Think Tank Talk Question?

Would you give exclusive rights to a download store in exchange for keeping 100% of your music revenue?

Comments

[Mark]

Fascinating question. If the download store was really beautifully coded, had strong indie principles, a trusted community (like CD Baby, etc.), I might consider it for smaller releases, singles, special projects. All things considered though, I probably wouldn't hand over exclusive distro for a major album release. I, for example, am a subscriber to emusic. I don't buy music online from any other place. I never purchase music from apple and if I can't find a release on emusic I either download it illegally or buy the CD if it's lovingly packaged. The lesson I draw from my own experience? Give people as many options as possible. People are funny in how they make purchasing decisions, and I would rather give up 50% here and there to sell more units in total.

[Julian Moore]

You need a compelling consumer proposition. This is a compelling artist proposition.

[Ricardo]

I'm thinking that there's something more important than the revenue percentage when doing a deal like this, and that is asking yourself why would your listeners go out of their way to buy your release off that store. I wouldn't do it for normal releases, I would only do it if I know the release will come with something special for the listener and know that the store is the only option available that could deliver such special package. Otherwise it just means closing down doors on your costumers, and there's not a lot of profit in 100% of $0.00.

[Sebastiaan Elsenburg]

Is it not more likely that download stores will soon start offering different deals to different bands, the favourability of which deals depends on the band's ability to generate traffic for the store?

I think you are overestimating the value download stores attach to their artist clients. I know certain artists have unaccountably been screaming that the value of Bebo was largely attributable to their input, but I hardly think that the industry puts much faith into the MP3 home-recordings of a million hobbyists. It seems unlikely that the industry is going to be drawn into a bidding war for the services of these hobbyists.

On the other hand, my answer to your question is a resounding yes. As an independent artist, the only person I expect to generate sales is me. Every sale is generally the result of someone having seen a live gig. From there, they were directed to our web-site, where they would have noticed a widget pointing them to our aggregator. I do not rely on iTunes to sell my music for me and, for now, only make the type of fan who does not mind going out of his/her way to acquire my music, as I suppose is the case for most independent artists. Whether my music is available from iTunes or Dave's Dodgy Downloads is immaterial to me. All that matters is that they are available. I also think that the consumer will increasingly opt to buy his music from a wide variety of sources.

[Julian Moore]

If the consumer is increasingly opting to buy his music from a wide variety of sources, your music should be available to buy at all those sources. Only going for fans who would go out of their way to acquire your music is missing out on all the thousands of people who would quite happily stumble upon it, surely?

Most music sites like iMeem, iLike etc refer people to similar tracks that they are currently listening to.This is one of the most powerful tools out there right now - aligning yourself to similar styles, tags and genres so that people can come across you. People can't discover you if you're not there. And some people are on iMeem but not iLike and vice versa. You can't choose where people like to hang out online.

And music is a lot to do with discovery IMHO. (I was very excited when I 'discovered' Justice until I realised the rest of the world had already found them. However, telling all my friends about them was exciting as I got there first in my group of friends. I came across Justice on some random site somewhere. Discovering new music which I'm pumped about still gets me acting like a child.)

I think you should give your fans in waiting the best chance possible to discover you.

[Beth Callen]

There are distributors like Tune Core that allow musicians to keep 100% of sales revenue, while distributing their music to many digital stores such as iTunes, emusic, etc. No need to have an exlusive deal with one store unless that store is offering you something amazing (like free and widespread advertising). ;-)

[Aaron Trubic]

No. Hell no.

Why chase pennies? Seriously, right now, how many of you actually benefit financially from the sale of downloads? How would the situation change for you if that revenue doubled? tripled?

I think the emphasis on SELLING downloads is seriously flawed. If we're talking about empowering the indie musician, we need to level the field with a nuclear missile - make music free. Make your download a TOOL for sales, an opportunity to build community - not the SALE itself.

Screw 99 cents. Give it away, build trust, build community and THEN monetize. Building TRUE fans means looking at each fan's lifetime spending potential. Their dissemination potential! A real fan is a megaphone for your music, NOT a consumer with a tray at the buffet.

I'd pay .99 for a real fan. Wouldn't you?

[Julian Moore]

I thought Trent Reznor had proved that all price points are valid, including free.

I'm still perplexed why there seems to be the need to find 'the solution'. You can charge between zero and and infinity depending on what you're trying to achieve.

If your fans keep asking you where to buy your stuff, you'd be crazy to give it away for free. Every band, every track, every situation has it's nuances. We can choose how to do any of this stuff using all available tools.

I think it's fantastic that there's no one way of doing things, but all these incredible options. Our toolkit has expanded. But I'd like to choose the tools for the job. Radiohead did what was good for them. Trent Reznor did what worked for him. Do what works for you.

I still think it's a cool thing to let people download pretty good versions for free, but charge for the better quality versions. It's the nearest to try before you buy there is without DRM. You like it, you leave it. If you really like it, you may buy the better sounding one. If you really that you may buy the CD with the sleevenotes and the cool thingy it comes with. If you are rabid, you buy the live versions too, which you could watch on youtube, but with the DVD you get better sound.

The flaws in the technology already give us a ready made fan upgrade path. And no one is going to mind at all. Just be upfront about it, and offer lots of options.

People not only want the option to hang out where they like online, but to buy what they like online, in the ways they want to. Make available as many options as you can.

I think there are two marketing points to consider:

1. Presenting a range of the same product from the cheapest to the most expensive creates value. People actually don't like buying the cheapest, including free, when given choice. With the options in place, you'd be surprised how many people may go from buying free to the next option up. Or higher. Sure, draw people in with a freebie. But on that page, show the other versions they could be having.

2. People will pay for convenience. For instance, here are the 12 tracks available to download one at a time. If you want to download the lot in one go, with the included sleeve notes, wallpapers and exclusive xyz's, please click here (5 bucks) - if it's more convenient to actually pay the five bucks than sit and click on the 12 tracks (and miss out on some other stuff) then a lot of people will try that option

Give people options every step of the way. Having ANY visible monetising of the freebies also gives the freebies more perceived value.

[Sebastiaan Elsenburg]

We can all agree that a nuclear missile is not required: recorded music is pretty much free already. It is generally possible to download the song you are after for no money. For this we have the Internet to thank.

Having been robbed by the Internet of the means to make money from recordings, independent artists are somehow still loathe to let go of the Internet as a business opportunity. However, when it comes to new conceptions of making money in a web environment no one seems capable of being anything other than exceedingly vague: 'selling relationship', 'building community', 'building trust' and my personal favourite: 'monetizing', what does any of it mean?

I am sure when the industry moved from sheet music to recorded music, there was not the same degree of confusion as to how to proceed that there is now: they had something to sell. Now we have to sell 'relationship', and over the Internet - of all places. Who is going to buy it?

The record is just a marketing tool. The product is music. How are we going to sell it now?

[Anne Leighton]

The question here is what's in it for the download site? If you're getting 100% of the profits, what's the site making?

I don't believe in ever having an exclusive deal with anyone to sell any of your product if you're an artist. It makes you less independent, and less apt to have work fluid work relationships. Things always go wrong if you're too dependent in a relationship.

[Justin Boland]

Only if I had the option of getting those rights back later on...and at a price that was set at the beginning of the contract, too. Overall, this proposition would make me wary and I'd be curious to see more details.

[Aaron Trubic]

@Sebastiaan

Since you seem to think that the notions of community, trust and monetization are too vague to grasp, then allow me to expound.

Building community is about your fans gathering under a common banner - you - using a common mechanism for them to participate in your career. People bring people - excitement brings more excitement. It's about gathering momentum through your fanbase and them through you.

Monetization is your revenue stream. T-shirts, videos, tickets, donations - these are the ways artists sustain themselves financially. If you've "built community" correctly, then these people are qualified consumers ready and willing to buy what you choose to sell them. You have fans, now you can MONETIZE that relationship through sales.

Trust is why they buy. Hopefully, you've built that by over-delivering to their expectations. They're hungry, they're excited and now, they trust you. Let's do business.

You can go ahead and curse the Internet of robbing you of a revenue opportunity. Frankly, this kind of entitlement is what's wrong with this discussion.

Am I being vague? Then let's get more specific. Exactly how much money have YOU lost to Internet piracy? Have YOU ever broke even on a single cd release? How much has file sharing hurt YOUR career?

Music is a product? Do you know who MADE music a product? I'll give you a hint: it wasn't a musician.

[Sebastiaan Elsenburg]

@Aaron

People cannot muster respect for a product that is widely available for free. That there are still some folks left who have respect for the record at all is due to its distinguished past. However, in ten years time this respect will have been entirely eroded, as a consequence of the record's (MP3's) availability on the web for free.

It is impossible to build community on a meaningless product/marketing tool. Giving away compressed home-recordings will soon no longer induce anyone to buy T-shirts. Monetize while the monetizing is good, but anyone who wants a career in music in the next decade, ought to focus his attention on his live show - and abandon the web.

There will come a time when an artist's slightest presence on the web will signal to the consumer that his music is meaningless; damned if it isn't happening already.

[Julian Moore]

I have been listening to music on the radio for free since I was born. This morning the radio came on at eight and I must have listened to at least five songs for free before I managed to get to my first cup of coffee. I cannot imagine how many songs I have consumed like this over my lifetime, before the 'net was invented.

There will come a time, damned if it isn't happening already, that if you're not on the 'net you may as well not exist. All the music I've ever loved is on the 'net, and hasn't become at all meaningless in the transition. It's just another place I can engage with it.

I didn't hear many people cry 'sellout' when Radiohead did their thing, or NiN. Rather, it increased their 'true artist' legitimacy tenfold.

Abandon the web? The web IS the future, and it's early days yet.

[Sebastiaan Elsenburg]

Listening to BBC radio is, in any case, not free at all since it is a government institution and as such funded by the taxpayer. Listening to non-government-affiliated broadcasts might well seem free to the listener. However, the artists whose music is used during these broadcast (as during BBC broadcasts) are being paid for their services. The listener pays by sitting through reels of advertisements and this is how the music is assigned an economic value - for the radio station, for the advertisers and also for the listeners.

All the music we have ever loved could not be devalued for us if MP3 versions were manufactured out of manure (hypothetically speaking), however, the ten-year-old kid who is right now illegally downloading his first MP3 for free, will have no such mystical relationship with music. He will not develop into an economical force to be reckoned with for the music industry, like we did.

I want to know how I am going to sell music to that ten-year-old kid in such a way that it means something both to him and to me. The internet will be of no help in the solution of this conundrum.

[Julian Moore]

@ Sebastiaan

I am finding it hard to get on your wavelength right now (I know we've had this in the past!) I would like to see you propose some of your own answers - we all want answers! But you do seem to be waving your fists in the air a lot. Damn those thieves and their internet!

Music is the number one activity for all kids globally. It binds them, connects them, excites them, defines them. They are making the rules up, it is for them to show us how they connect and discover music. We have to learn from them, not dictate. That would be like the old model we all hate, right?

This generation's relationship to music will be nothing like ours was. I talk about post-Beatles music with my mother and her eyes glaze over, she has no idea what I'm talking about. She's still stuck in an era before her when people went to musicals. My friends kid has an ipod with 2000 songs in it. When I was his age I had three records, and they were kids records. He's listening to adult music.

The next generation are creating their own mystical meaning from the music out there, and it's different from how we experienced it. One thing is for certain - the buying experience has become almost transparent. Whether you pay or not, it's one click. The 'shopping' experience is gone. So selling with meaning is gone.

HOWEVER

Many people get really excited when they buy anything on amazon or ebay. I do. Every morning when the postman comes is exciting when you've just pressed buy. So there can still be anticipation.

What was so great about the way YOU were sold music when you were a kid? What gave it it's meaning?

As far as I can see, the kids today are doing the same things I was with music. Except at an exceptionally greater speed. I still feel like a kid when I'm playing with all this new stuff. It's exciting and fun. Like music.

[Robin Charmant]

The industry is changing. Point final. All artist must accept it or they'll lose it. Heck! It's been changing ever since it started.

When music passed from paper sheets to piano rolls, then from rolls to records, what a mess that made in revenue-wise for the composer. When Sebastian says 'they still had something to sell', musicians weren't the ones making a living; the manufactures were (the record companies). So Legislation changed and in came the mechanical rights. When radio came along, that didn't help musicians get any richer. And lets not even get started on the advent of blank tapes and recording devices. And now the internet and everything that goes with it...

Every single time there has been a new technology, music creators (and associated parties) took a financial blow. But they would also bounced right back on their feet because those same technologies helped to distribute the music, getting it in the hands of the fans, the community. The whole tape swapping phenomenon in the 70s is the exact same thing as file swapping nowadays, just proportionally. The selling process is almost transparent indeed, that's just the way it is.

So how should the new model work? Well the system is crumbling but the musicians are surviving with in-house production, free internet promotion (that only works if you spend time and effort building their community) and DIY booking. Everything is DIY actually, it's a hard transition stage but they'll make it. Its like many internet startups: they don't have a product but they bring entertainment and generate tons of traffic, they have the community. If they have the buzz they'll find a way to make money, all you gotta do is monetize. It no secret why most those companies create blogs before launching their product. Bands are living off their community through shows and tours, not many other options out there but make money at the door and selling merch. Actually there is something more and more musicians are looking into. Music licensing agencies are popping out of nowhere these days on the net. The media companies want fresh new talent and know they can get it on the web for much less then securing the rights of mainstream music. Musicians and bands are capitalizing on that too.

So to end my monologue, I will answer 'no' to the question of this post. I would not give a single website the exclusivity because that just wouldn't help me out. To chase pennies as Aaron puts it, I don't see the logic of it. History tells us that its the distribution of music, as chaotic as it can be, that allowed musicians to survive and create a following, so i'll go with that.

[Chip Gall]

Simple answer...never!

[chris purifoy]

I have not read through the comments. I am only addressing the question.

No. The long tail is the key to sales these days. Becoming exclusive to one retailer cuts off the ability to utilize all distribution outlets (and the list is growing). The 100% return wouldn't offset the loss unless the retailer was Apple, and Apple also agreed to play your music on an ipod commercial or something.

Simple cost/benefit says no.