I spoke with NPR’s Sami Yenigun last week for a piece he was working on about Boards of Canada’s pre-release marketing campaign. You can hear the full interview here:

Morning Edition – Boards of Canada Pre-Release Marketing

In a nutshell, Boards of Canada and their label, Warp, engaged in an easter-egg-hunt type of pre-release campaign that involved sneaking out different codes through key outlets, including a code on a very limited (one copy available in the US!) vinyl, a mysterious clip at the end of an NPR piece, a banner on a fan run message board, and more. Here’s an example of one of the “clues,” which was broadcasted on Adult Swim:

I loved the campaign on many levels, but one of the things I liked the most was that I had no idea it was going on before Sami called me about it. And that is sort of the point. I’m familiar with Boards of Canada, but I am not anywhere near the inner circle of fans that the band and Warp were trying to reach with this campaign. To me, this was a brilliant campaign focused on the hard core fans that share a similar psychographic with the band – a band that is known to be cryptic, intelligent, tech savvy, and mysterious. Their serious fans, from what I can tell, are similar.

The campaign was a wonderful way to engage with fans in an authentic way, provide a level of engagement, and in many ways, flip traditional promotion on its head. Instead of the band releasing a standard press release to key online and print outlets, and instead of working retail with expensive co-op campaigns, press and retail were at once in on the campaign (in the case of Radio 1, Rough Trade / Other Music, Adult Swim, and NPR), and in other instances they were reporting on what was already happening with the fans (in the case of Pitchfork and others). Also, Warp picked perfect “niche” outlets to work with on the campaign. This was not a carpet bombing campaign where the label or PR company was sending out 500 advance copied of the record to press and blogs, this was a campaign totally focused on outlets that matter to the core fans, and outlets that speak to the exact psychographic traits of their fans. Once the clues were out there, the fans did the rest.

Certainly not something that every band can do, but I think it illustrates the success a band can have once they have acquired a substantial fan base, and engage with that fan base in the way that they want to be engaged with.

Read more here on the full campaign.



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.


===

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 did a quick 30 minute open house in the Berkleemusic studios a couple of weeks back. We talked about free music, radio, distribution and retail, setting up your website, and some other things. Take a look here:

The marketing courses that I teach, as well as all the other online music courses at Berkleemusic, start this Monday, April 2.

Check out a fun video from Austin-based The Bright Light Social Hour promoting their recording fundraising effort.

More here

Thanks to Ihor Gowda for the tip!

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

Great post from Amanda Palmer of the Dresdon Dolls on using online media to connecting directly with fans and make $$$. Love the creativity here…

=====

From: Amanda Palmer
Subject: twitter power, or “how an indie musician can make $19,000 in 10 hours using twitter”

this story has just been blowing people’s minds so i figures i should write it down.

1.
FRIDAY NIGHT LOSERS T-SHIRT, $11,000

about a month ago, i was at home on a friday night (loser that i often am when i’m not touring, i almost never go out) and was, of course, on my mac, shifting between emails, links and occasionally doing some dishes and packing for a trip the next day. just a usual friday-night-rock-star-multi-tasking extravaganza.

i twitter whenever i’m online, i love the way it gives me a direct line of communication with my fans and friends.

i had already seen the power of twitter while touring…using twitter i’d gathered crowds of sometimes 200 fans with a DAY’S notice to come out and meet me in public spaces (parks, mostly) where i would play ukulele, sign, hug, take pictures, eat cake, and generally hang out and connect. this was especially helpful in the cities where we’d been unable to book all-ages gigs and there were crushed teenagers who were really grateful to have a shot at connecting with me & the community of amanda/dolls fans.

i’d also been using twitter to organize ACTUAL last-minute gigs…i twittered a secret gig in LA one morning and about 350 folks showed up 5 hours later at a warehouse space….i played piano, filmed by current.tv, and then (different camera crew) did an interview with afterellen.com.
the important thing to undertsand here is that the fans were never part of the plan..,i basically just INVITED my fans to a press day, the press didnt’ plan it…i did.
i was going to be playing in an empty room and doing q&a with afterellen on a coach with only the camera watching.
it was like….why not tell people and do this in a warehouse instead of a hotel lobby or a blank studio? so i did.

it cost me almost nothing. the fans were psyched.

but back to the bigger, cooler story….

so there i am, alone on friday night and i make a joke on twitter (which goes out to whichever of my 30,000 followers are online):

“i hereby call THE LOSERS OF FRIDAY NIGHT ON THEIR COMPUTERS to ORDER, motherfucker.”
9:15 PM May 15th from web

one thing led to another, and the next thing you know there were thousands of us and we’d become the #1 topic trend on twitter.
zoe keating described it as a “virtual flash mob”.

the way twitter works (if you don’t have it) is that certain topics can include a hashtag (#) and if a gazillion people start making posts that include that hashtag, the topic will zoom up the charts of what people are currently discussing. it’s a cool feature.

so anyway, there we were, virtually hanging out on twitter on a friday night. very pleased with ourselves for being such a large group, and cracking jokes.

how do you “hang out” on the internet? well, we collectively came up with a list of things that the government should do for us (free government-issued sweatpants, pizza and ponies, no tax on coffee), AND created a t-shirt.
thank god my web guy sean was awake and being a loser with me on friday night because he throw up the webpage WHILE we were having our twitter party and people started ordering the shirts – that i designed in SHARPIE in realtime) and a slogan that someone suggested: “DON’T STAND UP FOR WHAT’S RIGHT, STAY IN FOR WHAT’S WRONG”. neil gaiman and wil wheaton joined our party. the fdnas felt super-special.

by the end of the night, we’d sold 200 shirts off the quickie site (paypal only) that sean had set up.
i blogged the whole story the next day and in total, in the matter of a few days, we sold over 400 shirts, for $25/ea.

we ended up grossing OVER $11,000 on the shirts.
my assistant beth had the shirts printed up ASAP and mailed them from her apartment.

total made on twitter in two hours = $11,000.
total made from my huge-ass ben-folds produced-major-label solo album this year = $0

2.
WEBCAST AUCTION, $6000

a few nights after that, i blogged and twittered, announcing a “webcast auction” from my apartment.
it went from 6 pm – 9 pm, my assitant beth sat at my side and kept her eyes on incoming bids and twitter feed.
while we hocked weird goods, i sang songs and answered questions from fans. we wore kimonos and drank wine. it was a blast.

people on twitter who were tuned in re-tweeted to other fans. the word spread that it was a fun place to be and watch.
we had, at peak, about 2000 people watching the webcast.

at the suggestion of a fan early in the webcastm anyone could, on demand, send us $20 via paypal and we would chew,
sign and mail them a postcard. we sold about 70, and we read all those names at the end of the webcast and thanked those
people for supporting us. here’s how the sales broke down:

all the items were signed by moi and hand-packed by beth and kayla._ the items and highest bidders were as follows:_ hilary, ukulele used on the european tour: $640 _jake, “guitar hero” plastic guitar controller used in album promo shoot: $250_ lary b, copy neo2 magazine, plus two post-war trade slap-bracelets & a crime-photo set: $230_ devi, glass dildo, with subtley-sordid backstory: $560 _liz b., “hipsters ruin everything” t-shirt, made by blake (get your very own here!!!!): $155.55_shannon m., my bill bryson book, a short history of neary everything: $280_ nikki, huge metal “the establishment” sign, used at rothbury festival for the circus tent i curated: $450 _j.r., purple velvet “A” dress used in the dresden dolls coin-operated boy video shoot: $400_ jessie & alan: who killed amanda palmer vinyl: $100_ nikki: wine bottle, auctioned BY REQUEST!!! $320 _shannon w., torn-to-shit vintage stockings used in the who killed amanda palmer/ michael pope video series: $200 _jodi,
school-note-book break-up letter, written to amanda from jonas woolverton in 7th grade (i still haven’t emailed him about that….): $250_ daryl, ANOTHER wine bottle, by request, that we had LYING AROUND: $320
and…………..
reto emailed, having barely missed the wine bottle, and asked us to send him “something funny” for $129.99. we sent a heath ledger statuette.

total made on twitter in 3 hours, including the postcards, was over $6000.
again, total made on my major-label solo album this year: $0

3.
TWITTER DONATION-ONLY GIG, $1800

a few days later, i twittered a guest-list only event in a recording studio in boston, to take place a week later.
the gig lasted about 5 hours, all told, with soundcheck and signing. i took mostly requests and we had a grand old time.
first come, first served. the first 200 people to ask got in, for free. i asked for donations and made about $2200 in cash.
i gave $400 back to the studio for the space and the help. we sold some weird merch. i think we should call it an even 2k.

total made at last-minute secret twitter gig, in about 5 hours = $2000
major-label record blah blah blah = $0

…..and for fun, and to thank my fans for being awesome, i’ve been doing some twitter perfomance art, including answering their questions by magic-markering my body until it’s covered, and displaying time-lapse make-up application advice….but that’s another story.

TOTAL MADE THIS MONTH USING TWITTER = $19,000
TOTAL MADE FROM 30,000 RECORD SALES = ABSOLUTELY NOTHING.

turn on, tune in, get dropped!!!!!

love,
amanda fucking palmer

http://www.amandapalmer.net

http://www.dresdendolls.com

p.s.
if you want to read the full blogs and see the pictures from the #LOFNOTC events, i blogged here:

1. the friday night that started it all:

http://blog.amandapalmer.net/post/111667948/twitter-the-beautiful-losers-lofnotc

2. the webcast and magic-marker/make-up mayhem:

http://blog.amandapalmer.net/post/127401792/wasnt-this-supposed-to-be-my-fucking-week-off

Dear Steven Van Zandt,

I just read your interview in CNN, and I wanted to offer an alternative view to your thoughts, particularly related to this quote: “The reason nobody wants to talk about it is because it mostly sucks! Who are we kidding here? Nobody’s buying records? Because they suck!”

You also suggest that if bands learned more cover songs and listened to more “great records” (i.e. classic records) the record industry would be saved, which I think it is a slightly myopic view of what is happening in the business. I think you are missing two key points:

1. THERE IS AN AMAZING AMOUNT OF GREAT MUSIC OUT THERE, but I think you are looking in the wrong places for it. I suggest you take a look at eMusic – the largest online retailer for independent music. Find an artist you like, look at recommendations by eMusic and other consumers, and you can easily fall down the rabbit hole for hours experimenting with new, and in many cases, amazing music you have never heard before. Like Psych Rock? Check out Wooden Shjips. Sign up for newsletters from forward thinking physical retailers like Other Music, a store run by music geniuses who can connect the music dots between Grizzly Bear and Erlend Øye in three steps or less. And of course there are dozens of music blogs, from aggregators like the Hype Machine, live music session and editorial blogs like Daytrotter, old school outlets like Pitchforkmedia, and a million in between. Not to mention the myriad of online radio stations that are not hamstrung by the tight-playlists the consolidated commercial radio business has given us over the past 10 years. Widen your net, Steven, and you’ll find tons of music that will knock your socks off.

2. THE OLD MODEL OF A PHYSICAL RECORD-BASED MUSIC ECONOMY IS DEAD. It is not coming back. Dead. Dead. Dead. You can have a million bands covering “Working on a Dream” for a million years and you will not bring traditional physical record sales anywhere close to where they were at their height in 2000. The infrastructure has shifted forever. Some details you should consider:

Less Outlets for Traditional Music: Tower Records shut down their U.S. operation in 2006; Circuit City (9th largest music retailer in 2008) ceased operations in 2009; Virgin Megastore announced in 2009 that they will close all of their U.S. stores; Borders (the 6th largest retailer of music) has cut back their in-store floor space by 30% to 7% of their total floor space; and Transworld closed 101 stores in 2008, after losing $69 million dollars, including a 24% drop in total sales during the nine weeks leading up to the end of the year – traditionally the best music retail time of year. Taken together, there are simply less outlets and less floor space available to the labels to merchandise and sell their music. It is not a matter of buyers not taking in records because “they suck.” The space that had existed for music is now filled with DVDs and other media, or is gone.

Consolidated Commercial Radio is Ineffective: The number of artists that terrestrial radio “breaks,” in terms of converting radio play to mechanical royalty sales is smaller with each passing year. Although radio is still the primary method that folks hear about new music (49% of consumers list radio as the #1 way they find new music, according to a 2008 Edison Media Research survey), radio is quickly losing ground to the Internet, with 25% of consumers hearing about new music online.

The Replacement Cycle: Technological innovations have been shaping how, where, and when folks listen to (and purchase) music for years, beginning with improved production processes with vinyl, and then moving onto 8-track, cassette, CD, and finally digital music. Along the way, major labels have been able to monetize these technological innovations through a process called the replacement cycle – basically a repackaging of existing content in the newest format.

With consumers being able to convert files to digital themselves from existing CDs (not to mention sharing digital files for free online), the labels have been unable to find a way to monetize this format shift effectively. The end of the replacement cycle, coupled with the complete decentralization of the industry brought on by the Internet and the change in consumer habits, makes for a very tough time for the record business.

I know it’s a tough to find new music, particularly when you are on tour. Perhaps you don’t have regular access to the Internet. But I assure you; the issue is not that that music sucks. Spend some time doing your research on finding new bands, find some tastemakers you can depend on to turn you onto new music. The old industry that you grew up with is gone; but the phoenix is rising from the ashes with new models and new revenue streams. Whatever you do, please don’t blame what is happening on a lack of good music – it really makes you sound out of touch.

Mike

“Talking gross numbers that come directly to the band, we have made more money already than we have on the last record in four years,” said Mathieu Drouin, the band’s co-manager.

Great piece in the L.A. Times today on Metric. The band is forgoing a traditional record deal and focusing on alternative income sources and direct to fan sales and marketing techniques for their most recent release “Fantasties.” Direct to fan has been a proven model for megastars like Radiohead and Trent Reznor, and it’s encouraging to see a “middle class” musician (Metric’s 2005 release “Live It Out,” sold 45,000 copies) having success using a similar template.

Some takeaways from the effort:

1) Without the distribution fee and record royalties that a major label and distributor would charge, Metric is able to net $.77 per iTunes track as opposed to something closer to the $.22 per track a label would pay (this figure includes international downloads, which could pay the artist more than the US standard of $.70 per track by going direct)
2) As distribution follows marketing, Metric has hooked up with Topspin to handle the online direct to fan marketing and sales efforts. Take a look at their Website, here. Fantastic way to leverage “free” to acquire names for the mailing list, they have an active blog area, and most importantly, they are engaging in variable product and pricing which everyone from the hard core fan to the curious potential fan can engage in. Again, because the band is selling direct, their profit margin is much higher. Metric sold out of an initial allotment of 500 deluxe packages in 48 hours, said Drouin, who estimated a profit of $13 to $15 per unit. “We can never offer a fan that much value at that price if we had to go through a record company, distributor and a retailer. We cut out three rungs.”
3) The band made the entire record available for free as a stream a month before release, creating widgets that could be embedded in fans Websites (provided by Topspin). Folks were able to become familiar with the new record, they liked what they heard, and they paid for the record when it was released commercially. This is the “emotional connection” theory in action.
4) The band worked with independent distributor Redeye for the physical CD. Because Metric has a track record and had analytics that proved people were into the record, Redeye had an easier time shipping the record to physical independent record stores.
5) Canada supports the arts. The Foundation to Assist Canadian Talent on Recordings provided the band with $50,000 to cover recording costs, as well as a smaller federal grant.

Major labels are traditionally known for A) financing, B) marketing, C) distribution. I think Metric is a great example of a band that not only accomplishing all of these things outside of the traditional model, but is making more money because of it. Check out a cool Elliott Smith cover by the band:

It’s not all that surprising to read that some folks are making a killing from building apps for the iPhone. As of January ’09, over 500 million apps have been downloaded, and seeing that Apple takes a 30% cut on all apps (same as their fee for sales of music on iTunes), developers are taking in 70% of the revenue of these 500 million downloads. What IS interesting to me is the marketing behind these apps, and in particular, the way that some developers are using the concept of free to generate interest in their product.

The New York Times ran an article last week on Ethan Nicholas, the guy who built iShoot, an app that has generated $800,000 in sales in five months. Take a look at how his sales progressed:

After the project was finished, Mr. Nicholas sent it to Apple for approval, quickly granted, and iShoot was released into the online Apple store on Oct. 19.

When he checked his account with Apple to see how many copies the game had sold, Mr. Nicholas’s jaw dropped: On its first day, iShoot sold enough copies at $4.99 each to net him $1,000. He and Nicole were practically “dancing in the street,” he said.

The second day, his portion of the day’s sales was about $2,000.

On the third day, the figure slid down to $50, where it hovered for the next several weeks. “That’s nothing to sneeze at, but I wondered if we could do better,” Mr. Nicholas said.

In January, he released a free version of the game with fewer features, hoping to spark sales of the paid version. It worked: iShoot Lite has been downloaded more than 2 million times, and many people have upgraded to the paid version, which now costs $2.99. On its peak day — Jan. 11 — iShoot sold nearly 17,000 copies, which meant a $35,000 day’s take for Mr. Nicholas.”

Obviously, this is an extreme example of what can happen financially for app developers, but I do think that some comparisons can be made to musicians looking to generate interest in their music online. My friend John Snyder, who runs Artists House Music, once told me “the curse of the developing artist is anonymity, not piracy.” I do believe that some form of “free” makes sense for most artists; be it a download card distributed at live shows, select music available for free on your site (perhaps in exchange for an email address), live shows for download, etc.

Traditional one-size-fits-all physical retailers are failing – Virgin, Transworld, and Borders have all either closed up shop in the US, drastically cut back on music floor space, or are taking massive financial hits. I think a large part of the future of sales in the music business is online direct to fan relationships (with supporting offline components), where artists cultivate more extensive relationships with their fans, and in the process more effectively monetize traditional and non-traditional sales options. I think some part of “free” works to engage your existing fanbase, as well as turn casual fans into hard-core supporters.

Andrew Dubber has some good thoughts on the topic of free as well. Take a look at his post on “Why Give Away Music For Free.”

It’s been widely reported that Touch and Go, a seminal independent record label (as well as a distributor of other fantastic indie labels), is cutting back its label operations and discontinuing its manufacturing and distribution operations completely. Here’s the message from Touch and Go’s Corey Rusk:

It is with great sadness that we are reporting some major changes here at Touch and Go Records. Many of you may not be aware, but for nearly 2 decades, Touch and Go has provided manufacturing and distribution services for a select yet diverse group of other important independent record labels. Titles from these other labels populate the shelves of our warehouse alongside the titles on our own two labels, Touch and Go Records, and Quarterstick Records.

Unfortunately, as much as we love all of these labels, the current state of the economy has reached the point where we can no longer afford to continue this lesser known, yet important part of Touch and Go’s operations. Over the years, these labels have become part of our family, and it pains us to see them go. We wish them all the very best and we will be doing everything we can to help make the transition as easy as possible.

Touch and Go will be returning to its roots and focusing solely on being an independent record label. We’ll be busy for a few months working closely with the departing labels and scaling our company to an appropriate smaller size after their departure. It is the end of a grand chapter in Touch and Go’s history, but we also know that good things can come from new beginnings.

It’s sad to see a label so artist friendly (the handshake deals that Touch and Go does with bands pays them 50 percent of the net profit on their records–about four times the industry’s standard royalty rate) in this situation. Physical distribution is a tough business (as is physical retail), and as Rusk mentions in the last sentence of his note, good things can come from new beginnings. Innovative thinkers (like Terry McBride from Nettwerk) are forging a new direction with music companies that are based less on the reliance of income generated from distribution and sales of physical product. I hope Corey Rusk can do the same with Touch and Go.

Slint - Spiderland