Posts Tagged ‘cd baby’

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Don’t just monetize, maximize.

May 4, 2009

POSTED BY TONY VAN VEEN

There’s no shortage of information online about how to monetize your music: sell CDs in stores and online, downloads, merch, synch licensing, live gigs, etc. There’s not nearly as much written about how to maximize your revenues once you’ve made use of the above selling opportunities. Here’s a quick list of some common sense things the average artist can easily implement (and which will show instant results):

1) Be ubiquitous:
Common sense, but too often poorly executed. Pursue as many sales channels as possible: go direct to local record stores, traditional distribution (good luck with that one…), online (CD Baby offers the widest selection of online download stores, including iTunes, Amazon, to smaller partners in territories as far-flung as Armenia). Besides sales channels, you also want to pursue as many ways as possible to get your brand name out there. Besides your own web site and the big social networks like MySpace and Facebook, that means setting up profiles and a presence on other social or music sites like iMeem, iLike, Bebo, and any other site with a music angle. Then be an active participant, so your presence is a reason for fans to visit your site(s).

2) Don’t fear free:
Let’s face it, people don’t know you or your music. You have to push yourself on an unsuspecting audience. Free is the way to do that. Give away your music online. Put it on peer to peer networks. Allow fans to redistribute it. It may not look like it’s contributing to your revenues, but it’s building your brand. And if you selectively make some content available for free and sell other content, the free content will drive revenues.  Little Wayne gave away hours of content on mixtapes and online before blowing up and having the biggest selling album of 2008.

3) Build your list:
Most every activity you pursue should include a component meant to build your list. To put it bluntly, names on your list are sales leads. They’re prospective customers. Sure, you may call them fans, but really, you want them to be customers.  So make it easy for people to sign up at your web site. Have table tents at gigs that folks can fill in. When you’re onstage, tell people in the audience to email you from their smartphone (or text you) to be added to your mailing list. Offer an incentive: offer visitors to your site a free song download in exchange for their email address (and capture at least their name and zip code too, so you can email them when you’re in their neighborhood).

4) Retain mindshare:
What’s likely to happen right after someone signs up for your mailing list? They’ll forget about you! If you want to turn prospects into customers you need to remind them you’re still around. Do so by sending interesting, funny, engaging emails to your list periodically. Make them personal. Pretend you’re writing to one person, not 200, or 20,000. Use their name (any email program with a mail merge functionality will allow you to do this). Don’t just send “buy my music” emails. They’ll quickly end up in the spam folder. Share stuff of interest – about your tour, recording, band issues, political commentary, you get the drift. But communicate regularly – I’d suggest at least monthly – so your fans don’t forget you.

5) Build a deep product catalog:
The formula is simple: more products to sell = more sales revenue opportunity. So don’t just sell your latest CD. Sell ALL your CDs; don’t let any of your titles go out of print. Fans at your gigs may be tempted to buy more than one disc if you blew them away. Offer shirts (various designs if possible), hoodies, posters, other items. Once the fan is at your table you can try to upsell them on multiple items (more on this later). Sure, inventory costs money, and not everyone will buy every item, but you don’t need to produce large quantities today, and they’ll quickly pay for themselves.

6) Work your iTunes strategy:
iTunes is the biggest music store in the world. That means that your likely buyers are probably shopping there. It also means that there are many chances for other iTunes shoppers to accidentally stumble across your music. Publicist Ariel Hyatt recently posted a great article about how to use a simple iMix strategy to gain visibility for your music. CD Baby founder Derek Sivers suggested many years ago to record cover versions of moderately famous songs so that if someone searches for that song your version will show up alongside the original version, driving occasional incremental revenues for you. A derivative suggestion is to write your own original songs, but give them names identical or similar to well-known songs so they show up in search results. Finally, use multiple iTunes accounts (and encourage your fans) to write reviews of your product on your iTunes product page.

7) Tell customers what to do:
If you tell people what to do, it’s amazing how many of them actually do it. When you’re on stage, ask people to sign up for your mailing list, tell them you have merch for sale in the back, and invite them to stop by and check it out. You’ll see, if you start doing this your revenues will increase. Heck, feel free to ham it up: “We’ve been on the road for three weeks straight eating spam from a shared can. We have a merch table in the back and would love it if you bought a CD so we can upgrade to White Castle tonite.”

8 ) Offer specials and incentives:
Everyone loves a deal. One of the most popular and effective ways to sell more at gigs is to bundle products together and offer a discount. CD: $10. T-shirt: $20. CD + shirt: $25. Trust me, it works. If you have old CDs you can’t get rid of, offer your fans a free copy of the old disc if they buy your new one. Offer a free poster or button with purchase. Some major artist like Prince have even used a “free CD with every concert ticket” strategy to sell tickets and fill venues.

9) Make it easy to buy:
Sounds obvious? Then why aren’t you accepting credit cards at your gigs? Go to http://cdbaby.net/swiper to get yours. Artists accepting credit cards at gigs report that sales double or triple in many cases. Also, on your web site have a clear, prominent call to action with a “buy CD or download” link that fans can’t miss.

10) Take away the fear of buying:
Many new fans are hesitant to buy a CD from an artist they don’t know well. Start with a professional looking CD, which instills buyer confidence. But perhaps the best way to take away the customer’s fear of buying your music is to make the purchase of your music risk-free by offering a money-back guarantee. Put this in your e-mails! “Buy my CD. If you don’t love it… please return it to me in 30 days or less, and I’ll refund your full purchase price.” Two things will happen: You’ll sell WAY more CDs, and you’ll quickly find out just how good your music really IS. BTW, most people aren’t crooks who will copy the CD, and ask for their money back. Some will, but most won’t. People like to support the artists they come to see. They may not support the labels, but they do support the artists they like. You’ll also find that a lot of people who intend to ask for their money, never get around to it. People love to procrastinate.

11) Work your ass off:
No one is as invested in your career as you are. It’s fun writing and performing music, but the business side (what I’m writing about here) is not nearly as much fun. Yet, executing the business side well is the biggest driver of revenues (and success) in the biz. Since you have the most at stake, you should do most of the work. At night. On weekends. After your day job. When you’re tired. The reason most artists fail is because they don’t have the discipline to execute the business side consistently well.

So there you go. 10 simple tips to execute, and one hard one (#11) that can cause all the other 10 to crumble like a house of cards if you don’t do it. Got any other suggestions  for maximizing the revenues from your music? Feel free to add them.

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What’s next for independent music retail?

February 18, 2009

I was talking to the CEO of a well-known music distributor the other day, when the topic of the future of independent music distribution came up. He lamented to me that his business was down 25% in the fourth quarter of 2008, and continues to be down this year. He’s not alone.

 

Most music retail chains are having problems paying their bills – Q4 saw massive returns from retailers to distributors(for credit) so they could afford to take in new titles.  Many record store chains have already gone belly up. Circuit City, long one of the country’s leading CD retailers, is out of business. Borders is reducing floor space for music by 70% over the next 90 days. One of the few healthy chains left appears to be Best Buy…for now.

 

These retail woes have repercussions up the distribution chain. Distribution giant Alliance announced in January that it was laying off over 400 and shutting down a warehouse. Circuit City owed them some $16 million. Gulp.

 

In the face of all this bad news, everyone gets more conservative. Less acts signed, less product into distribution, less product at retail; what’s an independent artist to do?

 

The only record stores that appear to still be doing well fall in one of two categories:

 

1) The specialty record store. Usually a single store in a niche market, the specialty store caters to a local clientele. There are clerks who know music and can turn you on to cool new stuff. And perhaps most important, they sell other products besides new CDs – used CDs, T-shirts, DVDs, posters, bongs, magazines… They’ve diversified within their very narrow niche. Artists can get into these stores, but usually by going direct, and only in regions where they are local.

 

2) Online stores. Amazon is the big daddy, and CD Baby is the most prominent one for independent artists. These stores sell physical product online, as well as downloads, and other items. Anyone can join these stores, though Amazon requires a retail ready, barcoded, replicated CD, while CD Baby’s more artist friendly approach accepts any kind of CD.

 

Is it still possible as a growing independent artist in 2009 to get your product into bricks & mortar distribution? Unfortunately, the answer is probably no, unless you have a track record of 5 to 10 thousand CDs scanned and sold of a previous release. Distributors, with lower sales than ever, are less likely than ever to want to take a chance on a band they don’t know. Rather than think “they might sell,” they think “I’ll get returns.” And can you blame ‘em, really? After all, retailers are reducing floor space so severely, that there is no place on store shelves for up and coming bands.

 

So here, in my opinion, is how the future of CD distribution looks for independent artists:

·         Physical distribution to bricks and mortar goes away. No distributor with nationwide reach will want to take a chance on an unknown act. Artists will realize the futility of physical distribution through traditional channels, and stop aspiring / hoping / dreaming of a distro deal.

·         CD sales direct to fans at gigs will continue to be a major revenue generator for independent artists for years to come. Catching a fan when they’ve just experienced a great show is still a strong sales driver, and will always be.

·         The main nationwide CD distribution opportunity for independents will be online. A couple of megastores like Amazon will thrive, as will niche players like CD Baby (100% independent), and other stores in certain narrow verticals (specific genres or interests).

 

Of course, digital is where all the growth is these days, but I can’t help but think that this viscious downward cycle we’re in is creating a rapidly accelerating self-fulfilling prophecy that the CD is dead at retail – and thereby prematurely killing an important revenue stream for artists.

 

In fact, my distribution scenario above is already playing out across the U.S. and Europe. It’s just that the old dream of nationwide distribution dies hard for musicians.