One of my good friends – we’ll call him MJ to protect his alleged innocence -- manages a chain of independent record stores in the Pacific Northwest. Over dinner last week, MJ lamented that the industry he’s loved and catered to for the last 20 years had changed so dramatically that he could no longer find a way to serve his customers profitably. His story was no Chicken Little lament. His sky isn’t falling – his entire world has flipped upside-down and hit him on the head. The writing was on the wall as early as seven years ago with a steady decline in compact-disc sales. But in the last six months, his revenue declined by more than 20%. It seems that in an iPod world, record stores are selling buggy whips.
According to MJ, 85% of the world still buys CDs, even if they then turn around and burn them on their computer and file-share them with friends. In fact, his used CD business is up in profitability. But the steady decline of CD sales is pushing specialty music retailers of the map. Last year, the giant Tower Records closed 89 stores. Nearly 800 more closed in 2006 along with them. With fewer stores, the big box retailers like Wal Mart and Target have more leverage to drive prices down even further. Unfortunately, downloads haven’t caught up to the slip in CD sales and the close of specialty stores.
You can find music online from any number of sources – kosher or otherwise. It is estimated that over one billion songs are traded illegally through file-sharing and peer-to-peer music sites every month. While the media hypes piracy, and certainly piracy is an issue for today’s musicians, many fans consume music from legal sources like Apple’s iTunes, MySpace downloads or Sirius satellite radio. Even bloggers are in on the action with downloads and podcasts featuring some of the best new music.
Many recording labels have complained that CDs have turned into marketing pieces for concerts and merch. MJ says that none of the major labels are planning big marketing pushes for the December season of gift giving. No more posters, giant cut-outs, wrapping paper and other promotional items pushing CDs. There is no more money left for the labels in CDs, but there is value in it for the artist in terms of marketing and driving the band’s brand.
Today’s chart-topping releases equate to roughly 60,000 copies in their first week. Most independent musicians only dream of that many sales. Yet, only two short years ago, it was common for top releases to sell 500,000 or more copies in their first week. The big releases are faltering. This could be good news for the independent musician. There is more room for profitable independent releases and CD sales at concerts. Perhaps the dream of an independent was once to sell 100,000 copies of their latest release is now to sell 15,000 copies. But an artist on their own label might make $10 per album compared with $1 on a major release. $150,000 for selling 15,000 CDs on a tour still sounds pretty great to the average musician.
So how can a rock band make money these days? It’s still quite possible and in fact might be even easier to find your niche in such a fragmented market. Here are some quick tips:
Plan tours, concerts and other performances. Book your own gigs and don’t turn down the state fair.
Sell a lot of merch on-site. Expand into more than just CDs, although the one place that CDs still sell is at concert venues. Get your own t-shirts, posters, tennis shoes, underwear, books, combs, iPod covers, travel mugs, guitar picks and whistles to sell at shows.
Embrace new technology. Why not offer your own downloads and by all means, get your music on ITunes. Learn podcasting. Reach out to the blogosphere.
Look at alternative places to get your music heard, like local advertisements, co-op giveaways, schools or licensing.
It’s not such a bad thing that Norah Jones isn’t selling as many copies of her latest CD. There’s more money on the table for you and less noise to cut through to get heard.
According to MJ, 85% of the world still buys CDs, even if they then turn around and burn them on their computer and file-share them with friends. In fact, his used CD business is up in profitability. But the steady decline of CD sales is pushing specialty music retailers of the map. Last year, the giant Tower Records closed 89 stores. Nearly 800 more closed in 2006 along with them. With fewer stores, the big box retailers like Wal Mart and Target have more leverage to drive prices down even further. Unfortunately, downloads haven’t caught up to the slip in CD sales and the close of specialty stores.
You can find music online from any number of sources – kosher or otherwise. It is estimated that over one billion songs are traded illegally through file-sharing and peer-to-peer music sites every month. While the media hypes piracy, and certainly piracy is an issue for today’s musicians, many fans consume music from legal sources like Apple’s iTunes, MySpace downloads or Sirius satellite radio. Even bloggers are in on the action with downloads and podcasts featuring some of the best new music.
Many recording labels have complained that CDs have turned into marketing pieces for concerts and merch. MJ says that none of the major labels are planning big marketing pushes for the December season of gift giving. No more posters, giant cut-outs, wrapping paper and other promotional items pushing CDs. There is no more money left for the labels in CDs, but there is value in it for the artist in terms of marketing and driving the band’s brand.
Today’s chart-topping releases equate to roughly 60,000 copies in their first week. Most independent musicians only dream of that many sales. Yet, only two short years ago, it was common for top releases to sell 500,000 or more copies in their first week. The big releases are faltering. This could be good news for the independent musician. There is more room for profitable independent releases and CD sales at concerts. Perhaps the dream of an independent was once to sell 100,000 copies of their latest release is now to sell 15,000 copies. But an artist on their own label might make $10 per album compared with $1 on a major release. $150,000 for selling 15,000 CDs on a tour still sounds pretty great to the average musician.
So how can a rock band make money these days? It’s still quite possible and in fact might be even easier to find your niche in such a fragmented market. Here are some quick tips:
Plan tours, concerts and other performances. Book your own gigs and don’t turn down the state fair.
Sell a lot of merch on-site. Expand into more than just CDs, although the one place that CDs still sell is at concert venues. Get your own t-shirts, posters, tennis shoes, underwear, books, combs, iPod covers, travel mugs, guitar picks and whistles to sell at shows.
Embrace new technology. Why not offer your own downloads and by all means, get your music on ITunes. Learn podcasting. Reach out to the blogosphere.
Look at alternative places to get your music heard, like local advertisements, co-op giveaways, schools or licensing.
It’s not such a bad thing that Norah Jones isn’t selling as many copies of her latest CD. There’s more money on the table for you and less noise to cut through to get heard.
http://www.flixya.com/blog/12/Can-Musicians-Still-Make-Money-in-a-Download-World
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