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.
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?