Music Business and Trend Mongering

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

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.

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.

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