The music industry is in a fairly dark time at the moment. The advent of internet downloading messed up the industry’s happy industrious money making times and the artists main source of income flew right out of the record companies hands. It has fascinated me over the past few years how the industy is going to get out of this hole and how will the record companies and artists make money now that CD’s and tangible music is virtually obsolete.
I have read many blogs, books and spoken with music industry leaders and company bosses as to how they see the future progressing. A few years ago I was told by those in the know, that record labels were seeking to sell records with a limited special edition item attached so that it would encourage sales and not illegal downloads. This would be like buy the album and get a signed poster etc.
The industry started embracing digital files in the last 2 years and have found their feet in this new world that turned their safe money streams into chaos (even though you could argue that people have always been able to make their own illegal copies of music from tape to tape from cd to cd and taping off the radio, its just easier now).
Artists these days are making money from other avenues that weren’t so important 10 years ago. Merchandise and tour sales are the modern artists best friend. Marketing themselves to the people who count (fans) is what will bring in the money.
CASE STUDY: Amanda Palmer
I would like to make special mention of Amanda Palmer. This woman is a phenomenal musician and has been going through some rocky record company times, as have many other artists such as Hanson (who I will get to later).
Amanda signed to Roadrunner Records with the Dresden Dolls over 5 years now. She has mentioned publically that she does not feel as though the record company is caring about her best interests and has considered leaving they whole record company system. She is taking some very important marketing steps to maintain her fans and income stream. I urge you to read this wonderful blog from Amanda herself on her situation and why she is not afraid to take people’s money! It probably sums up what I’m trying to say here better than what I can write.
Step 1. Harnessing the fans
In Adelaide last year at her mind blowing show at the Gov, she asked the crowd to text a specially set up mobile phone with their email addresses so that she could add them to her mailing list and keep everyone informed of her movements. That mobile phone ran hot with email addresses and the next day we all received an email from Amanda herself thanking everyone for participating in such a great night.
Twitter is the new frontier and Amanda (Twitter name: amandapalmer), being the saavy artist that she is, has grabbed the marketing and communication tool that is Twitter with open arms. She twitters an insane number of posts per day and constantly keeps her fans informed of events, news and posts photos etc. If she tells fans to do something, they follow her every command. Minions! What else could a rock star want!
Being the extremely generous, smart and fan loving person that she is, she invited 40 fans to a recording session in a secret location to witness her recording some songs for a new album last night in Adelaide. She also webcast the whole thing to people watching online all over the world. WHAT KIND OF ARTIST DOES THAT? And spends HOURS talking openly and lovingly to fans and taking photos with every single person until well past midnight? Shes good. She’s very good! More artists should take note of her honest, loving, giving nature.
Also unique to Amanda is that she is very honest about the industry and her situation. When she tours she asks to stay at fans houses. Yep that saves money and also builds good relations and fun times no doubt. She asked fans at the recording last night to donate money to help fund the recording too. Of course we obliged!
Step 2. Merchandise sales
I recently attended Amanda’s show at the Adelaide Fringe and discovered to my surprise that tshirts were $40! WHOA! That’s pretty steep I thought. Where have the days of $20 shirts gone? But yes dear readers, an artist has got to make money somewhere, and with CD sales gone (a percentage I assume), a gal gotta make money where she can.
Amanda has previously released a book of photos relating to her last album Who Killed Amanda Palmer, sheet music and other merchandise. All of it of high quality and of interest to fans.
Step 3. Concerts
Touring is what keeps artists in the money these days. A ticket to one of Amanda’s concerts is considerably less than lets say ACDC or Black Eyed Peas, but money has to be made to cover venue hire, travel costs, management fees etc.
Step 4. Licensing
Artists can earn good money from having their songs in ads, films, compilation cds etc. Royalties will keep the bank account ticking over for a long time.
Case Study 2. HANSON
Yes. I am a HUGE Hanson fan!!! Hanson originally signed to Mercury records in 1997 which subsequently folded after their second studio album in around 2001. They were then pushed to Island records which is a rap label. As a result, the company was not interested in the brothers best interests and long story short the boys left the label to go independent with their own label 3 Car Garage records. (All of the crazy run around that the A&R manager and label gave them is documented in their amazing documentary Strong Enough To Break. Click here to watch it in parts on Youtube).
Step 1: Harnessing the fans
Believe it or not, Hanson still have a LOT of fans and many of them are potentially psycho die hard fans that would do ANYTHING for the band. Around 7 years ago the band introduced a fan club. The catch to this lovely idea was that you had to pay $50US (I think) a year to be in it. The club gives exclusive content, dvds, blogs, news, chats, members only merchandise, concert meet and greets and so on. This is smart thinking on their part because it shows that they know their fans well (so yeah, they know that most of their fans are psycho die hards that would pay anything to see everything they possibly can). Those that aren’t so “devoted” can still see some content but not all.
Hanson have also harnessed Twitter (Twitter Name: Hansonmusic) to the delight of the fans that aren’t in the fee paying fan club as many photos and personal updates are given than ever before in the history of Hanson Fandom.
Their last album, The Walk, was a Bono esque hopeful album all about hope and helping African nations. From this launched “The Walk walks”. After each concert the guys would meet fans and go for a one mile walk around the city they were in to raise awareness for people in Africa. This was an excellent chance for fans to meet the band. They also teamed up with Toms shoes and donated money from each walk to charities in Africa. Toms shoes give a pair of shoes to a child in Africa with each pair purchased.
Step 2. Merchandise sales.
I laugh at this with Hanson because these guys are CREATIVE!!! Of course there are the normal shirts, posters, sweatshirts and now there is Hanson coffee? Hanson chocolates? Hanson playing cards? Hanson wrapping paper? Wow. And again, they are clever because they know about the psychos who will buy anything. Hahaha! High 5 boys!
I’ve got to admit they do a lot of unnecessary live recordings to bring in the money. I can count 4 off the top of my head. That’s a lot of extra albums with the exact same songs on them as already released albums.
The boys have no record label to take a cut of their earnings, so basically all the money they make these days goes straight into their pockets.
Step 3. Concert sales
Hanson havn’t been to Australia in 5 years but they travel America extensively. When they were in Australia in 2005 the majority of the fans (and I mean that seriously) took off around Australia with them and went to every show on the tour. That’s commitment (*cough* slightlycrazy).
Step 4. Licensing
Hanson’s music has been in some TV shows, an indie movie and every weekend their hit song MMMbop is blasted at clubs around the world. Hello royalties!
So what am I getting to in this rant? Music Marketing and success has really fallen to the artists these days to engage with their fans and to sell tangable items like tshirts and coffee to make their money. It is smart marketing and kind of undercover, not like an ad on tv for their album release. It mostly relies on word of mouth and connection with people and making them feel like giving their money to their favourite artist is a worthy investment.
The internet has taken a great deal of money potentially from artists with illegal downloading, but it has also given them a soap box to stand on and communicate loud and proud. I also must argue that through free downloading, there is a great chance for random music lovers to stumble across songs and artists, subsequently fall in love with them and then begin to indulge in the fan journey of shirts and concert tickets. There is good and bad in everything.
Embrace technology and communicate with your soul musicians! Your fans will thank you… and pay you!
Note to self: write a novelty song and watch the royalties flood in.