Topspin Shows That Premium Offerings Get Sales: People Will Pay For Value Beyond The Music
from the a-reason-to-buy dept
It's really been great over the past year or so to see more and more bands adopting business models that involve tiered "premium" options that add real value for fans -- the key to creating a real reason to buy, as discussed in my MidemNet presentation a couple months ago. We've seen all different variations on the tiered theme from Trent Reznor to Kristin Hersh to Jill Sobule to John Wesley Harding and many others. Personally, I still think that the most creative of the bunch is Josh Freese's tiers that go from just fun to ridiculous (one option lets you keep his car -- after you drop him off at home).One of the companies that's doing a good job helping some musicians make this model work is TopSpin, who we've discussed before. In fact, TopSpin has helped Reznor and Freese with their offerings (as well as the Beastie Boys, who recently launched something similar, as well). With TopSpin's platform coming out of beta this week, the company has released some data on its success so far, and it's impressive -- especially for those of you who keep insisting that fans these days just want music for free and are unwilling to pay for anything.
- Its campaigns have certainly helped bands grow their audience and improved ways to connect with fans. One of its first major projects was the release of David Byrne's latest album, and it increased his email list by 3000%. (Update: Originally we said 37%, but that was wrong. It's actually 30x, or 3000% as per Topspin).
- The various projects have shown that people are quite willing to pay if they're provided with real value and given a real (rather than artificial) reason to buy. The average transaction price is $22 -- significantly more than what people are paying for "just the music" and even more than what an average CD costs.
- Perhaps the most appealing stat: on a recent project 84% of the orders were premium offers above the lowest tier. People will pay more for being given real value, rather than just being forced to pay for the music.
It's also worth noting that the company has also announced a program with Berklee College of Music to teach courses to musicians in how to leverage TopSpin for better business models. Hopefully at least some of that class will include an explanation of how using free as a part of your business model can extend it even further.
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Filed Under: business models, music, platforms, premiums, reason to buy
Companies: topspin
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Thieves
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Re: Thieves
Theft ain't the issue here.
The issue is simpler: How would this work for an unknown artist? Remove Trent and Freese and replace them with "bob from the bar at the corner" and "my daughter helen that wants to start a band". Then explain how it works for them.
It's easy as heck to take well known names (built up and paid for by the existing label / radio scheme of things) nad have their fans follow them from A to B to C. Plenty of NIN fans would bleed gold to get something from the band. You don't even need a grand and complicated scheme to get their money. That isn't the hard part.
How does the model work from garage band to international stardom? How does this help anyone except the existing established acts?
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Re: Re: Thieves
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Re: Re: Thieves
Clue: It doesn't. Doing it your way, the established way, only the tiniest select few get any backing and any chance at stardom. Worse, it has less to do with talent than perceived marketability, and the once judging that are the ones that prove time and again that they are fallible.
This way, the new way, the way that will come despite your bias and ignorance, everyone with talent will get a chance to increase their exposure, to increase their audience, to increase their fan base. Instead of being almost nothing or being a superstar, broke or rich, there will be myriad levels of success in between. Instead of fans and musicians being forced into a predefined niche everyone will have endless options. The pocketbooks of all those who don't like mainstream, billboard chart, artists will open up for the new ones - vastly increasing the amount of money spent on music.
Take off the blinders Harold. There's not a fixed X dollars available to musicians, more musicians won't hurt existing ones. More choices won't hurt consumers or the industry. New business models won't hurt business but grow it.
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Re: Re: Re: Thieves
Here's where I have a problem with this: On one hand, we are told (by the great gurus) that music sales are down not because of P2P and tubes but because there are so many other entertainment choices out there, so people are just choosing not to buy music.
This while the amount of music in the average individual's possession continues to rise.
Then on the other side, the same great gurus say "embrace the new business models and you will all get rich". Yet nobody is explaining how suddenly the total number of entertainment dollars will shift back to music.
At this point, there is only so much water (money) in the music swimming pool. In order for it to be deep enough for people to swim, the size of the pool is smaller, and the record labels and other mechanisms have positioned themselves to control who is in the pool and who isn't. That part sucks, I agree, but what's the alternative?
Well, you can make the pool bigger. So let's make the pool 10 times bigger so there 10 times the space to swim in. Wait, now instead of a pool that has water 5 feet deep that people can swim in, we now have a wading pool that is 6 inches deep. Now nobody is swimming. Expand it 10 times bigger than that, and now everyone barely has enough water to cover their little toe. So much for swimming.
Now, that example only covers a 100 times increase in the size of the commercial record selling acts. Put in money terms, if each signed act is generating $100,000 of income today, the "new business model 100 times bigger" would see that number drop to about $1000 average. 4 guys in the band, they each get $250 a year, or about 70 cents a day (enough to save a starving child in Africa, I am told).
Instead of fans and musicians being forced into a predefined niche everyone will have endless options. The pocketbooks of all those who don't like mainstream, billboard chart, artists will open up for the new ones - vastly increasing the amount of money spent on music.
That isn't anywhere near proven at this point. Again, there is nothing out there that says the pool of entertainment dollars will get any deeper, and nothing out there that suggests that music would suddenly gain money back from other entertainment choices.
Just as importantly, you lose the star power of the situation. If U2 was just an irish pub band, or Trent Reznor was still washing dishes for a living and playing with his one syth back in his one room apartment, would they be selling or giving away that much music? There is little done in all these new business models to discuss the loss of the star system. I can remember seeing numbers where the top 10% of all signed artists account for more than 50% of the sales. Remove that process and replace them with tens of thousands of little regional bands and artists selling 5,000 itunes downloads a year, and that is what is left.
So we can't have it both ways - either there is a limited number of entertainment dollars and music isn't getting as many as before, or there is an infinite number of dollars provided we have a nice shiny new model of business that in the end will just create DIFFERENT middle men. I am guessing TopSpin isn't free, right? ;)
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Re: Re: Re: Re: Thieves
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Re: Re: Re: Re: Thieves
Please cite where this is stated. I think you'll find that most people are interested in musicians making a living from their music, not getting rich. The days of talentless karaoke singers showing us around their million dollar mansions (paid for by advances they dhaven't realised they need to sell 30 #1 albums to pay back) on TV are soon to be over.
By the way, have you ever actually tried reading past posts on this site before you tried poking your empty head in here? You'll see the term "Masnick's law" mentioned a few times to refer to idiots like yourself. If a model is mentioned that helps an unknown artist, someone comes in and says "well, that won't work for a 'name' artist". If a similar model is mentioned as working for a big name, someone comes in and says "well that won't help the little guy". As ably demonstrated by yourself, if you're committed to opposing every new innovation in the music industry, you contradict yourself rather quickly.
These models work for unknown artists, and work well. They just don't become multi-millionaire household names because of it. Frankly, actual musicians don't care about that so much and are happy to make a comfortable living from their art. Unless you think that "big sales" = quality, in which case you are deluded.
"I can remember seeing numbers where the top 10% of all signed artists account for more than 50% of the sales."
That's actually what's WRONG with the current system, and has nothing to do with the new models being suggested. The new models are part of an attempt to fix the music industry, and one major part of that has to be a move away from depending on a few "blockbuster" releases at the expense of anything new and interesting.
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Re: Re: Re: Re: Thieves
I think that making it viable for more musicians to make a decent living from making music at the expense of making it less likely to be in the market for gold-plated shark tanks a good move, and my only regret is that we can't bring the same sanity to the movie business.
Just my two cents. (which won't ever go to the major labels until they clean up their act.)
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Re: Re: Re: Re: Thieves
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Re: Re: Thieves
yeah, you already know that, but it scares you because you also know that once bands start rising on their own, making their own money, building their own labels, it's too easy for them to see you as the manipulative greedy leeches you are.
Goodbye and good riddance.
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Re: Re: Re: Thieves
2) They ain't my idiot friends any more than they are your idiot friends
3) removing all that supports and builds artists at this point and replacing it with a DIY universe is going to be fun - or actually funny. Where there suddenly isn't any new acts out there to sell out arena shows, everyone will remember why a star making system actually works.
4) The only manipulation is those who would make you think that you have the right to everything that isn't nailed down for free.
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Re: Re: Thieves
If, like the vast majority of garage bands, they suck, AND they're not all that smart, they will do badly.
I guess it's just all doom and gloom when the crappy artists don't get subsidized by the hit artists anymore, huh?
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Hmm....
It's a daunting exercise to try and educate people the forthcoming $0.00 cost model. People continue to insist "only top name bands can earn, but what about the little guy?"
*sigh*
I wish Techdirt would give more examples of the little guy. I love using them to back up my statement, but sadly, this article can't be used despite the reference to the little guy.
I'm stunned so many people can't adapt to this model, especially those who continue to spend money on an infinite supply. They continue to insist they're taking away from the artist if they don't pay.
But every single one has agreed they would like to see incentives outside the "typical purchase". Thus, they're willing to buy scarcity.
Why is this idea so hard to teach people???
ARG!
Anyway, good luck to TopSpin. Here's to hoping they'll start bringing in garage bands soon to prove everyone, who believes the $0.00 model doesn't work, wrong.
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Breaking new bands
I'm not complaining. I'm just pointing out that while it is now easier for unsigned bands to reach out directly to fans, actually earning money from the process remains a challenge. There are more bands giving away more music.
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Not all big name acts
It's fair to ask whether the return for lower-profile performers is similar to what the well established people see (and I don't know the answer to that question), but the Topspin platform itself isn't entirely big names, and I expect that Topspin is thinking as much or more about developing artists -- the Berklee connection certainly points in that direction.
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Bandbox
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Re: Bandbox
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They really don't have any clue, do they?
Perhaps if the music 'industry' wasn't trying to destroy itself by alienating and suing their customers, people 'might' be willing to spend a little more on music. However, as long as there are idiots like you defending this outdated business model as 'the only one that works FOR US', then don't be surprised when you don't have any customers.
Can you think of any other industry where the customers are expected to give 80% of their money to a money grubbing middleman rather than to the 'starving artist'? And if you can, is it still a sustainable business model today?
You complain about the 'smaller pool' that Music industry has today, but the industry has no one but themselves to blame. Perhaps if the RIAA hadn't been standing on the lifeguard chair pissing in the pool and on all their customers, there might actually be a few people willing to stay and play in their pool. As for me, NOT ONE CENT (I haven't purchased 'industry' music in over 10 years).
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Re: They really don't have any clue, do they?
Hahaha. Best line I have seen all week. Brilliant!
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Re: They really don't have any clue, do they?
> standing on the lifeguard chair
> pissing in the pool and on
> all their customers
actually, they didn't really do that, they
paid harlan ellison to do it for them...
-bowerbird
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Entertainment dollars
It's that second scenario that I see happening. Most people I know are cutting back on something. And the national/international figures show real contractions in spending.
So I don't see more money being available to support more musicians.
However, music will always been made and listened to, and it can be done on the cheap. You can listen to, play, and record music for next to nothing these days. So I have been telling people to expect that the money for music will be gone. Will you keep doing it if that is the case? The musicians who love it will. They may need to have day jobs to pay the bills, but music will survive. It may be free in every aspect, but it will survive as long as people can sing in their showers and with their friends.
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Re: Entertainment dollars
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Re: Re: Entertainment dollars
The industry may see fewer mega-millionaires, but a far greater number of artists who don't need a day job anymore.
The scale suggested on this site and others is that thousands of artists will suddenly hit the market. So take a few mega millionaires and divide that cash up between thousands, and they all have beer money (quick, what's 10 million divided by 1000? 10k, or less than the poverty line). At 10k, they will need a day job just to eat more than past every day.
The promised land looks better in the brochures than it will in reality.
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Re: Re: Re: Entertainment dollars
I dare say the t-shirt guy will know the needs the musicians more than they need him, and tying the musicians more closely to their fans would remind them of who needs whom more. ;)
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Re: Re: Re: Re: Entertainment dollars
Not only are you trying to kill the economy with your "free" rhetoric, but you're on your way to killing our culture!
Dirty thieving commies, all of you.
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Re: Re: Re: Entertainment dollars
This is the most intelligent post I've ever seen you add, WH!
And you know what? Fuck 'em.
Every day, millions get up to go to work. They offer their skills when they do. They get paid to do so. Sit back and not do anything but reap the rewards off their labor? Fired.
How long does it take for an artist to do the actual work? Are you trying to tell us, once completed, they have no time to promote themselves?
Sounds to me they're hoping a publisher, record label, or television station will pick them up.
Damn, must be many out there who starved to death relying on this model when they could have easily distributed themselves on the internet, with no middle man, and coming up with ways to make money themselves.
Your example of touring simply relates the missing equation you often forget: People go to concerts because they've already been promoted.
I can't believe you can't see this relationship on your own. But it doesn't surprise me.
I think I'm going to cry over this part of your reply. Too bad the rest was crap.
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Wowee...
Oh, and as a final thought, I'd like to take a page from Harold and his crew: "You kids get off my lawn!!!!!"
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Re: Wowee...
There is no chance we are going back to the way things were, but that isn't for any other reason that that the current P2P universe has removed all of the value from music. Even stopped today, it will literally take a generation to make people believe that music isn't free.
The milk is spilled and spoiling on the floor, and nothing anyone can make "FREE!!" will make that lost value come back.
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Smaller artists on Top Spin
Nice article except that I think that possibly you may not know that Top Spin DOES work with smaller artists. Not just Byrne or Beasties.
Have you ever heard of Joe Purdy? HELL NO you haven't or you would know he used Top Spin to launch his 10th album this week. Ok and I manage him so this is also a shamess plug as well but the point is that we've been working within Top Spins philosophy for a few years now. Selling direct to fans without a label. His catalog has sold over 800,000 tracks on Itunes in the US alone.
When I heard about Top Spin I went over to the office and they showed me what they had built and I crapped my pants. The platform is everything I was doing but on steroids. It's true that they aren't picking up every single artist under the sun out there. That's for companies who build ugly widgets. They are picking up artists who have a growing base or artists who can expand their already successful base. I think that will set them apart from companies that pop up every 3 months with a Ralph Kramden idea to save the music business.
Joe Purdy's new album sold about 500 downloads in the first 24 hours via Top Spin. I was able to release it 2 hours after Joe finished his cover art and approved the mastered audio. His fans knew that from the email that we sent to them and they felt special! They knew that they had it immediately and felt empowered. AWESOME! Word of mouth, instant back end info on who is buying and where, direct email thank you to the fan, viral player that spreads our store across the web, super distribution, more fans, I love it!!!
Check out what I'm talking about. Buy the new album, hell buy the other 9 albums direct from Joe Purdy Records. http://joepurdy.com/lastclockonthewall.html
Thank you for reading my ramble.
Brian Klein
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Labels vs. DIY
But one thing that gets tossed around that doesn't make sense is this:
People are saying that bands will make more money on their own than through a label. That was probably true a few years ago when all the CD sales money went into the band's pocket.
But now bands are giving away their CDs for free. So what difference does it make if they get no money from the label or get no money giving away their CDs? Either way, there is no money from CDs.
If you are making your money from shows and merch and you haven't signed a 360 deal, then aren't you better off with that major label promotional budget working for you?
Of course, what I don't like about label deals is that they control how often you can put out recorded music. I think bands should put putting out material all the time (like the Beatles), so in that regard I think a label deal is limiting.
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I Agree
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People pay for what they want
If you provide something of value (it could be access to a deeper look at the lifestyle or the story) the music could be a part of it, but not all of it.
Then if you stop providing the value that people have come to pay for they stop paying.
A tiny little fan/membership can be profitable enough to allow even a minor league talent to find an audience large enough to support a better than average lifestyle.
Besides they'd get to do what they want to do and make a decent living without all the bloodsucking execs (who probably turned them down anyway) being in the loop.
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Article correction
Great coverage. A couple of things...
* 'slight' inaccuracy: "One of its first major projects was the release of David Byrne's latest album, and it increased his email list by 37%".
***** the real figure here is "increased his email list by 30x, not 37%...i.e., 3000%".
* You also question why free content isn't used in our models. It was a free download of David Byrne's Strange Overtones that sparked the tremendous growth in fan acquisition mentioned above. To see this in action for David B as well as a few other artists, check out:
http://everythingthathappens.com
http://ilovemetric.com
http://smokeyrobinson.com
http://ww w.myspace.com/theriverboatgamblers
http://basecampmusic.com/
...more where that came from.
* The other figures are spot on.
* Also, you mention a few examples that have gotten a fair bit of publicity, but there are 10x more pet projects for the little guys that Topspin staffers are running on their nights and weekends to show the new bands how to apply the same fundamentals - turn each fan touchpoint into a relationship and treat it like gold by giving those fans quality content early and often, and also not letting your drummer blast the email list after a night of PBR specials and turtle racing at Brennans.
I wish I could post a few excerpts from the internal threads amongst the Topspinners that reveal the passion we've all got for finding truthful answers to the questions raised (about helping the little guys) in the comments on this thread. Suffice it to say we're not resting until we've translated the Byrne/Eno/Beasties experience into something that works for talented upstarts in a self-service mode.
There may even be a certain head-shaving deal that's been made within our ranks. Picture Ian, Bob, and I with shiny domes a-blazin.
Thanks again for the article yo.
Adam
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800,000 is small
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The needs of musicians
Here's how I would break it down:
1. Is there a market for your music? How do you determine that?
2. If there is a market, do you need resources to reach it?
3. If you have already determined there is a market, what tools can help you exploit that market?
The first is what unknown bands are struggling with.
The second is why some bands seek label deals.
The third seems to be Topspin's positioning right now.
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Everyone Else
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