I participated in a panel at MIT a couple weeks back, discussing the future of music with some folks I have a ton of respect for: Nancy Baym (University of Kansas), João Brasil (Brazilian artist), Chuck Fromm (Worship Leader Media), Erin McKeown (musical artist and fellow with the Berkman Center for Internet and Society at Harvard University) and Brian Whitman (The Echo Nest).  The Futures of Entertainment folks just made the video available. It’s long (two hours!) but I think we covered a fair amount of ground without getting boring.

Check it out:

MIT Tech TV

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 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.

Gail Zappa, daughter of a rocket scientist, mother of Moon, Dweezil, Ahmet and Diva Zappa, was married to the legendary composer Frank Zappa for more than 25 years. Since Frank Zappa’s death in 1993, she has overseen the release of his recordings, including many previously unavailable works, under the Zappa Family Trust.

I had the great pleasure of speaking with Gail recently about a number of topics, including copyright, offering Frank’s music direct to fans on www.zappa.com, and her opinion of third party online retail.

Mike: Can you talk a little bit about the process for choosing the material you and Joe Travers release from the vault?

Gail: Well, I think Joe has a very different process than mine. He’s a fan, which he has been since he was very young, long before we ever met him. First of all, he realizes that he gets to listen to stuff that no one else will ever hear in some cases. So that’s a very attractive part of the job for him and sad at the same time. He’s also interested in finding the source material that Frank used, in finding all of the bits and pieces. Or if he hears about a legendary project, he’ll work on reconstituting it because some of the ingredients of the sauce are missing. So there is a search and seizure part of it that he is always actively engaged in so when he goes into the vault, he usually has a motive; I don’t. That’s the difference; he’s looking for something in particular, usually. The collaboration happens when…. Oh what just happened recently? We sat down (in his office) and I said, “Joe, I need a really good concert and it has to be English. It has to be from Britain” and he said, “OK!” So he knows right where to go because he’s been through there so many times, that he knows. He says, “I think I know some choices” and he makes a selection based on that and then we find out, we’re not covered for a whole concert but we’re covered for several dates at the same time, so that we can pick and choose in terms of the performances. Sometimes you get a concert and that’s it; it’s a one shot deal and you have to go warts & all with what you’ve got and you don’t have the coverage. So, in that case, we’ve gone to fans and gotten bootleg recordings to fill in the blanks when the tape ran out and the reel didn’t get changed fast enough. So you can start with that or you can go to “well, we did several shows in this location over a period of time;” say three Halloween dates in New York. Then you can make one show from all three sources; that’s a different kind of an event. For me, the rule of thumb is, we are not making a Frank Zappa recording in terms of how its produced, but we are making a record from recordings made by Frank; that’s the big difference. There are two of us and that means there’s four feet and there is no way that they are going to fit in those two shoes.

Mike: Are you or Joe releasing material from the vault based on fan demand?

Gail: No. We’ve been releasing things based on what we think is a good thing to release. Joe makes classic arguments over and over again for releasing certain types of things that he’s knows the fans are interested in and those arguments that he makes influence some of the releases, in terms of what the contents might be; I certainly consider his opinion absolutely but my first obligation to Frank is to educate. First, you have to have a context in which you can release these things. For me, I can’t just put out a record and not have some background to it. Recently, we put out The Torture Never Stops as a DVD and this was made as a television show, because Frank had an idea that this would work on TV but this was very early on and nobody (in broadcasting) wanted to see these crazy edits that he was doing so there was a lot of resistance. So the concert, in different forms, ended up on USA Network and on MTV but Frank’s version which he created as a television special, was one particular thing that he put together himself. So my obligation, I feel, to the audience is to put out first what Frank created and then I can go back and take all of that footage, which we intended to do and are in the process of working on, and remix it in surround and put out the whole of the concert series in a big package down the road. But first, you have to see what Frank’s intention was and then you can go back to other opportunities where you can have your way with the material.

Mike: You released the MOFO Project/Object in 2006, and put in the names of anyone who pre-ordered the record into the liner notes of the release. I talk a lot about the importance of artists’ personalizing packages for their fans for direct sales off of their web site, as it helps to build the artist/fan connection. Was that part of the idea with MOFO? How did you come up with it in the first place?

Gail: We had actually done that as an experiment, when we put out our first concert release. I wasn’t sure how the audience would respond and it was FZ:OZ and we put everybody’s name on that, who ordered it in advance, because I wasn’t sure if we were going to be able to make it happen. So the pre-orders gave us an opportunity to see that we could actually manufacture the way we wanted to. I have always felt very strongly about the packaging; I always have. That started with Frank, so even in the face of economic disaster in the industry and digital downloads, I still believe in the physical package. So we had already done that, but the main inspiration for adding people’s names into MOFO, the special edition, was because Frank had listed the names of people who helped to influence that music, in Freak Out. So I felt that for the people, for whom the music exists, and they are going to support it early in, you can have your name and your credit on this too because you deserve it! It wasn’t anything to do, really, with being interactive on the site.

Mike: I know that you area selling a few digital releases of Frank’s music off of your own site, and that there is very little available on iTunes. Is that because you feel strongly about the packaging? Can you talk a little bit about why a lot of Frank’s music isn’t on third-party digital sites?

Gail: Ok, this is a very big answer to what seems to be a pretty straightforward question. First of all, what the studio audience doesn’t know and what’s behind the curtain, is that there is a lawsuit where certain parties are claiming many rights, digital rights being among them. I can tell you, absolutely, that it was never Frank Zappa’s intention that anyone would control the digital rights of his music other than his heirs, so its not anything he ever told me to sell. The fact of the matter is he published a paper on how music would be delivered in the future in 1983 and copyrighted it and just bemoaned the fact that he didn’t have the budget to hire programmers to make that happen. So he was way out there and he certainly knew. Although the term “digital rights”, at the time of his death and the time of the sale, didn’t exist, that doesn’t mean that he wasn’t thinking about them and planning ahead for what would best serve the value of the copyrights that remained with me. So he was thinking about his family at the time and he wanted to protect those rights. That’s part A. Part B is that I am not a fan of iTunes. I am not a fan of their growth through their overbearing means by which they have a reduced value of music. First, they taught everyone how to steal it and then they said,” Oops, sorry here’s how you can pay for it really cheap!” So you know, I’m not a fan of that and I’m not a fan of price-fixing, which is something they do. You don’t have a lot of choice in what you can offer and how you can offer it. I mean they just have rules and I understand that it is probably just a by-product of some of their programming issues but there should be other choices. I believe that the future is that there will be other choices and they will be on every artists own fan site or a conglomerate consortium of artists’ fan sites that’s not controlled by an outside party that does not respect artist’s rights. The part C of this answer, is that up until fairly recently and even still today, the sounds are massively compressed, they are not the way the artist intended them to be presented to an audience for an audiophile experience. So there was a reason for me to engage in that. Now I don’t care so much about Beat the Boots on iTunes because that’s not a recording made by Frank Zappa. Those are bootlegs as opposed to counterfeits.

Mike: I know that the releases you are selling off of Zappa.com are at a higher bit rate. Can you envision down the line that you would be releasing some of Frank’s catalog at lossless quality off of Zappa.com?

Gail: Yes

Mike: How are you working to expose new listeners to Frank’s music? If a lot of Frank’s catalog is unavailable digitally, and physical retail is cutting back with their inventory, what other ways are you working to expose potential fans to Frank’s music?

Gail: In an ideal situation, I would be able to have more participation in the original catalog than I do right now, and that may yet happen in the next few months. If it does, then you will see a very big change. For me, any kind of release that we get out there helps to sell everything. I mean, people think I’ve planned, perhaps with Dweezil, how to do this and Dweezil has certainly contributed to introducing music to a younger audience, for the most part, so that already exists. I get letters from people that are fourteen or under all the time that are interested in the music. The problem is, is that you are fighting a huge battle. It’s great that Dweezil is out there performing the music because the saddest part is that he comes closest to having produced the band that I think Frank would’ve actually hired himself, including Dweezil on “stunt guitar”. That would have been ideal, but there’s nothing else out there that touches that band, in terms of Dweezil’s intention with respect to what he is trying to accomplish with musicians of that caliber.

Mike: I saw them two years back in Boston with Steve Vai and they were just great…

Gail: Yeah, but that was back when everyone believed that you had to have former members of the band. With all due respect, you know, we love Steve Vai – but here’s a disappointment that I have to say fairly regularly, and that is that Frank’s agenda was to educate because when you educate the audience, you give them the opportunity to experience a wide variety of musical entertainment. Now I can’t do that as well as Frank because I’m not in a band. I mean, on stage, he would introduce Stravinsky, Varèse, and Bartok, you know, all sorts of composers and lots of R&B music that he loved when he was a kid and he went out of his way to make sure people heard those sounds and heard that music. It wasn’t so important from them to know who the composer was until he did interviews; you don’t have to announce it on stage because then people don’t really pay attention. The fact is that their ears are being trained; I can’t do the ear training that Frank did but I can constantly reinforce the idea that there is a basis; there is a history behind all of this stuff. It’s based in intention; the composer’s intent is everything. So you can’t just have somebody interpret Frank’s music because in many cases it’s no different than identity theft or character assassination. When people just take it into their own hands and arrange it without getting permission and do terrible things to it that were never intended – because for them it’s easier to play that way. So I feel that I have a really strong contract with Frank Zappa to get that music out there the way that he intended it and that’s the other part of how the releases work.
But, getting back to the disappointing aspect. For me it is that there are all these people that worked under Frank’s baton and not one of them does covers. You know, you would think that somebody would think it’d be a great idea to do a cover version. I’d love to license Frank’s music but it’s just so inappropriate to license classics in so many ways because they were never written or intended for, especially not those performances, they were never intended for commercial exploitation. If people did covers though, I could certainly consider licensing those if they were something that I thought was sincere and represented the intent of the composer.

Mike: Could you give me an example of something that you would be interested in licensing?

Gail: Well, for example, I get a billion requests for “Willy the Pimp,” but there is no way that I am going to let that go out there unless I had some other version because I don’t think that it is right to exploit Frank’s particular statement and that actual recording. I mean a lot of these records were made back in the day, where these studios themselves were instruments in the hands of the composer and that’s no longer true. Everybody works out of a box now that you plug in. Back in the day, the studio was one of the actual instruments and controlling what you could do in a studio gave you as many opportunities in terms of the sounds that you could get as any other instrument. So a studio in the hands of a skilled composer is a whole other animal.

Mike: I read an interview you did where you had this great quote, “my job is to make sure that Frank Zappa has the last word in terms of anybody’s idea of who he is and his actual last word is his music.” What does that mean in terms of your opinion of copyright as it relates to Frank Zappa?

Gail: Well, I think that every person who creates anything in the realm of intellectual property is protected under the Constitution of the United States of America, because that’s what copyright law is. I didn’t invent it. I’m not the bad (or good) guy that said this is how it’s supposed to go. There’s a reason for copyrights to exist because they actually are proof and a working version of the ideas of those people, at this time and this place and I like that idea. The more freedom there is to express these ideas, the better off we all are and that’s the reason why I also love and enjoy the Bill of Rights. However, when you consider the means by which other people are trying to take copyright law and try to take it apart at the seams, they’re doing it by misinformation. It’s disinformation basically. If you want to start a war and pretend that somebody took the first shot, you use disinformation as we’ve seen in the past, to make that happen. This is war against artist rights and I think that it is not a very good idea, in this day and age, to introduce any kind of arts programming, in terms of educational programs, without introducing also the means by which you protect your rights. It’s no different than a signature at the end of the day. It’s like this, if somebody is a Muslim or a Christian, do they have the right to make you be one by voting, by majority vote? No, that’s clearly not the American way and it’s the same with copyrights. If you want to give your music away for free, that doesn’t mean you get to join a group that’s going to take apart everyone else’s rights just because that’s what you believe. You have a choice. Go ahead. Give it away. If you think that that’s the best way to market your music, by never being able to earn a living from doing that, great. Join that fabulous club and enjoy.

Mike: Any other thoughts on the state of the music industry, and ideas on how to move ahead as an artist?

Gail: Mostly, the business of music these days is a popularity contest and it’s the ability of some performer, primarily, to capture the attention of an audience and expand on that. I think as a musician/composer, you can’t look at that as competition. I mean this industry was bound to implode on itself because it’s like any other. Once the distributors are more famous than any artists they distribute, you’ve got a problem because there’s a lot of money going in to support that structure that shouldn’t be in their pockets. You know, its like if an agency is more famous that the actors it represents, in the public’s mind, you can see how that’s a problem. Well that’s what happened to the record companies too, in many ways. The real issue for artists to consider is there are so many times where decisions are being made about your rights and people who are not even including you in the conversation are taking them away from you. A perfect example of that are record ratings. The RIAA bent over and gave away rights that belong to the artists because they wanted their special pay tax bill. We’re about to put out a release so you’ll see that, Frank’s testimony on the issue, but it’s a perfect example of the fact that artist’s aren’t at the table; they aren’t represented. So I would say to any artist that wants to make a living on what he does, the first thing is: don’t stop doing what you are doing. The second rule is keep on doing it. The third rule is get a very long-range plan and stick to it. You’ve got to use the force of your imagination harnessing the force of your will and once you put the two of those things together and you have a clear picture of what it is that your trying to do as an artist, it doesn’t matter how you change your path in terms of how you accomplish your goals but you just have to keep on doing it and don’t let anybody get in your way by telling you that your work is not valuable. Invest in yourself even if no one else does, because that is the only way that you are going to survive. You’ll find ways; first of all, there is no competition for what you do. Absolutely none, anywhere. It is hard to get peoples’ attention but it happens if you work at it! If you do nothing, it won’t happen. That’s for damn sure!

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.

I wrote a course for Berkleemusic called Online Music Marketing with Topspin, which starts this Monday, June 28.

My friend Peter Brambl at Topspin put together a post that details a few examples of the work some of the course graduates have been involved in. Take a look:


Crush Luther

Sheila Hash has been using Topspin to set up what she calls “The Living Room Sessions” for artist Crush Luther.  “Basically, you can request the band play your living room,” says Shelia.  “You need to send pictures of the space and guarantee that at least 20 people will show up. We set up a private ticket link on Topspin and every ticket purchase gets a hard copy of the album upon arrival to the show. It’s been highly successful and the band is booked at various houses throughout the summer. They love it because it’s much more intimate and interactive than a regular show. “
http://www.crushluther.com/


Jonesez

Annmarie McMath is kickstarting a fan acquisition project for artist Jonesez.  “The course was instrumental in not only honing my online marketing skills but educating my artist on best practices for social media marketing and direct-to-fan initiatives,” says Annmarie.  “We have had a steady intake of sign ups, and social media interaction is increasing. We have received a stack of great feedback from fans, musicians and others in the industry..and of course the widgets and music players have been a hit too. Thanks Topspin & Berklee.”
http://www.jonesez.com.au


Brandon Hines

Dan Conway is applying his marketing skills to student projects at Drexel University as well as his own record imprint:  “With our latest release on Drexel’s student run record label (called MAD Dragon Records), we utilized Topspin in creating a new website for the band (streaming player, mailing list, store functionality, etc.) as well as marketing the album using techniques covered in the course. Next year, I plan on incorporating Topspin into the everyday classroom through courses like Marketing and Promotion in the Music Industry and E-commerce in the Music Industry. I will also use it as our direct to fan platform for every Drexel released artist.  Along with my work at the university, I have applied the knowledge at my own record label, Revel Music Group. We used Topspin to release a free promotional “mixtape” for an R&B artist, Brandon Hines, that we have signed. We were able to grow his mailing list from 0 to over 5,300 in a few months (and still acquiring an additional 100 per week) using the email for media widget to exchange 10 free tracks for an email address. We continue to view Topspin as a large piece of the puzzle in both our distribution and marketing strategy and plan to incorporate it into all future releases.
http://maddragon.ning.com/
http://brandonhinesmusic.com/


Soul Mekanik

Ian Clifford is applying the best practices from the course to the marketing of online stores for artist Soul Mekanik. “I had some internet marketing experience already, but I had never applied it in an indie basis,” says Ian. “I learned about the process from the course. In six weeks we have added 600 fans to the email list.”
http://www.soulmekanik.com

Sign up for Online Music Marketing with Topspin, get your own hands dirty with the tools, and send me your success stories to feature next term!

I feel like I owe an apology for the lack of activity on my blog lately. While I’ve been better about keeping up with Twitter, I’ve definitely let the posts slip here. A resolution of mine for 2010 is to get back on the horse and get the posting schedule back on track. Not that it is any excuse, but I’ve been particularly busy with creating content in a couple of other ways. Here’s what I have been up to over the past few months.

I’ve written two new marketing courses that are enrolling now for Berkleemusic’s next term, starting January 11th. As I have mentioned on this blog before, Online Music Marketing with Topspin (co-authored by Topspin’s Shamal Ranasinghe) will teach you how to use Topspin’s unique marketing, management, and content distribution platform to help you market and retail direct to your fans. In the course, students will develop the in-depth marketing expertise necessary to properly execute a successful sales and marketing campaign using Topspin. You can watch some videos of Topspin’s CEO Ian Rogers and myself talking about online marketing and the course here.

I also just finished a second online music marketing course called Online Music Marketing: Campaign Strategies, Social Media, and Digital Distribution. This course covers some key areas that all marketers need to focus on, such as social media marketing, effective use of data to direct you campaigns, what partners you should be aware of, and much more. By the end you’ll have a fully timed, integrated, and optimized online marketing plan that you can use to generate interest in your music, acquire new fans, and sell your music online. It’s a great companion course to Music Marketing: Press, Promotion, Distribution, and Retail, with a greater focus on the online side of marketing.

Finally, the companion book to Music Marketing: Press, Promotion, Distribution, and Retail is done and available. The book contains additional interviews and content which complements the online course of the same name. I’m giving away a free chapter and selling the book on a discount here if you’d like to check it out.

That’s all from me. I wish you the best in 2010!

Here’s a video of me talking about the new Online Music Marketing: Campaign Strategies, Social Media, and Digital Distribution course:

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.

If you’ve been following my blog, you might be aware that I am a fan of artists and managers A) starting off by doing what they can themselves to help market and sell their own music, and B) seeking out partnerships with companies that can help them to do more than they are able to do themselves, for a fair price, and C) building up, communicating, and monetizing their own list in a meaningful way, using best practices with direct-to-fan marketing. I think direct-to-fan not only has the potential of generating more margin for artists now, but if done properly, DTF (direct-to-fan) can also help to ensure that artists are building a passionate base for the future. It’s not the only marketing segment that matters, but it is a segment that all musicians and managers should be paying close attention to, and integrating into their other traditional marketing and sales campaigns.

I’ve been working with Shamal, Gary, Ian, Adam and others at Topspin for the past 8 months or so creating a course dedicated to outlining the best practices that folks should be aware of in terms of online DTF (and traditional) marketing, and how Topspin’s software can be used to help facilitate these best practices. I’ve had the good fortune of not only taking a look inside Topspin’s platform to analyze their key features – a content management system that hosts your media assets, a fan management system that collects, organizes, and analyzes fan data, detailed reporting features, e-mail management system, widget creation and viral tracking, and more – but also to see the best practices and real data that Topspin has generated from the 150+ campaigns they have run over the past couple of years. While every marketing and sales campaign is different, this course presents folks with a unique opportunity to “look behind the curtain” to see exactly what has worked for some bands, how they set up their offers, the income they generated from these offers, and how they went about acquiring new fans. I think it’s helpful information.

I sat down with Ian here at Berklee in August to do a quick overview of the course, which turned into a bit of an online marketing clinic. Below is one of the clips from our conversation. To see them all, click here.

Online Music Marketing with Topspin is enrolling now, and begins on January 11th. If you are interested in learning more about the course, feel free to connect with one of our Admissions Advisors at 1.866.BERKLEE (US) or 617.747.2146 (International).

Tom Friedman, author and foreign-affairs columnist for the New York Times, doesn’t write much about music. But his piece “The New Untouchables” is a column well worth reading for those looking for a way forward in the music business. It may sound obvious, but the truth is that many of the fundamental techniques used for success in the “non-music” business world are the same techniques that can be applied to folks looking for success in the “music” business world.

Check this out, from Friedman’s piece:

A Washington lawyer friend recently told me about layoffs at his firm. I asked him who was getting axed. He said it was interesting: lawyers who were used to just showing up and having work handed to them were the first to go because with the bursting of the credit bubble, that flow of work just isn’t there. But those who have the ability to imagine new services, new opportunities and new ways to recruit work were being retained. They are the new untouchables.

Those who are waiting for this recession to end so someone can again hand them work could have a long wait. Those with the imagination to make themselves untouchables — to invent smarter ways to do old jobs, energy-saving ways to provide new services, new ways to attract old customers or new ways to combine existing technologies — will thrive.

It’s not hard to see the connection between lawyers and musicians, here, is it? Imagining new opportunities, new ways to recruit work, and inventing smarter ways to do old jobs is a great plan off attack for business folks AND musicians.

Bruce Houghton from Hypebot initiated a great discussion on his blog a few weeks back about his ideas that “there have always been skills beyond just making music that, if not required, certainly made success more likely.” It’s an opinion that I share, too.

I definitely would not frame any musician in the “untouchable” camp (brands are only as good as the trust their fans have in them), but generating leverage by doing as much as you can yourself (with the help of a good team, if possible), analyzing data to do it smarter, and figuring out ways to creatively attract new fans is great advice for any musician interested in building a more sustainable career.