Tag Archive for 'ancillary revenue'

The Canadian Press: Musicians Seek Extra Ways To Connect With Fans, Build Market

Arts&Crafts LogoA solid article from The Canadian Press on the new ways Artists are squeezing marketable material out of their musical exploits. Arts & Crafts, a Canadian indie label / artist services company, is cited as an example of ways in which their Artists further develop relationships and loyalty with their fan base(s).

A&C executive Kieran Roy remarks, “It’s not enough to go and record 10 tracks and call it an album and call it a day. There has to be live content, B-sides, covers, EPK footage, web shorts, videos, podcasts, audiocasts, videocasts, you name it - everything and anything under the sun.”

The added dimension of capturing the recording process on video is another way for the Artists to express their ideas and connect with an audience. For most younger Artists, exploring multiple platforms is a natural extension of their art. The music is still the most important part, but there’s so much around creating and capturing an Artist’s world. Really, what you want to do is be a more complete Artist, and now Artists are provided the opportunity to do that.

Arts & Crafts is firmly built on a 360 model, an artists’ services company, so while they may be seeing lower record sales, they’re also participating in other streams of revenue with their artists… building concert sales, building T-shirt sales, building fan club sales.

Pop-culture watcher and broadcaster Stu Jeffries adds, “If you’re a fan of the group, you want every piece of information you can get and you’ll pay for it.” In the end, it’s great for fans, no matter the quality of the extra material. “Of course it’s a money grab, but then the industry has always been a money grab, so what changes now?”

The Canadian Press: Musicians Seek Extra Ways To Connect With Fans, Build Market

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Terry McBride: “A True 360 Deal Should Include Stock Options” | Digital Media Wire

Terry McBrideAs reported by Digital Media Wire, in a panel entitled Band as Brand at the Canadian Music Week’s digital music & media summit, Terry McBride of Nettwerk Music Group suggests that in order to align the Artists’ interests with those of their record label or management company, they should get stock options, much like the company executives get.  That way, it would be a true partnership in building the artists’ brands for the long run.

He also went on to talk about how the music business can “monetize free” and used the example of how Gillette almost gives razors away for free in order to make money off selling razorblades.

“If you see the Artist as a brand, then all of a sudden you have several verticals of monetization at your disposal. It could be ring-tunes, clothing or live-shows etc…

Additionally, McBride points out that record labels don’t have the marketing muscle of some of the consumer products companies anymore.  So he expects we’re going to see a lot more of ‘brand alignment’ over the next 18 months.

Terry McBride: “A True 360 Deal Should Include Stock Options” | Digital Media Wire

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Free! Why $0.00 Is The Future Of Business: Cross-Subsidies

Free StickerIn this months WIRED (16.03), editor Chris Anderson (author of The Long Tail) pens a great article on why the future of business will be founded on providing goods and services for FREE.

An example of how live performance revenues subsidize recorded music revenue is brought forth using a Brazilian band called Banda Calypso that self-distributes masters of its CDs and CD liner art to local street vendor networks in towns it plans to tour. They have full agreement and expectation that the vendors will copy the CDs, sell them, and keep all the money. They allow this because selling recorded music isn’t their main source of revenue. The band recognizes they are actually in the live performance business. And business is apparently really good for them - they tour and travel from town-to-town via private jet.

In addition, the use of the street vendors for distribution generates more ’street cred’ for Banda Calypso in every town they visit. Their omnipresence in the urban soundscape means they get huge crowds to their rave/dj/concert events. Free music is just publicity for a far more lucrative tour business. Nobody thinks of this as piracy.

Free Prince CD

Last July, Prince debuted his new album, Planet Earth, by stuffing a copy — retail value $19 — into 2.8 million issues of the Sunday edition of London’s Daily Mail. (The paper often includes a CD, but this was the first time it featured all-new material from a star.) How can a platinum artist give away a new release? And how can a newspaper distribute it free of charge?

A) Prince spurred ticket sales. Strictly speaking, the artist lost money on the deal. He charged the Daily Mail a licensing fee of 36 cents a disc rather than his customary $2. But he more than made up the difference in ticket sales. The Purple One sold out 21 shows at London’s 02 Arena in August, bringing him record concert revenue for the region.

B) The Daily Mail boosted its brand. The freebie bumped up the newspaper’s circulation 20 percent that day. That brought in extra revenue, but not enough to cover expenses. Still, Daily Mail execs consider the giveaway a success. Managing editor Stephen Miron says the gimmick worked editorially and financially: “Because we’re pioneers, advertisers want to be with us.”

How Can A CD Be Free? – WIRED 16.03

Free! Why $0.00 Is The Future Of Business – WIRED 16.03

How To: Make Money Around Free Content @ WIRED How-To Wiki

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Jazz Summers Invests £10m In Music Talent — Telegraph

Power Amp MusicBritish newspaper The Telegraph is reporting that Jazz Summers, the manager to bands such as The Verve and Snow Patrol, is fronting a fund which aims to raise £10m to invest in new and established UK music talent. He is joining forces with venture capital and advisory firm Power Amp Music to launch the tax-efficient investment vehicle.

The Power Amp Music Fund will invest in up to 30 artists, with independent labels or concert promoters, in exchange for a share of revenues from recording and publishing, merchandising and live events.

With CD sales in decline but demand for concert tickets and music festivals at an all-time high, record labels and music business investors are seeking a cut of everything from TV appearances and ticket sales to T-shirts.

According to their website, the Power Amp Music Fund is described as a tax efficient vehicle offering the opportunity to invest in a diversified portfolio of UK music talent. The Fund uses an artist-centric development model that brings the source and destination of music closer together and generates enhanced returns for artists and investors.

By investing directly in artists’ careers, investors participate in all revenues available: recording, publishing, live, merchandising, and alternative (digital, branding etc,). The model offers an effective route into an industry with strong future revenue potential.

Jazz Summers Invests £10m In Music Talent — Telegraph

Summers Fronts Music Investment Vehicle — Billboard.biz

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Gerd Leonhard: Making Money AROUND The Music

Radiohead Questions Album Sales Report, Sets CD Release Date — Digital Music News

Regardless of what the actual numbers are, the success of this project from Radiohead’s perspective will not be based on how many people paid for the music in it’s digital form. It’s all about ancillary revenues for them.

Why do we insist on examining this effort in a vacuum, and start anticipating the follow-on effect? I’m guessing they will command an unprecedented fee to tour and play festivals this Spring / Summer 2008, and maybe (hopefully) go the Pearl Jam route wherein distributing /selling their live shows at a low cost via download. They will undoubtedly own the copyright of their material going forward, as their deal will in all likelihood be a licensing deal with XL (UK) and ATO/TBD Records (US).

Why did Paste Magazine allow subscribers to name their price? Simply to increase it’s distribution / readership in order to generate more advertising revenue.

Why did The Format (Nettwerk) allow people to download their year-old album Dog Problems for free from June 25 to July 15, 2007? So they cold use Google Analytics to tell them where people are downloading from in order to better focus their touring efforts.

Why does Trent Reznor want NIN music to be cheaper (or even free)? So more people can have the music to generate an interest in attending the live show when NIN tours. He knows touring revenues are the lifeblood of the industry going forward, and connecting with fans in a live environment will prolong his career.

I really like what he did with pricing option on the new Saul Williams release, 192 Kbps MP3s for free and 320 Kbps for $5.00 (with the option of uncompressed FLAC).

http://blog.wired.com/music/2007/11/choose-your-own.html

I think 192 Kbps is a formidable bit rate, the sound quality is good enough (for me) and the file size is very practical.

I have never listened to Saul Williams, but I will be downloading his new release. And guess what? If I like it and am entertained by it, I will probably purchase the CD and/or go check out his live show.

I am also willing to bet Trent and Saul are probably running Google Analytics on the site so they know how to better focus the touring efforts.

Radiohead Questions Album Sales Report, Sets CD Release Date — Digital Music News