| The
record business as we know it is changing into
something totally different. I'm going to describe
what this means to you and why you should be really,
really happy.
Nobody's
Buying What They're Told to Anymore
The
Big Labels - The big labels are having a
hard time selling CDs. They are panicking because
they put a lot of cash into producing, marketing
and promoting new releases and the masses aren't
biting. An associate of mine got signed to a
record deal last year. The whole package cost
the label about six hundred thousand big ones
to produce and promote the whole thing and they
have only sold about a thousand CDs so far.
The music industry is getting nervous. Why do
you think this is happening? The answer is simple:
the Internet.
The
Internet - The Internet has become the greatest
sales tool since the radio. It offers you an
inexpensive way to promote, distribute and market
your own CDs and gives you the opportunity to
make much more profit per CD than you ever could
any other way. There are millions of music lovers
surfing the Web every day searching for music
that they want to discover all by themselves.
They don't want to be told what to listen to
and buy anymore. There will always be the mainstream
market and Tower Records will stay on the street
corner. But, let's face it: the Internet offers
consumers many more choices, plus the option
of listening before they buy anything. You can
also browse for hours in your underwear without
a clerk calling the cops.
Choices
- A friend of mine who happens to be one of
the greatest guitarists around (he'll get mad
at me if I tell you who) and has also been signed
to a major label for the last ten years just
lost his contract. As I said before, CDs aren't
selling, so artists are losing their contracts
right and left. He has the option of shopping
around for another contract and could get one
without a doubt, but he has decided to do the
whole thing himself. His logic is this: he has
a big fan base so he can still sell a bunch
of CDs without a major label. Granted, he won't
be able to sell as many as he could with a big
company promoting every release, but he doesn't
need to.
I'll
tell you why. When he was releasing CDs signed
to a major label, he was only making about 6%
on every CD he sold. By releasing it himself,
he makes more like 80% profit. The more CDs
he makes and sells, the higher his profit margin
will be. Even if he sells only half of what
he has in the past, he'll still make much more
money. A ton more.
Artistic
Differences - Prince also did the same thing.
The reason I can mention his name is because
I don't personally know him. I never discussed
this with him and I don't know the specific
details (so forgive me if I am not completely
accurate), but from what I understand the whole
thing started because Prince, being the creative
genius he is, wanted to release a lot more material
on every CD than the record label wanted him
to. I guess the record label's logic is that,
the more songs there are on the CD, the more
packaging you need: more plastic, more paper.
All these things cost more money and cut into
their profit margin. Prince probably just wanted
to release CDs that suited his artistic needs
and at the same time gave his fans what he assumed
they wanted, more Prince per CD.
Obviously
they couldn't meet eye to eye. Since he already
had an enormous fan base, he decided to do his
own releases. Prince is a true pioneer. Record
companies aren't in the game to create art;
they are in it for money. They are very particular
about what kind of songs you write, how many
minutes each song is, and the order of the songs
and the mix of the recording. For these reasons,
true artists have a hard time dealing with producers
whom the label decides are best for them. If
you don't want to be told what to do, doing
it yourself is a great option. With the advent
of the Internet, this is becoming an easier
undertaking.
How
to Promote Your CD
Gigs
- This is an easy way to sell your CDs. Bring
'em to your gigs, set 'em up and just take cash
on the spot. Or, leave some at the register
so people can buy one on the way out. You may
want to offer a cut to the club you are playing
at. Make sure to mention your CDs during your
set, and don't forget to point people to your
site for information on your band and concert
schedule.
Marketing
- Without a major deal you will have a rough
time selling CDs in stores. You won't have the
money for promotion and distributors won't touch
anything under five thousand units. If you want
to get your CDs in some stores you will have
to think of some different marketing strategies.
This
is what I did. I went around to some small music
schools. You know, the kind that are inside
music stores. I offered them 25% on every sale.
All they had to do is play the CD in the waiting
room when people where waiting for their lessons.
Without a doubt the students would ask whose
CD was playing. When they found out they could
buy it, a lot of them would. It is a "win
win" situation for everyone involved and
only sets me back 25% on each sale. To put it
in a CD shop would set me back between 50% and
60% for distribution and the cut that the store
takes.
I
also pay the musicians on my CD a distribution
charge of 25% on each CD that they personally
sell. I don't mind letting them make a little
money on the deal because, as I said before,
I'm making enough profit on the CD to not care
too much.
Another
thing I did was tie up with an effect maker.
HAO, a maker of great stomp boxes, asked me
to record a CD demonstrating their distortion
boxes. Rather than take money for my studio
time, I offered my services for free in exchange
for a few hundred CDs that I give away from
my site or guitar9.com when anyone buys my new
CD, "Prospects."
Try
to figure out whom you can team up with as a
marketing partner. How about a restaurant, car
wash, veterinarian, or your local church.
Your
Site
Important
Features - The next thing to do is to get
your site up and going. Your site must have
three important features: a way to sell your
CDs, a way to point people to your gigs where
they can buy your CDs, and last but not least,
a reason for people to visit your site and leave
with a CD ordered or a memo in their schedule
book to go to your gig next Friday.
Sell
From Your Site - One super easy and cost-effective
way of selling from your site is to use PayPal.
This system allows visitors to buy from your
site using a credit card. PayPal simply charges
you a small percentage and credits the rest
to your account. You will have to mail each
CD out, but can get your girlfriend to do that
for you. Another way is to send them to an Internet
CD shop that will do everything for you for
a slightly larger cut. I'll get into this a
little later on.
Point
People to Your Gigs - This is easy. Post
your concert schedule. It helps to include the
time, door charge, and address and phone number
of the club. I would also link to the club's
site if they have one.
Reason
to Visit - Since no one is promoting you,
you're going to have to attract visitors to
your site. You are going to have to find a way
to make people who don't know anything about
you want to become your fan and start a lasting
relationship with you through your site. This
is what I did: I put my knowledge of the guitar
and experience as a teacher to work. I offer
free guitar lessons on my site. I cover a bunch
of different subjects such as music theory,
scale and chord patterns, etc.
This
is what usually happens. Someone sitting at
home is having trouble sleeping because he is
confused about the Phrygian scale. He heard
someone say that this scale works nicely over
a certain kind of dominant chord and can't figure
out why. He goes over to his trusty computer
with his guitar in hand and punches into his
favorite search engine, "phrygian scale
over dominant chords."
Low
and behold, a link pops up for my website. He
visits, finds the information he needs, may
even e-mail with a question which I will, without
fail, e-mail a reply to. He may even listen
to one of my tunes, come to one of my gigs,
or even buy one of my CDs. To be honest, I don't
even mind if he doesn't buy one. I made a friend
in the deal and helped an aspiring musician
in the process. What could be more rewarding?
I have people asking me questions from all over
the world, from Russia to Hong Kong and everywhere
in between. Spreading knowledge about the guitar
is the niche that I fill with my humble site.
Net
Networking - You will want to promote your
site by networking. Link from as many sites
as you can. I write Articles (just like this
one) for different sites from to time to time.
No money changes hands but the whole thing works
out because the website gets material and I
get free promotion. It also helps me get my
writing skills in order and organize my ideas
on various subjects. Send your CD to Internet
radio stations and music review sites.
Power
in Numbers - You can also try to hook up
with musicians like yourself. Seek them out
on the web. I tied up with a great guitarist
in Brazil by the name of Miguel Mega. I sent
him a bunch of my CDs and he sent me a bunch
of his. When you buy both of our CDs from either
of our sites, you get a discount on them both.
We use our fan bases to help each other out.
Great way to make friends all over the world.
Keeping
in Touch - Keep an e-mail list. Most of
the sites I mention in this article will provide
you with the e-mail addresses of customers who
purchase your CDs. You don't want to be pushy
but you may want to send out a newsletter when
you release your next CD. I offer a newsletter
that people can sign up for to get information
on new lessons on my site, concert and release
dates. Remember, don't bug anyone, if you get
on their nerves with daily e-mails it will have
the opposite effect.
Other
Methods
Internet
CD Shops - If you don't want to deal with
mailing CDs out to different parts of the world
you can use an Internet CD store. I use guitar9.com
and CDbaby.com. All you have to do is mail a
bunch of CDs to them, and they will sell them
and send a check to you from time to time. All
you have to do is link from your site to your
page on their site and the whole thing comes
together pretty easily.
The
best thing about using a site like one of these
is that music lovers browse through, searching
for the undiscovered gem and may, by chance,
discover you! I can't tell you how rewarding
it is when someone I never met in a country
I have never been to, buys one of my CDs because
he found me in a Web store, listened to a track
or two, found something that connected with
him in the music that is very much connected
with me, and parted with money that he probably
worked very hard for. If I were signed to a
major label, the whole thing would probably
be a lot less rewarding.
Downloading - You don't even really need
to manufacture CDs anymore; you can just sell
the data. There are plenty of sites that are
designed to do just that. This is how it works:
as you probably know by now, anybody can burn
CDs at home. You can also print out anything.
For this reason, rather then selling your CD,
and shipping it around the world, you can simply
have customers download both the music and the
jacket art and make their own CDs at home. Why
would you want to do this? The answer is very
simple: you can save a bunch of money doing
it this way because it cuts down production
costs. My CD, "Prospects" cost me
about $2,500 to just manufacture. What I mostly
paid for is mastering, burning the CDs, printing
the jacket and labor costs (somebody has to
put the jacket in the case and shrink wrap it).
Every time I sell one, I have to ship it. As
I mentioned before, if I had decided to put
it in stores, I would have to pay for distribution
and then the CD shop would take a cut. The download
concept eliminates all that. And the best part
is this: your selling data, so there is no limit
on how much you can sell. That's right, you
could technically sell a zillion CDs. The conventional
method only allows you sell what you manufacture.
No wonder the major labels and CD shops are
sweating, you don't really need them anymore.
Go down to the big CD shop on the corner and
you'll realize that they have started selling
way more merchandise (t-shirts, posters and
other stuff). They have to because they are
having problems selling the same amount of CDs
that they used to, they are trying to make up
the difference.
Magnatune
- There are a bunch of sites that offer downloads.
I found a great one: Magnatune. Most sites like
MP3.com or garageband.com offer a similar service
but the difference is that they do not filter
the artists, no quality control. They charge
the artists to sign up, if you pay, you're in.
They do provide an important service: anyone
can market and sell their own music regardless
of how it sounds using these sites. Magnatune
is different. John Buckman, the president of
Magnatune told me that he only accepts about
2% of submissions (yours truly, one of the lucky
ones). For this reason, it is easy to find great
music on his site. You are really going to have
to search through the other sites for something
great. The interesting thing with Magnatune
is that they allow the customer to pick how
much they want to pay for the CD they download
(from five to eighteen dollars). When I first
heard that, I figured everyone would only pay
the minimum five bucks, but it turns out I was
wrong. Most people pay more, looking through
my sales records, anywhere from five to ten
dollars. I guess they want to support independent
artists like myself. Magnatune splits the money
with me. What a great concept. Check out the
site, you'll find some very creative music.
Which
Method is Best for you - Technically you
could record your music, have it mastered and
just send the MP3 data to Magnatune or a similar
site. It would cost you way less this way than
the traditional method of selling music. The
only disadvantage is that your market would
shrink quite a bit. True, since there are no
manufacturing costs, you would not have to sell
near as many CDs to turn a profit but you would
still miss a lot of potential fans. This system
works great if you don't or can't gig around.
Since I gig somewhat, it is in my best interest
to manufacture CDs and sell them at shows (it
is hard to get people in clubs to remember an
url where they can download your tunes, they
usually want your CD on the spot). And to be
honest, there are still a lot of people who
just want to buy a CD and don't want to be bothered
with manufacturing your CD themselves. The combination
of these two methods works great for me, you
can decide for yourself which works best for
you. I have a strange feeling that downloading
will be the way people will buy music in the
future but it will take a few years yet.
A
Word on Recording - The same computer technology
that made the internet possible has also made
recording simple and inexpensive. Ten years
ago, not only did you have no place to market,
promote and sell your CD, you also had no way
to record it without spending some real cash.
Computer technology has inspired thousands of
engineers to open up studios in their houses
or in other small spaces and you can get yourself
recorded for a fraction of the cost these days
because of this. As I said in one of my last
articles; no matter where you decide to record,
make sure you are prepared before you go to
the studio. The big and small studios both charge
by the hour so make sure you have it together.
If you want to research this subject a little
more, check out my friend David Chamberlin's
site: http://www.dbwproductions.com/
He produces and records various artists for
a very reasonable price. He'll even arrange
your stuff and play on it for you. His site
offers advice on how to prepare for your session.
Have
Fun - The whole thing is a blast. You have
nobody to blame if you can't sell any CDs, and
that's part of the adventure. You get a chance
to use your head, grow in the process and make
friends around the world. What could be better
than that?
Please
e-mail me with any comments, questions or suggestions
for my next column.
Until
next time...
Resources:
PayPal:
https://www.paypal.com/
CDBaby:
http://cdbaby.com/
guitar9:
http://www.guitar9.com
Magnatune:
http://www.magnatune.com
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