To cut to the chase and get at the heart of the matter, the biggest apparent challenge that I can identify for direct-to-fan is that the music industry is broken and no one has yet discovered a practical model that will allow the typical independent, DIY musician to make money.
But let's not forget either that artists without a label and who are well-surrounded, and know how to integrate an entrepreneurial aspect into their approach to sell their production, can succeed. It can also be a question of entourage: if the artist works with a label, a manager or a team who are able to smartly consider the evolution of their job, it can also work very well. Artistic entrepreneurs and their professional entourage should really have the choice to develop their project the way they like. And direct-to-fan tools and services can really help them.
Direct-to-fan is not a fad. From a factual point of view, direct-to-fan started off in January 1966 with the Grateful Dead and really took off in October 1984. From the early beginning, the Grateful Dead had been devoting themselves to the fans, providing them with food, accommodation, care and music. Moreover, the band would always encourage them in recording their concerts.
In the early 80’s, the number of “tapers” (fans who record concerts and share the tapes) grows exponentially. In October 1984, they have their own reserved space, right behind the sound engineer’s mixing desk, and are sometimes provided with a direct cable, thus generating the traffic of some exceptional quality recordings.
At the same time, the Grateful Dead decide to leave the system. They step away from the music industry. Nothing will be released between 1981 and 1986. The band is one of the first in the rock world to retain ownership of their master recordings and editorial rights.
In 1986, Phish makes its debut on the circuit. At the beginning of 1989, the owners of a club in Boston refuse to book the band under the pretense that they had never heard of them. Fans, who had got to know Phish through all the circulating live tapes, form a convoy to follow the concert tour. The band then decides to rent the club... and the concert is sold out with the fans only!
In 1991, Phish became, with Bob Dylan, the Grateful Dead and The Beatles, one of the first bands to have their own Usenet newsgroup: rec.music.phish. At the end of 1993, already keeping a permanent contact with their fans through the printed newsletter “The Doniac Shvice,” the virtual newsletter sent by email from their official website phish.com or the one sent by their fan community phish.net, Phish start to sell their concert tickets directly to the fans.
Just when their record label thinks they finally have a radio hit, the band decides to remove the track from the album. Massive promotion and traditional marketing don’t interest them because they “survive” perfectly well, satisfying themselves with touring thanks to their fans... to such an extent that in 1999 they generate 19 million dollars with touring, while the Rolling Stones only made 12!!!
Not all artists can live off their music, only a minority can and will do so. To every artist corresponds a particular business model, and now, direct-to-fan tends to provide the same business model for every artists in the world (even if they say it’s customized). For example, rewards, a song versus an email, a t-shirt + a CD, limited edition, hand-made packaging, downloads, etc.
We can no longer consider one single model which would apply to all the parties involved. This is here, for me, the biggest challenge for direct-to-fan tools and services. They must be able to provide different services to different users and different artists.
This is Virginie Berger's response to sidewinder.fm's question:
Do you think that direct-to-fan marketing tools and services can reach their full potential? What challenges or bottlenecks may have prevented these companies and their clients from getting there?