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Potential Of Direct-To-Fan Realized By Few Bands

Topspin-logo1-500x333By Kyle Bylin (@sidewinderfm), founder and editor of sidewinder.fm, a music and tech think tank.

Direct-to-fan marketing tools and services continue to hold a lot of promise. They enable artists to connect with their fan base and sell their products directly to them. But has the full potential of these tools and services been realized? Who is realizing it? What part of this potential has yet to be fulfilled? In this interview panel on direct-to-fan marketing, four influential executives in the music and tech industry weigh in on the potential of direct-to-fan.

Direct-To-Fan Still an Afterthought to Many Artists

Jason Spitz | Independent online marketing consultant at The Spitz Agency.

The “full potential” of D2F is currently being realized by a few — very few — bands. I spent years running the online store for the Grateful Dead, and I can tell you their direct-to-fan business is quite healthy. In general, jam bands do D2F well. Smarter indie/rock acts make noble attempts, and some succeed, but many run sub-optimal campaigns. They often leave money on the table. Other genres hold promise, but aside from a few shining examples, direct-to-fan is still an afterthought to many artists.

Personally, I believe that every band has the potential to build a profitable direct-to-fan business, but it requires hard work, a smart plan, and a fair amount of time to see it come to fruition. Many bands don’t have the patience or longevity to fulfill their potential.

But there’s also a problem with the broader music market. Consumers want their shopping experience to be easy, reliable, consistent, and smooth. That’s why Amazon and iTunes and Zappos are so successful — they create a really good user experience, over and over again.

Bands as a collective group can never be as successful. Every band website has its own store layout, with different conventions for calls-to-action and navigation. Often the design is flat-out bad. The plethora of D2F platforms means shoppers will come across many different checkout flows, each one slightly different. This lack of consistency makes it hard to create a habit for consumers as a whole to shop on artists’ stores. That behavior may just remain the realm of the niche super-fan.

We’re Selling Fans Short on What’s Possible

Benji Rogers | Founder and CEO of the crowd-funding company PledgeMusic.

The full potential is far from being realized. As previously described, by offering fans more ways to simply buy products and not offering them more reasons to buy, we are simply selling short on what is possible. The full potential can be realized if artists and labels truly go direct-to-fan and offer the experience both fans and consumers want.

Nielsen data we just presented at SXSW points to an unmet demand for access and experience of up to $2.6 billion per year in the United States alone. Let's be clear here, too: This is music listeners of all types asking for more than just a bunch of ‘buy’ buttons or CDs on shelves. These listeners aren’t just looking for fan clubs. They want events that they can say they were a part of. The product they buy at the end is less the point and more of a takeaway, a souvenir to show that they were there, that they belonged.

To me, the social networks have in one way stolen the thunder surrounding releases simply by killing off the reveal. Fans see things on Facebook that are broadcast to all, that in many ways show the fans what they are missing. When artists are truly being artists, they hide the majority of what they are doing and then attempt what used to be the big reveal. Only now it's sort of flat. Formulaic. There may be a competition – some clever gimmicky marketing – but it all leads to the same core messages: Pre-order my album. Buy my album. Have you bought my album?

So much more is possible with the potential for taking fans along on the journey, unlocking access and sharing what’s happening with those who choose to be let in. There’s a fan-centric social layer that these true direct-to-fan tools make possible that is being chronically underused by most artists and labels.

I think this is the reason we’re seeing a decrease in the spend-per-fan as well as a lack of participation in a truly holistic musical economy across the board. The potential is that now more is possible – it just requires a fresh pair of eyes to see it and bold moves on behalf of those in the business of making music to adopt what has been built.

Artists Products Could Be On Streaming Services

Darren Hemmings | Founder of the digital marketing agency Motive Unknown.

I think there are still gaps in the chain. The front-end marketing and CRM element is pretty slick these days; its something Topspin and Bandcamp have evolved really well.

However, I think one missing part is the pick/pack fulfillment logistics, which are far less sexy than the whole email collection and communication element, but which are the Achilles heel of larger D2C operations. If you're looking at a pan-European retail setup then you really need to have a great, cost-effective partner for the fulfillment; preferably one who can provide customer support as well.

The other gap I'd love to see filled is the upsell from streaming services and other such points. I'd love to see info on deluxe products from artists I listen to all the time on Rdio or Spotify, be that extended editions of albums or other things like art prints or other merch bundles. Unfortunately, though, I think the stumbling block to that might be that such services simply don't see it as being in their interests to do this. Daisy seems to be suggesting it can deliver on this though, so I'll be interested to see how that shapes up.

Direct-To-Fan Not Magical Remedy That Saves Music Industry

Virginie Berger | Founder and general manager of the creative and development agency DBTH.

Don't go thinking that recorded music can still earn artists a living, or that digital music (and all its technical variations) is going to suffice either. While 75 million tracks have been deposited at SACEM (French collecting society) only 2,000 of its members earn royalties, which equal the minimum wage.

We consume differently. Indeed, record production is an anomaly, which has been going on since the 50s. Before musical production became industrialized, there were artists and we are simply coming back to the state of music before it got to be recorded: music was dematerialized, without intermediaries or real physical support.

Within the digital world then, thanks to the direct-to-fan marketing tools, your public does not necessarily buy you, they rather support you. Your fan — the one supporting you — will generate revenue, if you do things right.

But if your public considers your recorded music as worthless, they will not pay to listen to it. And there's worse: Will you be able to make a living out of it? It's not that certain. But that's not the point. The point is for you to be discovered.

No matter how many direct-to-fan tools exist. Direct-to-fan is not the magical remedy which will save the music industry. It is likely to help some people, but certainly not all of them. And, for the majority, it doesn't change a thing. Because of the lack of discovery and curation. It is of course quite normal, and even encouraged, to compose great songs, be an amazing stage performer... and show totally expressionless eyes at the sound of words like mash up, Twitter, widget, CSS, etc., that is, not having the slightest clue about it all.

But why people will “buy” you if they don’t know you exist?

And here is an interesting paradox: music fans can access an infinite choice of content, which may be consumed more or less at anytime, while artists get almost lost/hidden in the Internet. But, this is not yet comfortable, this is not yet mastered but it represents great opportunities for the development of a new generation of direct to fan tools and services.

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.

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