By Dan Servantes from Berklee’s Music Business Journal, thembj.org.
With recorded music sales in free fall and touring being a very expensive gamble to try to end up in the black, it has never been more crucial for up-and-coming artists to find non-traditional revenue streams to keep their art alive. There are many ways for musicians to make money – private lessons, doing session work, or even writing jingles. However, none of these are actively helping build an artist’s career, and the time spent working on those endeavors will ultimately take time away from their own art.
As all artists know, it takes a while to become profitable. Many hours and dollars are spent recording, performing shows for little or no money, and perfecting their craft. Even when money does start flowing in, it can take some time to earn enough to live off of it. Savvy artists may come up with ways to earn extra money using the same tools they already have. Still, it is worth outlining a way forward for artists that are less experienced at monetizing their craft. A word of caution: the following strategies require having at least a small, dedicated fan base. If people are emotionally invested in an artist and their music, there are numerous ways to capitalize on that connection and make fans feel even more special.
Marker Pens and Notebooks
One of the easiest strategies for an artist to earn additional revenue is to increase the value of items they already sell. Many artists sell CDs, vinyl, and posters. The simple efforts of signing (and personalizing) a handful of each offering can increase the value of the product by as much as 50%. This leads to a significant increase in marginal profit for the artist. Physical items are generally expensive to manufacture and ship. Permanent markers, however, are incredibly inexpensive. The additional revenue generated from signing merchandise can go a long way in covering manufacturing and shipping costs.
Moreover, many times there are posters left over after tours or album releases. Once the tour or album release is over, these items become useless. They can no longer be hung in venue windows promoting shows. Signing these posters gives them new relevance as memorabilia items and can increase demand in the product.
Artists can also offer limited merchandise from items they’ve used in the studio or on stage. Fans have a way of romanticizing the idea of the recording studio or a band on the road. This sentimentality can bring up the value of an order piece of gear substantially. For example, a notebook used to take notes on different takes, arrangement ideas, or others during the recording session would have a high monetary value to a super fan of the artist. Part of it is the one-of-a-kind exclusivity of the notebook. It is a complement that becomes uniquely tied in the mind of a fan to the recording of a favorite album. The artist may have only paid $5 for the notebook pad, but to a super fan, it could be worth much, much, more.
For bands that are known as “live acts”, something used live could have tremendous value to a fan. A set list that was used on stage, a drum stick used during the encore, and the laminate passes from old tours all have value to fans. These items are commonly discarded after a show or tour, yet represent the opportunity for fans to get an exclusive piece of memorabilia and for the artist to make additional income without spending any money.
Old Recordings and Specials
Often neglected by artists, unreleased recordings, demos, and live bootlegs have long been considered a treasured find by fans. While these are rare recordings for fans, artists often find themselves with computers full of unrealized demos, iPhone voice memos, unreleased tracks, and live recordings from shows. Occasionally, these recordings find their way onto the Internet and get leaked. Artists can take advantage of these miscellaneous recordings by releasing them as a B-side album. Naturally, only the most dedicated fans will be enticed by this offer, but they will rally behind it and bring in a spike of revenue without the artist having to spend any money on additional recordings.
Offering fans other forms of special treatment is becoming popular. VIP tickets and passes are the most classic example of an experiential offering for fans that works well on many levels. VIP tickets give the fans better seats, the opportunity to meet the band, and perhaps even a chance to listen to a sound check. Except for brief interactions with fans, there is little additional expense and only marginal revenue loss for the aspiring artist.
Similar to VIP passes are studio visits. Just as a VIP pass lets a fan see what goes on behind-the-scenes in a music venue, a studio visit allows a fan to go behind-the-scenes in the studio. This is the most intimate and vulnerable experience an artist can offer, and fans know this. That means that artists can offer these studio visits at a hefty price, well above the cost of a concert ticket. Studio visits are also a fantastic way to offset the costs of recording in a studio. If an artist has the ability to record in a home studio, income from studio visits is pure profit.
The advent of streaming technology also brings with it a host of possibilities for artists to connect with their fans. Sites such as Ustream, Concert Window, and Livestream allow artists to stream performances to fans for free, or privately for a charge. Online experiences can also include one-on-one video chats with fans. Skype, Facetime, and Google Chat do that like never before. Now, a fan can pay to have their favorite artist perform a song over Skype, do a Q&A across the country, or get a music lesson covering their favorite songs. This costs the artist nothing other than free time, allows them to build a stronger relationship with their fan, and brings in an additional source of income.
The major concern when employing these strategies is fan fatigue. If a fan has access to this kind of merchandise and experiences consistently, it no longer becomes special. With many of these offerings, exclusivity is key. To avoid fan fatigue, there are a couple ways to release these offerings and make it special for both the artist and fan. The first is through a pre-sale interactive marketing campaign that revolves around a landmark event for the artist such as an album release. Sites such as PledgeMusic, Kickstarter, and Indiegogo are specifically used for pre-ordering and selling exclusive merchandise and experiences for a limited time.
Another option is a flash sale. Unannounced and only available for a brief amount of time, flash sales are a great way to push unique and discounted products to fans and keep them on their toes, waiting for the next one. Direct-to-fan web stores such as Bandcamp and Bandpage are ideal for these events, because they allow the artist to work completely autonomously, with no set time, and no targeted sale amount or restrictions.
There are significant differences in how artists connect with fans during interactive pre-sales and flash sales. Interactive pre-sales allow fans to feel like they are a part of whatever career stage the artist is in. It deepens the connection between artist and fan and allows the fan to become more emotionally invested in the artist’s success. The flash sale comes across as more of a favor to the fan. With unique items and special deals, the flash sale is a way to keep fans regularly checking in for updates. What both of these strategies accomplish is conversation. Fans will get excited. They will tell their friends. By doing something out of the ordinary, artists are inspiring their fans, and standing out in a saturated market place.
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Each artist is different and, indeed, the marketplace relates to talent individually. This has not changed and goes back to the dominant era of the record labels: at end of the day, the majors managed a multiproduct roster business. So the way artists will employ some of the methods suggested above today depends on their personality, their own sense of their brand, the point at which they are in their career, and last but by no means least, their connection to their public. It has never been more important for artists to think out of the box and find ways to both earn additional income and make a deeper connection with fans for, alas, reliance on the record labels of old is a thing of the past.