DISQUS

Mashable - The Social Media Guide: Now, About Those New Online Music Business Models…

  • Thomas Fearn · 5 months ago
    It’s not as simple as if you’re an indie artist you’re not cared about – far from it. Do you REALLY think that the majors are just being stubborn? They’re actively trying to save their precious industry from collapse. The problem being, they don’t know how – no one knows how just yet as it’s still in a state of flux.

    Is Twitter the answer? Absolutely not. It’s a short term fix - Think of it as a temporary measure until something more refined, beneficial and music specific arrives. As for established bands giving away their music, I give it a maximum of 2 years before all bands resort to this and don’t sell tracks at all. Why? It’s becoming too expensive even to sell that’s why. With prices dropping as low as 29p in some cases, the transaction fees alone blow this model out of the water.

    The music industry is no longer linear; it’s a complex burst of marketing, music, brands and egos. Trying to build a career on record sales alone is going to give you a very short career. It’s gone far beyond forming a fan base and selling tracks.

    Even established artists are shouting for help. Take FAC for example, with board members including Dave Rowntree (Blur) Ed O'Brien (Radiohead), Kate Nash, Howard Jones, Billy Bragg, Hal Ritson (The Young Punx) & Mark Kelly (Marillion) - even they are feeling somewhat let down by the record industry as “digital” takes hold.

    The slow realisation that they’re only being paid royalty rates left over from a time when the record companies had to physically manufacture and distribute material is a scary one.

    We’re living in a time where brands have a more positive profile than the major record labels. In order to become a successful artist you have to realise its much more complex now, you have to be much more business minded in order to survive.

    The good news for UK music artists is that Britain is still one of Europe’s power houses. More over it accounts for roughly 10% of all worldwide revenues from music. For new music artists it’s never been better - With new services such as OOiZiT.com (launching later this year), ReverbNation, and MySpace Music the future is bright for artists who are savvy.
  • Matt · 5 months ago
    Mashable, you fail to mention that she is in the band, THE DRESDEN DOLLS.

    While, they might not be mainstream huge, they are well known in certain music scenes and have a pretty big cult following.

    She's a 'somebody' to her fans and that's great that she's able to make money without major label help and I commend her.

    But to say any indie musician can duplicate that success is not really the whole story. Can it be done? Yes. Can it be done as easy as Amanda did it? Unless you're in a similar career situation as her, absolutely NOT.
  • Stan_Schroeder · 5 months ago
    Added the bit about the band, but it should also be noted that Amanda is currently a solo artist as the band has been on hiatus for about a year.

    I'm not saying that *any* musician can *duplicate* what Amanda has done. I'm saying that there's a way for any musician - big or small - to reach out to their audience in ways that weren't possible before. I'm also saying that this includes selling goods to their audience. Of course, every musician's situation is different. Some do a lot of gigs, some don't do gigs at all. Some like to use Twitter and Facebook, some despise it. There's no universal solution, but the tools are there; and the success stories are piling up.
  • rubken · 5 months ago
    Any marketing message only presents the product. Sure, there are lots of great musicians making very little but I think things need to be judged based on the starting point. Giving away low quality mp3s and selling vinyl, t-shirts or even vinyl t-shirts will probably be an improvement on the status quo.

    Also many artists signed to "major" label don't make much money. Once all the deductions are made for advances and expenditure lots of folks make next to nothing from a two or three album deal (http://www.petdance.com/actionpark/albini/the-p...).

    You may well be better off working independently, but marketing is a skill. Doing it yourself is fine if you have the skills otherwise you're better off finding skilled help.
  • King Kaufman · 5 months ago
    This is also relevant in the journalism biz, isn't it? The model for monetization ought to be similar even if the product isn't: Gather a community and sell the members of that community things they are interested in buying. Amanda Palmer understands that the music isn't what she's selling, it's the vehicle for drawing a crowd. The news biz has to understand the same thing about "the news."
  • Marcello · 5 months ago
    I think we need to be a little more realistic here: the number of musicians who have profited from the "Web 2.0" business model is still dwarfed by the number of musicians who have profited from the corporate business model. And of course, the number of musicians who have made NO profit whatsoever from ANY business model is countless.

    The "online music revolution" hasn't really changed anything for most musicians. Instead of spending hours stapling flyers on telephone poles, we're spending hours posting tweets online. Pretty much the same thing, really. The lucky ones will sell a few dozen t-shirts and a few hundred albums and maybe break even. Most will need to hang on to their day jobs.

    The more things change...
  • Rob Murray · 5 months ago
    “TOTAL MADE THIS MONTH USING TWITTER = $19,000
    TOTAL MADE FROM 30,000 RECORD SALES = ABSOLUTELY NOTHING.“

    wow that final quote from Amanda's Twitter really sums up the future of music in general
  • Matt Searles · 5 months ago
    Speaking as both an artist and someone who's been into social media since 04..

    I think the point about business models.. well it used to be that the single biggest thing that distinguished a business that succeeded versus the one that failed would be.. did they have a business plan? But now we find our self in a situation where you kinda wonder about the shelf life of a business model, let alone a business plan.. do to the rate of change, and that's only accelerating.

    Social media and this web 3.0 stuff is still so new that.. well its only been a couple of months that it's felt like the folks on twitter weren't all in just in the fish bowl. I mean the audience is still mostly not up on what's really going on.. which I think has dramatic implications for any business trying to leverage he space.

    So I think the fact is #1 that we really have no idea yet what all of these changes are going to mean for the music business. #2 I don't think its best that we all look for the holy grail of business models.. I think what's best is we all try and experiment and search for what works for us. #3 Most musicians, and indeed labels and management and whatever, its my impression, don't yet have a very strong understanding of this space.. #4 The space is very immature still.. I think it was David Wienberger who said something of the order that its as if we've just landed on the moon.. versus.. star treck.. we need to bare in mind how primitive things are today..
  • FaceySpacey · 5 months ago
    I agree, as all the 2.87 tools us techs enjoy become more and more mainstream, some sort of market will emerge. Either that or everyone will just make music and listen to music by their best friends more than music from Michael Jackson and Madonna.
  • Dance Platform · 5 months ago
    Great Post!! Thanks for sharing!!
  • Dean Higginbotham · 5 months ago
    “TOTAL MADE THIS MONTH USING TWITTER = $19,000
    TOTAL MADE FROM 30,000 RECORD SALES = ABSOLUTELY NOTHING.“

    Brilliant!
  • Cesar · 5 months ago
    I think no one can truly predict what the new business model will be. The important for musicians and web & software developers to realize is this (as I think Amanda already noticed and this article suggests): the decision lies in them, NOT in the "music" corporations. The music corporations are just desperately holding on to a boat that might pretty well completely sink very quickly due to the stand they are taking. They are showing a nasty side that greed doesn't even begin to describe. BUT I believe the most important thing to notice here is that nowadays, technology has freed a musician from the powerful, all-controlling middleman, namely, the big music corporations.

    Here's why I believe this: even though nowadays having sequencers, samplers, VST instruments, fairly cheap but also fairly good recording hardware (mics, audio interfaces, etc) and of course social media and sites like Pandora all seem like they've been here all along, believe you me: 15 years ago you couldn't even dream of putting your music out there without paying a fortune for good quality and distribution channels. Up to very, very recently, you completely depended from the big corporations to record, mix, master your music and also from corporations to market your music, through the usual, expensive channels: music, radio and tv. Nowadays, if you as a musician not only polish your music skills but also invest time to get good into a few areas like computer recording, mixing, mastering and also into web marketing, you really don't need the corporations anymore.

    Several key factors are the drastic reduction in money investment you have to make now to produce good music. Also, now there are free distribution channels (social media) that let you reach a huge crowd without paying a dime. You don't have to depend on a corporation to run your campaign on the old channels.

    Of course, it's not and never will be as easy as it sounds. Independent of the business model, with or without corporations, there will ALWAYS be different kinds of successes: musicians who become huge, musicians who make a living, musicians who make extra income off their music, but still hold a day job, and musicians who don't make any money off nothing, and just play for kicks. This has been so, and will always remain so.

    The key point here is, though, I can't emphasize this enough, that finally the power is in the hands of musicians. They have now the tools and the economic factors that will allow them to be independent. This could also be huge for software developers who come up with cool sites, Pandora comes to mind, that deliver you music that you like.

    Of course, there is no free lunch. Since the barriers of entry into the music business will be lowered, there will be many more musicians trying to make it, so the competition will be tougher, and revenues might be spread thinner than now, but in the end, my take is that the actual business model isn't really based on music. Don't get me wrong, I'm not saying current artists aren't good, I'm saying that for every U2 band (and I love U2) there might be a 100 more bands just as good who unfortunately, due to the markets, their look, their perceived audience and all those other factors weren't as appealing to the market as others, and so, they couldn't make it before, Now, they don't have to ask no one for permission.

    This is crucial, but the ones who have to work to create the new music world are precisely musicians. The corporations will NEVER let their guard down, so the real solution is for musicians to move away from them. Only then will corporations understand that either they change and adapt, or die. And I don't think they will be that dumb, so I don't think corporations will completely die, but I do believe that recorded music might very well become free in the near future or become dirt cheap, like those models we are already seeing where you have a monthly subscription for like 15 bucks and unlimited downloads. Heck, give me three months and I'll reconstruct my present 30GB collection of music LOL. And that would cost me only 45 bucks for, say, 8,000 songs. (Which is another reason why the recent verdict made on that woman for a million + dollars is just ridiculous). But it's good that it's happening because we are seeing their true colors. A greedy, nasty corporation usually loses. Of course the battle will be tough, but again, crucial point, the move is in us, in musicians, and developers who think up new ways of distributing music so the best artists get more exposure and air time in the new free media.

    Of course, the question remains: well, if musicians don't get revenue, or a very small one, from their recorded music, how will they make a buck? Well, the usual answers come to mind: live gigs, which if you make it can give you a hell of a good run (heck, even tribute bands, if really good, can make a living off live shows!), also merchandise, but here is where people gotta get creative. Musicians could also build their studios and make money recording others' music. They can create soundtracks for movies, for plays, for events, etc. Of course, there are some artists that are going to have a tougher time, since certain music types don't adapt themselves to live playing, for example, music like Enya? I don't know, maybe they do play live, maybe not. But again, as tough as it may sound, when paradigms shift, and music paradigm IS shifting, some things may just end. But this is so in every aspect of life! Not only in business. Look at the camera industry. Developing photos was a huge business, now, it's been reduced to certain areas in pro photography and maybe some wedding pics you want for your living room. Other than that, developing film is now over. So will certain things be in the music business, but that's life for you. I think that's the biggest mistake corporations are making right now. They are blind, they want to hold on to the past WHEN THE PAST IS NO MORE. But again, the way to finally slay the dragon is in our hands, it will never come from the choices and actions of corporations. Peace.
  • Bill W · 5 months ago
    At the recent convention for the music industry trade org NARM, Mike Masnick made a great presentation on a similar subject. Watch here: http://vimeo.com/5229486
  • Sander van Zoest · 5 months ago
    If you'd rather see this explained by Amanda herself during a video interview see http://www.uncensoredinterview.com/vlogs/11836-...
  • Suzanne Lainson · 5 months ago
    I think the idea that there will be musicians and they will have audiences is in itself going to be outdated. The audience now wants to be the show. They are more interested in what they can do for self-expression than they are in following a select group of artists. So what I see evolving are more tools/ways for average people to be and participate in music and fewer opportunities for individual bands/artists to sell to audiences. The idea of "artist as brand" may not develop if the fans see no need to align themselves with any artists.

    Instead of thousands of indie artists making a small living at music, we may have millions of people who make music, but don't make any money at it, and don't care. Think about all the people who would rather do karaoke and Guitar Hero than go to live music shows. Give them even better tools, and they may feel even less need to support bands/artists. Perhaps true democracy in music is to enable every person to be a rock star within a small circle of friends than to have full-time rock stars.
  • bertwallace · 5 months ago
    have you had a look at GETZOOKS yet this will be your destiny once you get in you will love it go have a look http://www.getzooks.biz/index.php?aff=58e3c5b3 good luck and keep intouch
  • Steve · 5 months ago
    Great article..Here's who was first: (2003)

    http://www.rollingstone.com/artists/vast/articl...
  • music t shirts · 5 months ago
    This is also relevant in the journalism biz, isn't it? The model for monetization ought to be similar even if the product isn't: Gather a community and sell the members of that community things they are interested in buying. Amanda Palmer understands that the music isn't what she's selling, it's the vehicle for drawing a crowd. The news biz has to understand the same thing about "the news.
  • King Kaufman · 5 months ago
    music t shirts, I couldn't have said it better myself.
  • Chris · 4 months ago
    Where digital music is concerned when companies are complaining about not enough money, when people look at business models they look at the 2 main areas, The end user and how to get it there. No one is looking at the major chunks that the shops take for themselves, its the shops that sell the music we should be fighting against, most suck 50% off the music just for selling the music on their site thus they are taking a massive chunk of the label and artists money, we need to focus on getting these guys to cut their royalty fees!
  • Seiei · 4 months ago
    Im totally not buying any of this. All these so called indie success stories are all people who belong to ALREADY ESTABLISHED BANDS.

    Point me to a UNKNOWN artist that made it through WITHOUT the help of being in a big time band already.
  • colette · 4 months ago
    Hey there! Thanks for this. Did you see the article (with almost the same title) I posted yesterday? http://deepdivemarketing.com/2009/07/20/the-new... Focused solely on Imogen Heap, but I'm with ya -- there are a few examples of people who really know how to work it. Amanda Palmer is another great example.
  • carlalynnehall · 4 months ago
    I'm a big fan of indie artists doing it for themselves, but you still have to admit that Josh Freese is still not your average run-of-the-mill indie artist. As a former drummer with Nine Inch Nails, and in-demand Hollywood session musician, you can't exactly call him "lesser-known". He has access to perks that most indie artists do not. In his very cool merch line, he offers some sweet perks, such as:

    * [Included in $2500 package] Pick any 1 member of the Vandals or Devo (subject to availability) to accompany you and Josh to either the Hollywood Wax Museum or the lunch buffet at the Spearmint Rhino

    * [Included in $10,000 package] Twiggy from Marilyn Manson’s band and Josh take you and a guest to Roscoe’s Chicken ‘n’ Waffles in Long Beach for dinner

    * [Included in $20,000 package] Maynard James Keenan, Mark Mothersbaugh from Devo and Josh take you miniature golfing and then drop you off on the side of the freeway (all filmed and posted on YouTube)

    * [ncluded in $75,000 package] Take shrooms and cruise Hollywood in Danny from Tool’s Lamborghini OR play quarters and then hop on the Ouija board for a while

    Wired Magazine covered the story of how a fan purchased Josh' $20,000 package, and revealed that the fan heard about it from the TOOL band website, not Josh'. So while you can argue that Josh' plan is working, there's also the fact that most indie artists will not have access to famous friends, much less get their product line advertised on a famous band's website that gets thousands of visitors. In my opinion, the fan was paying for Josh' access to celebrity, which would be hard for an indie band in Kansas City to replicate.

    I'm not saying that it can't happen. I'm just saying that I'd love to see some genuine indie artists scale those heights WITHOUT being attached to a famous band, famous friends, or formerly signed to a record label.
  • Brian Dobbs · 4 months ago
    This is not spam.

    Nice to see my comment got deleted yesterday. Thanks. I'm trying to do everything I can to help independent recording artists today. I wrote a DIY guide. I'll provide a link and excerpt below...

    http://www.thesoloalbum.com/news/diy_guide_for_...

    -------------------------------------------------------------

    Major labels failed because they did not react quickly enough to emerging technologies and consumer trends, such as digital distribution. Who came out on top? Legally? iTunes. Illegally? P2P.

    But forget about the blame game. It is more important to start discussing solutions rather than past failures. The record industry must adapt to survive. It is in a state of flux, much like the rest of the entertainment industry. Only time will tell whether or not record labels can adapt well in this new millennium. They can start by continuing to pressure ISPs to police piracy. If not them, then who?

    It doesn’t make any sense to quit your job, leave your girlfriend, pack up the van and try to establish yourself through a self-funded tour. It’s not logical or practical. At best you’ll break even on costs. Those days are over. You have better things to do with your life.

    Plan on keeping your day job for the time being. In fact, it’s in your best interest to succeed at your job. You might get a promotion. Promotions mean more money. More money means you can support yourself and record more songs.

    In this day and age, you will earn a better living by going to school and getting a steady job than trying to make a career writing and recording songs. That is, until ISPs tame piracy.

    Right here, right now. Just lower your expectations. Don’t expect anything to happen to you. There are no A&R scouts in your town looking for the next big thing. Even if they are in your area they have better things to do, like looking for new jobs.

    Why so grim? For one reason – To motivate you.

    You’re flying solo now, and like it or not you’re the only person who has the power to change your circumstance.


    -------------------------------------------------------------

    To read more, please download this .PDF - http://www.thesoloalbum.com/news/diy_guide_for_...

    Brian Dobbs
  • Seiei · 4 months ago
    I'm gonna go ahead and say this article is totally misleading. The examples of the so called "Indie" artists are already inside the industry and able to generate money on their own. I'm calling BS on this article until it shows me someone who made it use the means mentioned in this article, that was a COMPLETE unknown. From the basement to selling his own albums. I'm so sick of articles like this giving false hope and faking the claims. The internet aint worked for the artists that aren't known yet. Prove me wrong. Until then, this article is crap.