You have to know where in the food chain to charge.<\/p>\n
Traditionally, labels were the driving force in music and they charged right up front, you had to buy the album after hearing a track or two on the radio.\u00c2\u00a0 Only problem was…were you going to like the whole album if you only liked the single?\u00c2\u00a0 Would the single be representative of everything else on the album (can you say Extreme?)\u00c2\u00a0 Oh, in the sixties you could just buy the single.\u00c2\u00a0 But if there even was a single in the nineties, it was deleted when the song got traction, you had to buy the whole album.\u00c2\u00a0 Sometimes people fell in love with the album and the act, but oftentimes there was no loyalty, buying the album was the only way you could get what you wanted, the single.<\/p>\n
But then came Napster.\u00c2\u00a0 With Napster, you could listen first.<\/p>\n
And even the legal iTunes Music Store allowed you to cherry-pick.\u00c2\u00a0 Suddenly, the labels’ business model was in the toilet.\u00c2\u00a0 They no longer controlled exhibition and distribution, and the buy-in price was no longer fifteen bucks.\u00c2\u00a0 Their revenue tanked.<\/p>\n
Now the labels are pissed about this.\u00c2\u00a0 You would be too if you were losing sales at a double digit clip.\u00c2\u00a0 The labels somehow think they can port their old business model into the new world.\u00c2\u00a0 But that’s not how it works.\u00c2\u00a0 You’ve got to play by the new rules.<\/p>\n
Now what are the new rules?<\/p>\n
You can hear everything before buying it.\u00c2\u00a0 Even the most amateur of Web-surfers can hear four songs on MySpace.\u00c2\u00a0 You get a feeling for an act.\u00c2\u00a0 So, you either only buy the single, the song you want, or the whole album if you like most of the tracks.\u00c2\u00a0 Assuming you pay for your acquisition at all.<\/p>\n
This is a problem.\u00c2\u00a0 Not only does the consumer want control over what he buys, he has control over the price too, which is free.\u00c2\u00a0 Not a good business model.\u00c2\u00a0 You’d think those in power would address this, for this goes to the core of their revenue stream, but they’d rather try to sue their consumers back to the twentieth century, and go on about the good old days.\u00c2\u00a0 There is a model for monetization of Web acquisition, by licensing P2P, whether an individual service or at the ISP level.\u00c2\u00a0 Then again, you can’t monetize hard drive swapping and IM transfer, so the boat leaks.\u00c2\u00a0 Bad if you’re in the recorded music business.\u00c2\u00a0 Not necessarily bad if you’re in the music business.<\/p>\n
Creators should get paid for their work.\u00c2\u00a0 But this is problematic today.\u00c2\u00a0 So, musicians must turn to other revenue streams.\u00c2\u00a0 Like live and merch.\u00c2\u00a0 This is fact.\u00c2\u00a0 One can rail about the injustice, how it was better when you could live off recorded music sales, but that world is in disarray.<\/p>\n
In the heyday of MTV, the way to get people to come to the gig was to get airplay of your video.\u00c2\u00a0 It was cause and effect, airplay begat attendees.\u00c2\u00a0 Not necessarily long term fans, but if you had a hit you could book short term revenue.\u00c2\u00a0 But now MTV plays no videos.\u00c2\u00a0 And radio listenership is down.\u00c2\u00a0 So it’s harder to drive revenue streams, not only recorded music, but live and merch.\u00c2\u00a0 So, you’ve got to go another way.<\/p>\n
Some people employ corporate endorsements and\/or advertising\/TV\/movie synchs.\u00c2\u00a0 Corporate cash is short term, it runs out.\u00c2\u00a0 And, you can only usually get it if you’re big already.\u00c2\u00a0 Advertising…it hurts your cred.\u00c2\u00a0 TV and movie synchs, not bad, but there aren’t that many slots, and there isn’t that much repetition.<\/p>\n
In other words, it’s hard to get your music heard without selling out.\u00c2\u00a0 And even if you do sell out, it’s still hard to get your music heard.<\/p>\n
That’s why when you’re a wannabe, when you’re starting out, you give your music away for free.\u00c2\u00a0 Forget the fact that you want to be paid.\u00c2\u00a0 The problem is, nobody knows who you are to buy your music.\u00c2\u00a0 Your free campaign is a way to get traction.\u00c2\u00a0 Revenue is down the pike!<\/p>\n
Kind of like Google.\u00c2\u00a0 There was no revenue at first.\u00c2\u00a0 Just the truly great search engine.\u00c2\u00a0 They got eyeballs, and then they came up with their advertising model.\u00c2\u00a0 There’s already a business model in music, live, merch and the recorded music sales you can garner, but it pays to look at Google.\u00c2\u00a0 Google is constantly releasing new products, that are free to use.\u00c2\u00a0 Google News.\u00c2\u00a0 Google Earth.\u00c2\u00a0 Google Video, Blogs and a whole host of other features.\u00c2\u00a0 You see they want you hooked, they want you to be a member of the club.\u00c2\u00a0 They’ll figure out how to make money off you later.\u00c2\u00a0 Funny, but this strategy not only decimated Yahoo, it put a huge dent in Microsoft’s online strategy.<\/p>\n
Once again, why was Google successful?\u00c2\u00a0 Because its search engine worked quickly and came up with the correct result right away.\u00c2\u00a0 And you didn’t have to wade through ads, you weren’t bombarded by come-ons.\u00c2\u00a0 You got what you came for, nothing more unless you so desired.\u00c2\u00a0 This is why the endorsement\/commercial tie-in aspect of music is so problematic.\u00c2\u00a0 It undermines the experience and the trust.\u00c2\u00a0 Sure, it gets the message out, but it muddies the cred and the belief and the bond.\u00c2\u00a0 Google’s bond is so good that searchers see the ads on the side as a bonus, a benefit!<\/p>\n
And isn’t it interesting that Google doesn’t sell the ads to the highest bidder.\u00c2\u00a0 Oh, they do at first.\u00c2\u00a0 But if a subsidiary ad gets more traffic, it ascends the ladder.<\/p>\n
Insanely great thought and execution.\u00c2\u00a0 If only Yahoo could duplicate it.\u00c2\u00a0 It can’t.<\/p>\n
There aren’t that many good bands out there.\u00c2\u00a0 It doesn’t matter if you sell out or play for cred, if you suck, you’re not going to make it.\u00c2\u00a0 But if you are good, manage your cred, and your mailing list.\u00c2\u00a0 Pay attention to the bond with your fans, nurture it.\u00c2\u00a0 People will do anything for you as long as you don’t trick them, if they believe in you.\u00c2\u00a0 Have great music, create a fan base, and then collect the money.\u00c2\u00a0 Yes, this does mean you’ll starve or leave money on the table at first.\u00c2\u00a0 But if you give it away for free up front, or cheap, it’ll pay dividends later.\u00c2\u00a0 This is the benefit of Arcade Fire staying indie, of having cheap shows, their fans love them.\u00c2\u00a0 It’s more than the music.\u00c2\u00a0 And it has to be more than the music to have longevity today.<\/p>\n
Remember, bond first, money second.<\/p>\n
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