Direct-To-Fan Holds Much Promise, Many Problems
By Kyle Bylin (@sidewinderfm), founder and editor of sidewinder.fm, a music and tech think tank.
The notion of
artists selling music directly to their fans holds a powerful allure. Why pay to distribute your music to iTunes and Amazon if you can set up your own online
storefront? You keep a higher percentage of the sales revenue and obtain invaluable information about your audience.
This information — such as email addresses and buying behavior — empowers you to contact your fans the next time that you have new music or merch for sale.
Furthermore, going directly to fans allows you to set the price of your music and sell high-end bundles. Rather than limit your release to a $9.99
digital download, you can create unique tiers that align with the different spending levels of your fan base. By doing this, you stand a higher chance of
making more money because causal fans can buy the baseline offer and avid followers can snap up the exclusive fair.
At the apex of the direct-to-fan craze, these beliefs emerged like prophecies. A middle class of musicians would blossom and supplant the traditional model.
As great as those conference panels and guest posts were, it appears as though much of the initial hype around direct-to-fan has
been displaced by reality. To better understand the promise of direct-to-fan and how it has changed, sidewinder.fm asked several music and tech experts: How would you describe the initial promise of direct-to-fan? Have any parts of this hyperbole been displaced by reality?
The Promise Of Direct-To-Fan Is Engaging Fans
I made my own CDs and sold them on the road direct-to-fan in 2000. Shortly after that, I got them up on CD Baby, and when iTunes launched, I got them there
as well. I had my own website and was an early user of Bandzoogle, which to me is still one of the best and most powerful direct-to-fan tools out there.
Through my website, I communicated directly with the hardcore fans, updating them with pictures, songs and videos from the road or the studio.
With the embers of MySpace still glowing and the sparks of Facebook emerging, I had an amazing home where fans could be a part of what I was doing
musically. All of this was, if I'm honest, building the case for why a record label should sign me — it was out of necessity and not really out of choice.
I couldn't get the mega deal I had always wanted, but I wasn't about to let that stop me.
As the tools got better and some of the more established artists started to use this method, a shift in thinking began to creep in — a sense that this
could become the new way of doing business for the industry as a whole. There was a sense that all you needed was a website and an email list and you could
become the next Radiohead. For most artists like me, this was simply not true.
To add to this, everyone started to do it. The social web was awash with what to me became a more homogenized consumer experience that dealt in fan
acquisition, direct-to-consumer targeting and strategies to monetize and capture, often at the expense of any kind of fan engagement. As the labels and
larger artists got involved in these ways of direct selling to fans, the experience part of the equation began to suffer.
In today’s industry, every band has a website through which they offer a bunch of products. Are these considered direct-to-fan or simply consumer
experiences under a friendlier name? To me, direct-to-fan is more of a process in which fans can participate.
To me, the promise of direct-to-fan was one of engaging fans in a journey that led to a destination. Artists and labels leave fans on the table every day
by simply offering them more ways to consume, rather than more reasons to buy, which is what the journey of direct-to-fan should really be about: process
and not product, reasons and not simply ways.
Fans want and deserve more than a bunch of items for sale on a website, email blasts and social networks posts about pre-orders. While all those things are
good, they won’t be a game changer for most.
Bands With Good Work Ethic Can Find Real Profits
The Spitz Agency.
Similar to the platitudes that accompanied the arrival of the “long tail” theory, direct-to-fan initially promised a paradigm shift in favor of smaller,
more independent bands. Who needs a label when you can be your own manufacturer, distributor, and store? The ideal of cutting out all the middlemen is
appealing — and believe me, it can work — but it requires a realistic set of expectations, and just like any other “hot new theory,” the buzz around
direct-to-fan was all about lofty promises.
I believe one of the reasons Topspin became an early leader in direct-to-fan was because it aimed for higher-tier established acts first, and worked
hand-in-hand with David Byrne and Metric to prove the viability of its model with real case studies. Most other platforms just courted the “mass market” of
direct-to-fan users with shiny apps and nifty features, and a breathless industry press (and optimistic artists) happily got their hopes up. But the tidal
wave of change did not materialize. But that is due to the realities of the music business — not direct-to-fan’s business model.
The fact is, being a successful band — like any entrepreneurial endeavor — takes hard work and time to scale up from zero, and often fails. If an artist
runs a direct-to-fan campaign, and they fail to “make it” and eventually break up, does that mean the business model is flawed? Nope. Direct-to-fan does
not promise easy, instant success for everyone who uses it. But the shine of a hyperbolic music/tech press can set unrealistic expectations that deflate
quickly.
Meanwhile, artists — and their audiences — are adapting slowly. Fans must be taught to buy directly from the artist; they must trust that the artist will
provide a good customer experience. And the artist has to follow through. There’s a huge gap between doing direct-to-fan, and doing it well. Fortunately,
e-commerce has a well-established set of best practices to follow. Bands with good work ethic, a decent-sized audience, and a basic grasp of business
fundamentals can find real profit in direct-to-fan.
Direct-To-Fan Is Great In Theory, Harder In Practice
Today, many more artists get to broadcast since the access to broadcasting has become widely open (a Mac, a guitar, and a Facebook page) and since labels
face more and more difficulties (too many potential artists to manage and less and less money to do it). It has never been so easy to make music and
broadcast it. And above all, via any contact platform, I am in tune with my public.
One of the greatest advances in music marketing and promotion is the ability to go directly to the fans and engage with them in information exchange and
commerce. This is direct-to-fan. By developing direct online relationships with your fans, you can make and keep more money, and begin to amass a wealth of
data.
But, no matter if you are able to broadcast your music the way you like; if nobody cares and knows you, you might as well send it by mail to your friends
and the result will be exactly the same. More and more online direct-to-fan tools exist to ensure the promotion of artists. Pretty cool. But how can you
master these tools?
"Do-it-yourself" and "direct-to-fan" are great concepts… if the majority is okay with not making a living out of it. Again here, without a very consistent
fanbase, a serious work team and a strong marketing and media broadcasting basis, things won't get very far. You won't even earn enough money to remunerate
your web designer. First, you have to work hard, really hard. "Direct-to-fan" doesn't boil down to directly selling content to fans, it is about providing
them with an incentive to buy; whether via your website, a record store or on tour. To sum up, the upstream work is essential here in terms of visibility
and bonding with your audience.
According to Cory Doctorow, only 3% of musicians signed by majors before Napster earned more than $600 per year from their record sales. So it wasn't that
much better then for a whole category of artists. What now? What the Internet has also created is a whole middle class of artists. As Jack Tatum of Wild
Nothing states in Pitchfork: “From a certain point of view, the Internet is the best thing that has ever happened to music. From another, it is also the
worst.”
Hence the fundamental point of direct-to-fan: establish strong bonds with the public / consumer. What for? To earn a living… But, the truth is that almost
everything almost every artist tries to earn money fails.
Middle Class Artists Face Direct-To-Fan Challenges
I think the initial promise — or certainly the implication via PR etc. — was that direct-to-consumer (D2C) could be a significant move against the prime
retailers, potentially allowing artists to cut out the middleman and get closer to fans. I think the reality is that the logistics and percentages involved
mean that this only really works for unsigned DIY artists, or the likes of Paul McCartney.
For everyone else, D2C can work but its more the icing on the cake than a significant income stream. I think one area that rarely got quite the coverage it
needed when analyzing the merits of D2C was the logistics: how the product is shipped, who handles that, the costs involved etc.
If you're an unsigned DIY artist, you can handle this all yourself because the scale will be relatively small. If you're Paul McCartney or another huge
artist, you can also manage it because you have sufficient assured sales to bring on a fulfillment partner. If you're an indie band with a relatively
modest budget and general sales expectation for your release however, you fall between the two and that's where problems creep in.
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Sidewinder.fm is founded and edited by Kyle Bylin of Live Nation Labs. If you would like to contribute a post to be featured on the site, please reach out.
PledgeMusic needs a cheap & easy fulfillment division of their business.
Benji & the team are ambitious folk – I think the reason they haven’t set this up yet is that they, too, know what an incredible pain in the arse it is to get product shipped (both physically and financially).
A great deal of the value in direct-to-fan platforms is their ability to facilitate what the Lean Startup folks call the “Build-Measure-Learn” cycle. Sure, you can make money if you have an established fan base and proven business model, but if you are starting out or working on something innovative and untested these platforms are a great way to get prototypes in the hands of your early adopter fans and learn what it is they need. PledgeMusic is a particularly cool platform for this sort of thing. If your music or product offerings aren’t engaging people you’ll get that feedback and have the opportunity to try something different. If your music fails to move people it’s not the fault of the DTF platform/model. If anything these platforms are doing artists a great service by providing this feedback. Multiple failures should be expected and seen as an opportunity to learn. That’s the way it works in every other startup business.
Thanks Boy Georgia,
It is a tough one but we’re going to get it done!)
Benj
Thx Eric.
It’s surprising that there is still not a “salesforce” type software solution for musicians.
Great perspectives on a topic that reflects a wider concern of the music industry, too often seeking a one-size solution for the challenges of the digital era.
It’s true that at any size an artist needs to connect deeply and directly with fans, but the extent to which a platform is required to do this will vary greatly according to size and stage of their career. For those just starting out, the emphasis will be more on discovery and gaining attention, making the breadth of platforms more crucial than the depth.
As a fan base accumulates, however, too many artists stop short and continue to focus on that breadth, without customizing their art, content, and merch to the most passionate fans. This leaves both fans and money on the table, as Benji points out, and fails to take direct-to-fan to its most beneficial conclusion. Those building the closest ties to fans, offering the most of themselves, lay the groundwork for those same people to spend more time and money with their music.