Okay first, everyone started freaking out that music would become free and nobody would be able to work out how to get paid and break into it. Last week “new models” for the music industry was what everyone was talking about.
So first then lets look at hypebots list of new models.
”As CD sales and label profits tumble, a great deal of hope and excitement has been attached to a variety of new models”:
- Music Is Free - And hope to make money elsewhere
- Name The Price - Radiohead asks the fans to pay whatever they want
- D.I.Y. - The artist is the label handling or hiring out distribution, marketing, etc.
- Label As Partner - Band delivers master and label does the rest sharing profits more equitably - often 50/50
- Ad Supported Releases - One-offs like Prince and the UK newspaper or Pennywise and MySpace
- Ad Supported Labels - The new RCRD LBL
- 360 Deals - The band as brand. Labels get a percentage of all revenue streams (albums, tours, merch, etc.) in exchange for longer term career investment
- The New Old Label - Keep costs down and hope to monetize across multiple revenue from downolads to ringtones to YouTube
Okay the first thing I’ve got to say is this:
All models! Why treat it like a horse race? Different solutions are going to be successful to varying degrees depending on your strengths and strategies, so use them to the degree that they work. If they all work for you, use them all!
I mean if you gig, you gig. If youre some Danny Elfman character who can write music made for TV then you should be looking into that. But the issue is whether revenue from content and even retailing content is even gonna survive. I think before we can even talk about t-shirts the bigger question relates to breaking new acts and how. So today I’m going to be making some models of my own.
If you want to call a blog or an ad supported platform a “label” then sure but I don’t see a big pay out coming. I see innovators who can present dynamic marketing propositions for extracting value from a musicians content and brand - just like prince did.
The models I see don’t include labels because someone like me – an “online content manager” - or possibly your manager will be handling all promotion and distribution of digital content, merchandising, publishing and collecting revenue from such activities, not some huge antiquated apparatus. Either for a fee like I do, or a percentage like a Manager, because if you’re serious, you cant do this by yourself, you need dedicated support in marketing, soliciting and negotiating for revenue, and the technology of media platforms.
If you’ve got the talent to do this, that’s what you should be focused on, not running or promoting the business of your music but in the product itself, in a commitment to quality content.
But let me start from the point where I stand in the business. I thought of offering through kurb a 100% model. That is, Kurb manufactures, distributes, promotes and receives 100% revenue from retail of content. Bands would monetize on the flow on off publicity through gigs, merchandise, licensing, royalties etc. generated by the promotion of the band around the retail of the content, with next to no overheads. But then it could take years to see my end! No Way! There are people in it for the love of music. I just happen to have a good business head on my shoulders as well.
Money in digital retail is like blood from a stone! All I really need to be doing is worrying about expanding on what key controls I have created in my current successful business model so I can learn to break a band like Henry Ford made an automobile. Then, well . . . all your base are belong to us.
So my next idea came thinking about monetizing on my own music - which lends itself more to an experiment rather than paying off my BMW - when I had a techy friend tell me about this thing called Moodle. Mootle? Apparently it’s a marvellous thing, its free, free open source software, but it was so successful the developer had been consumed by developing this amazing interactive content management system – BUT he didn’t do the obvious thing (like I did) and become a consultant – he made people give a percentage of their revenue from becoming approved consultants themselves!!!
THAT WAY HE GOT PAID TO KEEP WORKING ON HIS FREE PRODUCT BY ENGAGING INTERMEDIARIES IN A BLANKET PROPOSITION TO SERVICE ACCESS AND IMPLEMENTATION OF THAT FREE PRODUCT.
So why don’t you just offer anybody and everybody 50% of the profit if they can generate revenue from your music in any way imaginable?
This is the crisis of the act that is unknown. The amount of publicity that you must leverage in order to create enough attention to create revenue can only be achieved with either a serious budget or a bold strategy to propagate your content. That’s what’s needed.
That’s when amongst all the talk about new revenue models on the net, Dubber over at www.newmusicstrategies.com told us that he liked Bruce Warila over at http://www.unsprungartists.com
Bruce kinda took me as a bit of a crazy genius a bit like Gerd who you kinda react to like: yes you’re right, but it’s madness, and my brain can’t take it. I was down with the Fat packs but by the time we got to cool streams it was getting freaky. You don’t want to be battling over what you’re going to listen to in a public space, you need a gatekeeper on that. You reckon the Fonz would bid on a coolstream? Hell no!
But his blog is mad! I love it. Anyway the thing I really picked up was these Fat package deck things. It’s basically access to ALL your content monetized as either ad supported or premium paid ad-free um “buckets” of access.
And I don’t know where I wemt with it but I was like . . . yeah! I started riffing. You need to become an internet entertainment brand, you need to bundle up all your content, and diversify revenue streams from content by:
- Going old school and selling not that many units on itunes
- Going new school and embracing a tiny percentage of ad supported revenue
AND . . . create the ultimate unique proposition for premium access.
MAKE IT SO YOU PAY ONCE AND . . . GET PERPETUAL ACCESS.
I DON”T WANT TO PAY A FLAT RATE THAT WILL TIME OUT. I WANT TO PAY A FLAT FEE. EVERYTHING. FOREVER.
Now I’m sounding mad. A one time say - $50 charge allows you unlimited access to not only all archived content by the band, but everything else the band produces ever – everything that is and will be available on any other network, retail, ad supported etc would be available to the one time premium subscribers. Obviously this would need some ironing. But bare with me.
HYPOTHETICAL TIMELINE
In the beginning, when the band has only demos, things will be slow but they should be able to gain 100 close local supporters if they’re any good. Supporters are almost investing in the future of content from this band that they will have perpetual access to. This provides the revenue with which they can step up their online promotion, record a clutch of songs half decently, and arrange inter city tours and swap gigs. Subscribers will be built one by one, and the savvy and hardy musicians will be adapted to updating new content over several formats EVERY WEEK.
By the time the band has 1000 subscribed supporters, they’re already on their way. It may have taken a couple of years, but now the band has the funds to take time off to write and record, mount a professional campaign, produce quality merchandise. At this point they should already be monetizing on the traffic through their site.
Even if it takes 5 years or more, by the time the band has 10,000 subscribers – from which they’ve grossed half a million dollars just in subscription fees, but that’s still nothing compared to the value of those subscribers whose loyalty has been earned with years of regular content - they’re probably ready to pay $50 all over again for whatever physical product you make available – vinyl, t-shirts, coffee mugs, whatever suits your niche.
This model is all about every song traded on P2P and every copy of the big single downloaded off itunes and every ad supported platform, while still generating modest income, becoming the marketing for the flagship content product – unlimited and perpetual access to all digital content for $50. But it’s all about choice. You can still charge them $20 for a year or $30 for 2.
BUT WAIT THERE’S MORE. BRING THAT MOODLE BACK!
You can get canny. Real canny. I’m not just talking about affiliate schemes to incentivise paid up members to sign up their mates. I mean incentivise them to retail as well as develop products and merchandise for retail. Go public. Put up a perpetual 5% dividend of online profit to be shared amongst the first 500 – which means when the website reaches 10,000 subscribers . . . the first 500 members will get their money back!
Oh! This is making my brain twitch! Countless promotional offshoots abound. I’m getting antsy! Before we go lets look at the solids:
- A non exclusive, high value premium content product is only the most expensive of a range of choices
- Unique value proposition with unique opportunities to incentivize fans and create revenue streams from related non digital content
- the value of the and media and content on offer continues to increase over time as more content is continually added to the package
- Over time, the real asset becomes not the content but the access to the accumulation of subscribers as an active audience. Perhaps a forum would be the best place for fans to discuss fair and appropriate use of advertising and special product offers to existing subscribers.
Sorry I got kind of distracted. But I just love my new model! I’m off to get started! Maybe I can still hit half a mill in sales before I’m 35!
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