I’m a jazz guy, and although I spend a fair amount of time in the vaults of Verve, Riverside, Columbia, and many others, my first love is Blue Note.  The relationship started when I heard Stanley Turrentine’s Up at Minton’s in the early 90s. Stanley himself is impressive, but Up at Minton’s turned me on to the reason that I picked up the guitar – Stanley’s sideman on the recording, Grant Green.  Green was a session player on Stanley’s record, and after seeing his name on the back cover of the record, I dove down deep into his catalog, which turned me onto a wealth of other players, like “Baby Face” Willette, Big John Patton, Hank Mobley, Lou Donaldson and many more. It all started with Stanley, but the collaborative nature of jazz, coupled with the sideman information on the back of all the records, enabled me to dig in deep to a catalog that rarely disappoints.

Back in the day, this discovery process was mostly a physical endeavor.  I would take the Red Line to Harvard Square, and make a loop through all the areas record stores, starting at Mystery Train, then onto Second Coming, over to Looney Tunes, Tower, and finishing up at Newbury Comics. Excellent way to spend a Sunday.

Of course, physical retail has constricted since then, and while there are a lot of positive attributes associated with the convenience of digital music, one thing that has not been replicated particularly well online has been the discovery process.  I have trusted sources and curators that help, but there are few online options that replicate the experience of walking into a store like Mystery Train, finding an amazing record with a little known sideman, and heading down the path of discovery for a brand new artist.  This is the fundamental reason I like the Blue Note Spotify app so much.  It is the best option for replicating this discovery process that I loved so much back in the day.

Walter Gross is the Senior Director of Digital Marketing at EMI, as well as a 1993 Berklee Grad in Jazz Composition.  Walter spearheaded the development and execution of the Blue Note app on Spotify, and I spoke to him a couple weeks back about the creation process, what he was trying to accomplish with the app, and the opportunities that Spotify’s API offers technologists.


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Mike King: What did you want to accomplish with the Blue Note Spotify app?

Walter Gross: There was a small group at EMI that wanted to give this app a try, including myself.  I’m a Blue Note freak, and I remember being in a Berklee course with Jackie Beard [Professor in the Woodwinds dept] in 1994, and listening to a Joe Henderson Blue Note record, and having the classroom asking questions like: who is this player? When the record was recorded? Who else is playing on this record?   Experiences like that really played into the main reason we developed this app.  I was reminded of that moment, and I wanted to try and replicate something close to thumbing through a record collection, or the bins at a record store, with this app.  When we started talking about creating the Blue Note app, I immediately thought of what I loved about discovery in the past, and how I could structure the data in a similar way to replicate this process. There are a lot of improvements that can be made to the online discovery process, overall.  If you look for John Coltrane’s catalog online, for example, it’s a mess.  Nothing tells a story or takes you on a journey.  It’s like a jungle out there, totally convoluted.

MK: Can you talk more specifically about the process of building the app?

WG: Well, the idea really was in how to tell a story with finely tuned and structured data.  I started talking to developers, and found a company that we really liked in the U.K. called Retrofuzz.  They had done some apps that I was impressed with, and we decided to move ahead with them.  I had heard a lot of stories about how meticulous Spotify was from a development standpoint, and I wanted to use a developer that had been through the process already. It was important for me to move through the development process as smoothly as possible.  I went to Retrofuzz with a problem set covering 73 years of music, and I laid out all the data points I wanted to cover: artists, instrumentation, recording dates, and the ability to tag releases by simple genres.  It was important to me that we kept it all simple, as I didn’t want too many jumping off points, and I didn’t want to pigeon hole artists.

The other thing I asked Retrofuzz to do was to override some of the incorrect cover art in Spotify.  With old recordings, where records have been re-licensed, many times the album cover is not the right, or original, one.  I wanted the experience in the app to be as authentic as possible, so we created a way to override any incorrect album covers in Spotify, and replace them with the original vintage covers.

With this app, the whole thing really is a very specific look at the artist’s output on the Blue Note label.  Of course with the merger of EMI and Universal, it’s possible to include the Verve and Impulse catalogs into the app, but we wanted this to be just about Blue Note. We wanted this to be accurate for purists, which there are many of in this genre.  For example, Cannonball Adderley has only one record on Blue Note, but many on Capitol. Our label-focused approach gives us the ability to put a long tail look at this thing, too.  We can tell the Pacific Jazz and Capitol Jazz story at some point, for example. Michael Cuscuna was also a big inspiration.  Michael is one of the foremost experts on the Blue Note catalog, and we wanted the type of detail that he would think was appreciate.  We actually used his discography as a resource for plugging in a lot of the data.

 MK: As a discovery vehicle, the app is outrageous.  I’m a big fan of the label, and I’m surprised with how much I didn’t know about the catalog.  I’m constantly going down a different rabbit hole around some of the sidemen on these records, and being turned onto releases I had no idea existed. It must have been a serious process getting all this information into the app. What was that like?

WG: It was definitely a time consuming process to create that experience. When Retrofuzz finished building the CMS, I spent a full month plugging all the appropriate information in, all by hand.  Our team had to set up the full artist info, like the first and final recording dates, sideman info, and so on. During this process, I had my wife yelling at me for spending so much time on it, and I had to say, “Trust me, this will be really cool!”  I ended up bringing in some pf the rest of my EMI Digital Marketing team to input the data at one point. The problem there was that because I knew the info topically, I could blast through setting everything up quickly using Michael Cuscuna’s book to see correct sideman and instruments, but for the folks I brought in who were not particularly familiar with jazz and the catalog, it was a slow and painful process. Should this be a this groove or tradition release? Is that an alto or tenor sax on this record?  This was the sort of thing I knew intuitively, but for the folks I brought in, it was really tough. I actually used All Music and Wikipedia in the background as resources to double check everything, and in fact, all the bios are pulled from All Music.

MK: Is the entire Blue Note catalog available in the Spotify app?

WG: No, not all of the records are up on Spotify, and a lot of that is because of licensing issues.  For example, some records are not available from a licensing standpoint in U.S., and for us, we need to look at the ones that can be cleared quickly going forward.  There are a couple of inconsistencies that we have to work on, too.  Some records simply never became fully finalized in the US, even though we have a worldwide clearance.  It could have been a simple issue of the person setting up the licensing left the company, or forgot. There are some glaring omissions that we need to focus on, like Joe Lovano and John Scofield.

MK: Are you approaching this app as a potential revenue generating opportunity, or is this simply about awareness of the catalog?

WG: There is no one looking at this app saying “well, here’s comes the money!” right now, but I can say that this could change with the scale.  The analytics associated with engagement and usage far exceed our expectations.  We just launched the app, and right now we are getting around 16,000 visits a day, and the average use time is over three hours.  That’s amazing engagement.  I think that as this adoption grows, the app could drive revenue.  Right now it’s definitely an awareness tool, and a great opportunity to put the Blue Note brand and catalog back into the forefront. There are some really good things happening with the label right now.  Don Was is now involved as the President of the label, and he is driving A&R.  He came in last fall, and he brings great energy to what we are doing.

MK: Are you leveraging the work that Retrofuzz did for the CMS in other ways?

WG: We are.  Retrofuzz built a really amazing database,  and we are actually in the process of refining the Blue Note web site to be driven by this data base. The Spotify app will inform the Blue Note web site and we’re planning using the same CMS to power Bluenote.com.

MK: What’s your favorite part of the app?

WG: I’m a fan of the Blue Break Beats section. This is the area where we pull in content illustrating who sampled what in the Blue Note catalog.  When we were conceptualizing the app, I had an epiphany:  there has to be data out there that shows every sample from a Blue Note record, and where that sample occurs. There’s a great site out there called “Who Sampled,” and I ended up connecting with them and letting them know what I was looking for.  They came back with hundreds of Blue Note samples, and we integrated all of this into the data structure.  Everyone from Jay Z, to Madonna, to 90s hip-hop artists have sampled the catalog, and we structured the Blue Break Beats area to align the original recording and the sample side by side.  For me, it’s simply another great discovery tool, and I think the usage in the app is so high because there are so many ways to discover music within this app.  It really illustrated the possibilities of how music discovery can be in an online environment.

You know, Spotify loves the app, too.  They recognize that this steps the bar up, and they expect folks to improve upon this concept to offer more opportunities for deep music discovery.  For me, it’s nice to be part of a game changing development. I’ve done a lot in my professional career, but nothing has gotten the press or accolades that this app has gotten.  It’s a pretty neat thing to be involved with.

I spoke to Adam Gold from American Songwriter recently for a piece he was working on about the changing music business and best practices for success. A couple of my comments made the piece, along with some thoughts from folks at Kickstarter, SoundExchange, and Moontoast. Check out Adam’s interview with all of us, here.

Here’s the rest of what I said, which didn’t make the piece:

American Songwriter: 2011 is over. I just recorded the best song I ever wrote. What’s the new model for getting my music heard? What to do with my demo?
Do I post my music on Facebook, or is there a better place for music?

Mike King: This is a long answer. I think there are really so many paths and so many options for musicians now to get their music heard. That’s both a blessing and a curse. I think the key is to think about this from a consumer, or fan standpoint. For consumers, there has never been a better time to listen to music. It’s everywhere. The floodgates are open, and if I want to check out practically anything I can do so in a matter of seconds.

I think the tricky thing, and something that a lot of folks are trying to figure out, is curation. Although larger gatekeeper-based vehicles still do have an effect at exposing folks to music, like commercial radio exposing folks to pop music, I think that for the most part consumers are moving towards niches, and are finding new music through trusted sources within these niches. For example, there are some rooms on Turntable.fm, and some DJs, that I totally trust to turn me onto new music. In one of the soul/funk rooms I’m part of, one of my favorite DJs is also a musician, and occasionally he “spins” his own music – which I love. So for me, that DJ is a trusted source, and that is where I am finding some of my new music. Same thing for blogs. A site out of LA named Rollo and Grady has the exact same taste in music as I do, and I have been turned on to some great music there. The other way I find new music is by providing my contact info to artists that I love, and I let them deliver new music to me. For example, I found a band Fanfarlo a couple years back, and because I gave them my email address, I am among the first to get new music from that band prior to release, and then can be one of the first to purchase when a new record is out.

All of this should filter into how bands release their music, and their plan for getting heard. I think that everything in a marketing plan should be integrated, and there are a lot of moving pieces that include live events, press, online retail, your own site, PR, and more, but from an overview standpoint, I think that realizing that A) fans are more niche based and look to certain outlets to curate music for them, and B) it’s possible to connect directly with fans to deliver music to them, are both key. I would approach both of these areas separately, using some of the developing marketing / technology tools and best practices. Starting by identifying who you think your core fans are, and then looking at pitching the niche outlets where they hang out is a good first step. I think that acquisition is also extremely important for all artists, and I suggest using email for media widgets from Topspin, Official.fm, SoundCloud or other marketing/technology companies to help retain a permission based contact for future communication and up sell. I also think that optimizing your site for the search engines, and making your site an awareness and conversion engine by providing media in exchange for an email address is a best practice, too.

Finally, I think you have to develop a content plan for your release. This is something that I think Metric did a great job with for their last record, Fantasies. Metric sketched out what type of media (single, acoustic version, live version, demo versions) they were going to release on their site and through widgets on third party sites prior to the release of their full length. This allowed them to acquire email addresses prior to the pre-release of their record. They were then able to reach out to these folks across the full timeline of the record release, and engage with them, make them aware of what they were doing, and also provide them with the opportunity to buy. I think that Facebook, Twitter, Instagram, Thisismyjam.com, Turntable.fm, YouTube, and more could all fit into your plan, but I think having a plan is key.

American Songwriter: If I do post it for free, will anyone want to buy it?

Mike King: The short answer is that case studies, examples, students experiences, and data I have seen say yes, but I think the long answer is more nuanced. My personal opinion is that artists have to think about sales differently. I think artists have to romance new fans a bit – it’s really kind of like dating. I don’t think going in for the kill immediately makes for the best long-term relationship, you know? I mean, I suppose sometimes that works, but I think a better option for retaining a fan for years, which is much less expensive than finding new fans for every record, is to treat your fans respectfully, offer then what they want, provide them with some free gifts, communicate with them regularly and effectively, and then offer options for monetization. Again, not so different than any other relationship you might have in your personal life. This is the difference – artists now have an option to provide music for free, and engage with their fans in ways that was not quite possible before. I think the new technology / marketing companies that have emerged to foster this relationship have been really helpful.

But to say it simply – I think that providing free music is key to building up your larger community, and I think that in terms of sales, you are going to want to sell a variety of items to your fans from your own site, with the idea that you can sell items that are more personal, and not available in traditional retail. Talk to any of the third party direct to fan companies like Topspin, Nimbit, Pledge Music – they will all tell you that the average revenue per sale is over $20. This is because artists have this relationship that they have built with fans, and they are monetizing much more than a single song on iTunes.

American Songwriter: Should I sell it on iTunes, CDBaby, Spotify? What sort of cut will I get?

Mike King: Yes, absolutely. There are folks that only buy music on iTunes, and are not interested in buying from an artist directly. I think for some larger artists, the volume they see from third party sales on iTunes is much greater than what they will see on their own site, but I think that the margin has the potential to be much greater by selling from your own site. In terms of the cut, every service is different. iTunes takes 30%, and if you use CD Baby as a distributor, they are going to take a 9% fee, too. So for a $.99 cent sale on iTunes, an artist would see about $.63 if they were using CD Baby. TuneCore takes no fee on sales, but has an annual fee for distribution. I consider Spotify now as more of a way for folks to discover music, not unlike radio, and I think that artists have to be there. They certainly don’t pay artists anywhere close to what iTunes pays, but I tend to think that is more because of the deals the labels / distributors made with Spotify than it is an inherent problem with the service itself. I am optimistic that as the service, and other streaming services grow, we’ll see better deals, and larger payments to artists. But I think worse than the lower payments from these streaming services is being anonymous. I have Spotify and Rdio open all day long, and if I hear or read about a new band, I have the option of immediately looking these artists up on a streaming service to check out the whole record. If I fall in love with it, I’ll then check out their site, perhaps download something interesting, and the relationship between the band and me starts. The band now has a direct, permission –based contact with me, and can up sell me on live events or other items. This all starts on Spotify. If I didn’t see the band on a streaming service, I am likely to move on and find some other music to listen to.

American Songwriter: What if only ten people buy it? Will I still get digital royalties? Via Soundchange? How do I protect my recordings?

Mike King: There’s a lot of confusion around how digital royalties work. SoundExchange collects and distributes royalties from statutory licenses, including digital cable and satellite television services, non-interactive webcasters like Pandora, and satellite radio services like Sirius XM. SoundExchange only covers performance rights, and doesn’t collect for downloads, interactive services (like Spotify, Rdio, Mog, Rhapsody), or traditional radio or TV. It really depends on where the “sale” originates to determine how much you will be paid. So, 10 sales on iTunes will pay you much more than 10 listens on Pandora or Spotify, and 10 sales off of your own site has the potential to pay you much more than all of these services. In terms of protection, copyright exists as soon as you have a tangible version of your music, such as sheet music and/or CDs. In the US, you can register the copyright to your music here: www.copyright.gov/eco. I also think that Creative Commons, which sits on top of copyright and reserves some rights, can also be a positive thing for artists who are interested in allowing their fans to participate in their work via remix contests or other forms of “participatory culture,” as Clay Shirky would say.

American Songwriter: Next, how do I get people in the industry to hear it, so I can get a record deal or have it placed in a commercial?

Mike King: You have to build up leverage. I think you can look at some recent success stories to see how other folks have done it, but all paths are different. For the most part, a label is not going to care about you unless you have leverage – unless they see that you have a base of fans that you can leverage to sell your music. Things are much harder for labels now, and while I think some labels can be great for artists, I think that artists should really consider building up their own base, hopefully with a smart in-house team. Once they have some leverage, then can then determine if they want to keep things in-house, or partner with a label. I think Karmin is a good example. Amy, Nick, and their manager Nils focused on creating great content on YouTube for years. They slowly built their base through some really great cover songs, and then did a cover of Chris Brown’s “Look at Me Now,” which exploded with over 30 million views on YouTube in a couple months. They got on the Ellen show, they were featured on Ryan Seacrest show, and built up a huge following on Twitter, Facebook, and via email. This is leverage. The labels saw this, and Karmin had deals with all of the majors on the table in the course of a few weeks. They ended up signing to LA Reid’s Epic sub label on Sony. All paths are different, but I think leverage is a component to whatever you do.

American Songwriter: The response has been great but I haven’t been signed or picked up for a commercial — what’s my next move? Tour? Hire PR?

Mike King: It’s different for everyone. Getting in a commercial is great, but if you are having problems with getting folks interested, perhaps you have to look critically at yourself and see what you can change or do better. There are so many data points musicians can analyze these days, supplied by companies like Next Big Sound, Google, Topspin, and many others. If you are not building up a base online through strategic release of content, if you are not generating interest on your site, if you are not seeing an increase of fans at your live show, I think it makes sense to look at what you are doing from a holistic standpoint. Perhaps your music isn’t there yet. Maybe your live show isn’t quite right. Perhaps you’re marketing to the wrong people. Data can help you to see what is working and what isn’t, and I think you can iterate your campaign and your approach. Also, I think that not everyone is going to make music their full time career. Steve Albini has a good quote that I think is accurate: “Not everyone can become a professional artist. Maintain a realistic perspective on your art that allows you to enjoy doing it.”

I met up with Owain Kelly, the bassist from the band Tigers that Talked, in March at SXSW. Here’s a video the band created during their time in Austin:

Tigers that Talked was a co-winner (along with Sonoio) of Topspin’s grant competition, which I helped judge along with some heavy hitters, like Rick Rubin, Marc Geiger, Richard Jones, Glenn Peoples, and Jennie Smythe. Owain and the band created and executed a compelling new-school music marketing plan, and I thought it might be helpful if I took a minute to lay out some of what this band did, and what they are continuing to do, from a sales and marketing perspective. Most impressive in my opinion was the band’s product and pricing strategy and execution, as well as their approach to PR and overall communications. Check out an interview I did with Owain from a few weeks back:

Band Background

Mike King: Can you talk a little bit about the background of the band, your ideas for the campaign, and what you were trying to accomplish?

Owain Kelly: I got together with Jamie, Chris, and Glenna after graduating from school. We all just kind of came together and we really liked what we were doing, so we went forward with it. We ended up signing to a local independent label. It was great at the time – we recorded the album and the label essentially turned around and said that they couldn’t release it. So we went through the whole process with them and eventually got the rights to the album ourselves, because we were very proud of it and we still wanted to release it.

MK: Were they not releasing it for creative reasons, or were they not releasing it for financial reasons?

OK: I think it was financial reasons. They aren’t even a label anymore. They are still a management company but they aren’t a label anymore. So I just think in the long run, they couldn’t do it. So we had this album that we finally got the rights to and we decided that instead of searching for another label, we could release it ourselves. We really just wanted to get the album out there and heard. You know, it’s the debut album, and a lot of people worked very hard to pull it together. We really just wanted to get it out there, get it sold and heard by people who had actually been waiting for it for quite awhile.

Process: Doing it Yourself with Help

MK: So when you say you put it out there yourself, was it just the four of you that were responsible for all the marketing and sales initiatives, or did you have some other folks that were helping out?

OK: We also have our manager, Ritchie. We had a radio plugger for the campaign but we didn’t have a press plugger. We did all of our press ourselves.

MK: I want to get into what you did with press because I think it’s fascinating, but I’m interested in knowing what else you guys were doing yourselves. Didn’t you also create your website?

OK: Yeah, absolutely. Essentially, the way that came about was another economic restraint. We had this kind of holding page website which we’ve had for years when we first started the band, made by the same guy who did the album artwork. It was a very simple one page that would just redirect you to the label’s website and it would direct you to our MySpace; there were just two links on it. We decided that we needed something a bit more substantial and we just couldn’t afford to go and get someone else to do it. Eventually we kind of talked about it, Ritchie and the four of us, and we agreed, “let’s just go for this and try and do it ourselves.” None of us had any form of web experience, no coding experience; basic Photoshop experience is really all we had. So we did a lot of online tutorials, chatted with friends who do a lot of web design; we just taught ourselves, and it took about a years worth of banging our head against the wall to get something that we were happy with. We kind of succeeded in the primary goal of making a website in about three months, it just took another nine months of honing skills to actually get a decent looking website that we were all happy with.

MK: It’s something that people talk about a lot, the fact that it is difficult to be writing and recording music, producing your own music, and then doing all the marketing yourself. Did you find that you were stretched thin by doing all the press and all the web design and updates?

OK: I have to say, without kind of just wanting to pat them on the back, it genuinely helps to have a service like Topspin involved to help with the direct communication with our fans. It is a lot of work, and it does take up a lot of time, but if you aren’t prepared to do that for your fans, then why are you even bothering to play the music? The fans are there, they want to hear from you, and I think the fans respond differently when they know that you’re making your own website and you’re doing all your own press. The more you can do yourself, the better. It’s really inspiring when you finish something you’ve done on your own, and while it might have taken you slightly longer than it would taken someone else to do it, I think it’s motivating to have a real stake in every aspect of your band as a business. With direct to fan interaction, we are getting the opportunity to tailor make our entire future and to do it in response to the people that are making this happen for us. Of course, there is a really difficult side to all of this, but it’s exciting!

Acquisition and PR Campaign

Email for Media Widget

MK: Can you talk a little bit about the techniques you used to make folks aware of you, and how you acquired permission-based contact with new fans? How did you do this on your own site and on third party sites?

OK: One of the big things we used for the acquisition stage of the campaign was the email for media widget through Topspin. Three weeks before the album came out we created an email for media widget and put it in a really prominently place on our site. The idea was that it was the first thing fans and potential fans saw when they visited the site, and we exchanged a free track for an email address. Kind of simple stuff really. But we also used the email for media widgets in the wild, too. You know, anytime we approached anyone in the press, we tried to hit him or her with the free email for media widgets. If they were going to mention that an album was coming out, we’d ask them to embed the e4m’s as well. And it worked! Using Topspin’s retrieved data we saw that the email for media widget we were using has been viewed almost 14,000 times, and from those views, the e4m was clicked around 1500 times, acquiring more than 900 new emails alone in the process. These are all people that we can connect with for this current record, as well as records down the line.

MK: You also had a dedicated EPK and content page on your site that only press could access, right?

OK: Yeah, we had that as well. That was another thing, the press page that we set up on our site. I mean that again came up quite incidentally, we were just having a conversation and said, “You know what? We’ve got this page for the fans where they arrive on the site and they can instantly go to where we want them to go, so why don’t we make one for press?” So we hid a URL that wasn’t hooked up to our navigation on the actual site, and we embedded the full album, we embedded a link where press could downloaded the full album, downloaded the press release, the bios; everything that actually goes into a normal press release by an email, except that this was a live URL so that they weren’t dealing with an email that just looked like the rest of the other emails. The emails to our targeted press list were very, very short and to the point. We’d send them out and they essentially just had this link in it that said, “if you are interested in this band, here’s a press link” and if they click on that, it would take them to fully dedicated page just for them, complete with a way to contact that management, to contact us, a way to explore the site and download content.


Tigers That Talked Press Page

MK: How did you focus your press outreach?

OK: We did a couple of things. First, we looked at everyone we ever talked to back from the first EP that we released, and we targeted those folks with a really personalized email. It looked a lot less like a press email, and it was from our personal accounts. We’d email these folks and say, “Hey, we’ve got this album coming out. Here’s the album for free with the press download.” This approach was really successful actually, we got some really great blogs that responded well. The second thing we did was that we created our own database from trolling through sites that we liked and pulling out email addresses of writers that we thought might like our music.

MK: Can you talk a little bit about the results? I know you were touring at the time. Were you getting more record release press or tour press?

OK: It was more record release press and we had a few tour presses, mainly for the lead show; we did an album launch show at one of the local venues and we had a few reviewers come down and do that. We also had quite a few interviews – one of the biggest local leads that did a full cover feature on us and did a full length interview. We’ve done some other things with press, like the PRS acoustic session we did and the Amazing Radio acoustic session. I think it’s nice to see the quality of the press hits and the longevity that you can have if you approach your campaign in a personal way.

Sales Strategy:

MK: So you’ve got some momentum with press and live events, you are building up your permission based contacts, and you’re engaging with your fans regularly. Can you talk a little bit about your ideas behind your graduated pricing campaign and your variable product offerings?

OK: Late last year, we released our album, The Merchant on a graduated pricing model. We did a four-week graduated pricing campaign where the price of the record ranged from £1.00 if you purchased early, up to £4.00. So the first week you could get it for £1.00, the second week you could get it for £2.00, third week for £3.00, fourth week for £4.00. We really wanted to reward the fans that had waited months between the recording and the release of the record. We just wanted to make it incredibly cheap so that anyone who was already a fan, who was waiting for it to come out, could get the record for the lowest price possible. Along side of the digital release, we were selling a t-shirt as well as the physical CD. We sold the CD for £5.00 and we sold the t-shirt for £12.00. We also created another bundle, at £15.00, which was all the digital downloads, the CD, and the t-shirt all together.

It was interesting to see that 58% of total revenue from the campaign came from the first week when we were offering a £1.00 digital download, and the average purchase on the site ended up being £4.48. So a lot of fans were buying some of our more expensive items. Overall, 18.3% of purchasers opted for the more expensive options we provided.

We followed The Merchant release with a ‘pay-what-you-want’ EP called Battles, featuring exclusive tracks, remixes and 4 pieces of graphic art we designed ourselves. We offered a variety of suggested donations, from £1.00 up to £25.00. We found that 67.9% of fans opted to pay more than the lowest suggested price of £1.00, while the highest option of £25.00 accounted for 47.5% of our total revenue.


Battles EP Donation Release Strategy

Communication Strategy

MK: Can we talk a little more about how you are communicating with folks? There was obviously some demand for this record, even though there was a while between recording and releasing in. How did you maintain this interest through messaging and communication?

OK: We run our own website, so all the blog posts come from us and we try and write at least one blog a week. We don’t like to bombard fans with emails. We don’t ever want to be an irritation for them so we try to send out about one email to the list maybe once a month. Every month, we’ll send out an email saying what we’ve been up to, what we are going to do next, that kind of thing. Facebook has been a great channel for us as well. We’re on our Facebook page all the time and all the posts on the Facebook come directly from us. We’ve found it to be a great way to have a direct and immediate participatory relationship with our fans.

Our overall strategy is that we’re all music fans at the end of the day, and we know what irritates us and we know what really inspires us, and what captures our imagination, and it’s just a case of looking at that and putting yourself in your fan’s shoes. You know, I wouldn’t want to have an email everyday, not even from my favorite band; barely every week. Once a month with what’s going on is a nice level of email communication. I also think it’s important for us to make sure our fans know that the Facebook and the Twitter posts all come direct from us. They are not talking to a representative or a PR agent; they are getting to hear what we’re actually saying and what were actually doing. It’s just brilliant that there are plenty of mediums now where you can reach your fans so directly.

Check out more on Tigers that Talked here

I had Matt Stine as a student in the inaugural run of my Online Music Marketing with Topspin course, and it’s a thrill to see him put the sales and marketing tactics we discussed in the course into practice with his artist Clinton Curtis. It’s equally thrilling to see his work presented in outlets that I admire, like Mike Masnick’s Techdirt.

I’ve pasted Matt’s guest post in Techdirt below. Congratulations Matt!

Case Study: Clinton Curtis Connects With Fans And Gives Them Good Reasons To Buy His New Album

Ever since Mike Masnick introduced the concept of CwF + RtB, he has been confronted time and time again with the argument that this concept can only work for well-known artists with large established fanbases. And time after time Mike has provided evidence that CwF + RtB can work for any band or musician at any level. Clinton Curtis’ latest release campaign for his new album, 2nd Avenue Ball, is a prime example of how a new artist can use the concepts behind Mike’s formula to build a foundation for a successful career while earning money along the way from a small group of “super” fans.

Clinton Curtis’ 2nd Avenue Ball comes out today, March 22nd but it has been available for Pre-Order since March 1st. My company, 27 Sound, has been responsible for every aspect of the campaign, from producing and recording the music, to designing ClintonCurtis.com to developing the marketing and promotion strategy. Although technically this is Clinton’s second album, Clinton is still very much a new artist, and we treated this latest release as if it was his first. Clinton had been playing a lot of shows locally and regionally over the past year, and acquired a decent amount of email addresses at those shows. We knew that a small percentage of those fans would likely support Clinton going forward. Our goal was to offer something unique to those fans already in Clinton’s network and at the same time create ways for Clinton to connect with potential new fans.

In designing Clinton’s website, we wanted to make sure we were giving Clinton’s fans a reason to return to the site on a regular basis. We created two new elements — CC Radio and CC Connect. CC Radio is essentially a bi-monthly live show, broadcast directly to clintoncurtis.com. Each episode features members of Clinton’s band, guest musicians, friends and even Clinton’s fans, getting together at 27 Sound Studios to perform a solid hour of music. Powered by Ustream, it’s really simple to use, easy to integrate into the website and shareable across all major social networks. In fact, Clinton’s album release party will actually be a CC Radio episode (9:30PM EST tonight, Tuesday March 22nd) which is a much more effective use of time and money than trying to throw a big party at a NYC venue. CC Radio is an exciting way to keep fans coming back to the site and a great way for Clinton to connect directly with his them. It has been a huge success in only it’s first two months. The fans love it, and the easy sharing capability brings more traffic to Clinton’s online store.

Once fans reach Clinton’s Online store we wanted to be sure that we gave them plenty of incentive to buy directly from us. We created CC Connect, Clinton’s “VIP” fan club, to add value to all of our direct-to-fan offerings. Any package purchased through clintoncurtis.com comes bundled with a lifetime membership to CC Connect. CC Connect members get free download packs each month featuring exclusive previously unreleased music, live recordings, studio demos, audio from CC Radio episodes and more. They also get ticket and merch discounts as well as an entire fully-produced album recorded exclusively for CC Connect members each year. By doing this we add a tremendous amount of value to each package we offer through the site, giving fans a good reason to buy.

For 2nd Avenue Ball, we worked hard to come up with a variety of packages that we think will please Clinton’s fans and drive their support. I won’t go into too much detail here on each one, but there are a couple of noteworthy items in the biggest, Super Fan Deluxe Package that I think might interest Techdirt readers.

Each of the 50 Deluxe packages come with gatefold vinyl packaging but the vinyl record inside is not Clinton’s album. We don’t yet have enough demand among Clinton’s fans to warrant manufacturing and selling vinyl, but we wanted to showcase the amazing album artwork we had from an incredible young artist, Matthew Burrows. We planned on putting high quality art prints of his work inside as an insert where the vinyl record would normally go. But then we had the idea to also include an actual LP from Clinton’s personal vinyl collection. Along with the LP, each package comes with a note about what that album meant to Clinton and what significance it had to his musical upbringing. We thought this would be a cool way to make each package completely unique.

Then we thought to return the favor…. If people get a piece of Clinton’s favorite music, we should give them back some of their favorite songs, too. So anyone who orders this package gets an email from Clinton asking for their favorite song, and then Clinton records that song and sends it directly to their inbox. Yes, it will be a lot of work for us to put this together, but it will give each of these 50 fans something special that they really want. And who knows, maybe some great recordings will come of it! (In fact, almost all of these Deluxe packages have sold out at the time of writing this, and the song requests have been really cool, including one person who requested an original song that his 9 year old son wrote.)

These are just a few of the things that are unique about this campaign although there are many others (including the “Turn This CD Into A Coaster” Kit that comes with each disc!). Have a look over at clintoncurtis.com to see the package offers in more detail and explore around the site to see more ways Clinton is actively connecting with his fanbase. I would love to hear people’s thoughts and ideas on what we could be doing better. I always keep reminding our team that this is all an experiment and we need to adapt and change every day as we learn from the feedback we get from our fans. So visit the site and help us out!

I had the opportunity to present at MIDEM in Cannes a couple of weeks ago. Check out a video of my “Direct to Fan: From Foundation to Execution” presentation below. Unfortunately, whomever edited this video cut out my intro – which I delivered in French! I assume my pronunciation was part of the editors decision making process.

I think there’s no debate that a part of the future of music is going to include an access (as opposed to ownership) approach to listening to music. On a large scale, music consumers have always chosen convenience over almost everything else, and the opportunity to listen to as much music as possible, anytime and anywhere, whether connected to the Internet or not, is a compelling proposition. And while I think it’s only a matter of time before Apple gets the licensing together to re-activate some version of LaLa, there are some great services out there in the US and abroad right now that offer a really compelling approach to music in the cloud.

I’ve been checking out Rdio for the past few months, and been really impressed with what they are up to. They have a pretty extensive catalog (made all the more extensive in recent weeks with the addition of the Beggars Group catalog), and interesting social media tools to help with music discovery.

I spoke with Rdio’s CEO, Drew Larner, a couple weeks back about the service. Here’s our conversation:

Mike: Can you tell me a little bit about the background of Rdio, and how you became involved with the company?

Drew: Janus Friis and Niklas Zennstrom, who were the founders of Skype, are the founders of Rdio, and they are the ones who have been funding it for the last two plus years. I met them first in 2000 and started working for them in about 2003, when they were just kind of getting out of the Kazaa phase of their careers. So it was interesting to meet them at that point because I had come from the film business, I had worked in the film industry for twelve years. To meet them with all that was going on – it was an interesting change for me. Shortly thereafter they started Skype, and then Joost, and now Rdio. So they’ve done a lot of things, and I’ve worked with them in fits and starts over all of that period.

Mike: I talk about Rdio in some of my courses, and one question that always comes up is “Okay, Rdio sounds great, but how do I get my music on the service as an independent artist?” Is there an opportunity for folks that are unsigned to get their music on Rdio?

Drew: We don’t have a self-serve option yet. There are aggregators out there that we’re speaking with that effectively provide that service for artists. You know, content aggregation for a service like this, is a long, and I don’t want to say tedious process, because it’s not, it’s an interesting process, but it’s a long process. So to provide a catalog that you are going to charge people for, you are going to need the building blocks, which are obviously the major labels and the major Indies. You get the publishing deals in place and you start adding to the catalog over time. So right now, we’re at seven million plus tracks. Very, very deep catalog. But like you’ve said, there are lots of great indie artists out there who aren’t yet at a label or may never want to go to a label. The paradigm may be changing where they don’t need to sign with a label and you understand that stuff better than I do. As far as marketing directly, we don’t have a self-service option yet and I don’t think it’s in our future over the short-term but I think once we sign with an aggregator that is a more geared towards indie artists, then that would be the way that they can get on Rdio.

Mike: So, from an overview, you are starting with the big guys, which makes sense in trying to get all of the content that the larger population is going to be interested in, and then your going to be moving down the line into working with an aggregator that is more focused on independent artists. Is that accurate?

Drew: No. I mean we’ve already done deals with IODA and some of the bigger Indie aggregators – what I was referring to simply is almost self-serve. So I guess I’d term it non-label indie artists. Those who aren’t signed to any label but are producing music that they want to be distributed. Yeah, we’ll get there.

Mike: Maybe through a partnership with CDBaby or TuneCore.

Drew: Exactly.

Mike: How difficult is it for you to get the licensing deals done right now, as opposed to three years ago? Is there a shift that you are seeing with the majors where they are saying, “Streaming is definitely going to be part of the future and we have to get our content on there?”

Drew: Well, our deals are done. We needed the deals in place before we could launch the service but it is a very good question because it was an iterative process in that, when we started this over two years ago, we were trying to figure out what the right model was. We were looking at companies that were doing ad-based premium type models and personally, because I am the one who was on the hook for defending the model that we choose to my board and my investors, I didn’t really believe in that ad supported model because the ad revenue doesn’t come in at a level that is significant enough to pay for the royalty costs. You know, I come from the content world and I believe content is valuable and needs to be treated as such, so it’s not that the royalty costs are out of line, they are what they are because this stuff is valuable.

So we kind of thought about what kind of model we wanted, and we decided to move towards the subscription model. The majors, as we were negotiating our deals, were moving in that direction as well. There were subscription services out there already, of course, but the functionality in those services are not as robust as they are now. I think the most important change is the offline caching, which if you are using mobile, you are hopefully using a lot because we think that is kind of the light bulb moment. You know, “Wait a second! I can turn my Android phone into a iPod!” You know, “I have a Blackberry and I can play a thousand songs on my Blackberry!” So it creates a single device strategy, and that kind of functionality is something that over the course of the negotiations came into the deal.

Mike: Are there any limitations to how much music you can cache?

Drew: The only real limitations are on the functionality side – what your device storage limit is. If you have a lot of storage on your device, you can store as many songs are you want. On the deal side, once you stop subscribing, your music is no longer available. But that’s the concept of moving, in terms of the model, from an ownership model to an access model. Meaning that you don’t need to physically purchase every song because they are all there. Why would you need to purchase anymore when you have access to everything?

Mike: Are there any other major partnerships that are on the horizon for Rdio that people can look towards in 2011 that you can talk about?

Drew: On the content side?

Mike: Yes.

Drew: We’re doing deals all the time. While we do have some announcements coming, my PR people would get pissed at me if I blew the lid off. So there is nothing specific I can speak to, but I can promise that stuff is coming. Again, it’s a process where you get those cornerstone building blocks that everybody needs for service, and from there you start adding more and more interesting elements. Whether its world music or classical music or additional deeper jazz – it’s a process! We have someone in-house who is very good and very savvy, and she is just continually doing deals. It’s just that it’s time consuming.

Mike: I was really pleased to see the Beggars Group up there.

Drew: I would agree. I’m very, very excited that Beggars is on there and by extension now, the Arcade Fire. It’s very important to have that extensive catalog.

Mike: Can you speak a little bit to the social component of Rdio and music discovery using the service?

Drew: We keep pushing new updates to the clients constantly and just keep making it a better experience in terms of finding new people to follow and giving you more information as far as new music and music that we think you would like, that we believe is unique and based on people rather than algorithms. Now we do have an algorithmic approach, I don’t know if you checked out the radio that we have? So for me, I like that because I am more of a passive listening guy. If I want to listen to Wilco, I can create a fantastic play list with Wilco, the Jayhawks, and Son Volt; that does it for me. Other people want a more core discovery experience, so we’re constantly updating and making it better, but social is really the core to our DNA. The fact is music brings people together. Music is a social conversation and that sense of community is what we really built this service around, and we believe that this differentiates us from the other services in the marketplace. We believe we’ve created a way to accurately & interestingly filter all that music to give users an experience where, instead of just a static search and play where you need to know what you want to listen to, you can come back to Rdio not just everyday but every hour and you will see new stuff! That we really believe is unique and creates a great experience.

Mike: Are you working with a third party like The Echo Nest here in Somerville for your radio algorithm, or is that homegrown?

Drew: It’s homegrown. We’re all in-house, everything is built in house. We don’t outsource, we really have a fantastic engineering and design team, and you’ve seen the result of it. It’s in-house.

One of the online sales techniques I’ve been advocating in my online courses is for artists to create different physical and digital products and make them available on their own site at tiered price points. The idea is that you can offer something for all of your fans – the hard core fans might be interested in something from you that is a little more personalized and rare, and newer fans might be able to get something from you that wont break the bank. All the while you have the ability to offer something that cannot be purchased at traditional retail, which makes the experience of purchasing off of your site more rewarding for your fans. Here’s an example from the Yim Yames site:

Determining what you offer – and at what price point – is an art that takes into account a number of factors. For example, if the goal of your campaign is to expose your music to as many folks as possible, you’ll want to price some of your items lower and take a lower margin per unit. You’ll also want to take into account what unique items your specific psychographic would respond to the best. If you’ve determined that one of the psychographic traits your community shares with you is a love for vegetarian food, you might want to create a downloadable PDF vegetarian cookbook for your fans as a value add (similar to what Jonsi and Alex did for their fans).

Another important factor in creating an effective product and pricing plan is to use data to determine what options might create the best result for you; which brings me to the point of my post.

John Grubber turned me onto a fantastic post written a few weeks ago by Craig Mod, describing how he and Ashley Rawlings used the fundraising website Kickstarter to self publish a book by generating $24,000 in 30 days. The entire post is well worth reading, and although Craig and Ashley’s goal was to generate funding for their book, I think there’s a lot of similarities between his execution on Kickstarter and the execution of a successful music-focused DTF sales campaign on your own site.

Once Craig and Ashley had determined the overall goal of their campaign – to sell enough books to generate a return substantial enough to further expand their existing or similar publishing endeavors – their next step was to figure out what their strategy would be for the pledge tier offerings. WIth Kickstarter, people pledge a pre-determined amount of money towards a project on a tiered basis, and get something tangible in return, once the project is funded. Kickstarter’s tiered pledge functionality is not dissimilar to what a musician would offer for sale on their own site to their fans.

What was really interesting to me about what Craig and Ashley did for their book project was that they looked at the top 30 grossing Kickstarter campaign to determine the most successful tiers of pledges. This provided Craig with data that he could use, in his words, to “look for a balance between number of pledges and overall percentage contribution of funds.” Take a look at his graph below:

Chris’ analysis of this data is spot in, and I’d like to quote his thoughts from his blog, here:

This data is, of course, hardly perfect (for example, not every project I looked at used the same tiers). But it’s good enough to give us a sense of what price ranges people are comfortable with.

The $50 tier dominates, bringing in almost 25% of all earning. Surprisingly, $100 is a not too distant second at 16%. $25 brings in a healthy chunk too, but the overwhelming conclusion from this data is that people don’t mind paying $50 or more for a project they love.

It’s also worth contemplating going well beyond $100 into the $250 and $500 tiers: they scored relatively high pledging rates compared to other expensive tiers.

The lower tiers — less than $25 — are so statistically insignificant (barely bringing in a combined 5% of all pledges) that I recommend avoiding them. Of course this depends on your project — perhaps there’s a very good reason for a $5 tier. More importantly, this data shows that people like paying $25.

Having too many tiers is very likely to put off supporters. I’ve seen projects with dozens of tiers. Please don’t do this. People want to give you money. Don’t place them in a paradox of choice scenario! Keep it simple. I’d say that anything more than five realistic tiers is too many.

The overall results that Craig outlines above are generally similar for musicians who offer a range of products at tiered pricing levels on their own site. While I do think that offerings of less than $25 do make sense for most musicians, Craig’s overall idea of not providing too many low cost items make sense. For example, I’ve spoken to a number of my students and other artists that are interested in offering $1.00 singles off of their site. While this is possible to do, providing a lower revenue option like that tends to incentivize potential curious fans downward, as opposed to incentivizing folks to purchase a higher priced option.

Based on the data that Craig obtained from past Kickstarter campaigns, he created the following pledge tiers:

Lastly, Craig and Ashley engaged in a wonderful online promotional campaign that focused on their permission based social medial digital touchpoints, as well as key design blogs and magazine sites that were completely in target with their psychographic and demographic. They focused their messaging campaign using Twitter and Facebook (their messaging was relevant and minimal, too), as well as their own mailing list.
Craig and Ashley had build up an extensive mailing list of design and art world over the past 6 years, which they leveraged nicely. Take a look at the timing of their targeted email campaigns, and the results:

Example of the artwork that was used for the email:

Perhaps most impressive was Craig’s outreach strategy to the blogs that he felt were a laser shot target for what he was doing with this project, and his method of communication to them. He was not focused on quantity of external outreach – he was more interested in the quality of the blogs he did focus on. Again, this is fundamental marketing strategy that all artists could use to their benefit. Again, in Craig’s words:

“I’m writing to blogs that I’ve been reading for years, so for me, referencing older posts of theirs and personalizing these emails is trivial, and fun. Whatever you do, don’t send scattershot emails to media outlets. Be thoughtful. The goal is to appeal to editors and public voices of communities that may have an interest in your work, not spam every big-name blog. A single post from the right blog is 1000% more useful than ten posts from high-traffic but off-topic blogs. You want engaged users, not just eyeballs!”

Here’s his PR results on the project:

While we’re not talking apples to apples between what Craig and Ashley did with their book campaign and an online DTF music campaign, many of the best practices that Craig and Ashely employed in this campaign, from the data analysis they used, to their communication techniques are exactly what independent musicians should be focused on when they engage in online direct to fan sales and marketing campaigns.

Some succinct thoughts in this interview from the guitar player in Radiohead who is not named Jonny Greenwood or Thom Yorke. Ed makes two good points in here, when talking about the physical release of In Rainbows. My paraphrase:

A) consumers are set in their ways, and if you are not making your product available in all formats (and stores) you are limiting your pool of potential consumers (as well as leaving money on the table). It’s a great point, and something artists need to consider on a large scale (whether to release digital only vs physical and digital) as well on a micro level (releasing music to 3rd party streaming retailers with lower pay rates, vs releasing only to higher paying permanent download options like iTunes and Amazonmp3).

B) artists need an “equitable, fair, and balanced relationship” with whomever they decide to work with to help them market and sell their music. This goes for labels, or any other artists service based company. As Ed says, many label deals are “an analog model in a digital era.”

Watch the full interview here, courtesy of paidcontent.co.uk

Ed O'Brien

Don Passman is an entertainment lawyer who has represented some musical titans, including R.E.M.,Tom Waits, Tina Turner, Quincy Jones, Green Day, Bonnie Raitt and many more. He’s also an author who has written one of the most thorough and practical guides to understanding the music industry. All You Need To Know About The Music Business is now in its 7th edition, and I had the good fortune of connecting with Don to discuss his thoughts on 360 deals, direct to fan options, file sharing, and the current state of the music business.

Congratulations on your revised and updated book! What do you see as being the most significant changes in the record business since the book first came out twenty years ago?

Well, there’s no more vinyl…[laughs]. In the record biz the changes have been profound. The record companies have gone from being incredibly powerful players to still powerful, but not nearly as much as they were. The biggest change is of course piracy, which devastated record company revenue. The record business has gone through such a hard period because it is difficult to compete with free. The record companies have been blamed for being asleep at the switch. They could have probably done more than they really did–although there wasn’t much anybody could do even with a rear view in the mirror.

Speaking of revenue, the 360 deals are certainly a way for labels to engage in other revenue streams, but are 360 deals a good option for artists? Is that something that an artist should be interested in if they are going to be signing to a label?

Whether they are interested in it or not, if they’re going to sign with a major or even an independent, they will have to make one of these deals as none of these companies will sign them without it. The labels are essentially trying to position themselves as branding companies, and are saying that they are not just a record company; i.e. we’re people that are investing in your career, we’re going to help you build your brand, and when you get benefits from that brand we should share in them.

This seems like a contradiction to me. The majors have downsized over the past few years, they have fewer resources, yet they are promising more with the 360 deals. Can they deliver?

No. In fact, they quit making promises a while ago. They started out by saying they would give you more attention, that they would give you a better record deal if you gave them 360 rights. They wanted the 360 rights to hedge their bet. That’s all gone. Now it’s just a record deal that looks pretty much like a stand-alone.

Are you saying that if you provide a label with the rights to merchandising, touring, or publishing there is no guarantee they will provide any marketing support to help increase these sources of revenue?

Correct. There are two kinds of 360 rights, active and passive. Some of the labels are actually taking the merchandising rights to manufacture and exploit, some the publishing rights, and others are just taking a part of income–meaning that you make your own deals for a piece of the pie. In the situations where they have a merchandising company, they are of course going to give you those services. They’ll do the manufacturing, the distribution, and the marketing. If they have a passive interest, however, they’re not really going to do anything.

That sounds like a pretty tough deal for artists. In the past, the only possible option was to work with a major label to get worldwide distribution, marketing support, tour support and more. Do you think that now is a good time for artists to be working with independent labels, which might be less constrained by the concept of multiple rights deals?

Well, the independent labels have gotten just as aggressive as the majors in terms of 360 rights. So you don’t actually get much comfort by going to an indie label. You may make a better deal, but they are still going to want the 360 rights as well.

Do you think it would make sense for a developing artist to switch their focus away from labels and instead try to market and sell themselves with the help of partners like an indie PR firm, a low-cost online distributor, or another artist service-based company?

It depends on what kind of artist you are. Nobody that is mainstream and wants to sell a multi- million release has done it yet without a label behind. That may change. But that is where we are today, Nov. 2nd. If you are an indie artist that has a niche market and a cult following, and you are content to stay there, then you can do just fine without a label. You can sell directly to your fans, you will know who they are, and you will have control of your marketing database. Anywhere in between, the answer is a little bit trickier. You’re better off economically on a per unit basis doing it yourself, because you can make so much more if you keep the 360 rights. But the question is: Will you sell enough going through a label to make up the difference? This is of course unknowable. It is easy to sign up on MySpace, use Tunecore, or have someone distribute your music digitally (or even do physical distribution). The problem is everyone can do that too. There’s no barrier to entry, and there are four million bands in MySpace. How do you break through the noise? That is essentially what record companies help you do.

France is adopting the so-called ‘three-strikes’ law, where Internet users could face a suspension of their services for sharing files. Britain might go the same way. Do you think that this is an effective way to fight file sharing?

It is certainly better than what we have right now. Presently, there is no consequence to infringers, really—there have been consequences for a few people here and there, but for the most part file sharing is rampant. So, I’m in favor of anything that makes piracy more difficult. But I also think it has to be coupled with something that people actually want, which we haven’t done a good job of providing yet. And by the way, that is not completely the industry’s fault. A lot of it is technological. There are limits to what [the record companies] can deliver today.

Do you think that technology will develop to the point where piracy might stop being an issue? I am thinking of the new Spotify model, where the idea is for premium users to pay a subscription to effectively have “anytime, anywhere” music with the inclusion of a smartphone app. It seems to me that offering a legal and more convenient option for fans to get music might be a better route than cutting off their Internet service.

Yes, if we offer something people really want. In that case, I think we can ‘conscript’ the pirates. There will always be piracy. Every business, from grocery stores to anybody else has some kind of theft. But it is minimal. In music, it is rampant. If we come up with something that is easy to use and readily accessible and cross-platform, I think we’ll have something that people will really want and should be able to monetize. It could be very good for new bands, because people who would never buy at a record store may now be willing to pay for music.

As traditional CD sales drop, are new income sources—such as video streaming services and the like—showing promise as alternatives to recorded music sales?

Well, none of that means much now. The revenues from videos are relatively modest when spread out, at least on an ad-supported model, because videos haven’t worked very well. It is hard to tie advertisers to a specific video and the advertisers are not willing to pay much for it anyway. This may change, but at the moment such revenue has not amounted to much. The same applies to cell phones. In the future, more things will be possible, but as yet there are relatively few options.

After years of contention, rights holders and commercial webcasters have agreed on pricing terms for online music streams; the prices will stay in place until at least 2014. In the updated edition of your book, you refer to the Copyright Royalty Board and this recent agreement. How does this change the playing field for consumers and artists?

It doesn’t change anything for consumers and artists. It really has to do with an alternative break in the statutory rate for webcasters, who were complaining that it was so expensive they couldn’t do it. So they came up with a private settlement, affordable to most, that makes the cost a bit less. So I think it would help consumers in the sense that there would hopefully be more services available that would cheaper. But otherwise, it’s not a direct impact.

In the new edition of your book, you also talk about P&D and ‘upstream’ deals. Could you discuss some of the options independent labels have if they chose to join forces with major distributors and labels?

A P&D deal works fine except that it is very risky and you are taking the risk of the manufacturing and the returns coming back. It can be expensive, but when it works you make far more per record. The upstream deals are deals that kick-in after a certain critical mass [of sales] is reached. Then, you no longer have a P&D deal, but a profit sharing deal. You are not taking any financial risk, and the major label takes over the cost of marketing, promotion, and so forth. Again, you make less, but presumably they take it to another level. Some of these deals have worked pretty well, but a lot of them haven’t, so it is not clear where the advantage lies. You may be better off or not. Just keep the P&D deal, and if it really works then your label will have more leverage to go out and make a better arrangement with the distributor.

At what point should an independent label think about a P&D deal? What should they have going before they even consider a P&D?

Product… [laughs]. You can make a P&D deal at any time. You just need to know that you are taking a pretty big risk with it. Maybe that’s all you can get, because nobody will give you any money, so they’ll only press and distribute the records. But that’s probably the deal you will end up having to make to get things going at the beginning, when you have no kind of track record or buzz.

It’s likely that you’ve heard of Jonathan Coulton. Profiled by NPR and the New York Times, Coulton has been a full time independent musician since he quit his computer programming gig in 2005. After initiating an ambitious project of releasing a new song a week, Coulton started to gain momentum, making what he described as “a reasonable middle-class living” — between $3,000 and $5,000 a month — by selling CDs and digital downloads of his work on his own site and iTunes.

Coulton is prolific in his conversations with his fans online, spending time each day personally answering every email he receives. While his direct to fan approach to sales and marketing includes a partnership with CD Baby (who warehouse and ship his physical CD, as well as get his music to the online retailers like iTunes and Amazon), Coulton’s most lucrative source of income is selling online from his Website.

Check out an audio interview that Scott Kirsner, author of the new book, Fans, Friends & Followers, did with Jonathan Coulton. Interesting ideas on communicating with fans, how Jonathan is using Creative Commons, his primary sources of revenue, his trepidation about signing to a label, and more.

Pay particular attention to Coulton’s recipe for success:

• Solo artist = low overhead when touring
• Records in a home studio = low production costs
• Distributes most of his music digitally = no co-op fees at retail, lower distribution fee
• Fosters a direct connection to his fans = fans are more emotionally involved in what he does
• Few middlemen involved in the chain = most of his income is his alone

Check out the audio interview here: