Midem White Paper: “The Real Cost Of Direct To Fan”

Last week Midem unveiled the first of a five part series on "The Real Cost of Direct to Fan".  This white paper is a research project of Good Lizard Media and the first installment seems to tie in well with such concepts as Mike Masnick's CwF + RtB = $$$ formula. DETAILS:

The Real Cost of Direct To Fan – midem-exclusive White Paper

"The Real Cost of Direct to Fan" is a midem-sponsored white paper by Good Lizard Media that is being released in 5 sections via the midemblog:

"Discover…the 'Direct To Fan' (D2F) concept, where D2F happens, its place within the music business, and who the major players are. As well as looking at how it relates to the various different revenue models implemented by artists, managers, online stores and record labels."

In discussing, but not clearly defining, the concept of Direct To Fan, this paper focuses on transactions that give fans the "feeling" of buying directly from the artist though they might be using third-party tools.

Unfortunately, the paper does not present a working definition of Direct To Fan, though it does state that a key issue is the artist controlling the pricing which is a problematic distinction.  It also doesn't clearly distinguish between the involvement of record labels and related legal entities with ownership shares vs. third party tools that may charge a fee or take a percentage, though such a distinction seems crucial to commonly held definitions of Direct To Fan.

The initial installment goes on to look at "drivers of Direct To Fan" sales via artists' websites using "data across the online stores for 25 medium to large sales artists in the UK over the period of a year."  They find that live shows and album releases are the biggest drivers of DtF sales though they claim that album releases themselves are not the driver so much as bundling the album with other products.  Even more importantly, in their analysis, is that bands pay more attention to their fans during periods of new releases and tours.

The study then maintains that Direct To Fan requires two things to succeed, creating a sense of "closeness between artist and fan" leading to the urge to buy and offering something that "fits to this demand" aka Mike Masnick's "Connect with Fan and give them a Reason to Buy" formula.

I look forward to seeing the rest of this series and what it reveals.  If you have questions about the methodology or details, please include them in the comments and I'll see what the folks at Good Lizard Media have to say.

Hypebot contributor Clyde Smith is a freelance writer and blogger.  He blogs about web business models at Flux Research and the world of dance at All World Dance.  To suggest music services and related topics for review at Hypebot, please contact:

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