Todd Durrant’s Random Thoughts
Follow the efforts of a creative, crazed entrepreneur.

How Do You Make Money In This Music Market?

To kick off a new week, I thought I’d discuss a question that has plagued me for nearly two decades now.   As most of you know, I work in the music market full-time, and have been doing so for eighteen years.   That does not mean that I’ve ever been financially stable while working in the music industry.  In fact, it means my financial life has leaned far to the opposite extreme– always unstable and always on the edge.   Sure, there have been times when things were going much better than they are now.    I’m currently not as bad off as I have been at certain times, but also no where near as well off as at other times.

It used to seem easy, at least in theory, to imagine how you could make money with music.  I decided that I didn’t have the personal talent to attempt making money on my own, as an artist, so I turned my focus onto the marketing of music by more talented artists.  I’ve run a retail store, both physical and virtual, and have run a record label, and have battled with distribution, advertising, and pretty much every other aspect of selling music, even dabbling live concert promotion and event organization.   In those early years, you simply found music that you thought was marketable, you made a deal with the artist to share the risks and rewards by putting out their music, and you pushed a couple of their songs as much as possible at the dance clubs, college radio stations, etc. until people started to recognize the song, and thus the band.  Once a song caught on, you sold as many CD’s a possible before the band decided to quit or move on to something more time consuming, like marriage, kids, and a REAL career.

But wow, things have changed.   First of all, remember that I’m talking about life as an INDEPENDENT label and INDEPENDENT artist.   That means we do not have a million dollar budget for promotion with which to buy air time on major radio networks, nor do we get major media exposure simply because we have a connection with Disney, etc.  We have to get people to hear our music the hard way– jamming it down their ears every time we can get them to spare a few minutes of their music exploration time.    We have to promote with little or no budget, and that means a lot of work with little payback.   Still, it used to be  pretty straight-forward on how you could do that.   But it’s becoming more complicated now, even seeming impossible at times.

Now, there are many articles about the valiant attempt of artists and small labels to make money and succeed.   Some talk about the difficult realities, while others try to convince you that anybody who can carry a tune can make money with music, if they just know a few tricks and have some spare time with which to promote their craft.   I’m not going to write a blog that gives you a completely dismal vision, nor that gives anybody a false sense of hope.   The only references from which I will pull are my own experiences.  After all, this blog is called “Todd Durrant’s Random Thoughts”, so that’s what you get.   If you want facts and figures about promoting your music, and much more useful information, go to www.passivepromotion.com

So, first, the problem.   I’ve always said one thing about music consumers and fans and I think it’s still true.  There are those true fans who will always BUY music, because it’s something they love and they can’t help themselves.  Then there are those who have always, and will always think that music is an entitlement, and that they should never pay for it.  They used to hear it on the radio, then push “record” on their cassette player whenever a song they liked came on.  Or they’d record their friend’s record collection.  Or they’d burn a CD from a friend.  Or they’d download using Napster…and eventually they would just download anything and everything they want without paying a dime.  They were always freeloaders, and they always will be.  But let’s talk about the music buyers, because they are your only hope when it comes to making any kind of living with music.   I once read an article about music consumers (and this was before the digital download revolution) which stated that 90% of music sales are to 10% of the population.  In my experience, that is true.  There are people who spend all their spare change on music, and they always want the newest release in their collection.  I was one of those people, and I still am.  Most of my long-term, faithful customers at A Different Drum are people who always want to know what is new and will buy it if they like it.   We are the people who have more than a few dozen CD’s on our shelves at home.  We have have hundreds, or thousands, or even 20K + CD’s in our libraries.  Our collections represent part of who we are, and we’d sooner have our car stolen as have our CD collection lifted away.   But then there are the other 90%.   Those people have a handful of CD’s.  They have one of those CD wallets in their car which carries everything they own, from Garth Brooks greatest hits to the best of Journey.  And that’s all.   They get a CD for Christmas from their wife because she can’t think of anything else to get and that fits nicely into a stocking.

Well, let’s fast forward that concept into the modern era.  Now we have the digital download revolution.   It has taken those percentages, which at the core are still true, but have thrown in extra complications when it comes to generating income.   A good portion of those 10% (music addicts) still buy a lot of music, but they do it digitally.  Thankfully, some of that 10% still has a love for a physical product, because unless it is sitting on their shelf, they’ll never feel like they “own” it.   That other 90% still doesn’t buy a lot, but MOST of them have switched to the digital media market.   Why have they switched?  Well, it’s just so much easier, and cheaper.  You see, you used to be able to get sales from both categories of buyers by forcing that song or two into their ears until they were hooked.  Let’s say the song was “Annie, Would I Lie to You” by IRIS.   Great song!   If they liked it, back in the 90’s, then they did one thing– they found the album with that song, “Disconnect”, and they bought it.  Bingo!  You just made three of four dollars profit, even if they bought it at another retail store.   These days, let’s say they just now discovered that song.  What do they do?  They pop onto iTunes (remember, we’re talking about the buyers now, not the freeloaders) and they buy “Annie, Would I Lie to You”, and that’s all.   They don’t feel a need to buy the album, because they haven’t head those songs, and nobody is making them buy the whole thing.  They just get the one song.   So, after everybody takes their cut, we make a profit of…oh…12 cents?  Maybe 20 cents?  The point is, when you do that a few thousand times, trading $4 for 20 cents, and despite the fact that people love the song, you’re just not making money anymore.

So, things have changed.   As my wife has had to go back into the workforce with two part-time jobs, and my business selling music is taking a hit, I’ve had to re-evaluate what the heck I’m supposed to do to keep making money.   I love the independent music market too much to just let it go.  Like the music collectors, I’ve got to have my drug.  But there are bills to pay!   Between the freeloaders and the casual purchase of “one-song-only” in the digital market, I’ve had to keep taking a look at the product models in hopes of discovering what it is that will encourage people to invest in the larger product once again.  How do we get them to invest in an artist, instead of just in a song.   Investing in the artist means that we have at least some kind of steady income, as long as that artist is actively making music.   If they invest in a handful of songs, then the pennies don’t add up.

The Europeans have been way ahead of the US market when it comes to certain adjustments.   They figured out long ago that the only people really putting their money on artists were super-fans and collectors.  So, they released physical products that would appeal to those collectors, while basically writing off all the casual listeners as the 20-cent investors.   Sure, they’d sell a bunch of single track downloads and such, but they would focus their physical releases on LIMITED EDITIONS.   There have been bonus discs, bonus DVD’s, special packaging with t-shirts and stickers thrown in, or autographed band photos, etc.  These days you can even see releases with both a limited edition AND a SUPER, DELUXE, limited edition with even MORE stuff thrown in.   The upcoming Depeche Mode album even takes that route.   Heck, Nine Inch Nails recently offered several versions of their release on their homepage, ranging from “take these downloads for free” all the way to, “buy the limited edition in a collectible wooden box with an autograph and extra swag for $300”.   I bet they had takers at every level, from the freeloaders to the people who would not be content without the $300 package.

A Different Drum started releasing limited edition CD’s with a bonus disc a few years ago.  But there were flaws.  I did it with some newer artists, hoping to boost initial sales.  But what happened?  I spent more on manufacturing as a result, and people were reluctant to rush out and buy a limited edition of a band they haven’t even heard before.   Thus the limited edition, in some cases, sat in storage, gathering dust.  I still have several of those limited 2CD editions.   That causes  a problem of customer perception.   How “limited” is a limited edition if it’s in stock for 3 years or more?   What’s so limited about that?   The perceived value goes down, and there is no longer any rush to buy the product.   Yes, there were a couple of more established acts with limited editions that sold out in a matter of two or three months, but usually, the net result was a mounting manufacturing bill that would take me years to pay off, while those 2CD’s sat in storage.   Ok, scratch that idea!   Let’s go back to a basic, inexpensive release when it comes to newer bands, because it’s hard enough to sell 500 or 1000 CD’s in the first place– it might end up being limited edition just in the fact that it was released physically at all.     A new band sells 500 CD’s in a year, and it’s gone.  Thus, it was limited even without a bonus disc.   But for the more established acts, we could still throw in extras.

I thought maybe we could go back to a collectable format– vinyl!   Yes, vinyl is alive and well in the music market, because it is something unique to collectors.  The casual consumer would never dream of buying a vinyl record these days– most likely they can’t even play it.  But collectors pick it up because it’s unique, it’s sturdy, and so darn cool in a way that casual consumers fail to comprehend.  But I’ve discovered that you have to be Britney Spears, or Depeche Mode to sell enough vinyl to cover the expensive manufacturing costs.   Again, you already have to be popular, or even a certain level of super-stardom before you have enough collectors that will pick up your vinyl.

Now the question becomes, once again, how do I manage to PROMOTE music well enough to create the demand so that people WANT a limited edition and will dish out the money for it?   I don’t know that I’ve found the answer.  I think there are many wonderful tools particularly online that can help these days.   It’s very cheap (even free) to make no-budget music videos to post on Youtube.   It’s free to get accounts on Myspace (yikes), or Facebook (much better), and Twitter.   There are countless sites for independent musicians to upload their music and people will listen (though many of those listeners won’t necessarily pay).   It just takes a lot of time, and often you see very little in the way of financial payback.   Because of the ease of using those tools, they are very cluttered with thousands upon thousands of new artists, all clamoring for attention.   People don’t have the money to buy everything, even if they DO like it.  Still, it’s a battle you have to accept and engage if you hope to get noticed.

Wow, I’ve typed a lot, but haven’t reached a conclusion.   Really, the only way that I can see for somebody to make money at all in the independent music market is to interact with people.  Stop looking for fans and make some friends.  They’ll usually end up becoming the same thing…fans.   Network, play live shows at small venues with “buddies”.   Create your little social circle on Facebook, Twitter, and elsewhere, so no matter what you do, your network of friends will dish out $1 for your new song, or even $10 for a new CD.   Once your network is big enough, then you’ll even be able to throw in a t-shirt, an autographed photo, and a bumper sticker and charge $30, because your friends will get behind you in the effort.

But how does that apply to a guy like myself who runs a record label?   Here’s my problem– I represent a couple dozen active bands at any given time, and I simply CAN’T, no matter how much time I have in a week, do that kind of networking and promotion for them all.   I can’t be the one opening their accounts on Facebook, or on Reverbnation, or on Garageband, or TheSixtyOne, or Ourstage, or LastFM, etc.  It’s impossible.  I can’t BE them when interacting with the public.   I can do that stuff myself, for my own label, making A Different Drum into a branded product warehouse that people trust, because they like what I’ve released through the label in the past.  But I can’t BE those artists.  I can’t play their shows and represent them to the people who wander the social networks, looking for a music buddy.   The artists have to want that kind of success, and they have to put in the time, and they have to take up their share of the load.  Some do.  Some don’t.

So, if it’s up to the bands to do this kind of modern promotion, what is the label’s job?   I tell you, I’m trying to figure that out too, because I know I spend more than a typical full-time schedule every week WORKING.  Yet the sales are still slow, and I still can’t make a decent living.  I’m doing what I can to release new music under my established brand, and I hope that it helps those artists get going.   Some will sell, and others won’t.  For the ones that don’t sell, I’ll just have to say, “sorry, some of the pieces obviously aren’t coming together, no matter how much I like your music. ”    That’s a hard thing to do, in my case, because I feel devoted to artists.   I’ve actually appreciated a couple of guys that have come to me and admitted that they have fallen short, and that they know it is because of their own lack of effort, and they don’t want me to keep putting money into their music.    Yes, it HAS happened.  But the more common feedback from an artist that is not selling as much as they’d like is different: I get an email complaining that I must not be doing enough.  I’m not spending enough money to promote them, because they aren’t as popular as “band x” and it can’t possibly be their own fault.  After all, they signed with the popular label, A Different Drum!  I, the label owner, must be screwing up!  Right?  So, sometimes they leave.   Every once in a while they’ll take a different path and find that it works for them.   Most of the time, I don’t see them again.   Maybe they put out something on their own and find out that things don’t happen automatically and they’re still not famous.   Well, what did they do differently?  Nothing.  But at least they covered their manufacturing bill that way, instead of me.

At this point, I look at my business and I think, “maybe it’s time to focus more on the things that I CAN control,” and that usually leads to myself taking a more active creative role, making more music myself and as a team member with others.  Sure, that music may not be as good as any number of bands out there, but at least I’m in control.  My success or failure is my own fault.  I CAN represent myself and be myself, and I’ve found out something else– as poor as I may be, making music makes me very happy.   At least I can smile and feel the joy of the creative process despite my lack of income.   Maybe one day I’ll have a back-catalog of hundreds of songs, some good, some bad, and that back-catalog will add up to something that CAN make a mortgage payment.    I can’t help but wonder if I shouldn’t have been doing something like this way back in 1991 when I started, then that back-catalog would already be very deep.   But hey, I can’t second-guess things.  I can’t change the past, and I wouldn’t want to.  I have loved the ride.   I’ve loved running a label.  It’s only now that I have begun to wonder how much longer I can keep all those balls in the air.

Whew!  That’s enough for now.  I’ll have to save extra thoughts for a future blog!

-Todd

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12 Responses to “How Do You Make Money In This Music Market?”

  1. It’s a challenging, changing time for both independent musicians AND those of us who want to make a living supporting and promoting independent musicians. This is why I’ve spent so many years avoiding doing what I love. It doesn’t pay!

    But I think the key now, since so much is changing within this industry, is, as you said in this post, engaging people. Finding creative yet sincere ways by which fans and potential fans can be a part of the process, not just buyers of the product.

    Recently, I discovered an artist who’s come up with a revolutionary, out-of-the-box way to be paid by his fans while creating 4 new albums. He declared his intention to make 4 albums in ONE year (which creates an impressive goal pressured by time). Then he created a multi-media membership site to which his fans could subscribe for a monthly fee of $4/month for one year OR pay the full $48 up front.

    What do they get for this support? Access to this artist’s creative process, every step of the way through video updates, rough audio of tracks in progress, lyrics, studio diaries, and tech notes. Plus, when the project is done, subscribers get all 4 albums (autographed, of course), a poster, videos AND their name in the liner notes!

    The power of this project, created by musician Mark Marshall and called Four for 4 (http://www.four.markmarshall.com), is that it offers something music lovers rarely, if ever, get to experience: the process, not just the finished product. Talk about interacting and engaging one’s audience!

    But, as you said in this post, this kind of project takes a lot of work. And commitment. And willingness to blog, vlog, do all the social media stuff, and give, give, give to one’s fans. Most musicians just want to make their music and leave the rest to someone like you. Or me.

    Which is fine. If only we could make a living at it!

    • Wow! Excellent post, and that’s indeed a very cool offer from Mark Marshall. Yes, it will take a lot of his time, but obviously, he is a person that is serious about being a success with his music.
      -Todd

  2. thank you for this awesome post. enjoyed reading it… and when people are serious about something they usualy tend to succeseed as long as they put the time and the effort in.

  3. I happened to run across this elsewhere. While the details are different (science fiction books rather than synthpop music) I think many of the ideas can cross over.

    http://baens-universe.com/articles/The_Internet_is_Not_a_Magic_Wand

  4. Hey Todd, I like this post because it really captures your personality and your unique challenges in the industry. But I did notice that you described yourself on this blog as a “creative, crazed entrepreneur” =). So I think you’re the ideal person to innovate and build new systems of marketing and promotion.

    A lot of artists and labels are overwhelmed trying to “keep all those balls in the air” as you said. But I’ve found that what works for me is:

    1) Try lots of new things
    2) Measure what works and what doesn’t work as well
    3) Consciously stop doing the things that aren’t getting big results
    4) Focus on the things that are most efficient
    5) Repeat

    In marketing, about 9 out of 10 things I try have little to no result. But that 1 out of 10 that does work, can sometimes work big. The key for me has been to stop doing the other 9 things, because that’s the only way I have time to try 10 new things and discover one more big thing that works.

    I’ve been talking to Brian Hazard of Color Theory about a lot of these things, and I hope you’ll join us in playing with new ideas and opportunities. I think right now is one of the best times to innovate, and I’m pretty sure you’ll come up with some creative, crazed entrepreneurial ideas =).

    • HI John,

      Thanks for your comment. I do feel that I’m trying new things all the time. Maybe not as quickly as you would recommend. I find that the new things often include a level of financial investment, and that’s what gets me down. You know, after you’ve had 9 of the 10 attempts end in a loss of a few hundred or a few thousand (or in one recent personal attempt, over $50k) you start to wonder how much more you can absorb before you find that one that works.

      Maybe that’s why I’m defaulting more to the “creative process” now, because it doesn’t cost much to be creative, write a song, and throw it to the public. If it doesn’t fly, well, I didn’t really lose anything but my time. That’s easier to take than watching myself near bankruptcy because of ideas that didn’t pan out.

      Maybe the best way to describe the sentiment is “gun shy”.

      With that being said, I did have a brilliant, but somewhat crazy idea yesterday which I’m now working on. It won’t cost anything to try it out, but it COULD be seen as a very cool idea, and actually make enough to pay a bill or two.

      Thanks for all your help through the years– it’s been much appreciated!
      -Todd

      • Yeah, I should note that I’ve always been gun shy about taking financial risk. Like most musicians, I didn’t have much to invest in the first place.

        But I found that internet marketing in particular could be done with very little money. I always leaned toward investing time rather than money. The struggle though becomes how to find the time to do everything. I noticed that everyone has exactly 24 hours each day, but somehow many of the successful people seemed to get more done in less time.

        That’s when I figured out how to be more efficient with my time, by focusing on only the highest ROI tasks. I don’t think you should spend a lot of money during this recession, but ideas are free and plentiful to those who seek them, and you definitely do NOT need money to make money if you use your creativity to turn intellectual property into cash flow to build and grow your business.

  5. Hi Todd,

    I really enjoy your articles. I’ve become a fan of Fixt’s artists, which tend to be more industrial rock than synthpop. I think the label was created by the guy behind Celldweller, who used to be one of the core members of cloud2ground. Anyway, they have a number of really good artists on there that only sell their albums electronically. They are also experimenting with WAV file downloads.

    I don’t know how good their business is, but they sure have been signing a lot of artists lately and releasing a lot of records so it must not be too bad. You might find some good ideas for your site from there. They have user reviews and some kind of social community, but I haven’t messed with that yet.

    – Mike

  6. Hi Todd,

    Yeah, John and I have had fun tossing around ideas. I’m still excited about getting up every day and trying something out. Though sales are still a joke compared to a “real” job, I feel like things are happening, and that my focus is increasing. Thanks for the plug on my blog!

    You know how I feel about digital versus physical. I’m 100% digital now, for ALL media. Music goes on the iPod, books go on the Kindle, photos and videos go on the computer. But I still feel a sense of ownership (of course, everything is purchased legitimately), and I spend time organizing my libraries to make sure that everything is set up just the way I like it.

    My guess and hope is that some sort of subscription service will take over, allowing us to play all recorded music on our stereos, iPods, computers, and phones. When that day comes, we’ll all be fighting for ears instead of money. Still, I’m not ready to give my stuff away for free just yet, because I don’t think it would increase my audience by much. In the meantime, I’ll keep trying new stuff, and writing about it at passivepromotion.com.

    Brian.

  7. I have also been thinking about how to make money when it is likely that people will take your songs without paying. I feel that is the reality these days, and it is going to get worse as the younger generations grow up without ever experiencing a time when you couldn’t easily steal songs. (By the way, I have purchased my whole collection.) Once the technology exists, we have to adapt to it, not suppress it, because that will not work in the long run.

    One idea that I have been thinking about is to sell a song or two per album to advertisers. Then you can make a good quality advertisement in the style of your band. I actually wouldn’t mind listening to adverisements if they were performed by my favorite artists. (It would be sorta like the world in Demolition Man.) The rest of your songs can be yours.
    I am sure this idea will not be for everyone. Some would definitely see it as selling out. Personally, unless the lyrics of a song are unusually good, I am much more interested in the music, so I wouldn’t mind writing the words of one of my songs with the sole intention of being paid. Especially if it would allow me to write the other 9 or so songs in the style of my choosing.

    I am sure there are other great ideas too (most likely even better ones), I just haven’t thought of them yet.

    Steven.

  8. “Then there are those who have always, and will always think that music is an entitlement, and that they should never pay for it. ”

    In my observation and encounter with them younger than I; that is to write while I was a teenager in 1981, they were yet teenagers in 2001, I have remarked a considerable notion of entitlement which saturates everything they have or do. This attitude not only affects you, Todd, it affects me as well in the technology vocation.

    I am one who grew up during the age of ownership; I saved my allowance so that I could visit a record shop and purchase a “45” of my favorite artist (generally Gary Numan, Human League or Visage). Saving my weekly one-dollar allowance, I was rather proud of my accomplishment. As an adult, this continued as my wife and I purchased a CD of every synthpop, futurepop or darkwave act which attracted our interest.

    They younger than I seem incapable of understanding this. Music is neither to be owned nor purchased; rather it is to be downloaded and copied, to be later discarded as attention wanes. The “artists” (written caustically) of this music, neither write the music nor play an instrument. Everything is a transient performance to be had freely.

    This permeates my industry as the OSS/FSF (open-source, free-software foundation) zealots who rally against software ownership and intellectual property. As music, software is not to exact a price; it must be free. Ownership is non-existent; rather, communal property is de rigueur.

    These unsettling demands destroy all inspiration and motivation. For what reason an artist compose and labor over music only to watch as each release is copied with no financial support received. For what reason should one create an inspired work of software only to watch as the zealots demonize any attempt to secure financial reward?

    What you describe, Todd, is Atlas shrugging.

    Nick de Lioncourt

  9. As an electronic musician myself I have to completely agree with all of todd’s musings in this post. All I can say is stick with it. My electronic dance music act Kandystand took 5 years to push in the independent music market, but now we are in the US DJ charts, getting airplay and coverage in Japan and the USA and making a decent living with the music sales even in these troubled times.

    I can only say that to succeed as an true indie or one man band you have to basically become an expert marketing guru and bust a gut pushing your music. There is no other way, but it is possible with the tools available today, you just need expert guidance on using these as there are so many you need to know which ones will work and which ones wont. Back in the 80’s when I started making music the opportunities the internet provides right now were just not there.

    I’ve now started up my own music consultancy called MyMusicSuccess.com to help others replicate the success blueprint that I forged for Kandystand. If any readers need some guidance drop by and say hello

    Simon Adams
    CEO (and one half of the dance music act Kandystand)
    MyMusicSuccess.Com


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