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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...
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