This post was written as a guest post for the wonderful Silver Threading blog. Be sure to check it out!
The incumbents had spent decades building the perfect business model. Anyone who wanted their art to reach the world had to go through specialized agencies, who acted as gatekeepers, producers and distributors.
Then, thanks to the digital revolution, barriers to entry were rapidly dismantled. An entire new industry sprang to life. A grassroots Indy movement refused to give up control of their art and reached their intended audience directly. Existing companies fought the revolution at first, explaining how only they could guarantee quality. But consumers ignored them. Profits plummeted. Companies merged, until only a handful of Goliaths remained.
New models, based on digital distribution and low prices, emerged from the ashes. Artists can now record and distribute a song – for this is the music industry we’re talking about – without signing to a major label. Independent labels have proliferated, and they are taking on the artists passed over by major labels. Hit songs are still a lottery, but the public gets three times as many lottery tickets.
Sound familiar?
Image: the Economist
I have been reading some fascinating articles on the Economist (Hidden in the long tail and The music industry: Super fantasy – be sure to check them out afterwards) lately, and was once again intrigued by the similarities between the music industry and publishing.
For example, one of the main criticisms against the new music industry model is that, since a minority of artists account for the vast majority of music sales, the fact that songs available for digital download tripled between 2000 and 2010 might not be a big deal: most of those new songs may be by marginal artists of no great interest.
Similarly, a handful of popular authors like Hugh Howey account for the majority of Indie book sales. So, where does that leave the rest of us? The small fry?
According to the Economist, Joel Waldfogel of the University of Minnesota believes this criticism understates the internet’s contribution. The demand for cultural products is much harder to predict than for conventional products such as shoes or soda. Seasoned publishers have only a vague idea what book, film or song will be a hit. A major record label can sign only a fraction of the artists available, knowing full well it will unwittingly reject a future superstar. And recorded music revenue has collapsed since 2000 which suggests declining, not rising, music industry output.
Mr Waldfogel says that is misleading: because of piracy, revenue understates how much music the public has really consumed. He calculates that the quality of songs recorded since then has been either stable (based on the number that made it onto critics’ “best-of” lists) or significantly improved (based on the pattern of sales and airplay). This is corroborated by the success of indie-affiliated bands such as Arcade Fire and Mumford & Sons. Indie labels’ share of the Billboard top 200 selling albums grew from 13% in 2001 to 35% in 2010, just like self-publishing accounted for 31% of books published in 2014.
Mr Waldfogel and a coauthor reckon that tripling the selection of songs available has produced 15 times as much benefit for consumers than tripling the selection of a more predictable product.
So, consumers reap the benefits of e-commerce in surprising ways.
Social fabric softener
Doom and gloom have been the music industry’s dominant narrative since the late 1990s, when Napster and other file-sharing services threw a wrench into the system. The debate continues: at the end of last year, well-known artists like Taylor Swift and Thom Yorke of Radiohead lambasted Spotify, a music-streaming service, for its royalty payments.
But, while the old stars worry about Spotify, a new model has appeared. You see, average fans spend money on a band maybe two or three times a year. They buy an album, a concert ticket, maybe a shirt. But what does that amount to? Maybe $60. For most bands that’s not sustainable. So, what about relying instead on super fans and crowdsourcing to fund you more regularly?
“Instead of worrying about Spotify’s royalty rates for streams, artists should be worrying about what content or merchandise they can provide to a fan base that wants to consume everything they do,” says Dave Cool, the director of artist relations at BandZoogle, a Montreal-based start-up that makes band websites. “There’s so much money being left on the table. Fans want to be able to do more, have more experiences, buy custom product and merchandise, but so much of that is not being done.”
Fan engagement is hardly a new concept among industry professionals. However, a seemingly endless arsenal of low-cost digital tools makes it increasingly efficient nowadays for artists to find their fans, learn what they like, work out how to meet those expectations, and involve them in the creative process.
Patreon, a crowdfunding platform, allows patrons to pledge money every time a band or artist produces something: a new video, an animated cartoon, an e-zine. The patrons then get exclusive access to those items, additional bonus items, or, for the top donors, private sessions with the band. Brian Buchanon of Jubilee Riots, a folk-rock group from Toronto, has used platforms like Google Helpout and StageIt to offer paid-for music lessons to fans online. The band has organised six European tours that it sold to as many as 200 fans as a holiday with their musical heroes. Megadeth, an American metal band, recently worked with PledgeMusic, a London-based crowdfunding site, to record their 15th album: fans who pledge can pre-order the album, get signed guitars, have a guitar lesson with the band, spend a day with them in the studio, and participate in a jam session.
Just the other day, I received a swag bag from Dan Dombrowski, which was my reward for supporting his Kickstarter Nonlocal campaign. It included awesome items such as a bag; tee-shirt; poster and an amazing-looking print version of the magazine. I was struck by the similarity between what Dan had put together and the ideas mentioned above.
To stay relevant, modern musicians need to build a social fabric: they want as many people as possible talking about the same thing. But they have to nourish their fans in an authentic way and offer super fans unique content.
Much like authors, then. Could the future of publishing include swag bags, private reading sessions and Skype calls?
For further reading, my friend MT McGuire suggests Self-publish with Integrity by Dan Holloway, in which he basically states that if you can get 1,000 fans who love everything you do, and do enough readings, merchandising and books, you will earn enough to live. So, here’s to the lucky 1,000! 🙂
While pondering the future, why not read my children’s book, Runaway Smile, for free?
I’m absolutely with you about merchandising. That’s why I spend a sod of a lot of money on my covers, because then I have ready made post cards, mugs, t shirts, book marks etc.I know there are people who have seen or bought the merchandising first and then bought the books (a good mini blurb on the post cards is essential). Further to that, I can really recommend a book called self publishing with integrity by Dan Holloway in which he basically states that if you can get 1,000 fans who love everything you do, and do enough readings, merchandising, books, you will earn enough to live. It’s a really interesting read. This is something that I feel too. I know my work is not great literature but it’s funny and it’s fun. There are people who like it and I would rather fail on my own terms than be told my work is crap again and again by the kind of people who would never read or appreciate something like it anyway.
Cheers
MTM
Thanks for the great feedback. As I’m about to prepare a swag bag for an event I’m planning, this is very timely.
I’ll add the information on Holloway’s book to the post, thanks for sharing that 🙂
My pleasure. I don’t think the 1,000 fans is his idea but he sums it up well.
cheers
MTM
Interesting piece, Nicholas. Thanks for sharing. 🙂
Glad you like it! 🙂
I’m not sure how I feel about Patreon etc. I think the idea can be a good thing for the artist (be in music or writing), but I worry about creating two classes of fans. Those who can and those who can’t. There are ‘super-fans’ who may want to contribute and receive the extras, but because of financial constrains, can’t. I wouldn’t want to contribute to creating a system that rewards those with money and penalises those without. Maybe I’m looking at this from a completely different perspective than everyone else. but that’s how I feel right now.
An interesting perspective! Thanks for sharing 🙂
I think at least 14 authors in your immediate vicinity fainted at the very thought of Skyping! 🙂
… seriously though, ‘added value’ is a real thing that indie authors need to integrate into their business model.
Lol – I use it all the time for work, so I guess I’m lucky that way 😀
Once again, your post leaves us with a lot to think about. As for authors giving out swag bags, some of them already do. I’ve noticed a few of them offering them online in connection with book promotions.
Huh, I didn’t know that. I only knew it as part of Kickstarter campaigns etc. Thanks for that!
Reblogged this on Jan Hawke INKorporated and commented:
More food for thought, not to mention words of wisdom from indie publishing blogging guru Nicholas Rossi
I’ve read about the comparison between the music industry and publishing somewhere a while back but appreciate this post. I like how you’ve broken this all down. On the other hand, like Beetleypete said, I too have no interest in grab bags and special collectibles or must-haves. I tend to wait till the new is heavily discounted. Still, this type of promotion may well be better suited to the young. In 30 years they will be us and we will be gone and music and publishing will have changed again and again. 🙂
This, too, shall pass 🙂
Loud s.i.g.h.
This is . . . why am I having Deja Vu? 😛
I know, right? 😀
Saw your guest post on Colleen’s blog! Great, Nicholas!
She was very kind, allowing me to post it here as well 🙂
Colleen is such a lovely spirit. I am so glad to be connected with her.
I found this most interesting. As an ‘older’ person, and lifelong consumer of books, music, and films, I have different ideas about the modern ways of funding and marketing. I still buy music on CD. I like to own the product, look at the inserts, and get the feeling of something tangible for my money. The same applies to films on DVD, and to some extent, books. To make this more affordable, I have learned to be patient. I wait until the CD, book, or DVD has been around long enough to be heavily discounted, and sometimes buy used, from reputable companies. But I am older, so less concerned about having to have things immediately.
The need to have something ‘Now’ is no longer a concern.
I have never downloaded a song or a film, and I have only four e-books, all bought to support fellow bloggers. I am aware that this has to change. I am running out of room to store all this stuff, and if I live long enough, will undoubtedly have to begin to buy things in electronic form only. Crowd-funding, and being a ‘super-fan’ has no appeal to me at all, but I can see this working well for the younger generation, who will come to regard this as the norm.
It is still obvious that the music industry and the world of books remain dominated by a few best-selling musicians and authors. Marketing budgets of the large companies are bigger than ever, and yet they still go with the tried and tested whenever they can. The ‘loophole’ offered by the Internet has allowed in bands like Mumford and Sons, and some Indie authors, proving that the system can be bucked, if the product is good enough.
Thanks for the article Nicholas. Sorry about the long comment!
Best wishes, Pete.
Thank you so much for the great insight and for offering your point of view!
Whether it’s print or analog, the conversion to digital is inevitable. Publishers can look to the music industry for examples of what to do and what not to do as they plan for the future, continue to make strides towards developing their own innovations, and hope to stand a fighting chance in an evolving online marketplace.
Well said, Mihran!