Direct to Fan

This is where all the shit’s a-poppin’ in the music industry right now.  Everybody’s jumping all over the direct to fan train and holy crap, you’d think people never sold or marketed music before direct to fan.

Before you get all frothy and race to preach the direct to fan gospel, let’s understand exactly what we’re talking about.

Starting in the middle of the 20^th Century, major record labels emerged and started signing artists.  Folks like Chuck Berry, Elvis Presley, and Wham all had deals with such entities.  In return for a large advance on record sales, and a portion of the proceeds from those aforementioned sales, the record label would do things like market, promote, and manufacture the artists’ music.  Seems great, right?  Not so fast…

Many of these artists signed bad, unscrupulous deals that made the labels disproportionately wealthier than the artists.  Soon the artists couldn’t afford the upkeep on their yachts, and even worse the price of quality drugs continued to escalate[1].

With the advent of the Internet, people soon realized that they didn’t go to their local Tower Records/Sam Goody/RecordTown/Strawberries to buy it.  Instead, they could just download it online and pass along pristine, non-degenerative versions to as many people as they could connect with on Match.com.  Or was it Napster?  Anyway…

At this point, the major labels got very concerned.  Up to this point they had cornered the market on distribution.  You couldn’t get that nice, quality Milli Vanilli LP, CD, or cassette without forking over some cash to the (now a distant memory) record store.

As music downloading (illegal and otherwise) became more prevalent, the record labels lost control of distribution and couldn’t stop artists from selling their own music direct to fans.  And without the need for record labels, artists didn’t have to share the proceeds of their sales anymore either.  If they sold a Cassingle[2] to a fan for $1.99, then by golly they kept the entire $1.99.

And so a golden era in music was born, downloaded, and passed around to friends.

Direct to Fan involves, and implies, that there is no middleman between you and your fan (customer).  In order for the concept to work, you have to create opportunities for access between artist and fan.

Mike Masnick summarized it brilliantly and thusly[3]:

Connect With Fans (CwF) + Reason To Buy (RtB) =

The Business Model ($$$$)

You have fans, you have stuff that they want, and you sell it to them to make money.  See, I told you Mike was brilliant and perhaps a tad more eloquent than I.

The first part of his equation, Connect with Fans/CwF, is where you’ll want to focus your time to start.  As mentioned a few chapters back, if you have nobody to talk to, there’s also no one to sell to.

Here’s a great example of connecting with fans courtesy of a fine artist you should all know and love:  Dan HL[4]:

Dan HL is a Boston based singer-songwriter who describes his music as “abrasive-folk.”  After a parting of the ways with his former band, Dan’s about to release his first album.  But at the time, he had nothing of his own – no website, no Facebook page, no Twitter account.  He was starting completely from scratch.  Lots of musicians get to this point and panic.  It’s understandable.  But if you take things logically and strategically, it’s not impossible.  Here’s how it went for Dan HL:

First thing we did was establish his goals:  in 90 days (crazy!) he was going to have his album finished.  By the time the album was done, we wanted to have his website up and populated with content as well as creating a presence on social media platforms (Facebook and Twitter).

Dan’s website came together quickly.  And since it was done before the album, we were challenged with putting up content.  He didn’t have his own tunes to add (yet), so we added a couple of rough demos (and let people know they were demos!) followed by some blog posts about songs and artists that he liked.  In this case, the bands he talked about were pretty well known.  They helped clue potential fans into his style as well as drawing a little attention on their own.

A little while later, Dan was goofing around on Facebook and replied to someone’s post with a haiku.  It was random enough, and funny enough, that people started asking him to write haikus for them.  We moved this over to his artist page and let it be known that anyone who “liked” the page could suggest a topic for Haiku Monday.  From there, we recapped the day’s best haikus over on his website. We called it “Haiku in Review.”

Soon enough, community started to build around Dan and his music.  The album was released and tour dates started to book up with less effort.  New album, shows booked, sales coming in, and all for a debut release.  The best part?  All of “Haiku Monday” was totally free:  free to create, free to participate.

At this point, you’re thinking – haikus and folk singers don’t mean much to me.  Me neither.  I prefer hip hop sonnets with rhyming couplets.  But it doesn’t matter!  What Dan did, and the lesson to walk away with, is that Haiku Monday was an amazing example of Connecting with Fans.  That 5-7-5 helps people create a relationship with Dan that brings ‘em out to gigs, sells his music, and perpetuates his career as a musician.  And that’s what you want, remember?  A career as a musician.

The second part of Mr. Masnick’s equation is “Reason to Buy (RtB).  Now that you have fans, you want to offer them reasons to buy your goods.

When we began selling this book (and thanks for buying it!), we reduced the price early on.  What was the reason to buy?  It was cheaper during the pre-sale period.  Price is often a motivating factor.

Then we got a call from the folks printing the book.  Overruns are common in printing, and there was going to be an extra 25 copies of the book created.  They were going to give them to me at no extra charge.  At first, we thought wow … how cool, free stuff!  That’s generally our first thought when we don’t have to pay for things.  But rather than indulge our own materialistic ways, we decided to find a way to connect with fans and provide a reason to buy.  Did we mention the genius of Mike Masnick yet?

Anyway, we decided that since the books were free we would donate them to local libraries.  That way the libraries got something cool, and to connect with fans, we told people that anyone who bought a printed edition of this book would be given the opportunity to have the book added to the collection of the library of their choice.  We’d even include a label that says who donated the book.

If you were trying to decide what version of the book to buy before (the $6.99 eBook or the $10.99 and up for printed editions), now you’ve got a reason to buy the printed version.  That’s not to mention the connection that ensues when there’s a dialog about where to dedicate the additional book.  It’s what cheeseball marketers refer to as a win-win.

Reasons to Buy tend to exist primarily during the album release release cycle.  For those discussions, kindly refer back to Chapter Four:  Sponsor Me:  Real Word Cash Strategies that Don’t (Just) Involve Begging.

That being said, it makes sense to continually provide enticing reasons to buy at all times.  Why limit yourself to only selling product when you have a new disc coming out?   Additionally, you’re playing Peoria for the first time, so people there are going to start checking you out.  Have something unique and compelling when they get to your site!   Again, the more reasons to buy you offer, the more opportunities you have for sales.

Starting way back, Pearl Jam sold a limited quantity of amazingly cool posters for each city they toured in.  An exclusive “Boston” poster only sold in Boston, a totally different one for NYC, and so on.  They became ultra collectible and they were usually sold out within minutes of the doors opening for the show.  Dedicated fans showed up early, were provided with a quality product with a compelling Reason to Buy, and the band likely made a solid profit.

This may go without saying, but as you create these reasons to buy, make sure you actually make money on them.  In other words, if you’re selling your new release for $6.99, but the actual cost to create the product was $10.00, then you’re losing money with every sale.  It’s understandable to want a compelling price point, but don’t set yourself up to fail.  The result of the equation, done correctly, is where you start to see your bank balance growing.

Here’s the part of this chapter that might raise the hackles of a few people.  Going in, readers need to understand first off that we have no reason to recommend one company over another, and nobody sponsored the writing of this book, this chapter, or anything like that.  In fact, we take pride in the fact that we’ve never gone out of our way to screw anybody over in the industry.  We shall now discuss the multiple direct to fan service platforms available.

Before you try and decide which company/products to go with, you need to first have a plan of attack.  For example, if you’re only interested in selling digital music on iTunes, then you don’t need to spend money on a Topspin account.  But if you’re working to build a community around your music – a legion of fans hanging on your every word, then it might be worth looking toward companies like ReverbNation.

Some might be surprised to hear this, but the team at D.I.-Why are big fans of ReverbNation and Jango.   For the most part, your friends and family are the worst critics of your music.  If they love you, and care about you, they’re not going to tell you if something sucks.   “That’s great, dear” will destroy your career if it’s the only guidance you’re getting.

Jango allows artists to upload music and tag it according to similar artists.  Your new music is Madonna-esque?  Great – it’ll get played and recommended to folks that like Madonna.  You pay for the number of plays you get, and you’ll collect demographic/analytics as things move along.  Prices are reasonable and within the scale of any indie artist.  Using the stats the provide on their website[5], a $30 investment yields on average 30-50 fans.  COA per fan would be $0.60 – $1.00.  Not bad.  But let’s not assume these people are fans.  Jango is more about focus group style marketing.

Have you ever been accosted by a focus group marketer at your local mall?  They’re the ones that usually start with “Can I pay you $5 to take a 10 minute survey on movies coming out this Fall?”  They walk you into what was formerly a Spencer Gifts or Chess King[6] and ask you questions about actors, film clips, and what influences you.  There are all kinds of stories about how focus groups and test markets preferred one movie ending over another and thus the history of cinema was changed forever.[7]

Jango can be influential in the same way – without the tedious questions and inane film clips.  A bunch of people you don’t know or have influence over are going to sign on to listen to music.  Your stuff comes up, they have an opportunity to critique it, and you get the benefit of their feedback.  At last check, Jango averages around 2-3 million visitors per month, so odds are their audience is bigger than yours – and less likely to include your cousin Herbert and Aunt Gertrude.  Isn’t that nice, dear?

ReverbNation does all kinds of things.  In fact, it’s difficult to keep track of everything they do.  For emerging talent looking to dip their toe in the waters, ReverbNation seems to consistently be their first stop.  Basic features are free, but you can up the monthly subscription to include things ranging from digital distribution (to places like iTunes) to email distribution and storefronts for your website.

There’s an advantage to the “all-in-one” style opportunity that ReverbNation represents – specifically everything you need is in one place, easy to manage, easy to update, easy to get results from.  In the case of ReverbNation, and based upon client feedback, we’re hesitant to recommend their “upgrade” products.  Our experiences with ReverbNation is that their products are difficult to integrate, limited in customization opportunities, and often seem amateurish in presentation.  We also found their interface to be slow and somewhat confusing.

However, similar to Jango, we have no hesitation recommending ReverbNation as a first stop and test market for your music.

Moving on, there’s Topspin.  To paraphrase a D.I.-Why client, “this shit is serious.”  The folks at Topspin got (and continue to get…) a ridiculous amount of buzz which centers equally around their success as a platform but also the hip/cool factor which seems to precede every discussion they’re part of.   We saw a credible industry blog reference the fact that the CEO changed hairstyles.[8]  We blame the Kardashians for this – regardless of any actual proof of involvement or interaction.

Here’s the deal with Topspin – like ReverbNation they provide tons of useful marketing tools and platforms.  Artists at all levels of success can benefit from using Topspin.  Unfortunately, getting the most out of a Topspin account often requires a huge amount of effort or hiring a marketing company to help you get going.  For that, naturally, we recommend D.I.-Why.

The beauty of Topspin lies in its ability to pull data from just about everything it does.  If you’re selling something, they’ve got stats.  You’ve got their streaming audio player on your website?  Here are those stats.  The list goes on and on.  As we’ve discussed, collecting data is your main mission with marketing.  The more info you collect, the more informed your decision making process becomes, and hopefully you’re making better decisions and watching your career grow.

We worked with a client who relied on us to set up a storefront on their website.  Their budget was somewhat limited, and we thought they’d get more bang for their buck with Topspin.

As we were setting things up, and building their store, the team at D.I.-Why couldn’t figure out how to enable sales of single tracks alongside those of the entire album.  It seemed bizarre to us that you couldn’t just click a “sell singles for this price” type button and enable the option.  In the iTunes world, we wanted the 99-cent singles lined up and ready to go.  In fact, it was a specific request of the artist to sell singles from their website.

After a few hours of head-scratching, forum searching, and FAQ reading, we broke down and asked the folks at Topspin what was going on.  At this point we were being to question ourselves, and that’s a dangerous sign.

It turns out the option we were looking for doesn’t exist.  While you could manually create individual product along side each album, you can imagine how long it would take to set up each album if you had to repeat the process 10 or 11 times to accommodate the number of tracks on an album.

Topspin went on to explain that their payment structure[9] takes 15% of sales plus 2.2% in processing feed per sale.  In addition, they charge a  30 cents transaction fee per sale.  As such, if you sold a 99 cent single, your net profit (money after all fees are taken out) is 53 cents.  That’s nearly half the cost of the single!  They went on to explain that it makes more sense to sell entire albums – there’s bigger margin so that the associated feels don’t amount to as high a percentage of your overall profit. Still though, if your business model involves selling lots of singles, Topspin just isn’t the right solution for you — at least, not for the sales functionality.

Our favorite part of Topspin, above and beyond their data collection abilities, is the way their platform handles assets.  It takes a little getting used to, but when you add content to Topspin, each individual piece (each image, each track, each merch item) is treated separately.  So technically, you’re not actually selling an album;  you’re selling a digital package which contains a bunch of tracks and maybe a PDF or JPG with your cover art and liner notes.

Again, it takes some time to get used to this way of dealing with product, but its inherent versatility lets you do all kinds of awesome things.  In particular, you can bundle any items together in just about any way you want.  Maybe you want to bundle your new album with a t-shirt?  No problem.  Maybe you want to sell the third track off of each album you’ve released on the third day of every month?  Again, no problem.  If you know what you’re doing, it takes all of 15 minutes to set this stuff up.

Another cool Topspin feature is that while you can use their “on board” Spinshop tool for designing your store, they readily offer links to every item you’ve decided to sell.  Those links can sit behind any image you want allowing you to create a totally custom store on your website.  Design things as cool, funky, crazy, or creatively as you want.  Just make sure you link the right product to the right image, and you’re good to go.

They do a whole host of other cool things (mobile-enhanced ticketing, special fan clubs, etc.).  For bands that are anticipating growth, or already have a solid fanbase, you can accomplish great things with Topspin.

Before you think we’ve sold our soul to Topspin and would recommend them to anyone with a credit card and a guitar, just stop.  That’s not the case.  We discussed Bandcamp briefly before, and they’re an excellent solution for the musicians.  Their stuff is exceedingly simple to setup and use, and they’ve got a pretty nifty way of letting you sell physical and digital products.  In addition, for those not savvy with code or willing to spend the time/money/effort creating a website and associated store, you can pretty much do it all for free with Bandcamp.  The list of features they include with a free account is staggering, and would leave the average (or not-so-average) artist with no need to look elsewhere.  They’ve also got some of the best web copy and demo videos we’ve ever seen.  Seriously, who writes their stuff?  We’re impressed.

As mentioned earlier, the downfall of Bandcamp lies in its lack of embeddable store-bility.  Your Bandcamp page/store/profile lives exclusively with Bandcamp and can’t be seamlessly integrated into your website.  There are some design-able ways to work around this, but it’s still gonna wreak a reasonable bit of havoc on your analytics.

One other small complaint with Bandcamp is that it’s very easy to tell when someone’s using it.  While there are a lot of customizable options, Bandcamp pages tend to all look somewhat the same.  The fonts/layout/widgets all have a certain element that tells you “this guy’s using Bandcamp.”  While this may not matter for some artists, those that want everything to “match their vision” may want to consider Topspin.

The oldest platform on the block is Nimbit[10].  What started as a way for artists to “build websites and sell online” without knowing code progressed over the years to becoming a solid direct to fan platform.  In terms of usability, functionality, and pricing they fall squarely between Bandcamp and Topspin.

The attraction of Nimbit is ease-of-use at a level that while not as fully featured as Topspin offers a platform that most artists can operate with ease.  Nimbit offers a full complement of tools that let you setup an album, sell it on your website, and promote to the masses about what you’re up to.  From inside your Nimbit account, you can accomplish multiple goals ranging from creating storefronts to creating and distributing emails, and scheduling/posting to Facebook and Twitter.

Nimbit spent a lot of time recently promoting their Facebook storefront.  It’s quite easy to integrate into a Facebook band/artist page, and provides the necessary promotional and sales tools you’d want.

Interestingly, Nimbit offers digital distribution to iTunes, Amazon, eMusic, and others as part of a paid Nimbit subscription.  They don’t restrict the number of products you can sell through those 3^rd parties and they don’t take any commission on those sales.  If you’ve got a growing catalog, it’s worth considering Nimbit, if nothing else, just for that capability.  We’d strongly recommend artists compare rates at Tunecore alongside those of Nimbit.

Nimbit seems to be the ideal solution for a middle class of musicians looking for a solid array of options at a reasonable price.  Much like Bandcamp though, you can tell instantly if an artist is using Nimbit.  Their storefronts are limited in customization.  The more advanced features that come with Topspin aren’t available on Nimbit, but at the same time you don’t have to consider hiring an expert to set up your Nimbit account.   Additionally, Nimbit charges a flat 20% commission on sales unlike Topspin – no transaction fees, bandwith fees, etc.  If you’re using Nimbit to sell music, you’ll know exactly how much you’re earning without having to do any advanced math.

There are lots of other companies working in the direct to fan space, but there’s enough to suit any musician with the ones we’ve described.  If you’re upset that your company wasn’t included, well, we’re sorry.   But we can still be friends, right?

No Comments D.I.-Why