The Early Beginnings of Direct-To-Fan: How Grateful Dead and Phish Made It Happen

LightningBoltSkullBy Virginie Berger (@virberg), founder and general manager of the creative and development agency DBTH.

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?

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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  1. I get frustrated with people who are relatively new to music and assume that signing with a label was the only option for bands pre-Internet. And that now the Internet has opened so many more opportunities for them.
    Back in the day, there were other bands besides the Grateful Dead and Phish that used the direct-to-fan model and did well at it. These bands recorded their own albums, sold them directly to fans at shows, and made great margins as a result. What cost $1.50 to manufacture could be sold for $15 (a generous margin that would go directly to the band).
    Any band with a decent fan base would make enough to fund their touring, to fund the next album, and often enough to pay themselves a decent living.

  2. Some examples of bands would help your argument. Seems to me the author stated the Grateful Dead and Phish because they actually had success with their business model of direct to fan marketing. Both bands mentioned were able to become successful pre-internet and has nothing to do with the bands using the internet to get direct to fans until much later in the band’s careers. Because Phish never was attached to a label other then their own, they were able to adjust their business model to include the internet during a time when the major music labels were struggling to keep people interested in buying cd’s.

  3. I am not responding to this article’s author. I am tossing this out because of all the techies who believe the Internet has rescued musicians from the clutches of major labels. But there have been entrepreneurial musicians in the pre-Internet days, too. Not just the Grateful Dead and Phish.
    String Cheese Incident and Yonder Mountain are two Colorado-based bands who made money selling direct to fans. And of course two examples of non-Colorado musicians doing this were Ani DiFranco and Mannheim Steamroller.
    There are others, but their names may not be as familiar to you because they have had more of a regional or niche presence. But going back at least as far as the cassette days, some musicians have been putting out their own music and selling it at shows.
    People too young to have experienced those days, or older ones who weren’t going to packed shows featuring unsigned artists may not realize the extent to which such things were done.
    I’ve gone to many such shows where the musicians (either singer/songwriters or bands) performed and then sold their own albums from the stage. Years ago I would catch Wind Machine, for example, at a number of Colorado events and buy their latest album on the spot. Even further back, my parents befriended a roving cowboy singer/songwriter who would hit the Southern Colorado circuit and sell his own cassettes. And so on.

  4. Sorry if you guys thought I was commenting about the article. I was not. I was just venting my frustration about how little many people know about how bands survived before the Internet.
    Most bands were never signed to labels so if they were going to make a living at music they had to figure it out on their own.
    And selling albums directly to fans was a way that many of them were able to do it. It didn’t start with the Internet, and there were other bands beside the Grateful Dead and Phish who used that model. But often they remained local or regional so they didn’t become nationally famous. Still, they had 1000s of fans who bought what they put out and that was enough to keep them afloat.

  5. Incidental tangent: I consider myself to be a pretty knowledgeable Phish fan, but I’m unfamiliar with the removal of a track that the record label thought would be a hit. What track and album are you talking about?

  6. Ok, after doing a little research, I can narrow it down to Runaway Jim from either Picture of Nectar or Hoist, OR Simple from Hoist. I’m thinking probably Simple.

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