Indie Music Business & Marketing Blog

Business Ideas for independent artists & musicians + suggested articles, reading and links!

Friday, January 22, 2010

Music Release Strategies 101: Profit vs Penetration (did he just say penetration?)

Yes - as in Market Penetration, but more on that later.

Release Strategy 1 - Free
Pro: Free is attractive, you can get right into the hands of end users quickly and achieve a potentially decent amount of fans quickly (if you're material is good anyway, but that's another discussion entirely).

Con: You haven't made any money yet and you may devalue the non-monetary qualities of your music. Someone may think, "if it's free it must not be any good." There's also so MUCH free nowadays that just offering a free download doesn't even mean you will get mass downloads. Ever noticed how free flyers at a concert end up just being littered on the floor? Sometimes free is just seen as junk.

The Deeper Question: Are you trying to make a career and pay the bills? Are you just interested in getting more exposure and more fans/listeners now so that you can take them with you on a career long journey and make deeper profits later? The answer may be a combination of the two.

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Release Strategy 2 - The Value Sell
Pro: Whether it's on 'sale' or you've added bonus/deluxe content, if you can give fans a 'value' beyond a straight $.99 x # of songs, you reward customers and entice newcomers alike. You also may sell more units b/c it's a 'deal' and you make money plus achieve deeper market penetration at the same time.

Con: Unless you're convincing with the value proposition of the purchase your fans may feel like it's not a great deal or not agree with the value. You need to find out what your fan base wants and make sure you're delivering that or you may put out a product that receives little sales, leaving little money and little market penetration.

The Deeper Question: Do you want to give back to the fans while they continue to help support you? Are you looking for the biggest buck back or to make happy customers/fans and create even longer lasting relationship with your followers?

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Release Strategy 3 - The Premium Sell
Pro: If you have established fans or die-hard followers you may be able to sell a premium, higher-priced product and make a great profit return on each sale. Make it a rare/limited item and fans will see the premium value and want it even more!

Con: Some fans might not be as quick as you'd thought to shell out $100 for a glossy 5x7. You may tarnish your reputation as a caring artist who wants to give back to the fans and be seen as a sellout.

The Deeper Question: Do you have the fan base established yet to pull off selling a premium item? If you do, are you ready to be creative and deliver an interesting product that will grab users attention and help you pay your bills?

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I realize sometimes it's not always as clear cut as the above examples and you may have a release strategy that is outside of those or combines them in a unique way. I'm just pointing out some basic ideas to evaluate as you may be deciding on a release strategy that is right for yourself. Here's some more quick points:


Things to Consider:

Price Points:
Sell an album at $9.99 and you may make more profit per sale, but sell less records b/c fewer people are willing to pay that price.

Sell an album at $5.99 and you may make less profit per sale, but sell more records b/c more people are willing to pay that price.

Or - make an album so amazingly spectacular that you can sell it at $9.99 and make both profit and deep market penetration.



Final Note:
Running the FiXT Store and working with dozens of indie labels and hundreds of artists, I can say matter of factly that our most popular type of sale has been the Value Sale. I personally feel that offering a Value Price Point keeps sales moving, gives you more fans, and helps to thwart piracy. Most fans do want to support the artists they listen to, but when they have to pay $10 for an album, it may be worth their time to rip it off the web - but if you give them a deal and an experience with bonus/deluxe content officially released at an affordable price, you may find out that more people will go ahead and just pay for your music.

Oh and if you're looking for some new music - we've got over 60 albums on sale from $3.99-$7.99 right now as part of the FiXT Store's Discover New Music in 2010 promo.

Do you have your own view on release strategies? Drop a comment below!

Thanks for stopping by,
James Rhodes
FiXT

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Friday, January 15, 2010

We've come a 'Long' Way: Why More Is Better and Why You Need to Find a Niche Retail Outlet

You may have noticed that over the past year the FiXT Store has been adding an exponentially growing list of products. Not only have we been adding new artists, labels and releases, but we've been adding more options available on our popular releases, such as bonus and deluxe content, as well as attempting to weave together a seemingly transparent web of interconnectedness between these products. This strategy is due in large fashion to a book I read just over a year ago titled The Long Tail.

Reading The Long Tail gave me an entire paradigm shift in thinking about music distribution, sales and even marketing & promotion. The groundbreaking concepts, backed by unbelievable data and case studies is gripping and holds big implications for independent artists.

I don't want to entirely spoil the enjoyment of what you might experience should you read it yourself, but the basic concept of the book is that with the increasing supply of everything available in the digital era, more and more customers are finding greater satisfaction with niche (or underground, rare, etc...) products vs the traditional mainstream best sellers. The book explains that as the ability to discover deeper niche material is allowed (through various forms of filtering/search/suggestions) we actually have a great capacity to enjoy these rarer items than what popular culture may dictate with the standard "top 10' blockbuster releases of a given genre/type. And interestingly these 'smaller' hits can add up as whole to equal the revenue of the 'big' hits.



What this meant for the FiXT Store was that we saw the opportunity to add more and more products in increasingly smaller niche sub-markets & genres with the expectation that even if individual products only sold a small number of units, it could still add up as a whole to a strong revenue stream. As we began that process we saw that as much as we have added in new releases and new genres we saw sales in almost every single area. One of our largest hurdles has been in the efficiency of providing more filters for users to find the items that will resonate most with them, such as popularity charts, genre browsing, featured listings, etc... This is something we will continue to work on in 2010 - adding reviews, artist directories, charting systems, more search meta-data, etc...


So What Does this Mean for an Independent Musician?

1. Officially Release all of your Material for Sale!
In the digital age you have no reason to not release everything! There is no out-of-print anymore and chances are if you're not selling that previous release just b/c you don't think it represents what you can do now, people are probably still downloading it and you're just not getting paid for it. If you have a sizable following your die-hard fans probably want to discover your rare, unreleased or demo material and anything in a so-called back-catalogue. The aggregate sales can exponentially increase your overall revenue and you may as well be the one directing fans to that material and allow them the chance to support you directly or else piracy will surely win out and they'll have the material anyway. You may be surprised at how many fans may actually enjoy that sub-par recording of their favorite song - it may have actually captured the emotion of that magical moment when you first put it down to tape (or disk, etc...).

2. Release Bonus & Deluxe Content.
It doesn't matter if you're an indie artist with 1 song or Trent Reznor trying to change the entire industry - people want to get a value and a personal experience. Any artist can release a single and get it into iTunes or post it for free on their Myspace. But if you take the time to put a package together of not just 1 song, but the demos or b-side that came out of that same studio time, you've increased the value of not just the tangible extra content, but the intangible element of an experience. Even in a digital download, if you give an end user extra information, art, lyrics, demos or anything else, it can legitimize your artististic output and show depth to your talent and ability. Add some value to your next release and include value added bonus content or charge a slight premium for extra deluxe content. The more content you have, the more power you have in releasing it and finding ways to market it.

3. Find a Niche Music Store to Host Your Content.
You've put in all the hard time and work in creating your latest release and you want to get it in front of potential fans/customers who will want to purchase it, right? Well by all means, get it into iTunes, Amazon, and all the major music stores who each have great filter systems (you can get your music into any of these stores by using an Aggregator such as CD Baby, TuneCore or ReverbNation). But if you really want to make sure that you're gonna reach maximum exposure to the potential fans who would most immediately be interested in your music, take some of the pressure off of your own promotion and marketing and get your release into a Niche Content store such as places like Beatport (electronic/DJ music), DownloadPunk (Punk/Rock/Metal), and of course (insert shameless self-promotion here) - the FiXT Store (Electronic-Rock/Industrial & Film/TV Music).

The value in being in these niche stores is that typically people will be browsing them with existing interest in the type of music the store carries and often times it's much easier for indie artists to receive featured spots, promotion and visible listings in these stores than the mega-stores like iTunes.

Major store vs. Niche Store


Rule of Thumb 1: Release lots of material and make it easy for fans to officially support you.
Rule of Thumb 2: Go where your fans are, but also be where your future fans are.

In future posts, I'll be listing the best Niche Stores that may be of interest to you, as well as what genres/categories they cover and how to get started with distributing your content into those outlets.

If you're interested in learning more about the Long Tail, I highly suggest picking up a copy from Amazon:



Please leave a comment if you have read The Long Tail and have any other ideas to share from the book, or if you have any feedback to my interpretations and ideas.

Thanks for stopping by,
James Rhodes | General Manager
FiXT

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My Top 3 Suggested Business Idea Sources for Indie Musicians

If you're an indie musician, let's face it - you don't have the support of a major backing company, which means, you're probably wearing more hats than you can keep track of - in addition to being an artist, you may also be your own: Producer, Manager, Marketing & Promotions department, Sales, Distribution, Inventory Manager and Promoter, amongst other things. (yeah, that might have been a run-on sentence, but it makes the point)

So if you're looking for some online resources to add some value to each of those hats when you choose to put them on, here's 3 sites I highly suggestion taking the time to get to know:


http://www.musicthinktank.com


20 Things e-book
(free e-book inside - download it!)


Derek Sivers
Derek Sivers Blog


I'll share some specific links from each site in the coming weeks, but until then, enjoy checking out the sites!

User Feedback Wanted
What are your favorite website links to great business ideas for indie musicians? Leave a comment below!

Thanks for stopping by,
James Rhodes
FiXT

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A New FiXT Blog for 2010!

Hey everyone,

We are launching a new Blog page for 2010 that is focusing on Independent Music Business, ranging from business planning, marketing, analysis, suggested reading, links and videos and of course - open discussions.

Please bookmark the page or subscribe to the RSS Feed and join in as we kick off the new blog for the new year!

Thanks for stopping by,
James Rhodes
FiXT