Protected: The Do It Yourself Artist
The Do It Yourself Artist
“It just seems like musicians want to sell a few records and put out a perfume line, and I think it’s so sad to say that there are so many musicians who don’t want to change the world… Music has been so much more.” -Moby
The revenue equations of the legacy music industry were once fairly straightforward: composer-performers signed to labels, could expect to receive mechanical royalties, publishing royalties, and other payments such as synchronization fees.
Today, the new music business landscape has far more configurations and opportunities, but it has become so diffused that it presents almost too many possibilities to the do-it-yourself (DIY) artist.
The lobbying organization, The Future of Music Coalition surveyed working musicians about their actual income and came up with a list of 45 revenue categories!
They included publishing and record label advances, mechanical and airplay royalties, sheet music sales, ringtone revenues, live and recording session work, litigation settlements with labels and publishers, merchandise sales, speaking fees, fan funding, interactive service payments, ad sales revenue sharing from outlets such as YouTube, teaching, endorsements, acting, corporate sponsorship, and funding from government grants.
Perhaps no one musician taps into all 45 sources, and many sources on the list offer little in the way of predictable recurring revenue. But taken together, they form the new music industry’s economic mosaic.
The Direct-to-Fan Era
Twenty-five years ago, recording artists might have incurred a debt to their record label of $1 million or more for a first album, video, and related costs like tour support before the first record could be sold. To show for it, they would have had the record and the video, but the copyrights to both would be retained by the label.
Years later, that same artist or band might invest a fraction of that amount in recording equipment and have not only the same creative output, but also the means of production for the next album and video-and the next and the next. Instead of paying over $100,000 of fully recoupable dollars for 2 months in a traditional recording studio, they can pay less than $20,000 for a comprehensive computer-based recording system.
Instead of over $250,000 for a music video, they can purchase affordable video editing software and a high definition video camera for well under $2,000. Instead of the high- overhead workings of Major Corporation and publicity and marketing materials for the record release, they can use powerful graphics/word processing/website creation software suites costing only several hundred dollars and also use the power of Social Media.
At the end of the day, the independent artists not only own the equipment, but can retain the rights to their recordings and thus able to repurpose and remonetize them for years to come.
Doing The Math
- The lower capital costs of this new economic order enables artists to sell their music for less, yet retain a higher percentage of their revenues.
- For instance, an artist signed to a major label might, with its more sophisticated promotion and distribution capability, sell 200,000 units of an album at a wholesale price of $12 each for gross sales to the label of $2,400,000. Under a typical split with a major label, the artist’s share of that might be 15%, or $360,000 (some of all of which would be applied to any advance the artist had already received).
- An independent artist could approximate that same level of income with sales of only a quarter of that at an even lower unit cost – 50,000 units at $10 per album. If 60% of the sales were through iTunes (grossing $300,000), the indie artist would net the 70% iTunes usually pays to the label, a net of $210,000; assuming the remaining 20,000 units were sold direct-to-fan (D2F) via gigs or through the artist’s own website, the artist could expect another $200,000 in gross revenue.
- This is a highly simplified example and doesn’t reflect the percentage of sales the artist would have to pay to management and attorneys or the points due to a record producer. Nor is it meant to suggest that independent music artists routinely achieve those kinds of numbers – the vast majority will not.
- But it does graphically illustrate how the economics of independent recorded music can, under the right circumstances, achieve respectable numbers. This, combined with revenue from live performances, from which an increasing number of artists derive the majority of their income, indicates that even in today’s challenging music business landscape, making a decent living is possible when artists can effectively leverage the recording, promotional, and distribution tools to which they now have access.
Chance The Rapper’s Manager – Pat The Manager Corcoran
https://www.youtube.com/watch?v=8rATt9HK1e4
https://www.billboard.com/articles/news/grammys/7677738/chance-the-rapper-manager-grammy-nominations
Tools of The Trade
- Music artists can be forgiven if they pine for the business models of the legacy record industry. For all its excesses and financial tenuousness, it at least seemed comprehensible: Success usually required money and an array of industry specialists, hence the vital role of big labels, that had both capital and a multifaceted workforce.
- Labels still scramble for market share, of course, but the intriguing story is in the new century DIY.
- Compared to the good ol’ days, today there are fewer consumer dollars to fight over, more releases vying for prominence, and a kaleidoscope of technologies and services offering to assist those trying to promote or merchandise music.
- Independent artists are confronted by a plethora of companies offering them various combinations of assistance such as: Bandzoogle, Mobile Roadie, Snapchat, Tunecore, Reverb Nation, Topspin, Sonicbids, D2Mondo, etc.
- Some of these tools could be used by labels as well, but they’re generally of more value to DIY musicians who use them as a substitute for resources that a larger label should already have in place.
Sales/Promotion
- Sales and promotion tools help artists decide how to connect online with fans and potential fans, as well as provide various types of distribution formats, including file downloads, streaming, and physical media. This is the most populous category of Web-based tools. Some examples include:
- Topspin (est. 2007) offers tools to help artists create online sales and distribution strategies, gather analytics on their sales, and leverage those to boost sales. Like many such services, Topspin charges a modest monthly fee that provides a hosted website and online sales portal with social media integration widgets and targeted emails to up to 2,000 fans.
- Also offers a premium membership, which adds subscription membership sales, preorders, third-party fulfillment partners, and targeted emails to up to 20,000 recipients. http://www.topspinmedia.com/
- Bandcamp (2007) is another sales and promotional portal based on the direct-to-fan concept.
Bandcamp does not charge a monthly or annual fee, but instead takes 15% cut sales up to $5,000 and 10% for sales above that. Not a bad deal for artists compared to regular-label royalty rates, except of course for the big difference: Under this model, it’s incumbent on artists to finance, produce, and market their own work; all of these types of online toolsets add leverage to the artists’ own sweat-equity investments to themselves. - CD Baby (1998) might be considered the “grandfather” of all online toolsets for music artists and it’s one that, via its relationship with parent company Discmakers, offers CD replication (mass production generally requiring minimum runs of 500 or more units) and duplication (per-piece manufacturing of CD-R discs with virtually no unit – run minimums) integrated into online sales portals/website and promotional tools (iTunes).
- It’s rights management service, CD Baby Pro, allows independent artists to tap into mechanical royalties from streaming services both in and outside of the United States. https://www.cdbaby.com/
Other companies offering services along these lines include:
- Tunecore (2005)
- RecordUnion (2008)
- ReverbNation (2008)
Not just about sale of music, can get music heard, ranked
Financing
- The traditional way of financing a music career via investment by a record label is no longer the only way, and given 12% to 15% minority stake artists often receive in label contracts, this is not necessarily the best deal for the artist.
- Self-financing alternatives, also known as “crowdfunding,” allows artists to develop funding sources for music from the public at large by offering a premium, such as copies of a finished product financed by small donations or buy-ins.
- The drastically reduced cost of recording technology and diversity of affordable distribution and promotion methods make this approach a viable option for some.
-Companies in this category include the following:
–Kickstarter (2008), a Brooklyn company that serves as a conduit for artists, musicians, industrial designers, and others to solicit donations to capitalize artistic projects.
–Patreon (2013)
–RocketHub (2010)
–ArtistShare (2003)
–PledgeMusic (2009)
Touring
- Over the years as revenue from physical formats continued to shrink, live concert performances have emerged as the single largest source of revenue for the vast majority of music artists.
- Many of the sales/promotion websites also have some tools to help artists promote their live appearances, both as ways to increase revenue through ticket sales and as a venue for additional record and merchandise sales.
- However, as live music takes on even more importance in the revenue mix for music, more companies are offering dedicated toolsets for this aspect of the music industry.
Indie on the Move (2008) allows users to announce and promote their live shows via press, radio, and Internet, look for and apply for club and other venue bookings, and share reviews of not only their shows, but also their experiences with various clubs and promoters.
https://www.indieonthemove.com/
SonicBids (2000) connects touring musicians with venues and bookers as well as fans. Like many Internet-based service companies, it has tiered membership with monthly feels varying depending on the level of services required.
BandsInTown (2007) relies heavily on social media to connect artists with fans for live shows.
Gigwell (2013) enables talent buyers to book gigs and pay fees negotiated by agents.
Eventful (2004) connects live performers, including touring music artists, with consumers.
http://losangeles.eventful.com/events
Ourstage (2007) helps artist members advance their careers by allowing consumers to rank Ourstage-client songs appearing on the platform.
Licensing
- The “synch” fee has become a significant source of revenue for a growing number of independent music artists. “Synchronization” refers to the pairing of music and picture, mainly in the form of film and television, but which increasingly encompasses multimedia.
- While more artists have received exposure through synch deals, a high level of financial success has become increasingly rare. The five and even six-figure licensing deals of the 20th century have given way to synch fees as low as several thousand dollars. Fees may be lower, but the exposure can be valuable enough to justify granting the license.
- These kinds of placements have attracted a huge assortment of brokers, including conventional music industry professionals such as A&R staffers, publishers, and record producers. There is also an array of online companies that specialize in making the connection between music and picture.
They include:
Taxi (1992)
Audiosocket (2008)
Jingle Punks (2008)
Pump Audio (2001)
Rumblefish (1996)
Broadjam (1999)
Many consider synchronized music placement to be the new radio for independent artists who are all but shut out of terrestrial hit radio rotation. It has definitely added one more dimension to the toolkit.
Radio Promo
- Airplay Direct connects artists to music supervisors and radio programmers for music placement.
Singers and Producers
- Vocalizer (2012) connects singers and producers.
Social Media
-Snapchat
-Tumblr
-Rockbot
-Soundcloud
-Musical.ly
Most significant digital phenomenon in recent years. Create a connection between millions of users every day.
At the very least, a Facebook page is considered critical to marketing music by new and established artist alike, as well as record labels, music venues, and other business entities.
In only a few years, an entirely new universe of online tools has emerged to help music artists cut through the “noise” of so much music on the market. These include:
FanRX
https://www.facebook.com/FanRX/
Beetailer
Pagemodo
Tweepi
Tweetdeck
https://tweetdeck.twitter.com/
Periscope (2015)
- DIY artists need to be creative and cultivate multiple sources of revenue in order to stay afloat
- Talent, Hard Work, & Luck are also all part of the equation
