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    How do you think bands should make money?

    by Mark Glaser
    October 1, 2007

    With digital distribution and file sharing online, bands have been able to get their music in front of more fans than ever before. But because of file sharing and cheaper downloads, bands also might feel like they can’t make as much money by selling music and will often give away some MP3 tracks. In fact, Radiohead recently decided to let their fans name their own price for their new album. Many artists now figure they can make more money by playing live shows and through merchandise. What do you think? If the value of recorded music is going down, how do you think artists should support themselves? Would you pay to join a special fan club for bands or to get limited edition music? Share your thoughts in the comments below and I’ll run a selection of the best ones in the next Your Take Roundup.

    Tagged: business models cd comments downloading music
    • I think it is obvious in the wired world that it is nearly impossible to keep audio files from being shared. Bands should focus their money making on live performances, merchandise, etc. Selling records only made sense when they were an actual item you could hold in your hands. Today, music is virtual. Most people do not buy CDs anymore, music is downloaded and then shared. Pretty soon artists won’t need “record” companies, they will only need sponsors for their tours. Music will go 100% digital and they will only need recording studios – and even that will be done by freelancers, not corporate drones.

    • There are plenty of revenue streams that savvy bands have had to turn to in the past to compensate for monies not paid to them by their record label–touring and merchandising are the two obvious options, and the increased acceptability of licensing music for advertisements in recent years has also opened up new profit opportunities for bands.

      I think the real question for up and coming bands is who will provide the less tangible benefits a label offers in the future? Just because mp3’s and file sharing have “solved” the distribution problem and turned it into a direct band-fan relationship doesn’t mean that other essential roles in a band’s development are being served–artist development, retail and radio promotion, and press and new media publicity are all things that a label typically handles for a band, in addition to pressing plastic discs and getting them in stores. Who will do that for bands less established than Radiohead, who do not have the resources to hire expensive freelancers who provide those services? It’s the question that nobody is asking or answering, but is an essential one to address.

    • The NYT, oddly enough, had a piece a while back on how artists can make it by completely self-sufficient distribution and promotion. I have been in several bands, a few of which that had some success, and the only model that worked was to produce, record, promote and distribute music personally and out of pocket. This was before MySpace, lastFM, etc. which only make self-sufficiency “easier”. Sell merch at shows and hopefully get a few minor guarantees for gas money and you may break even enough to get that coveted TV ad — mailbox money. Commercial radio and label management are certainly dead ends for the majority of bands.

    • Perhaps an annual membership to access all of the band’s songs for the year (with authenticated but otherwise unmetered downloads).

      The yearly membership could yield significant rebates on various band products and show tickets (or live online events).

      The paying members should be given an opportunity to chat with the band members at least once.

      Just my 2 cents ; )

    • everysandwich

      I’m old enough to remember Neil Young singing “This Note’s for You,” and I’m amazed at where the industry has gone since. Sometimes CDs are released simultaneously with ad campaigns the songs appear in. Ideally, I think the artists should be able to determine what they release free andwhat they release for sale. Limiting artist revenue to live shows and merchandise squeezes out studio dwellers, and there have been some fine bands that fit that description. With the explosion of video content (and great cameras at cheap prices) I think music will find a whole new revenue and audience channel in advertising, entertainment, advocacy, community, and whatever other channels the artists allow their work to grace. But I think that should be up to the artists. The downside to me is that music itself, standing on its own merits, seems in decline. Much of it is micro-niched and in oversupply. There used to be a generational divide with music. Now there are a million niches within each generation. Cultural consequences and zany hijinx may ensue.

    • Mark, crowdfunding is one of the solutions. Did you visited http://www.sellaband.com? It’s an alternative…

      Best,
      Anderson, from Brazil

    • GJ

      The idea of rethinking the marketplace for music is an important one. Music is still the intellectual property of the artist, which means it still warrants some form of compensation for its exchange. Where the musician, poet, writer wants to sell his or her work, he or she must engage with a market. In the past, the music market has been limited by the exchange medium. The exchange of a single musical object – such as a CD – mean a deficit of that object in the distributor’s stock. The exchange was tangible. Thus, the distributor’s control over the product was great. Today, however, exchange of a digital musical “object” doesn’t result in a deficit in the distributor’s stock or in the exchange of a physical, controllable object. Digital artifacts are infinitely replicable and therefore hard to control. So what market model can support this limited control and infinite exchange? It is a difficult question. The suggestion of a per-license model of music exchange is interesting – certainly one with which Yahoo, eMusic and a number of other sources have had success. Perhaps allowing listeners to pay a flat fee through a third-party digital distributor that permits buyers to listen, replicate and distribute songs as many times as they wish is a new model to consider. This doesn’t remove the distributor, it just changed the nature of the distribution role from producer to facilitator. What if bands could even specify certain songs for open license and others with limited license, so they still could retain some control over their product? Would it work? It’s difficult to know what will work given continued innovation and evolution in the media market, but it is important to converse about it and try to establish new, appropriate models for exchange that incorporate, rather than fight, continued innovation.

    • Ged

      Musicians and other artists should get paid for their work. The question is how much and by whom?

      Part of the challenge is that record companies had an artificially high price and weren’t able to exploit the long tail.

      Now that distribution costs had been cut and marketing is easier to do than it used to be this cost can be more easily taken out. iTunes and the recent Radiohead launch showed the people were prepared to pay for the music, but the price point had to be right. Groups like The Bays make their money from live events and use their recordings as promotions for the live events.

      In terms of who should pay, Lenny Kravitz (Absolut Vodka) and Prince (Dail Mail newspaper) have shown that commercially funded music can work. Also interest in older formats like vinyl have proved to be a small but reasonable revenue stream in certain genres like dance music and jazz.

    • Shoving a majority of the revenue stream into live performances is isolating the concert-going public. Ticket prices are outlandish, as are their associated fees. I see a backlash from fans who can’t or won’t pay more than $20 to see a band. $20 for a couple hours of music is a fair price; $120 is not. Don’t even get me started on the t-shirt prices. I’ve bought and screened tees for $7 each, so I know how much they cost. I can’t imagine the discounts for volume producers.
      Touring is where it’s at for musicians AND fans – the bands love to play, the fans love the whole experience of going to a show. The secret is to keep costs down and give the fans a break, creating loyalty that will pay for itself over and over again on subsequent tours.

    • John

      I think bands should be paid by companies. As if a company like Coca Cola was taking over the roll of record label. Bands wouldn’t have to pay back recording and touring fee because the company could use the bands songs in commercials as long as they are with company. Bands would be able to pocket the millions they make rather then paying a bank styled record label. Then the file sharing/free records wouldn’t be an issue.

    • M

      The statement you make that “the value of recorded music is going down” is interesting. Perhaps if the music were more valuable, relevant, meaningful and powerful…the perceived value would rise. Music is not immune from the powers of supply and demand. There are thousands of bands falling over one another to be the next “this” or the next “that”. And the radio is full of monotonous, shallow pop tunes. No one seems to write songs about the world around them. It’s all about the world in them instead. And that’s just not interesting. Hence, there isn’t a lot of perceived value. So one trick to increasing the money made by your music…is to increase the value of your music. Whoever says the “real money” is to be made at live shows obviously hasn’t done a live show lately. Are you kidding me? The artists see very little of that scratch. And what self respecting band wants to run around ranting about the fact that they make more money from selling T-Shirts than they do from their music?
      Record companies aren’t needed any more. And the days of artists taking a bunch of advances for recording and touring should be over. The only thing standing between good music…and profit…is promotion. Perhaps that’s the last niche for record companies to occupy? Ultimately, music is a product. Like any product, it faces competition. But there is money to be made. I’m thinking the bucks lie in digital downloads of music files that have solid DRM tied to them.

      Anyone know how I can stop fans from giving free copies of my music (my product) away?

      Here’s a place to find some high value music.
      "Man, This Is Gonna Be Tough"

    • i think the death of physical album sales will do wonders for the music industry. if people dont buy records and they actually like you..they’ll see you live and pay. but all the talentless generic cookie cutter crap is weak live…so maybe it’ll go away one day and only REAL groups will survive haha

    • Interesting looking back at this post from 2007, nearly 7 years later as the same question is still being asked by bands and their management today. Over the last seven years we have seen many new markets opening up for bands around the world in a wide range of audio-visual sectors in both new media and old media formats. Progressive media music companies such as the global media music company I co-founded, Audio Network, are increasingly working with bands and band members alongside the more traditional media music composers as the distinctions between production music and commercial music continue to blur. Don’t overlook film & TV and even Youtube placement as a major source of revenue for your band when signing your record deals.

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