MAKING MONEY: Digital Distribution and Shows
In the music business, it takes money to make money. Starting out for any independent music artist can be hard and artists almost always invest more money than they make initally. This generally means that the less money you have to invest, the less likely you will be noticed. However, the amount of money isn’t the only factor because the effectiveness of your investments determine how far your money will go. I covered exposure in my last blog and now I will discuss how an artist can capitalize on the exposure and translate it to income.
Prior to the digital music age of ITunes and file-sharing, hard copy album sales (Vinyls, tapes, and CDs) and shows were the most profitable sources of income for independent artists. Now that CDs are becoming a thing of the past and MP3 players are about as common as cell phones, independent artists must adjust to the revolution. The hard copy sales are primarily focused on by elite, major label artists with a hot product and independent artist get the most revenue from digital distribution.
Independent artists have to shell out thousands of bucks for studio sessions, duplication, and promotional materials and at the end of the day, each CD unit usually comes out to around 3-4 bucks if done professionally. Now when the artists take their prized possessions to the local record store or distribution company they can negotiate the selling price. If the store sells it for $9.99 you get around 6 bucks back per copy and if they sell it for $6.99 you get 4 bucks per copy. To get a decent deal, most artists must purchase the minimum of 1,000 copies which is pretty much the standard for most duplication spots. So if all these numbers get confusing, remember that independent artists can only expect to receive around $2-4 per copy sold! So for all the time and money invested in getting the hard copies, it’s hardly worth it for an artist to sell hard copies unless they can sell at least 1,000 units.
So if you honestly feel like you don’t have the following to sell 1,000 units, don’t feel trapped. There are a few ways local artists can make a few bucks to make your time and investments worthwhile. Firstly, ITunes is your BEST FRIEND!! For $35, you can sell your music on Itunes, Rhapsody, etc... through CDBaby. A few album sales and you get your money back, then it’s all profit from there. You can even send in a homemade CD to them and they will still sell it as long as all the material is original. For each 99 cent download, you get around 60 cents and that adds up especially if you have a few singles which stand out from the other tracks on your album. Realistically, most people would rather just buy a few songs that they like instead of the whole album so this gives the audience more options in purchasing and enjoying your music.
Also, if you have a decent amount of exposure from free shows and your reputation for putting on a good show gets around, start charging! Be humble and charge venues reasonable amounts to perform and if you bring a good crowd, they will bring you back! And another tip in getting good venues is to offer a discount if they give you free tickets. That way they get more traffic that buys there drinks and you can get a familiar crowd in the spot to help get your audience crooning. Even simply charging the venue for gas money can be valuable for artists since they can break even while reaching a wider audience.
Even though the hard copy sales are decreasing, ditching hard copies entirely is not a good idea. Making free promotional CDs or cheap demos to pass out to potential buyers is a good option for low budget artists. With that said, digital distribution and shows remain the most profitable for local independent artists. Another way to get money on the side is to branch out and offer services to other artists that they don’t have. This can be a business or bartering system that is called networking, the topic of my next blog.
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4 comments:
I don't understand why labels and artists aren't smarter about digital sales. Songs at 99 cents is about the same as it was in the old days when the songs were on a CD. As you said, the CD costs money to produce.
With digital, once you make the song, there is no additional cost depending on how many you sell. So if someone would come along and have a nickel song store, then labels and artists will sell in volume.
You make $500 selling 10,000 nickel songs, or the same selling 500 99 cent songs. Don't you think many more people will try out songs and buy many more songs if they were a nickel.
It could also essentially end piracy. Why steel something that only costs you a nickel?
Part of the problem is contract negotiations. Artist contracts still are so much for unit sold. Instead, they need to be written to get a percentage of the sales, rather by unit. Then the digital music revolution will really take off, both for major artists and independents trying to break in.
It's interesting how so much of what we write about and read about revolves around changes in technology.
Here the writer chronicles how technology is affecting the music industry and the struggle musicians (and promoters) have to deal with.
I think that the writer could have made a stronger case using some examples:
"Independent artists have to shell out thousands of bucks for studio sessions, duplication, and promotional materials and at the end of the day, each CD unit usually comes out to around 3-4 bucks if done professionally."
I think the writer should have done the math for us: how much is 'thousands of bucks?'
The writer also makes some good suggestions about how writers should consider going digital and avoiding the costs of CDs.
That good news could have been at the beginning of the column, rather than down so far.
One suggestion: don't refer to past blogs without posting the URL at the same time.
Thanks for the comment dan,
Yeah, digital distribution is MUCH cheaper $35 and actually paid my group around 4 times as much as the hard copies did. We spent around $2500 for our hard copies (including promotion etc...) and only made around $1200 back on the hard copies!
Plus there actually are places that sell songs for less than 99 cents like itunes.. Also with cdbaby, napster pays 1-4 cents per song download since users pay a $12.95 subscription fee for unlimited downloads. Itunes is what actually gave us profit on our album at the end of the day..
mayne TY, I been tryna sell my shit on snocap and aint made shit. I think its cuz of the economy at the moment. Whats my prollum?
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