Does the “Freemium” Model Work for All Artists?
This guest post is by Chris Bracco; he is the digital marketing coordinator at Intrigue Music, LLC, a music company in NYC and author of the Tight Mix blog. 
With every month that passes, more and more artists are jumping on the bandwagon and deciding to give away some of their music for free. Some artists are even giving away entire albums and EP's, and asking for kind donations. Indie record label Sub Pop is considering turning its business model on its head, giving away all of its music for free, and instead selling the unique physical products that used to be given away as promotional material.
The growing trend these days is to use your music as a marketing tool to help promote the other products, services, and experiences you can offer your fans as an artist (live shows, physical CD's, vinyl, t-shirts, toys, video games, music lessons, bundled packages, etc), since those products and services usually yield higher profit margins. While the "freemium" model seems to be working pretty well for some artists, it doesn't necessarily mean that it will work for you.
1. Be aware of what's driving your costs.
While the cost of music production has gone way down in recent years, it can still be relatively high for some DIY artists with no label support. If you drop a couple grand to record a five-song EP at a local studio, and want to give it away to your fans for free, you better have a plan on how to (at least) recoup the money you spent on production. If you have no other unique products or services to sell to your fans during that time, then maybe free isn't the best option for you.
2. Your other products and experiences must be valuable.
If you do decide to give away some of your music for free, whatever else it is you're selling has to be extremely valuable, attractive to your fans, and well worth the price. The reason that offerring free music downloads works for some artists is because they have something else that is awesome, and that their fans want (like a kick ass live show). These artists consistently leave their fans wanting more than just the free music downloads, and they know what their fans are willing to pay for.
3. Know what your fans want, and deliver it to them.
I know that sounds obvious, but it often goes overlooked, assumed, or misunderstood. What do your fans really want? Are they into vinyl, or prefer making playlists on their iPods? How do they dress? Do they like cooking? What do they typically spend their disposable income on? Are they willing to pay for any music, let alone yours? If so, then why the heck are you giving it all away for free? Don't assume that your fans are exactly like you, because your probably wrong. Ask them!
4. Make getting your music either stupid-easy, or super-difficult.
If you ask any typical marketer, they will tell you to make buying your music so easy that even your grandmother can figure it out. However, have you ever considered doing the opposite? There have been several studies about top luxury brands that support the notion that a more difficult buying process could actually lead to an increase in customer commitment. If you have something high-end to offer fans, it could be beneficial to make it hard to obtain, because it would increase it's perceived value.
5. Don't be afraid to charge for your music.
If you have given away your music for free before, and want to sell your next project to your fans, then don't be afraid to do so!
Going from "free" to something is tough to do in any market, but it can still be done. You just have to make sure the "something" that you will be charging is a price that is deemed reasonable by your fans.
A great example of this is Bandcamp's new 15% revenue sharing business model. The company surveyed the crap out of its devoted user base to determine a model that would keep users happy, but also make the company money. Not many people were upset by this model (considering their outstanding services), so Bandcamp ended up retaining the overwhelming majority of its user base.
If you have any interesting experiences about selling or giving away your music, please share them below!
Artists and labels who give away music for free are ruining the music biz. “All you can eat” offers like MOG are ruining the music biz. Piracy, and companies that promote piracy (Google) are ruining the music biz.
I know it’s the labels fault — but does EVERYONE need to follow suit?
Please people, realize that if you give away your music for free, it devalues it to be worth nothing.
I’m not talking about giving away a free track here and there for marketing purposes. I’m talking about the relationship of art and commerce and how to save this business.
People inherently like to “buy” things and “own” them. Let’s not forget this basic facet of human nature.
Get back in the game…
I don’t think everything has to be free as an artist, you just need to build a loyal tribe of peep and they will be happy to throw you a few bucks to keep the music coming…
AirHammer
It is a sad day when I inform my bands that the thing they have worked their whole life to produce is at best a tertiary form of income and that the real money is in things they could not care less about.
Fantastic post and one of the keys to all of this is if you choose a great avenue that hits with your fans you dont have to waste time promoting in ways that arent working, one of the most important and underestimated parts of marketing today.
Great article Chris! I think the most important point here is the idea of re-couping the money spent in actually creating the music that is being given away for free. Many artists have not thoroughly considered the freemium model and end up sunk in their own debt because they have no other way creating enough value to make money. Well said – thanks for bring that point to light.
Nice work Chris! I really do think free is the way to go for most artists starting out. As a music fan, I love MOG and Spotify, and I’m sure Apple’s offering will be at least as good. We may just find out in a few days! We do earn money from these streaming services – not enough yet to buy a Coke, but that may change.