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Friday, October 26, 2012
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The Shifting Worth of Music

I've always wanted to build a business on the "$10,000 hamburger" revenue model. Sell one and you have a good week.

It would be nice if a song could be given that same price tag when its worth is judged by audience or radio industry programmers, but we all know it's not going to happen. Music is resting at its lowest "worth" in memory, and there's no indication we will see its value grow.
"It's not really any easier to make money with digital. It just appears that way."
Where is the money in making music today? At what point in an artist's career does a change occur which increases the value of their songs?

Getting Consumers to Open Wallets

With music pricing where it's at, it's not the consumer's wallet that's opening but their coin purse. Most songs from rising stars are 99-cents or less, yet putting 99-cents on your Visa card may seem like wasted motion. I know we can set up a PayPal debit account to deduct the amount, and a small percentage of people do this today. It's just that this is a decade away from becoming mainstream.

The paying gig is still a band's profit center, though it's not all that's out there.

I know bands don't want to hear this, but one skill all should master in this technologically crazy world is data base management. (Here's a decent article on building a data base.) Effort needs to be placed into building a database of fans and music services. The former are people you sell music to, and the latter are influencers who reach more than one-fan-at-a-time so fans can seek you out. (AG's RRadio Music is in this group.)

Any independent online radio station is an "influencer." When approaching one, understand that this category is filled with "enthusiastic amateurs." They have plenty of music to choose from, but lack time in exploring all that may be presented to them.

I continually read how college radio stations should be targeted by indie artists, but know that college radio is suffering a dwindling of listeners. And we all know the problems trying to get airplay within the radio industry at large.

Let's spend a few more sentences on radio stations to discuss another aspect of getting airplay, online and off, that's not understood by artists. A station playing your new song is taking a chance on losing listeners - and you have nothing to hedge that bet for them. (Consider this the next time, in your developmental years, that you feel compelled to seek payment for radio airplay.)

Place value on the station owner's risk in playing new music. Until your act is a proven draw - i.e., Taylor Swift, Keith Urban, etc. - your music's value is unknown (literally).

The story learned here is that technology is good and bad, simultaneously. It has blemishes of file sharing music and the serving of an unlimited supply of competing bands. Tech also has tools for simplifying music sales which are only effective after you've gained knowledge on how to use each.

The good news is that artists can market themselves to a wide audience on their own - they no longer need the broadcast radio industry. The bad news is it requires marketing and data base management skills.

Music's worth is more than ever based on supply and demand, which is affected by the digital environment.

Your mission (and you need to accept it) is to find how tech can be used - by you - to build awareness and sales. I strongly suggest studying data base management and the messaging disciplines of email, social media, etc.

It's not really any easier to make money with digital. It just appears that way.

As for that $10,000 hamburger, I don't suggest using that as your revenue model unless you have years to waste waiting; you're better off buying a lottery ticket.

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