Entries in Planning & Strategy (20)
Bruce Warila | Fri, April 25, 2008 at 11:13 AM Why You Must and How to Implement a Free Song Strategy
I read most of the music business blogs out there, and I read a lot of comments that readers post on many of these blogs. I believe it’s a common misconception that new-music-business bloggers generally advise artists to give away all their music for free. So, I am declaring my position here, along with guidelines for implementing a Free Song Strategy.
General Comments on Making Songs Available for Free
The day you enable fans to download your songs without paying for them - will NOT be the day you experience a massive spike in traffic. In fact, nothing will change. Those that really wanted to obtain your music for free already did so.
More than 50% of the population will buy your songs if they like your music. Digital music revenue is growing not shrinking. There is no survey or statistical evidence that demonstrates that FANS that share/borrow/demo/steal music will NEVER buy music from the artists they like.
When people get older they have less time to share/borrow/demo/steal music; instead they opt for uniformity and convenience; this is when you will convert the other 50% of the population into purchasers.
There is a lot of dribble out there about the growth of BitTorrent/file sharing and the percentage of demonstration (stolen) music within MP3 players - ignore this. There are bigger picture concerns that labels and artists should be focused on. The only thing these surveys tell me is that a lot of people are test-driving a lot of music.
You are NOT training an entire generation of music consumers that music should be free. You are declaring to the world that you may try my music prior to buying it. However, you should also be declaring that your music is available for purchase on every digital music store on earth. “PLEASE BUY AFTER YOU TRY” should be your message.
It is EXTREMELY difficult to run a profitable business when you are relying upon selling $.99 cent downloads that are sold by stores that take a cut of your revenue; irregardless of your size and popularity. MP3 downloads will NOT be the last digital product this industry creates. If you focus on seizing every bit of download revenue you can obtain, you will be hurting your chances to increase your popularity; which will hurt your chances of selling high-margin digital products when they arrive. Focus on popularity not on selling $.99 cent MP3s.
Reasons Why You Must Make Some Music Available For Free
For a lot people - the MP3 player is their radio, and this is a rapidly growing segment of the population. If you want to be on this radio - you have to make free songs available for download. You cannot expect people to buy your music until they are fans of your music.
Falling in love with songs is a complex process; although widgets help, it rarely happens by listening to songs played through a widget that is tied to the Internet. In a recent post I use this equation: Listeners * Frequency * Conversion Rate = Fans. If you have a few minutes, you should read this post.
Someday soon every device (MP3 player, car stereo, cell phone, home stereo, computer, etc.) will be tied to music recommendation engines. Recommendation engines will be the most convenient way to attach HUGE pools of songs to devices. Many of these engines rely upon DATA to make recommendations. If you the artist, or if your songs are VOID of data - it will take forever for you and your songs to FILTER their way up the data-driven recommendation ladder. It is essential that you work to accumulate P-SPINS (plays) if you want the advantage as these systems come on line.
Strategies For Setting Songs Free
Flood the world with versions. This is not 1995 - it’s 2008. Release multiple versions of your songs. Release versions of your songs that have lower encoding rates than the versions you sell. Some people say encoding rates don’t matter to consumers. It does and it will. Have you ever cranked up an MP3 encoded at 128KBPS - it sounds like shit in the car.
Release multiple mixes. Chances are - if you are looking for a record deal - your best songs are going to be rerecorded, remixed and repackaged under the guidance of a label. This is one of the versions/mix/packages that you will ask people to purchase.
Labeling matters. Put your encoding rate and the word DEMO right onto the label of your MP3s. This matters, especially to people that are freaks about uniformity and sound quality. This segment will be happy to upgrade when they fall in love with your music.
Clip the end. You could clip off the last ten seconds of your song. I wouldn’t do this, but I’ve seen it done.
Append a message. Once again, it's 2008. You have the tools to tag the end of a song with a five second message - try it out. Find someone sexy to speak your name and your song names for tags that can be stitched onto the end of each song. Get creative and make your end-tags into a puzzle.
Glue songs together. Sandwich multiple songs together with no ID tags in-between songs. I guess you would call this your free songcast, podcast, or song-sandwich.
Hold back some songs. You don’t have to enable the download button on every song/version. Use caution when applying this strategy. If you only have one great song, you probably have to cut loose a version of this song to accumulate P-SPINS.
Find a sponsor - this may be annoying, but tagging the end of song with a soft message or placing an ad into a song-sandwich could be an interesting revenue source for you.
Consider trading for something such as an email address for the free version of your song. To find tools and widgets that will help you implement and manage a Free Song Strategy, check out ReverbNation.
Bruce Warila | Wed, April 23, 2008 at 02:11 PM Stop Worrying About File Sharing or You Will Be Plowed Under by The Future
Record Labels, Business Advice For Artists, Illegal File Sharing, Planning & Strategy, The Substitution Challenge 
Study the diagram attached to this post. This diagram is the future. When I say that substitution is going to be a far bigger challenge for record labels and artists than replication/file sharing - this is what I am talking about. File sharing should be a dead issue. Use your energy to conquer the future.Sudden Substitution Impact
Attached to every play, forward, reverse and shuffle button will be a digital aggregator, a recommendation engine and ten million songs. Every link on this chain is or may become a commodity.
Devices - Commodity
Apple has a device manufactured like the one shown in the diagram for less than $50 USD. It doesn’t matter if the thing is bolted into a cell phone or implanted in your head, the hardware to play music will be a commodity business. Any record label or group of artists will be able to buy/sell/give-away these things by the truckload. MP3 players will multiply like the one billion used cell phones rotting in your junk drawers.
Digital Aggregators - Commodity
Paid downloads, ad-supported music, personalized streaming, etc. - any company will be able to wrap songs into a business model that uses inexpensive point-of-sale and/or ad-coupling services; supplied by the companies that will compete to supply this low-margin, high-volume service. It won’t be much different than seeking a company to process credit cards - it’s will be an obtainable, competitively priced commodity.
Recommendation Engines - Commodity?
It’s early days for recommendation engines. I’m still undecided if one service will outperform another service to the extent whereby they all don’t end up competing on price? Nevertheless, any company will have the ability to plug and unplug recommendation engines into their consumer offering.
The Song Pool - Commodity
Record labels don’t like hearing this, but the combination of device + digital aggregator + recommendation engine + ANY large pool of songs makes every pool of songs a commodity. So what if Universal is missing from the pool - take this device (Brand Z) - it’s free. Press the play button, press the play button again, press it again, press it again, press it again… Sounds pretty good huh? Brand Z doesn’t need 100% of consumer mindshare to make money - no, they just need an hour or two a week of their target market’s disposable time.
It’s a Great Time To Be an Artist
Artists please take note that I did not say your song will be a commodity - it’s the pool of songs that will be the commodity. While the eventual reality of this scenario is a problem for some, for artists that make great songs - this is the future that will cause the companies with cash to bid for your songs and services. Every company that can offer a branded music solution will seek to differentiate itself from every other company offering a competing product. While I stressed “commodity”, it won’t be a commodity like bananas are, it will be more like cars or television channels; switching will occur within the category less frequently than it does in the produce isle.
Strategies For Artists
Stop worrying about file sharing, forget everything you know about promotion and do nothing but make great songs. Everything else will sort itself out. But seriously, read about P-SPINS on my previous post and think about how to improve the odds of enabling your songs to be found within a large pool of songs connected to a recommendation engine. Translation = great songs placed everywhere and anywhere, paid and unpaid - will increase your odds for success.
Strategies For Labels
Stop worrying about file sharing, clone the red square, put it under the blue container and stock your pool with the best songs. Cut overhead, hire the Google guy and prepare to bid on the best songs and artists. Start building/looking for products that will generate higher margins and offer a deeper level of engagement for consumers. Pray that Live Nation isn't doing all this.
Bruce Warila | Wed, March 19, 2008 at 05:04 PM You Can Make Money In Music
Making Money In Music, Business Advice For Artists, Planning & Strategy, Alternative Music Marketing 
If you have not seen the movie Once, rent it and watch a great example of what I have been calling an elaborate plan.
Once was written and directed by the John Carney, the bass player for the Frames. The movie featured unknown actors including Glen Hansard, the lead singer of the Frames.
The Once team wrote a plan, raised $160,000 and made a great independent film that featured their music.
The film Once has won numerous awards. The song "Falling Slowly" won the 2008 Academy Award for Best Original Song, and the Once soundtrack was twice nominated for Grammy Awards.
Once has grossed over $17,000,000 (as of March 08) at the box office alone.
If you want to make it on your own, you have to be as smart as John Carney. Great execution John. Brilliant! Read the NY Times movie review.
Bruce Warila | Wed, March 12, 2008 at 11:22 PM Music Think Tank
Making Money In Music, Disruptive Technology, Business Advice For Artists, Illegal File Sharing, Music Industry Commentary, Planning & Strategy, Business Models 
I am taking the advice I give to Brand Together. You will be able to find new articles I post on Music Think Tank. I am flattered to be part of such a great group of people.
Bruce Warila | Sat, March 1, 2008 at 07:09 AM Communities Dominate Brands
One Hundred Million People a Month and Growing
Three years ago nobody cared about MySpace or Facebook. Now here we are in 2008, and one hundred million people around the globe are using social networking technology on a monthly basis. What’s the motivation? Alan Moore says in his recent article titled INFLUENTIALS ARE TOAST that “Human beings have an innate need to connect, communicate and collaborate. Digitalization has revealed the true nature of humans, and that truth changes everything.”
Digitalization Has Revealed A Truth That Changes Everything
“Human beings have an innate need to connect, communicate and collaborate. Digitalization has revealed the true nature of humans, and that truth changes everything.” This is powerful and profound; you can’t unwind a truth; MySpace and Facebook have birthed a truth. Obvious it is not. Most things in life are assumptions; proof of truth is hard to come by. The truth is, social networking technology will forever enable people to connect, communicate and collaborate - like they innately desired to, but could not easily do - in such a manner - until 2005.
Connect, Communicate and Collaborate - So What?
Moore also says “culture is created by the interaction between human beings”. So, people are creating micro cultures or communities at a pace and via methods that were unheard of three years ago. Good or bad - and irreversible, these communities are changing the game when it comes to music marketing and promotion; it’s communities that are dominating brands. It’s not intense advertising, it's not celebrity endorsements, it’s not street-team marketing, it is the formation of communities that will dominate the creation, the maintenance and even the destruction of brands.
Brands Dominate The Charts
Not only do brands dominate the charts, brands dominate ticket sales. If you are not creating music, you are probably thinking about how to create a brand. Prior to 2005, you could build a music brand with a pile of money and a proven formula; record labels were pretty good at it; now, communities have all of the power. Not only can members of the community try music before they buy it, a community or a micro-culture can rapidly form to breath life into a brand, or they can suck the wind out of it before it takes a second breath.
New Truth = Unlearn Old Methods
I read a printout of INFLUENTIALS ARE TOAST when I was stuck on a runway for two hours last week. On a normal day I could have read right through this article without giving it much consideration; after all, the implications of social networking have been analyzed more than the laws of gravity. However, it was the notion of “truth” that struck me as significant. You can do some things in life based upon assumptions, however when you’re stoned with the truth, you have to make real adjustments. Perhaps I have to unlearn everything I learned about marketing prior to 2005-2006? Seriously!
Old Marketing Out - New Marketing In
Old marketing doesn’t work. New marketing has barely been invented. You may want to start by reading David Jenning’s book titled Net, Blogs and Rock “n” Roll. You could also consider the next couple of paragraphs. Moore goes on to say “communities form around values, interests and desires, not demographics.” You should ask yourself (self) - how do you leverage the knowledge that communities are formed around values, interests and desires - and not demographics?
Hang a VID Sign
People that share your Values, Interests and Desires (VID) want - and may even have an innate need - to find and connect to you. Making it easy for your “VID Tribe” to find you has to be an important part of your elaborate plan.
Your songs say a lot about your values, your interests and your desires. You should post your lyrics, but unknown lyrics don’t translate well to the way people search for information; so, lyrics won’t help much in making that first connection to your tribe. They will however, be invaluable after you’re found.
You will have to go beyond lyrics and really think about how you want to STRONGLY communicate your values, your interests and your desires. You can blog about these things, and you can post images and video that paints a picture of the community or micro-culture you belong in, or that YOU innately want to connect to. Everything you post becomes searchable, and the more you say - the bigger the sign becomes!
The Ends of the Battery
When you are hanging your VID Sign, remember: power comes out of the ends of the battery. My advice would be to know who you are and strongly commit to it; don’t play the middle. People may join lots of communities, but they will have millions of communities to choose from. I am not talking about extremism as much as avoiding the trap of trying to appeal to the widest possible audience. A strong commitment to your values, interests and desires powers the brightest sign. You’ve heard of a brain dump, try a heart dump…
Be True
You can’t make the shit up. Everything you say goes under a microscope if you’re successful. If you manufacture the gravity you’re using to attract a community you will eventually be exposed as a fraud. Every sentence you type is archived and searchable. If you are taking a strong position on something, you may want to reserve your right to change your mind; you may also want to ask for feedback to shape an opinion that you are attempting to form.
Inviting or Joining
Your hanging out your VID Sign that communicates your values, your interests and your desires - are you inviting members to your micro-culture or are you joining a community that already exists? The answer is both. If you enjoy things technical read this page about mesh networks. Basically, you have to join and invite at the same time. Nobody owns the community and the community goes on with or without you. The marketing of artists use to involve making the artist the center of the universe, now the artist has to become a valued and accepted contributor to the community.
How Do You Invite?
You have to become a blogger. There’s no escaping the fact that you have to hang your sign and declare your positions if you want to be a contributing member of a community. Declaring your positions means describing with word, image, song and video - your values, interests and desires. Moreover, I believe this is an activity you can’t be skimpy about. The “truth” has been revealed, and to ignore it by relying on pre-2006 methods to market and promote your music is a recipe for death by obscurity.
How Do You Join?
Scout the earth for those that share your values, interests and desires and make real friends. This goes beyond talking about your music, and it goes way beyond the fake-friending people do on MySpace. Find real friends, start conversations, declare your allegiance to positions and then introduce people to your music and the interesting and COMMON things you blog about.
Tools & Technology
Creating a blog under your own URL and using it in conjunction MySpace and/or Facebook is one option. Facebook just launched Facebook Music. In my mind, the right tool has not hit the market yet. If you are going to go through the effort of “hanging a VID Sign”, “inviting” and “joining” as described above, you should strongly consider promoting your own URL; while using sites like MySpace, Facebook, iLike and Last.FM to drive traffic to your own branded blog. If you are into messaging, you may also want to give Twitter a try.
Communities Dominate Brands
For this post I stood on the shoulders of Alan Moore. Alan’s blog is also called Communities Dominate Brands. Alan’s article “Influentials Are Toast” was the inspiration for this post.
Digital Music Can’t Be Marketed - The Rewrite
This is a quick rewrite derived from my post on Music Think Tank last week. If you read my comments on Music Think Tank, you will see that I combined all my thoughts into this new post.
Not long ago, record labels raked in profits by being experts at packaging and marketing music. Real and imagined benefits were shrink-wrapped into jewel cases, slick marketing coupled to payola pushed the product onto consumers by the billions, and lack of quality was a promotion problem solved by the marketing department. Digital music is changing all this. Everyone’s ability to promote and market music is eroding rapidly.
Music is now the most naked product on earth, and this nakedness is driving down overall music sales. Music sits upon the shelf unwrapped, raw and void of packaging. Consumers can fully try it before they buy it, they can take it home, and they can pay for it randomly, or not at all. I can’t think of another product that is so fully exposed and vulnerable to quick and precise, pre-purchase decision-making as music. You click. You listen. You buy. It doesn’t get any quicker or more precise than that.
Yes, exposure leads to sales, but exposure costs money, and some reasonable rate of return is expected on every dollar spent on exposure. Because music is so exposed, raw and naked, the return on investment (ROI) on every marketing dollar spent, generates the worst marketing ROI of any product I have ever marketed.
How many dollars do you have to spend on promotion, to generate a single dollar of music revenue?
Marketing and promotion is really just a form of navigation now, it can help people LOCATE a great song, but it can't budge rubbish beyond a core fan group or the teen demographic. If marketing still worked, every single record label would not be cutting back on staff and expenses.
The truth is, the only promotion that works now is…the play button.
In the naked digital music world, the solution for record labels is to increase marketing ROI through perfect targeting. The problem: extremely low margins force your targeting to be dead correct. You have to be picking the exact songs to promote to the exact audience, and without a high rate of failure. (Record labels have to become information driven businesses.) Or, if cutting down on the failure rate is not an option, you have to have a workable per-unit cost basis (thus the cutbacks), plus enough volume/velocity to make it all work (obvious right?).
Fortunately for artists that make great songs, the same naked qualities that make music impossible to market, also make music the easiest product in the world to recommend. Once again, I can’t think of another product that has the viral qualities that are inherent in music. It’s the only product where the entire product (the MP3) can be easily attached to the recommendation. Try doing that with chicken nuggets.
I fully believe, of the five billion tracks sold on iTunes to date, a billion (20% or FAR more) have been sold to consumers that have NEVER seen the artist, have NEVER visited the artist’s website or MySpace page, and have NEVER had any interaction with the artist…other than exposure to a thirty second clip. A billion(s) of iTunes purchase decisions have been driven off simple recommendation algorithms (those that liked X, also liked Y). For those that doubt this estimate, look at how much real estate the recommendation space occupies on iTunes; including the front of iTunes. If it didn’t work, it wouldn’t be there.
My advice to artists is as follows: it's far better to focus your time and money on song quality and on making lots of songs, than it is to focus on any type of typical promotion (other than putting your songs everywhere and anywhere). Time spent in the studio, or money spent on a quality producer, will yield more return than the same investment spent on marketing tricks or promotion "experts". Anyone that tells you otherwise, doesn’t realize how much music information retrieval will change the marketplace over the next five years.
If abstaining from aggressive promotion seems odd to you, the best thing you can do, is to form a consortium, or a brand of artists that brand together to promote an umbrella brand. This is a form of recommendation, and it will stretch your marketing further by having thirty or forty artists all promoting one destination; which I would argue, should be a blogsite which features artists that have sonic synergy. This strategy will improve your targeting, decrease your per-unit marketing costs, and it will drive up the sales volume of everything the brand sells.