people's phones so they could get news before anyone else. Shady indeed, but their effective use of the principles of Tai Chi softened the PR blowback.

Tai Chi's philosophy (the self-defense kind, not the retirement home kind)  "emphasizes yielding and "sticking" to an incoming attack rather than attempting to meet it with opposing force". The concepts of "Fox" and 'Hacking" are tied together in the public's mind. This is the force of a punch. Instead of trying to resist the connection and get hit, Fox merely adjusted the direction of this punch by rebranding the "Fox-Hacking" connection that people already had made. Whenever Fox mentioned the event, they described how "hacking happens to everyone" from Citi to the Pentagon instead of emphasizing that Fox was the hacker, not the victim. Politicans have been using pivots like these since time began, pay attention to the next debate you watch for some good ones. (Note: I'm not condoning the phone hacking. I'm just talking about public relations techniques.)

For Goldman's secret sauce, we would ensure that every communication talks about the company's client-focus and any program/policies they do to make sure they have happy clients. Something along the lines of "I'm glad this brings to light the important issue of all the work we regularly do for our clients. Sometimes we get so immersed in the details that we don't fully communicate the value we create. Let's talk about how we've served our clients in the past..." Follow that up with a blend of additional client stories and data about the money you've made for your client. Mix thoroughly and apply liberally over sandwich. Slice sandwich diagonally and serve.

Now wasn't that much tastier than the bland response we initially recieved?

Now Is The Golden Age of Indie

With all the doom-saying about piracy, it's easy to become disheartened about the state of the music industry.

Far from it.

Just like the shift from selling sheet music to recordings hurt the legacy industry of music publishing, the new digical landscape is the newest change in the landscape of the music industry.

And it's the best it's ever been for small bands.
1. Less middlemen = more money in artist's pockets.

Every intermediate link between the fan and the artist take a little bit of money out of the equation. The economics term is rent-seeking, or using structural factors to increase one's share of existing wealth instead of creating new wealth.

Remember Louis CK's million dollar self-release? He released an entire special via a $5 direct download on his website. With no unnecessary links in the chain between Louis and his fans, there was so much money on the table that Louis gave half of the money to chairty and a quarter to the production crew that helped create the special.

Selling a 99 cent song on iTunes gives the artists 79 cents back. Back in 90s, each $15+ CD Toni Braxton sold earned her only 35 cents, which lead her to declare bankruptcy twice. And this was after being certified 8x platinum in the US.

2. Dedicated fans are becoming a larger and better source of funding than major labels / corporations.

When game design great Tim Schaefer wanted to fund an old-school adventure game, he knew he was out of luck getting a major player to take a big risk on a largely ignored genre of game. So Tim started a kickstarter page with a goal of $400,000. He raised $1,000,000 within a day. This year alone, Kickstarter is expected to provide more funding to small artists than the National Endowment for the Arts.

But the amount of money raised isn't the only import issue here. This is also about control.

Signing a contract with a large company to record an album means you're giving up total creative control. Suddenly your music has baggage and you must use this producer and release this way. Stifling.

When your fans fund you, the only thing they want is for you to be yourself.

3. The middle-ground is hollowing out. Niche is in.

Major labels are Wal-Mart, they need to move hundreds of thousands of units to just break even so they shoot of safe, middle-ground music. (Here's my post on how to sell out properly) Depending on their budget, indie bands can break even with only 10,000 album downloads. It's a lower bar to clear, meaning it's easier for risky projects to succeed.

Given the reach of the internet and the irrelevance of having your music physically in stores, it's easier than ever to connect with these fans of your post-polka-core band instead of begrudgingly accepting that a label will never pick you up.

If you're starting a new grocery store business, trying to compete with Wal-Mart is suicide unless you have infinity plus one dollars. Start an artesan cheese shop instead.

How Can Classical Music Make A Comeback?

Classical music is in crisis.

With the hit of the recession, donations to orchestras and symphonies took a nose dive.

The Philedelphia Orchestra declared bankcrupty. The Honolulu Symphony, Syracuse Symphony, and Louisville Orchestra folded. The Dallas Symphony, The San Francisco Opera, and The Colorado Symphony are all having massivie financial problems.

But it's not like people aren't going to concerts anymore. Worldwide, as of 2010 the value of the music industry was $168 billion dollars, up $32 billion from 2005. I consistently blow a hole in my monthly budget with concert tickets and I have no intention of changing this. If you're a music junkie I'm guessing you can say the same as well.

The real issue isn't the lack of financing for orchestras, it's the disconnect between concert-goers and the symphony business.

When is the last time you went to a classical concert?

When are you planning to go next?

Personally, I adore string quartets. I'm such a sucker for cellos that I almost always immediately like a band with one. But I don't have any desire to hear anything from the Dallas Symphony. The "Symphony Experience" of being a fanicly dressed statue has no appeal to me. It's a crappy school field trip that costs up to six times the price of a normal concert ticket. As callous as it may be to say this, should the organization fold I'd feel only a slight "meh".

It's surprising how artists, who live off of their creativity, can be too stubborn to change their presentation when it's clear the market isn't interested in their current offerings.

In times of crisis, it's the artists who unleash their creativity on their business who prosper.

The Orchestra of the Age of Enlightenment realized the conventions of classical concerts weren't attractive to their fans, so they went on a pub crawl.

Maggie Faultless, joint leader of the orchestra, elaborates on their Night Shift concert series:

...I'd like to think that some people will feel that we have broken down some conventions and after this they might like to try other performances of classical music, but this isn't about enticing people into the concert-hall to hear an 80-piece OAE in concert, this is about empowerment. Audiences want to have a bit more ownership of what they're listening to. The best performances involve a three-way relationship - the music (ie what's on the page) the audience and the performers. The performers react not only to the written notes but to each other and most importantly, to the audience. But all too often in today's concerts, the third part of that equation is forgotten. Often when we're performing you can't even see beyond the first couple of rows, let alone to the back of a thousand-seat hall.

This idea is utterly fantastic. If the Dallas Symphony were to pull off something like this I'd be all over it.

Other ideas that have sprung up from clever musicians are lie-down concerts of Bach (bring a bean bag!), drive-by Handel, and my favorite, baby-sitting for concert attendees. These are more than just "stunts" to be discarded, they're a targeted response to customers' needs.

Creativity isn't just for your art, it's for your business as well.

Are you making it easier or harder for your customers to throw dollars at you?

Two Kids Spend $100,000, Disappointed They're Not Famous

Over at Time's "Entrepreneuerial Insights" section, the brothers that form the band Two Lights write an op-ed about how their music career has cost them $100,00 so far and it's really hard, man.

Quoth the band,

"What meets me backstage is nothing like what I pictured. No fountains of champagne, no elegant lounges. It's just as dingy as the venue itself, with a printed sign taped to the star's dressing room door. The band is hanging out on a couch that someone obviously found on the street, and there are some catered snacks that look like they could have come from the NYU dining hall I try to avoid.

It occurs to me that if any part of me is doing this for the good life, I should let that go."

They then go on to elaborate on their expenses, ending with:

In short, the School of Rock is expensive. Then again, class can be a lot of fun, and some of the homework is pretty cool. And of course, if we do graduate — if we make it in the music business — we'll soon be earning a lot more money than even doctors and lawyers. Or so we tell ourselves...

Surprise! It's almost as if we make music for the love of it, shocking!

Lefsetz does a much better job of dissecting the article than I would.

1. If you think backstage was lavish back in the pre-Internet heyday, you were never there. Maybe in New York and L.A., but rarely there either. Just a ton of cold cuts, potato chips and beer on ice. As for who was there? A ton of hangers-on, who believed if they could just be close to the icons, they’d be cool.

2. Training. Irrelevant of whether you need music and voice lessons, complaining about the price is like me bitching how much it cost to go to college and law school. At today’s price, my college is $200k for four years. Add three years of law school on top of that and this guy is bitching about fifteen years of piano and guitar lessons for 30k? (And oh yeah, I had those too!)

3. Rehearsal. We all need an office. And if you’ve got no money, make it in your home. And if that’s too noisy, move where it’s cheap and you’ve got some space, like back to Maine. You don’t have to live in the metropolis anymore to make it. The Internet is everywhere.

3. Gear. As everyone online is saying, you spent $500 to move a piano? How’s the gas mileage on that Lamborghini? Either get an electronic keyboard or buy something used or rent. Don’t put the lifestyle in front of the success.

4. E-mail blasts. You wasted a grand. I ignore that stuff, and so does everybody else. We get hipped to quality and success by our network, we hate self-promoters/hypesters.
I could go on and on but you not only get the point, you know the story as well or better than I do.

It’s a long way to the top if you wanna rock and roll.

And you don’t make it by complaining, you make it by knocking them dead. And you can do that on a Japanese guitar as well as a Les Paul. Talent is much more important than equipment. These guys are just being ripped off by an old system which is trying not to die. They’re being bitten by hucksters the same way you get ripped off on the street by the guys playing three card monte.

Laughable.

P.S. If you’re so damn great, why do you have only 98 Twitter followers?

Lessons From Louis CK's MIllion-Dollar DIY Experiment

For those of you who missed it, on December 10th Louis CK released a self-produced, self-financed comedy special for a $5 download on his own website. No restrictions, other than asking you "please don't pirate this."

He made a million dollars in ten days, no middlemen required.

Louis C.K. said he was shocked as he watched the orders come in -- and then began to feel guilty about the amount he'd netted.

"I've never had a million dollars all at once. I grew up pretty poor and I was like, this is not even my money," he said. "This is just a five-dollar impulse that 220,000 people had, and now I have it. And I felt uncomfortable about having that much money."

So Louis C.K. set aside $250,000 to cover the cost of the expenses of producing the special, then doled out another $250,000 in bonuses for his staffers.

He then donated $280,000 to five charities: The Fistula Foundation, The Pablove Foundation, charity: water, Kiva and Green Chimneys.

"I was going to [donate] $100,000, but it's like blackjack -- I just kept dishing it out," he told Fallon.

That leaves $220,000 left over.

"Some of that will pay my rent and will care for my childen [sic]. The rest I will do terrible, horrible things with and none of that is any of your business," Louis C.K. wrote in a statement posted on his website.

He's not the first artist to make a killing without a label, this just serves as more proof that you can make it on your own. Radiohead's In Rainbows made the band more money than they've ever made for a record even though it was a pay-what-you-want record.

1 Direct-to-fan sales mean cheaper products AND more money going to the artists.

For a large company, $1,000,000 is break-even. For a DIY artist, it's a smash hit. Rembember $18 CDs back in the 90s? Each CD you bought from a third party only returned cents to the band.

I don't know about you, but I'd rather keep my first million.

2) Fans will pay for great art from the artists they love.What with all the crap the MPAA and RIAA are throwing about to justify the Protect IP Act and Stop Online Piracy Act, you'd think people will only pay for art when they're forced to.

Nope.

As the video game distribution platform Steam has shown, making legitmate purchase a better experience for consumers opens their wallets.

Piracy is a service problem.

Louis CK allowed you to download and watch his video using any platform you wanted.

He didn't even bother copy-protecting the video.

He didn't have to.

---

"I like the people at our record company, but the time is at hand when you have to ask why anyone needs one. And, yes, it probably would give us some perverse pleasure to say 'Fuck you' to this decaying business model." - Thom Yorke

Facebook Is Not A Website

Facebook is not a website anymore, it's an operating system. Same with Google and Apple. Amazon plans to follow suit with the recent release of the Kindle Fire.

And these platforms are becoming increasiingly interconnected with many other websites you use daily. Ticketmaster, Spotify, CD Baby, and eBay have either already integrated ot plan on full integration into Facebook. Youtube just added a "buy it now" button for songs wo work with Google Music. All of Apple's products are designed for integration.

In order to survive as a musician in the digital world, you need to make your music compatible (available) with these big four platforms (not that big four, sorry). Most all internet traffic will be centered around these behemoths and if fans cannot get your music here, you'll either be pirated or worse, ignored.

How important is it to be on the "operating system" as your fans?

Magazines have been reluctantly making the transition to digital subscriptions for years, but with low renewal rates and slow growth, it was not as profitible a channel as it could be. When Apple released the Newsstand icon as a default on the iPhone and iPad, sales of digital subscriptions went through the roof.

PixelMags reported a 1,150 percent growth increase in the first week after Newsstand and iOS 5 debuted on Oct. 12. It’s now sold over four million digital magazines.

Why? Digital magazines finally aligned with the same platform that fan's were using. The Newsstand app moved magazines from being buried behind apps, to being front and center on the home screen. The product stayed the same, only the platform changed.

New music/tech websites form and disppear every day. Some will grow large, but most won't. A majority of your online sales will come from major platforms, as that's where most of your customers spend their time.

Make sure you're available on the same "operating system" as your fans.

What Can Music Learn From Video Games?

In an interview at a recent tech conference, Gabe Newell, co-founder of Valve (the video game company behind Half-Life and Portal), gives some fantastic hard data on the economics of sale pricing and freemium models of digitally distribution.

For those of you who aren't gamers, Value has a web service called Steam where you can purchase a game online and have it download directly to your computer instead of having to buy a physical copy of the game. You can download the game any number of times, but you have to be signed in to your account online to play. Simple, unobtrustive DRM (digital rights management) that protects creators but doesn't screw legitimate customers.

Beautiful.

With an estimated 70% of the digital game distribution market, Steam has access to more data than you could ever ask for on pricing and consumer behavior.

And they decided to share some insights with us. Groovy.

From the Geekwire transcript of the talks, Gabe Newell on piracy:

One thing that we have learned is that piracy is not a pricing issue. It’s a service issue. The easiest way to stop piracy is not by putting antipiracy technology to work. It’s by giving those people a service that’s better than what they’re receiving from the pirates. For example, Russia. You say, oh, we’re going to enter Russia, people say, you’re doomed, they’ll pirate everything in Russia. Russia now outside of Germany is our largest continental European market.

...the people who are telling you that Russians pirate everything are the people who wait six months to localize their product into Russia. … So that, as far as we’re concerned, is asked and answered. It doesn’t take much in terms of providing a better service to make pirates a non-issue.

Pay attention to your customer's wants and needs and they'll pay you for the effort. This business knowledge is far from new, yet it's also ludicriously easy to overlook. Don't do draconian DRM as it'll chase off paying customers and move them to less-hassle piracy.

Software-as-a-service / cloud platforms such as iCloud and Spotify seem to be the way forward as they balance DRM with customer service and price. However, royalties from these sources are small and will remain so for the foreseeable future. Use them as entry-level services for new fans but don't put your entire catalog on them.

Gabe goes on to talk about the company's pricing experiment by making Team Fortress 2 a free-to-play (aka freemium) game:

Why is free and free to play so different? Well then you have to start thinking about how value creation actually occurs, and what it is that people are valuing, and what the statement that something is free to play implies about the future value of the experience that they’re going to have.

And then the conversion rate, when we talk to partners who do free-to-play, a lot of people see about a 2 to 3 percent conversion rate of the people in their audience who actually buy something, and then with Team Fortress 2, which looks more like Arkham Asylum in terms of the user profile and the content, we see about a 20 to 30 percent conversion rate of people who are playing those games who buy something.

So that’s a fairly surprising and fairly recent statistic, which is that there seems to be something about the content that significantly changes how your monetization occurs, with apparently much broader participation than you would see out of something like FarmVille.

They first get the customer interested in the product, then increase the value they offer to the customer as the customer become more commited. Again, it's a simple concept that's simple to forget.

No matter whether your're talking about video games or music, It's all about making it easy to become a fan.

What IS Exposure?

"Getting your name out there."

Some are willing to give away their entire catalog for free in  hopes that the extra exposure will build loytalty and gain fans.

Other artists insist that every piece of music should be paid for and don't care about exposure.

What, exactly, is exposure worth?

My thoughts:

A) The exact value of exposure-for-exposure's sake is nebulous at best.

It's difficult, if not impossible, to calculate an exact value for each additional unit of exposure, so to speak. Much like advertising, the benefits are only visible over the long-term and are often difficult to directly quantify.

For example, how many additional fans would you expect to get for making an album available for streaming online for free? Would these additional fans buy enough of your music, merch, or shows to make this trade-off a net benefit for your band? This great post by Frank Woodworth does the math to estimate profit per stream, but attempting to discern the value of increased fans and their propensity to purchase is strictly guessing. 

As much as I'd like one straightforward answer, it seems justifying a decision based on the value of exposure is a subjective choice. In the case of streaming, I choose a blended approach. 

B) Some types of exposure are more valuable than others.



Hypebot: I understand you gotta get paid,
but both you and I know this ad you run isn't
worth anything to 99% of DIY artists.

Paying your own tour expenses in order to tour with an internationally popular band that fits your genre would (probably) be worth it. Paying to get your music tweeted about by a local music blog may be worth it. Paying to get your music available on a Chinese web store if you're a Tennesse-based funk band will not be worth it.

C) Opportunities that tout "exposure" as their primary selling point should be looked at skeptically.

Often, the word exposure is a red flag that a service or person is trying to take advantage of you. We've all had fantasies that if we get our music in front of the right A&R person / magical wizard, our entire musical career would be solved forever. Companies who base their value proposition on offering bands exposure are playing to this fantasy. 

In our early days, my own band bought into one of those compilation CD rackets where we had to pay $200 for a box of compliation CDs which one song of ours would be on. We were going to be taking baths in exposure-flavored champaigne!

After dropping the cash and getting the compliation, we quickly realized that the other tracks on CD were awful and didn't have any rhyme or reason as to why they were all included. It was a mess and we couldn't, in good conscience, charge people for that collection of debris. I'm pretty sure we ended up throwing the box out.

Our email inbox is so flooded with these kinds of "opportunities" you'd think we were one email and a thousand dollars away from a world tour. That exposure must be some pretty powerful stuff!

---

How do you feel about the concept of "exposure"? Does your band give away free music or not? Why do you make the choices you do?

What Do We Do About Streaming?

There's been quite a raging controversy over Spotify over at Hypebot as musicians across the industry chime in with their opinion on the streaming service. 

Zoe Keating, Cellist and brilliant DIY musician, talks about how independant artists are treated unfairly.

         That’s it. That’s my complaint: fairness.

If Spotify would level the playing field and make the distribution equal to all artists. I would lay off (since I am sure that my constant complaints are a total priority for them!). Now, if Spotify was to make those royalties algorithm-based, they’d have my full nerd support. For example if, thanks to their 'related' algorithm,  people listen to small-artist X after listening to large-artist Y, then I could see that a particular play, not all of them, of artist Y could be ‘heavier’. However, if people end up at artist Y by searching for them directly, the play-weight should reflect that. Data, do it with data!

But just to pay tracks from major labels more because they are major labels, that is so OLD. Where is the revolution in that?

Four indie labels have already withdrawn from the service. Sam Rosenthal of Projekt, the most recent label to pull out, issued a public statement explaining the label's decision bluntly:

For a stream on Spotfy.... NOW READ THIS CLOSELY..... on average $0.0013 is paid to Projekt's Digital Distributor. 5000 plays generates around $6.50. In comparison, 5000 track downloads at iTunes generates $3487. To be clear: I am not suggesting that every stream would have been a sale at iTunes. Believe me, I understand the reality of the music business. I am providing that as a comparison for you. Let's look at this another way: To earn the U.S. monthly minimum wage - $1160 - 892,307 plays a month are needed at Spotify. This is not a viable number for artists.  

Spotify responded to Projeckt by changing the subject:

Spotify does not sell streams, but access to music. Users pay for this access either via a subscription fee or with their ear time via the ad-supported service [just like commercial radio] - they do not pay per stream. In other words, Spotify is not a unit based business and it does not make sense to look at revenues from Spotify from a per stream or other music unit-based point of view. Instead, one must look at the overall revenues that Spotify is generating, and how these revenues grow over time.

Spotify is generating serious revenues for rights holders, labels, publishers and the artists that they represent.  We have paid over $100m to rights holders since our launch, and the overwhelming majority of our label partners are thrilled with the revenues we're returning to them. Spotify is now the second single largest source of digital music revenue for labels in Europe, according to IFPI.

But is this current royalty structure sustainable? According to Spotify's filings in the UK, it lost $42 million on licensing fees in 2010 alone despite a five-fold increase in revenues from the previous year. 

What does all of this mean to an independant artist? Is streaming worth the loss in income so more fans can listen to your music? Can you ever break even on streaming? Is it better to just ignore the whole deal?

Here's how I see things playing out:
---

1) Streaming services are similar to radio in that both benefit major labels with more money and muscle than independant bands. 

When it comes down to corporation-level negotiations, a DIY artist will always be at a disadvantage. Self-sufficent bands don't have legal departments, lobbyists, consultants, piles of cash, or a fanbase ranging into the millions that can be used in negotiations. If Spotify can't sign a DIY singer-songerwriter it's no big deal, but if Spotify doesn't have access to the entire Universal Music catalog, the streaming service will be severely crippled. The streaming service has to make that deal.

As such, these large entities leverage their influence and power to ensure that they maximize their benefit from negotiations. Organizations not at the table miss out.

It sucks, but I don't see a solution to this problem without either a PRO stepping into negotiations or a coalition of DIY artists forming their own right's group.

2) There's no turning back, the cloud is here to stay.

For better or worse, streaming services figured out how to monetize piracy. Judging by the success of Rdio and Spotify, businesses have made their services more appealing than piracy. Unless there is a game-changing method of piracy to replace BitTorrent, the ease of use of the cloud will continue to draw in customers. (Piracy in Sweden is down 25% since the Spotify's introduction.)

Businesses won't give up this revenue stream without a fight.

3) Streaming is marginally better for indie musicians than radio.
Radio was a passive music experience, with a song selection heavily influenced by who had the most cash for promotion.

Streaming/cloud services/piracy enable an active music experience by allowing curious fans to give new bands a try. It won't pay much, if anything, but it does benefit smaller and niche bands that wouldn't get much airplay on traditional radio.

A minor win.

4) Streaming an album is a moral dilemma.
As a fan, it was absolutely awesome to hear the new Mastodon the day it came out for free on Spotify. Now I've got no qualms about throwing dollars at Mastodon, I've bought every studio album because they're that gravy. But. having spun the album a few times, there wasn't any reason for me to buy the actual album anymore.

This is a mammoth moral dilemma.

Instead of Mastodon seeing my entire $10 for a digital download (minus iTunes' cut), the money is instead spent on a subscription to an intermediate who only offers the band a fraction of the $10. The middleman (streaming) scoops most of the profit off of album before it ever hits the band.

Owch.

How do we cope with this?

5) Delaying and limiting releases to streaming is an effective compromise.

By delaying release of new material to streaming services, we ensure that super-fans who are willing to pay for a "brand-new" album actually pay for the album, while not excluding casual listeners who may convert to a sale later down the line. This is the same method of price discrimination that movie companies use; movies don't come out on DVD/Netflix until months after they've left the theaters. This ensures that movie-buffs willing to pay a price premium to see a movie in theaters actually pay.

For the same reason, any b-sides, rarities or limited-edition material shouldn't be released to streaming services as this would discourage willing fans from paying at the cost of providing the material to casual fans, who really won't care about "extra" material.
---

What are your thoughts on streaming?

What is a Fan Worth?

New fans are expensive. You have to pay for fliers, press, merch and your songs in addition to social media, email lists, networking, bear costumes, pyrotechnics and everything else.

A super fan that's been digging your music for months is cheap. Send a quick text or email and you have an extra body at a show.

Smart businesses have known forever that it's worth spending money to retain customers. It's about Customer Lifetime Value (CLV), a wonderfully self explanatory business term.

A fan who only buys one ticket to your show has a lifetime value of $10. You're not going to retire on that, but it's appreciated.

Now say this same customer loved your show so much they'll see you whenever you're in town. Assuming you tour the city once a year and you only plan on touring for ten years or so, that same fan's lifetime value shot up $100. Now that's groovy.

It's easy to get caught up in short term thinking, especially in the early stages of a music career when you're making negative dollars. If a fan comes back a show later and wants to return a shirt for whatever reason, it's easy to justify a "No Refunds" policy since you're already behind a couple hundred dollars because of the shirts. They'd be annoyed, walk away, and that would be the end of that. How did this action affect that fan's lifetime value? Will they invest more or less on your band in the future?

However, you can make an arguement against being fan friendly goes like this: You say it's cool to return the shirt. The fan says thanks, but doesn't buy anything else and walks off. It's a monetary loss, sure. And what if everyone did this, you'd be broke!!!

To be fair, some people are just jerks. If bunches of people try gaming your good will, then by all means cut it off. But remember, how you treat your fans affects how they percieve you. Even if they returned the shirt, they still thought highly enough of you to buy it in the first place. It's better to err on the side of being too good to your fans than too tight with finances.

Fans fill up your wallet, not the other way around.


This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.

How Much Merch Should You Stock?

I've changed my mind since writing that merch problems are an insult to your fans. While I still agree that losing revenue and bumming fans is bad karma, I'd like to refine my position.

When you buy inventory, you're forecasting demand. Easy for Walmart, difficult for musicians meeting at Taco Bueno. So when you decide how much to buy, you can either err on having too much or too little merch, so let's take a look at the costs and benefits of each decision..

Excess Inventory (Pro):
   Less risk of lost sales / bummed fans.
   Bands with larger fan bases can still possibly sell excess inventory.
   Bulk discounts.
   Less waiting for fan orders.
Excess Inventory (Con):
   Higher up-front costs.
   Higher risk of having unsold inventory (taking a loss).
   More inventory to track and haul around to shows.

Limited Inventory (Pro)
   Lower up-front costs.
   Less risk of unsold inventory.
   Easier to experiment with different items. (Top sellers are easier to scale up, bad merch is easier to drop)
Limited Inventory (Cons)
   More risk of lost sales / bummed fans.
   No bulk discounts.

Personal experience: We waaaaaay overestimated demand on our initial release. We could have saved a significant amount of money by buying less merch in preparation for our first release. Since our first release was paid out of our own pockets, overpaying was not only a bummer but it's left a chunk of our capital sitting idle in the corner of the practice room.

IDLE MONEY MAKES ME A SAD PANDA.

---



My advice for your band?

For an entry-level to mid-level band: It's better to err on the side of too little. In this stage you're still experimenting with merch, sound, marketing and whatnot. Since you're not relying on your legacy material as much as a more established artist, you should always experimenting to find what your fans want the most. Having demand drive your decisions will save you money AND help you get a feel for what sizes/things your fan base actually wants.

For a mid-level and above band (extended tours): It's better to err on the side of too much. Esetablished bands have breadth of both material and fans. If a shirt doesn't sell on one tour, you can carry it over to the next one with a better shot at selling than only a local band. And since larger bands rely more on merch, the risk of missing a sale hurts much more than a smaller band that's still building out a product line.

What's your take?


This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.

How To Sell Out Properly

Continued from last week's discussion on Cash vs. Control
---

So you've got it in your head that you must be signed to be happy. As you know, I am very much against labels as they are 95% of the time a terrible financial decision.

However, you don't care.

Cool, let's work with that.

Since you've got your heart set on getting signed, let's get our heads around how to look sexy for a label. As I've mentioned before, getting signed and getting bought out are exactly the same thing. A larger entity with lots of cash is willing to supply you with some sweet, sweet cash money in exchange for future profits and oversight. Not all of these investments (bands) will return as much cash, so a venture capital firm (label) will have a diverse portfolio (artist roster) in the hopes that a few investments (bands) will make enough money to cover the losses for all the failures.

The label's interest in you is contingent upon how your band performs as a financial instrument. An advance is essentially the label loaning you money for a set period of time with the expectation that you'll be able to repay the loan plus interest, thus making the label a Return On Investment (ROI).
 
If you're making the label less money than they're spending on you, consider yourself on the short list to get dropped. At this point they may suggest you change your look, sound, or direction. It's not really a suggestion. Once a label has thrown cash at your band, it's your duty to help them recoup their cost. Often, a band is given an advance to record an album with the stipulation that the band will not receive any additional compensation until the label makes enough cash to cover the advance. After that thresh hold is met, you'll still earn only a percentage of profit from each sale. You have to make them that skrillah or you're gone.
 
So if you really want to be signed, you want to position your band in a way that signals to labels that "this band is a solid investment."


Let's talk about some ways to preen your band for getting signed.
---

1. Study the Labels You Want To Get Signed On: Each label has a distinct personality, and your band needs to be careful about who they choose to do business with. (Death Row Records was affiliated with The Bloods and hired crooked cops/gang members!)

Pay attention to the sounds of artists already on the label. Do they already have forty bands that sound like you? Or do you think you'd be a good way to round out their lineup? Remember, it's about portfolio diversification.

Pay attention to the marketing and tone of communications the label uses. Do they like proper press releases with careful wording, or are they more punk rock-ish? This will help you determine if the personality of your band would be a good fit.

Pay attention to how satisfied artists are with the label. Does the label actually listen to the artist, or do they chew bands up and spit them out on a regular basis? (See the Victory Records Hawthorne Heights lawsuit)

Pick out a list of a possible labels in your genre that might be a good fit for your band. Tailor your band's "pitch" to fit each label's personality, and you're more likely to catch their attention.

2. Find an "In": Getting a label interested is infinitely easier if you can find an actual person to listen to you, as opposed to sending in a demo EP in the mail. Look around the label website, music publications, blogs, and local music industry directories to see if you can get a name.


In most cases, phone will tend to be ideal since emails and physical mail are much easier to ignore. Better still would be having a friend introduce you. Be polite and to the point with your pitch.

3. Pitch: Label or no, you need to know how to describe your music in under 10 seconds with a solid pitch. The goal of a pitch is to only get the "main ideas" of your art across and interest the listener enough to have them say "Hmm, ok. Tell me more."

This is good: "We're The Wigglin' Waggles, a danceable Nirvana-sounding band from Dallas. We'd like to ask your permission to send a demo CD so we can talk further about possibly signing with your label."

This is bad: "Hey, dude. Where do I send our demo?"

Expect more posts on building an effective pitch in the future. This is a BIG topic.

4. Get a High-Quality Demo: Your music needs to be its best to get someone to pay attention. If you have to apologize for your sound recording (It's just a demo, man, so ignore the skipping sound), you need a new recording. End of story.

5. Minimize "Distasteful Behaviors": Pure-bred businesspeople are uncomfortable going too far outside the norm. Musicians and artists live to push the boundaries, as that's where artistic growth comes from.

But be aware of this disconnect.

There's an limited amount of 'edgy' that a firm will be willing to tolerate before you cross a psychological thresh hold where people become uncomfortable. the 'edginess' works against you. Venture capital firms are less likely to help fund totally new enterprises in wholly unproven markets, as they have to defend their decision to their bosses. It's much easier to defend investing $10 million when "the market for all-natural pet nutrition has been growing at 12% yearly, and this young company is perfectly positioned to take advantage of this growth." It wasn't until after Nirvana and Pearl Jam blew up that it became incredibly easy for a grunge band to get signed.

This thresh hold exists even in corporate life. Even if the official company policy says "tattoos and piercings are ok", having ostentatious sleeves and plugs will permanently stunt your career at a corporation. We (humans) like those that look like us. We identify and help those that look more like us, consciously AND unconsciously. Being "too far out" makes others uncomfortable with you AND themselves. Just the same as if you were wearing a full suit to a punk rock show, looking like a punk rocker in a cubicle is asking for others to distrust you. Don't.

So how do we apply this knowledge? First, cut the songs you have called "The AzzHol Commandoz" and "Shoot Heroin Into My Eyes". That's not mass-market material. You can still keep some swearing and vulgar material in your songs because, hey, it's rock and roll. But you don't want to get too avant-garde with your performance or too offensive in your lyrics that your songs would not be playable on radio.

You don't have to water down yourself completely, but be aware that you'll want to polish your rough edges so that an A&R rep will spend her time selling you instead of explaining/defending you. And ditch hard drugs. Drugs signal unreliabile people which makes it difficult for a label to trust that dropping $20k on an album won't end with someone in the band freaking out and ending up in rehab. Don't be stupid.

6. Maximize Your Draw: Adding a band/company to your portfolio is risky. The larger an initial market you can show your investors, the easier it is for them to justify signing you up for a few albums.

Put yourself in the A&R rep's shoes. Even if you loved this new band you saw, how would you defend your decision to sign the band if the only people in attendance at the show are the band's significant others?

Same decision, now assume the band can regularly pull 60 people at regional shows.

Get your pull up. Don't assume that a label will "discover" your no-name band at an open-mic night. Get a big enough fan base and buzz that the label hears about your music and have to check it out themselves.

7. Already Be Making Money: Less risk for investors. Same as above.

8. Take Any Contract to Your Lawyer Before Signing: Yes, lawyers are expensive. But so is being trapped in a crappy contract for five albums. If you're not finished with or currently working on a law degree, you'll save yourself years of heartache by having a professional review the contract to make sure you're getting a fair deal.

Labels assume (correctly) that most musicians don't know about or care to know about contracts. While there are benevolent labels out there, there's also malevolent labels out there. Protect your band so you don't become trapped in a terrible marriage.

9. Know Your Band Member's Intentions: Have a serious, sit-down talk with everyone in the band to work out all the details you can think of before you sign anything.

   -Does everyone want to get signed?
   -Is everyone willing to relocate?
   -What is the minimum offer we would accept?
   -What is our goal for getting signed?
   -Where does everyone want the creative direction of the band to go?
   -What would make everyone happy?
   -How much control will we give up?
   -Will everyone be able to work around getting signed, or will some have to quit their jobs?
   -Would the band member's spouses approve?
   -Would each band member be able to take care of their dependents?
   -How much touring is everyone willing to tolerate?
   -What would cause someone to want to quit the band?
   -Are there any current issues with/between people that must be taken care of? (Skipping practice, not paying rent, fights, medical issues)

10. Be Respectful: You'll get turned down.

A lot.

The Beatles were turned down by Decca, HMV and Columbia because "Guitar groups are on the way out." It happened to them, and odds are your band isn't the next Beatles.

That's perfectly ok.

Deal with rejections gracefully. Say thanks, and scurry off. Don't get mad, don't act crazy, and don't bad mouth the label; the industry is all connected. If word spreads you're jerks, it'll be much harder to gain an audience with already-overloaded label professionals.
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There's millions of other considerations to make, but these are the red-flags you need to take care of before earnestly pursuing a label. Anything else you think should be added to the list?

P.S.: Are you noticing how improving your band in order to get signed sounds awfully similar to how you build a career as a DIY artist?

I thought so.


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