Musician Making A Living With Forty Committed True Fans

from the imagine-what-he-can-do-with-1,000 dept

A year and a half ago, we wrote about Kevin Kelly's theory that to be a success as a content creator, you just need 1,000 "true fans." These were the ultra-committed fans. The fans who would follow you to the end of the world and purchase whatever you came out with. And -- more importantly -- they'll help bring more fans into the fold. The point isn't that these are your only fans, but the most committed. At the time, I wasn't sure if the 1,000 number was really accurate, but certainly agreed with the idea of more closely connecting with your biggest fans. My guess was that 1,000 wasn't really enough. But, perhaps I was off in the wrong direction? Ariel Hyatt has been blogging about the concept of 1,000 True Fans and has an interview with musician Matthew Ebel, an up-and-coming musician who makes a living from his music, and breaks down the details -- including pointing out that he makes 26.3% of his net income from just 40 hard-core fans.
Music Sales:
  • CD Sales - 4.1%
  • Digital Music Sales - 13.9%
  • Subscription Site - 36.9%
  • Live Shows - 18.1%
  • Cover Gig Fees/Cover - 9.8%
  • Original Gig Fees/Cover - 6.2%
  • Tips (Including UStream) - 2.1%
  • Works For Hire & Voiceovers - 8.2%
  • Affiliate Sales (typically for my own albums/tracks) - 1.1%
  • Licensing - 13.2%
  • Independent Film - 6.6%
  • Internet - 6.6%
  • Web Design - 4.6% (I include this because I'm doing a website for a friend... it's something I choose to do, but it is part of my income this year.)
Now, first thing I'll point out is that I'm still not sure the numbers fully add up. Matthew doesn't give a total amount earned, but in a comment says:
Suffice it to say that I'm renting a house in Wellesley, MA with a couple of room mates... I'm not starving, I can still eat sushi from time to time, and my car (neither a Pinto nor a Bentley) is paid off.
So, he's making a living wage, but not raking it in, which is to be expected (and is certainly a hell of a lot better than many musicians). Now, of course, the other number that stands out above is the "subscription site" with the single largest percentage of his revenue. That would be his MatthewEbel.net site, where he offers a $5/month subscription offering. It actually looks quite a lot like the music business model I suggested back in 2003, so it's nice to see someone making it work directly. Basically, it's people paying for access to Matthew (he even admits that in the description, saying it's like a permanent "backstage pass"). While subscribers will get regular access to new music as soon as he creates it, the selling point is special invitations and access to the artist.

And, of course, Ebel seems to certainly recognize the CwF (connect with fans) part that has to go along with this RtB (reason to buy). In the interview, he discusses the importance of really connecting with those fans. First, he notes that one of the nice side effects of his "subscription" offering is that he promises fans two new songs and one live concert recording every month, and that keeps him top of mind:
Little did I realize that new releases every two weeks would be better than any good album reviews or press coverage. Giving my fans something new to talk about every two weeks meant exactly that: they talk about me every two weeks. They're not buying an album, raving about it, and losing interest after a few months, they're constantly spreading my name to their Twitter followers, coworkers, pets, etc. Regular delivery of quality material is damn near my one-step panacea for the whole industry.
And, of course, he uses social media to connect as much as possible:
Good music is barely enough to get fans to hand out 99¢ anymore; they have to be emotionally invested in the artist if that artist wants their loyalty. Don't get me wrong, there can still be a "fourth wall" during a live concert or video, but real, meaningful connection with the fans is what keeps me in their heads after the show's over (heck, even your "character" can interact with fans in-character). I chat with my fans via Twitter, Facebook, matthewebel.com and matthewebel.net, and as many other channels as possible. The more I interact with them between performances, the more I stay fresh in their minds and the more inspiration I draw from them.
Yet another musicians showing how CwF+RtB works. Now, I'm sure some will complain that this isn't a "real" success because he's not selling out stadiums or something (of course, those are the same people who would say that those selling out stadiums don't count because they can afford to do crazy experiments). But given how many musicians we're hearing about these days making exactly these types of things work to the point where they can make a living doing it, you have to begin to realize that something's working.
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Filed Under: connecting with fans, cwf, kevin kelly, matthew ebel, rtb, subscriptions, true fans


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  • identicon
    Anonymous Coward, 30 Oct 2009 @ 8:57pm

    I make 100% of my income from just 1 hard-core fan. My boss.

    link to this | view in chronology ]

    • icon
      Drew (profile), 31 Oct 2009 @ 1:34am

      Re: AC

      Wow, missing the point. Of course your boss can replace u with someone who they pay less. I'm sure you'll start in about how so could his fans, now try and think of an argument that doesn't compare apples (people giving him money because they enjoy what he creates and he tries to treat his fans more like friends) and oranges (your boss paying you your wage/salary because they tell you to do stuff and you have to do it or you get fired).

      link to this | view in chronology ]

      • identicon
        Matthew Ebel, 31 Oct 2009 @ 8:16am

        Re: AC

        Strangely enough, the jump from part-time to full-time musician happened in 2006 when I was laid off from my day job. Best thing that ever happened to me. Now I can't be fired, I can just go broke... and that hasn't happened yet. Even with the economy taking a nose dive, my business has been improving since the beginning of 2007.

        I'd like to think my songwriting has improved as well. ;)

        link to this | view in chronology ]

      • identicon
        Anonymous Coward, 31 Oct 2009 @ 9:36am

        Re: Re: AC

        Actually I was making a joke. I don't even have a boss! I don't even have an income!

        link to this | view in chronology ]

        • identicon
          Anonymous Coward, 31 Oct 2009 @ 9:42am

          Re: Re: Re: AC

          Actually I was making a joke. I don't even have a boss! I don't even have an income!

          As you can probably tell, AC is already blitzed and waiting for his frat's Halloween party.

          Keep rockin' it man!

          link to this | view in chronology ]

  • icon
    David Dufresne (profile), 30 Oct 2009 @ 9:14pm

    40... That's awesome. Mike I need to update you on Backfed soon... coming along slowly, but nicely.

    link to this | view in chronology ]

  • icon
    zcat (profile), 30 Oct 2009 @ 10:27pm

    "26.3% of his net income from just 40 hard-core fans."

    And then there's the long tail, folks. I'm betting it takes about 960 less hard-core fans to make up the other 73.7% of his income..

    link to this | view in chronology ]

    • identicon
      Matthew Ebel, 31 Oct 2009 @ 7:39am

      Re: Long Tail

      Well, the long tail's a wonderful thing... I've got about 5,000 people on my mailing list, so the residual CD/track sales come from the larger mass of fans.

      The 40 that I refer to are just my VIP subscribers, too, it's not my entire Matthew Ebel dot net subscriber base. There are 3 subscription levels (soon to be 4) and the VIP's are just the one's I'd classify as the "true fans" by this definition.

      Pax,
      Matthew

      link to this | view in chronology ]

      • icon
        Suzanne Lainson (profile), 31 Oct 2009 @ 10:41am

        Re: Re: Long Tail

        Well, if that is the case (5000 fans), in theory at least you should be making a ton of money if everyone buys something.

        I worked with an artist who had 3000 people on her mailing list and grossed about $150,000 a year.

        About $45,000 of that was from CD sales. She averaged 3000 CDs a year at $15. This was a few years ago and I haven't looked at her books for a few years, so the CD sales figure has probably gone down as people in general don't buy as many CDs.

        I did a business plan based on the information she had accumulated for 3 years. These were very reliable numbers. We weren't guessing. I projected that were she to get about 30,000 to 40,000 fans around the country, she could gross about $1 million annually. We based those plans on three levels of fans -- those who would spend $10 a year on something (which is less than one CD a year or just going to one show), fans who would spend $20 a year (maybe a show or two a year or a t-shirt or CD), and hard-core fans who would spend $100 a year.

        However, she chose to have kids rather than tour the country, so she remains a regional rather than a national act.

        link to this | view in chronology ]

        • identicon
          Anonymous Coward, 31 Oct 2009 @ 11:28am

          Re: Re: Re: Long Tail

          However, she chose to have kids rather than tour the country, so she remains a regional rather than a national act.

          Thanks for sharing, Suzanne. To know you have performed that type of analysis work may be very valuable to others.

          Some may be interested to know if you work on a contractual basis...

          link to this | view in chronology ]

          • icon
            Suzanne Lainson (profile), 31 Oct 2009 @ 11:46am

            Re: Re: Re: Re: Long Tail

            Some may be interested to know if you work on a contractual basis... It depends. I've gotten involved with projects I'm interested in.

            I'm working with a few artists, but find it is really hard for most of them to grasp the amount of work that is involved in interacting with their fans. The artists who are succeeding in the new world of music have a combination of talent, attitude, work ethic, and social skills. It's hard to find people who have all of that. So for most people I just say, "Find a good day job that pays the bills, have fun with your music, and don't worry about making a living from it."

            I'm always open to working with or exchanging ideas with people who can pull it off. And what I have been doing lately is trying to flesh out some of the concepts in my blog. The same few people are being touted as new music success stories. I want to look at what they are doing and what can or can't be applied to others. Amanda Palmer, for example, is great at what she does. But she's using her street performer skills to maintain connections with her fans. Most people don't have the ability to create an online party or an offline event like she does.

            link to this | view in chronology ]

  • identicon
    tony west, 31 Oct 2009 @ 3:25am

    poetry

    any poets?

    link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Oct 2009 @ 4:46am

    Hang on a sec Mike, yesterday you were up my behind about rabid fans:

    Mostly, they prove that file traders buy way less music than "rabid fans" should buy

    I had no idea there was an official amount. Please, do tell, us, what do the ruling overlords say is the official amount that rabid fans should buy?


    Then you make a post that effectively answers you own question.

    You are a truly insulting person at times.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 31 Oct 2009 @ 4:51am

      Re:

      ..oh and Mike, if you want to know what the "ruling overlords" say, ask one. I don't know any.

      link to this | view in chronology ]

    • icon
      Skeptical Cynic (profile), 1 Nov 2009 @ 12:11am

      Re:

      Shut up! The two are not even related but by your "rabid" mind.

      Dumb Ass!

      Also people like you that can only post as an anonymous coward are really not worth listening to.

      Get a life.

      link to this | view in chronology ]

    • icon
      Mike Masnick (profile), 1 Nov 2009 @ 2:42pm

      Re:

      Hang on a sec Mike, yesterday you were up my behind about rabid fans:

      Yes, and I stand by it. Because you insisted that there was some specific amount rabid fans had to give to be legit. This post doesn't show anything different.

      Then you make a post that effectively answers you own question.

      No, this post does not show that at all. It just show what one particular musician was able to set up in a way of delivering what his fans wanted in a way that they would pay.

      You have to understand the difference: you are assuming what a fan *owes* an artist. This is about a fan setting up a business model to deliver to fans what they want at a reasonable price.

      Can you really not see the difference? Yours is a position of entitlement. What Matthew and the other artists we discuss are doing is setting up smart business models where people want to pay, not that they're expected to pay.

      It's smart business. You think they should just be entitled to income.

      link to this | view in chronology ]

      • identicon
        Matthew Ebel, 1 Nov 2009 @ 3:21pm

        Re: Re:

        ...and if you wouldn't mind sending that in writing to the people at Polyphonic, I'd appreciate it. ;)

        (And thanks again for the article.)

        Pax,
        Matthew

        link to this | view in chronology ]

      • identicon
        Anonymous Coward, 2 Nov 2009 @ 5:36am

        Re: Re:

        Sorry, Mike, but this is a case where the proof is right in front of you, and you refuse to acknowledge it. You have instead gone of on a rant trying to define what I am saying, which isn't true.

        The "business model" (you love to throw that term around) isn't entirely relevant to my point. Rather, it's the proof that a relatively small percentage of the fans (in your words, "40") are doing more than the rest. This is the case in point of what I would consider a "rabid fan". The numbers in absolute and relative terms would change act to act, but the reality is that a small number of fans are signficantly more active than the general fanbase, and even more so than the general public.

        My entire point has been that these active / rabid fans are the ones that have been lost to the music industry by piracy. The people most actively looking for music, and most willing to do anything to get it, are getting it via pirated downloads. In the Canadian study, there was no distinction that showed any group specifically buying more than others, which is an indication that the rabid fan is getting served elsewhere - usually for free.

        All this does in the end is prove the point. There is nothing about entitlement, or "owing anyone" anything. Nice way to try to smear me and my opinions. Still waiting for you to call me Mike, so we can talk about this. One day you will understand I don't work in the music business or have any involvement in it at all.

        Congrats to Matthew in finding a way to convert it all to a living. Let's hope things continue well for you :)

        link to this | view in chronology ]

        • icon
          Mike Masnick (profile), 2 Nov 2009 @ 11:50am

          Re: Re: Re:

          The "business model" (you love to throw that term around) isn't entirely relevant to my point. Rather, it's the proof that a relatively small percentage of the fans (in your words, "40") are doing more than the rest. This is the case in point of what I would consider a "rabid fan". The numbers in absolute and relative terms would change act to act, but the reality is that a small number of fans are signficantly more active than the general fanbase, and even more so than the general public.

          That's always been true. I'm not sure what point you are making.


          My entire point has been that these active / rabid fans are the ones that have been lost to the music industry by piracy.


          Clearly, as Matthew and others have shown, that's not even remotely close to true. In fact, as we've seen over and over again, those rabid fans are even more likely to spend these days, because they know they're supporting the artist directly, and they feel a stronger connection to the artist.

          All this does in the end is prove the point. There is nothing about entitlement, or "owing anyone" anything. Nice way to try to smear me and my opinions. Still waiting for you to call me Mike, so we can talk about this. One day you will understand I don't work in the music business or have any involvement in it at all.

          Uh, yeah, I'm supposed to call someone who's totally anonymous? Funny.

          link to this | view in chronology ]

          • identicon
            Anonymous Coward, 2 Nov 2009 @ 2:28pm

            Re: Re: Re: Re:

            Uh, yeah, I'm supposed to call someone who's totally anonymous? Funny.

            Oh please Mike, cry me a river. You track my every post. You know exactly who I am. Another transparent line.

            Clearly, as Matthew and others have shown, that's not even remotely close to true. In fact, as we've seen over and over again, those rabid fans are even more likely to spend these days, because they know they're supporting the artist directly, and they feel a stronger connection to the artist.

            In the Tommy Lee post, you pretty much ridiculed the idea of rabid fans. Now you are saying they are gold. Please choose one stand and work with it.

            The question is this: If they are spending X right now, how much would they really spend without piracy? There are no studies yet that show that the top downloaders buy significantly more music than other music buyers. What we do know is that they have signficantly larger libraries of music, but haven't spent anywhere near what it would normally cost to have it.

            link to this | view in chronology ]

            • icon
              Mike Masnick (profile), 2 Nov 2009 @ 4:35pm

              Re: Re: Re: Re: Re:

              Oh please Mike, cry me a river. You track my every post. You know exactly who I am. Another transparent line.

              I have no idea who you are. I believe I know the nickname you used to use because your "voice" and lack of logic skills make it obvious, and I can look up your broadband provider if I so choose. But I don't know who you are in the slightest.

              In the Tommy Lee post, you pretty much ridiculed the idea of rabid fans. Now you are saying they are gold. Please choose one stand and work with it.

              You are a piece of work. I did not make fun of rabid fans. I made fun of your claim that there was a specific amount rabid fans "should" pay. I have always said that "true fans" are a great way to build a business model.

              The question is this: If they are spending X right now, how much would they really spend without piracy?

              Again, such an entitlement attitude. It has nothing to do with "piracy" and has everything to do with putting in place a smart business model. I'll bet the 40 fans who Matthew is talking about are now spending much more on him this year than they spent on any artist a few years back when their only option was to buy a CD and maybe see him at a local club twice a year.

              And that's the point. It has nothing to do with piracy at all. Matthew has given them a way to regularly support him because he gives them something they value back.

              There are no studies yet that show that the top downloaders buy significantly more music than other music buyers.

              Um. We posted just such a study today. And we've posted half a dozen similar studies.

              You can have your own opinions, but you can't have your own facts.

              link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Oct 2009 @ 7:41am

    1st you all have to admit this is a an extreme case.
    I don't have a problem with the concept, but 40 is quite low, even as Mike say's even 1000 might be cutting it short.

    what i do like about it, is it reinforces what "we" (pretty much every1 who thinks the IAAs are committing suicide and need to update there business model) are say is right.

    link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Oct 2009 @ 8:06am

    Yea, but...

    The important thing left out of his "support": DOES HE HAVE HEALTH INSURANCE!!!!??? Can he afford it? What if something happens to him, who will pay??

    link to this | view in chronology ]

    • identicon
      Matthew Ebel, 31 Oct 2009 @ 8:11am

      Re: Yea, but...

      Actually, because I live in MA, I'm paying less for health insurance than I ever did in WA or Nashville. And I have dental coverage, and my insurance covers $200 towards a season pass at the ski hill (or a gym membership, or karate, etc.)

      Pax,
      Matthew

      link to this | view in chronology ]

  • identicon
    Matthew Ebel, 31 Oct 2009 @ 8:23am

    If you want clarification

    Mike-

    Thanks for weighing in on the article Ariel did. If you want to talk to me directly for any follow-up or clarification, I'd be happy to answer some questions. Feel free to drop me a line!

    Pax,
    Matthew

    link to this | view in chronology ]

    • icon
      Marcus Carab (profile), 31 Oct 2009 @ 8:42am

      Re: If you want clarification

      Matthew-

      From a regular Techdirt reader, thanks for showing up and participating in the comments! Your presence is having a leveling effect on the wildly hyperbolic debate that normally shows up after an article like this.

      -MC

      link to this | view in chronology ]

      • identicon
        Matthew Ebel, 1 Nov 2009 @ 8:41am

        Re: Re: If you want clarification

        It's all about conversation... hyperbole tends to crumble under the weight of actual interaction and connection. Thanks for being a part of it!

        Pax,
        Matthew

        link to this | view in chronology ]

  • identicon
    Will, 31 Oct 2009 @ 9:12am

    negativity

    Wow there's so much negativity out there - this is likely from people who:
    -have a day job and are angry that they never followed through
    -love to criticize but never take enough consistent action
    -are taking action but not seeing instant results and are frustrated
    -can anybody add some more?

    Matthew's just getting started - these types of memberships take time to build up over time. Keep going!

    link to this | view in chronology ]

  • icon
    stat_insig (profile), 31 Oct 2009 @ 9:25am

    A couple of qns

    Very nice idea matt. And good luck.

    I had a couple of questions. Do you have a streaming link to your music (not snippets but the whole songs). And how would you feel if one of your subscriber shares his/her collection through torrents (or other public modes).

    link to this | view in chronology ]

    • identicon
      Matthew Ebel, 1 Nov 2009 @ 8:28am

      Re: A couple of qns

      I do have whole song samples at http://matthewebel.com/main/music with a brief "station ID" from me at the beginning and end. For the Matthew Ebel dot net stuff There are only 30-second samples because of the nature of the subscription.

      As far as torrenting goes, I really don't have any problem with people sharing the "station ID" versions of the songs... There is good file sharing and bad file sharing... the former is done with the intent to help the artist gain more paying fans (i.e. feed him/herself). The latter is done because you think people should pay for that artist's work.

      Personally, I'm in favor of the former, but it's difficult to endorse file sharing when the latter is so prevalent. My official policy has always been "you know why you're sharing these songs, so just don't be a shmuck."

      Pax,
      Matthew

      link to this | view in chronology ]

  • identicon
    Wil, 31 Oct 2009 @ 9:29am

    torrents

    Stat_insig - I can't speak for Matt but the idea behind newer business models like membership sites is that you are selling 'access', or the 'experience' not the specific material. It's a community of raving fans that get immediate access to the artist and his new tunes. So while some people can get the tunes over time, they won't really be part of that tight knit group. Also the music isn't the only thing you can offer - behind the scenes vids, live streaming video sessions, artwork, sheet music, etc - as we move towards real time the individual digital products are less important.

    And usually smaller (long tail) artists should be more concerned with getting attention than worrying about some people stealing the music.

    link to this | view in chronology ]

    • icon
      stat_insig (profile), 31 Oct 2009 @ 3:28pm

      Re: torrents

      Hey Wil,
      I was visiting his website and couldnt find any full size samples (except the spy song which was there because of that video contest).

      I thought he was a bit possessive of his music (not as possessive as mainstream artists I agree). If his goal is to sell the concept of freshness he shouldn't be worried about people "stealing" his old music.

      If he wants to increase his fan base, then my suggestion: load a few songs which he considers best to youtube and link them from his website.

      BTW, I live in MA. I kind of liked that spy song. If he posts a few more and if I end up liking them.........

      link to this | view in chronology ]

      • identicon
        Stampy, 1 Nov 2009 @ 7:31am

        Re: Re: torrents

        From what I can tell, you've been looking in the wrong places. Matthew has a LOT of previews of his music available! Infact, pretty much everything up on http://matthewebel.com/main/music/ are full versions of his songs, with small voice overs at the start saying which album the track is available from. MatthewEbel.net is designed more for the person who is already familiar with Matthew's music where matthewebel.com is designed for everyone. But even matthewebel.net has 30 second samples of every single song. http://matthewebel.net/category/downloads/samples/

        Oh and finally, do remember that Matt puts on a live Ustream show for completely free every single week on a Tuesday at 6pm EST over on http://matthewebel.net/category/downloads/samples/ . These shows are filled with music from matthewebel.net so most people tend to learn to love a song from hearing it a few times on there. Then end up signing up to matthewebel.net from there. Oh and most of these concerts are recorded by him on ustream too. So people can rewatch the live shows. And this is completely ignoring the recording some of his fans such as myself do.

        So his music is definitely out there, available for people to hear.

        link to this | view in chronology ]

      • identicon
        Matthew Ebel, 1 Nov 2009 @ 9:17am

        Re: Re: torrents

        Stampy already covered some of your questions so I won't rehash it here, but you mentioned YouTube. Have you been to http://youtube.com/matthewebel yet? I've got quite a few live recordings, music videos, etc.

        I love it when fans make videos based on my music.

        Pax,
        Matthew

        link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Oct 2009 @ 9:31am

    That's pretty cool, Matt. Hey, it says you do physical CD sales. Do you burn them yourself or do you go through the troubles of having them pressed? What's you experience with this?

    Thanks!

    link to this | view in chronology ]

    • identicon
      Matthew Ebel, 1 Nov 2009 @ 8:47am

      I've done both, honestly... I like the options that come with a professionally-pressed CD batch (like the black vinyl look of Goodbye Planet Earth), but the zero-overhead of Kunaki.com CD's and DVD's makes my current business model possible. It all depends on what you're trying to do with the album.

      Pax,
      Matthew

      link to this | view in chronology ]

  • identicon
    wheatus, 31 Oct 2009 @ 9:46am

    yes, Go Matthew!

    I can affirm that small and real is better than big and fake...

    Our wheatus.com donation download thingy is a hit with the people who care about us most.

    Without getting into numbers, which I am honestly afraid to discuss, we are looking at whether to unplug from iTunes and the like all together, as it seems people are more comfortable putting smaller amounts directly into the wheatus site than they are putting bigger or even EQUAL amounts into our tunecore distro network (iTunes, emusic, Rhapsody, amazonmp3 etc.)

    Matthew, and all others facing similar fates, I HIGHLY recommend an Australian company called DL Guard http://www.dlguard.com/dlginfo/index.php Very reasonable customizable POS widgets with personal attention and support.

    There is another factor to all this that makes me sleep well at night even if we don't have $100,000 in the bank...No one has their hands in our revenue stream. As a former major label artist I can tell you that is indeed a problem with "Partners". And your true fans can always smell it when there is a big corporate partner lurking under the buy button.

    Best To All,
    bbb,
    wheatus.com

    link to this | view in chronology ]

    • icon
      Suzanne Lainson (profile), 31 Oct 2009 @ 11:02am

      Re: yes, Go Matthew!

      Why are you, Matthew, and others afraid to share your income and expense figures?

      I did a business plan for someone a few years ago. I've got copies around somewhere, in bits and pieces, so I have to do some of it from memory. But I've been willing to disclose numbers as it is useful to people. I don't necessarily mention the artist's name when I write about her, but it's not a secret.

      She incorporated (full incorporation, not just an LLC), pays taxes (including sales tax on merchandise/CDs at shows, has an accountant, gives band members and others who work for her 1099 forms, etc. So she's not hiding anything.

      link to this | view in chronology ]

      • icon
        taoareyou (profile), 31 Oct 2009 @ 11:34am

        Re: Re: yes, Go Matthew!

        Hey Suzanne, would you share your income and expense figures with us here?

        link to this | view in chronology ]

        • icon
          Suzanne Lainson (profile), 31 Oct 2009 @ 1:23pm

          Re: Re: Re: yes, Go Matthew!

          Hey Suzanne, would you share your income and expense figures with us here?

          I'd have to look for my files. They were on an old computer and I haven't been able to transfer them to my new computer. And I haven't been sure I have all editions of the plan still on that computer.

          But for now, I can toss this out from memory.

          CD sales averaged about $45,000 a year.

          The artist played as many as 200 shows a year. Everything from solo to full band. As I recall she paid out the band members about $43,000 for their share of the gigs. She contracted with them and paid them an agreed upon amount per show. She paid more than most bands and paid them even if her receipts for the evening didn't cover their fees.

          I'll have to go back to retrieve the expense figures, but she self-managed and covered all the cost of promotion, etc. She also paid all the costs from producing her CDs and then kept the profits. She'd spend about $15,000 in studio time to make a CD, was probably into it closer to $20,000 by the time it was ready to sell. So generally the first 1000 CDs went to pay back costs, but after that it was almost all profit. She's got 8 CDs available now and I think she still keeps them all in print. So she's able to sell multiple titles to fans; her hardcore fans own them all.

          She also plays private gigs and festivals with guarantees. That sort of thing brings in between $1000 and $5000 per gig. People think you have to be a cover band for that, but you don't. You just need a deep collection of your own material that is family-friendly and can get people dancing.

          This artist is a great songwriter and was courted by someone who wanted to enter into a publishing and corporate deal with her. Without going into detail, suffice it to say she has the songwriting skill to turn out commercial material.

          She had fans helping her with some tasks. She used them to sell CDs at shows (though she also paid them for doing so). She had me doing PR and marketing, which I didn't charge her for because we were working toward putting together the corporation, etc.

          We tried various things and abandoned them with they didn't work. For example, we found out that taking out ads for shows did not increase attendance, so we just used PR for promotion. We didn't use a radio promoter. She didn't go into debt to tour. And so on. So we never let expenses get too far ahead of income.

          link to this | view in chronology ]

          • identicon
            Anonymous Coward, 31 Oct 2009 @ 1:47pm

            Re: Re: Re: Re: yes, Go Matthew!

            Protip:
            Until you have permission to speak about an ex-client's financials, please ensure you have permission.

            It's quite possible that your client and/or their new record label may now own the work you performed.

            I would suggest holding off until you can see the agreement between the label and your ex-client.

            Perhaps the numbers you shared are not entirely accurate.

            link to this | view in chronology ]

            • icon
              Suzanne Lainson (profile), 31 Oct 2009 @ 2:10pm

              Re: Re: Re: Re: Re: yes, Go Matthew!

              Yes, respecting a person's privacy is good. I don't anticipate anyone plans to share anything in such detail that there will be any legal problems.

              What I find is that bands have no clue the range of possible incomes without comparing notes. For example, so few bands can even sell 1000 CDs that they are surprised when they find out other bands in their area are selling as many as 10,000 per title.

              link to this | view in chronology ]

          • icon
            Drew (profile), 1 Nov 2009 @ 12:20pm

            Re: Re: Re: Re: yes, Go Matthew!

            Very interesting about the artist, and good job trying to side-step the question by taoareyou. He asked:
            "Hey Suzanne, would you share your income and expense figures with us here?"

            I am fairly confident that he wasn't asked about your experience with the artist you had been discussing but was asking about your personal income and expense figures. It is very easy to talk about someone else's income and expenses, or call on others to be 'more transparent', but when it comes down to it everyone tries to sidestep. So I'll ask the same question. Would you be willing to share YOUR income and expense figures with us here?

            (Side-note):
            Before I start seeing AC's or whomever calling out for the same information from me, I make a little over $43K a year from my Job and generally spend it all on rent/food/electricity/water/etc with some left over to buy the occasional movie or book.

            link to this | view in chronology ]

            • icon
              Suzanne Lainson (profile), 1 Nov 2009 @ 12:38pm

              Re: Re: Re: Re: Re: yes, Go Matthew!

              I'm not sure I don't any figures here to share with you that would be helpful.

              Here are a few that might be relevant.

              As a writer I used to get what was standard, about $1 a word. Worked out to about $1000 an article. People are lucky to get that now.

              A monthly sports business column. $1500 per month.

              Daily articles for a business publication. About $3500 a month.

              Consulting fees: In the greater business world, about $100 a hour. Can any musicians I work with pay that? No, so I don't charge them that and just get involved with people I want to do favors for. So it's mostly pro bono work.

              To do a business research report? Depends on the length. $1000 to $7000.

              Book advance? $30,000, shared with an agent.

              The above are all actual examples of fees I have charged and received.

              You want breakdowns of what I pay for the Internet, phone, magazine/newspaper subscriptions? Sure I could give them to you. I try to keep expenses very low in order to pursue projects that interest me. I never buy the latest of any technology or cars.

              link to this | view in chronology ]

              • icon
                Suzanne Lainson (profile), 1 Nov 2009 @ 2:59pm

                Re: Re: Re: Re: Re: Re: yes, Go Matthew!

                Sorry about the typo.

                What I meant to say was, "I'm not sure I have any figures to share with you that would be helpful."

                I rarely took money for any of the music projects I worked on because either the artists needed it to live on, or I chose to plow it back into the next CD or merch or whatever. Had I taken a commission and/or charged fees, my share would have worked out to about $20,000 to $30,000 a year.

                The reason I cite CD sales, gig income, etc. rather than my income is that is how we monitored the success. If I booked gigs (which I did in some cases), I didn't take any commission. If I spent hours on PR, I didn't charge for it. My goal was to help the people I was working with and to grow a national company. But what I found was that the artists were often less interested in the big picture than I was.

                Over the last year I've been phasing out working with artists and focusing more on general future-of-music-business projects. And I'm not even looking at what can be done now. I'm more interested in where we'll all be five years from now. Debating how we deal with licensing and digital files just seems to be covering the same territory over and over again.

                link to this | view in chronology ]

                • icon
                  Suzanne Lainson (profile), 1 Nov 2009 @ 3:21pm

                  Re: Re: Re: Re: Re: Re: Re: yes, Go Matthew!

                  More more clarification.

                  When I say, "grow a national company," I mean for the artist, not for me.

                  You can set everything up for them, but if they don't want to take advantage of it, what can you do? If you want to benefit personally, you either have to take a percentage (and control some tasks to make sure the company makes money) or you have to charge them a fee, which in some cases feels like exploitation because they are broke.

                  What I have learned about music is that it isn't always just about opening some doors to give artists the opportunity. In many cases you have to shove them through it, and even that doesn't always work.

                  link to this | view in chronology ]

                  • icon
                    Drew (profile), 2 Nov 2009 @ 12:09am

                    Re: Re: Re: Re: Re: Re: Re: Re: yes, Go Matthew!

                    Thank you for the very detailed reply, I figured from your other posts that you would post something more than just overall figures.

                    I can understand about getting frustrated when the people you work with don't seem to want to put forth an effort to truly build a business, in your case I would imagine that some just want to make some music and that's it? At my job, which is enterprise level technical support, I have coworkers that always want the quick answer instead of finding out how to get the answer. It seems the old addage 'If you give someone a fish they eat for a day, if you teach someone how to fish they eat for a lifetime' is true in many different businesses.

                    link to this | view in chronology ]

      • identicon
        wheatus, 31 Oct 2009 @ 12:05pm

        Re: Re: yes, Go Matthew!

        Suzanne,

        Have you ever been cross examined in a court of law after being wrongfully accused? I have.

        Look...until you've had some dreadful amoral scumbag come after your intellectual property, lawyers blazing, and WIN YOUR CASE, vindicating yourself against all odds only because you kept one single POST IT NOTE from 5 years ago, but still have it destroy you financially, because, broke, coke head lawyers who declare bankruptcy upon loosing a witch hunt case like yours can't pay your $60,000 legal bill, well then you could never understand why that question you want me to answer is just completely out of line.

        I'm only here to share with other people like me, what methods I have recently found to be sustainable.

        Jay-Z recently said, on the Bill Maher Show, when asked about the music industry: (paraphrasing)...When I was dealing crack, as a dealer your word meant everything, and if you went back on your word the consequences were severe....but in music people just hide behind their lawyers.

        Yep.

        best of luck and love to the creators of art....

        Middle men, GET A JOB.

        bbb
        wheatus.com

        link to this | view in chronology ]

        • icon
          Suzanne Lainson (profile), 31 Oct 2009 @ 12:17pm

          Re: Re: Re: yes, Go Matthew!

          Have you ever been cross examined in a court of law after being wrongfully accused? I have.

          Well, you answered my question, then.

          The reason I asked is that it's hard for everyone to learn without exchanging info. Online might not be the best place to do it, but it is helpful for people to get a sense of income and expenses.

          Amanda Palmer has been great about talking to everyone about what she makes.

          I really like Topspin because they are sharing what they can without disclosing specific artists.

          And Matthew has shared more than most, so I applaud him for that.

          The grey area for a lot of people is what constitutes successful. The more they know, the better able they will be to decide whether trying to make it as full-time musicians is something they want to do.

          I use some theoretical examples sometimes, pointing out that if a four-piece band grosses $120,000 a year, that really only gives each band member about $20,000-25,000, plus leaving some for expenses and perhaps to pay a manager or staff. And to gross $120,000 means pulling in $10,000 a month. So how are they going to do that? How many shows for what ticket price? How many t-shirts? Etc.

          link to this | view in chronology ]

        • identicon
          Anonymous Coward, 31 Oct 2009 @ 1:17pm

          Re: Re: Re: yes, Go Matthew!

          You're right, Boss.

          The thing is that if you can connect artists to people who can do this on their offtime or weekends, and have the background, an artist could hire them and not worry about signing something away.

          Friends, relatives, and family is always the best starting point. But if someone doesn't have the connections, and desires to purchase services such as what Suzanne can provide outside of a record label, and desired to maintain rights, how do they do it?

          You say middle men, I say, creative direction. Creative direction should be owned by the artist. But still, your agreement should be setup such that if creative direction doesn't work out, you, as an artist, can cut ties and not be stuck.

          To many artists, doing a major record deal is a stop gap, but as you mentioned, and we talk about here regularly, can almost always a difficult position down the road.

          It's sad to hear how things worked out. But we all realized that you learned a $60,000 lesson that shouldn't have happened, or be repeated. It's a lesson more artists know and new artists need to learn.

          It's silly to think all artists have to do everything on their own, and that's a common theme to many of the conversations here. In the process, a lot of people are waking up to stories such as your own. Many artists are deciding to crowdsource which works up to a point, but don't forget, if you need something, you can still consult and obtain good advice as a last resort. People like Suzanne may be a good source, because I've told her to go pound sand a few times and she's still here. Because (I gather) she's still on speaking terms with the person she worked with, I imagine she really liked the music and did it for the love of music.

          So as an artist after step 1,

          Step 2 is often finding folks who don't do it for the money, but for the love of the music.

          Step 3 is to figure out what you want to do and in a way, just go from there.

          I leave you with a very interesting article from another person in Boulder. Check it out if you get a chance-

          http://alexbogusky.posterous.com/creative-directors-are-in-the-business-of-pro

          link to this | view in chronology ]

          • icon
            Suzanne Lainson (profile), 31 Oct 2009 @ 1:57pm

            Re: Re: Re: Re: yes, Go Matthew!

            People like Suzanne may be a good source, because I've told her to go pound sand a few times and she's still here. Because (I gather) she's still on speaking terms with the person she worked with, I imagine she really liked the music and did it for the love of music.

            Yes, I got involved with that person's project because I loved her music and offered to help. I already had experience in sports marketing and felt I could apply what I had learned there to the music business.

            As time went on, I became involved to the extent that I am still technically the secretary of the corporation, though I haven't looked at the books in recent years. But she and I learned a lot working together. We did it all. Everything from mailing CDs to radio stations to hanging posters to sell at shows. I went to those 200 shows a year with her.

            She decided she didn't want investors and didn't want to tour the country, so I become much less involved. But we are friends.

            I met the Fray boys before any labels knew about them and did some PR for them until they signed with Epic. The label then took over that task. (I take no credit in helping them get signed. The band send a song to a website site, someone from Epic heard it, and was immediately interested.) I've remained friends with them and did PR for a television project that Isaac Slade created. Watching their career develop taught me not to discount all label deals. If you can get the right one, be open to it.

            There have been some other Colorado artists I have been involved with to one degree or another. Generally what happens is that I love their music, see potential, and offer to help.

            More recently I have been working with a music marketing company out in LA and writing my blog about trends in new music. Saying it can be done is one thing. But laying out the details to actually make it work is another. That's why, whenever I read about a "success story," I ask about the details and the extent to which it can be replicated.

            link to this | view in chronology ]

          • icon
            Suzanne Lainson (profile), 31 Oct 2009 @ 2:27pm

            Re: Re: Re: Re: yes, Go Matthew!

            Funny that you should put up the link to the Bogusky blog.

            John Winsor, who just started a new agency, Victors & Spoils, was most recently VP/Executive Director of Strategy and Innovation at Crispin, Porter + Bogusky. He became part of CP+B after he sold his company, Radar Communications, to them. Before Radar he owned Sports & Fitness Publishing in Boulder and I did a number of market research projects for the company (reader surveys; industry reports on the inline skating, inline hockey, and climbing industries).

            http://www.reuters.com/article/pressRelease/idUS157017+29-Oct-2009+PRN20091029

            John's new company is going to incorporate crowdsourcing into the world of advertising and, as it turns out, I'm starting to focus on the same concept with music. I think fans no longer want to just be fans. They want to be part of the music, to some degree or another, so I'm looking past the current music environment to what that is going to mean in the future.

            link to this | view in chronology ]

    • identicon
      lordmorgul, 31 Oct 2009 @ 12:33pm

      Re: yes, Go Matthew!

      On this subject, I would suggest (not as one of your fans at the moment, sorry), that you do consider higher quality downloads than available from the core distribution sites.

      I spend money on music... at least $25 a month and sometimes double that, and I'm getting more and more frustrated that CDs for the bands I want are not available locally... and I cannot get adequate quality downloads from anywhere.

      Offering Apple Lossless or FLAC downloads of your own music, through your own site, is a good idea for all artists and more so for those working to build the fan base.

      link to this | view in chronology ]

      • identicon
        wheatus, 31 Oct 2009 @ 1:04pm

        Re: Re: yes, Go Matthew!

        Yes...I completely agree. There are extremely hi res file formats out there that noone seems to want to offer their customers. FLAC, Apple Lossless...etc... We have offered all those at wheatus.com...BUT...

        There is one that beats them all. DSD_DISC! DSD is not high res...it's FULL res. Meaning it's a 1 to 1 version. It's better than vinyl or tape and it's downloadable. Using DSD we recently became the 1st band ever to offer a record in this format for Playstation3. We have had some pretty serious attention from the gaming community, a group I must admit, are light years ahead of the music community when it comes to format and adaptation and ease of use. DSD Download #'s have exceeded both FLAC and WMA combined at wheatus.com....Read more about it here:

        http://wheatus.com/download_dsd_frameset.html

        Incidentally, we own the mastering system for the DSD format...you can DL it, it's future proof and it's beyond audiophile quality....anyone interested in having their music prepared in this format hit me at our site: bbb@wheatus.com

        bbb

        link to this | view in chronology ]

      • identicon
        Matthew Ebel, 1 Nov 2009 @ 8:59am

        Re: Re: yes, Go Matthew!

        Oddly enough, I already do that. The typical downloads are high-quality MP3's because every player on the planet can play those, but subscribers can also purchase full-quality CD's or download Apple Lossless versions later when Songs from the Vault collections are available.

        I also have started providing MIDI, Sheet Music, and remixable AIFF versions when appropriate for the songs I'm releasing. We'll see how that fares, I'm not sure what the demand is for that kind of thing yet.

        Pax,
        Matthew

        link to this | view in chronology ]

    • icon
      Dark Helmet (profile), 2 Nov 2009 @ 6:36am

      Re: yes, Go Matthew!

      Yo, Wheatus, two questions:

      1. Are you guys still signed to Sony BMG

      and

      2. When are you getting your asses to Chicago? I think a guy in a darkish helmet in your stands would make for a nice crowd pleaser...

      link to this | view in chronology ]

  • identicon
    Stampy, 31 Oct 2009 @ 10:13am

    I have to admit, I am very proud of being one of the hardcore fans that make up that 23%.

    I'm a big music fan, I love going to concerts, I love hearing new material.. and Matthew is able to deliver new music to fans such as myself, fortnightly without fail, pull off weekly liveshows and constantly interact with his fans throughout the week. All of combined meant Matthew quickly became my favourite musician out there. Yes someone interested in his music might think that the VIP price is expensive at first. But constant new material, receiving signed goods in the mail as well as other various VIP perks, combined with the personal interaction he has with fans, makes every single penny of it easily worth it.

    And the thing is, its all still a relatively new thing. MatthewEbel.net has only been running for a year, now, and its already accounting for a lot of his income. In another years time, I'm fairly certain that he'll have accumulated at least the same again allowing him to tour and gain more fans.

    I absolutely love the system Matthew has got set up. and as I'e said before, the moment he does a concert in Europe, I'll be there to see him play.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 31 Oct 2009 @ 11:37am

      Re:

      okay Stampy, now can you please explain to Mike how much more a "rabid fan" such as yourself would spend over an average person?

      It seems he missed that day in economics class.

      link to this | view in chronology ]

  • identicon
    bigpicture, 31 Oct 2009 @ 11:21am

    Earning a Living

    I expect this model would even distribute the spend on music and entertainment more evenly. Less Super Star promotions from recording companies, and the sucking up of all the money, and more artists who though they created good music were never promoted and therefore "didn't make it". Now they have a business model option from which they can earn a reasonable living, just like an engineer, a doctor, a fireman or anyone else.

    The question that keeps coming up again and again is, what value does recording companies add that they expect to collect disproportionately millions of dollars off someone else's talents and efforts?

    link to this | view in chronology ]

  • icon
    Suzanne Lainson (profile), 31 Oct 2009 @ 12:06pm

    Keeping good records is important

    Here's one piece of advice I'll give for anyone who hopes to pull it off.

    Keep records of everything. How many CDs and t-shirts are you selling at shows to how many people in the audience? What's your sell-through rate?

    Start charting how many people you are reaching online and how many you are converting to paying customers.

    There are a lot more companies now providing data based on online info. I've looked at some of what they have to offer, but I don't have access to data for some artists that I am curious about, so I haven't put most of that to a test yet. What I'm finding with artists who I know personally is that they may be very successful in one area, but haven't leveraged that success into other areas. For example, they may be touring a lot, but not staying in touch with fans. Or they may be highly visible on YouTube, but not maintaining an email list. Etc. A lot of stuff falls through the cracks for artists for a variety of reasons.

    Once you have records, start looking for patterns. Are you making progress? Are your sell-through rates consistent? With the artist I worked with, I did the merchandise at shows. So we'd keep track of sales and also estimate the size of the audience. I found that worst case scenario was selling 1 CD per 10 people. It could go as high as selling 4 CDs per 10 people. We had three years of this to draw upon. So I felt pretty confident doing some sales projections based on that worst case scenario.

    People wanted to invest in her company so I felt we had to plot some sales projections, and we had the data to show how we thought we could do it. Then she realized she didn't want to take on investors and was happy running her corporation without outside money because it reduced the need to figure out how to pay dividends, etc.

    I've since tried to apply the concept to another artist, but she could never pull together any sales figures. And consequently, she has never had good data to show potential investors.

    You don't necessarily have to be profitable at the moment (though it helps), but you need to show why you think you CAN be profitable and then use that to get small loans or investment.

    I think it is harder now to ask people to put in money than it was five years ago because so much is in flux. But I don't think you can begin to do it without a good grasp of your current and potential financial situation.

    link to this | view in chronology ]

    • identicon
      Matthew Ebel, 1 Nov 2009 @ 9:03am

      Re: Keeping good records is important

      Actually, I would advise any serious musician to keep anal-retentive records of their transactions. Just like any small business owner. I wouldn't be in business right now if I was just winging it... I have separate business accounts, a local business license, invoicing/accounting software...

      Anyone who wants to run a business should be doing these things, whether you're steaming lattés or screaming into a microphone.

      Pax,
      Matthew

      link to this | view in chronology ]

  • icon
    Suzanne Lainson (profile), 31 Oct 2009 @ 12:45pm

    A good resource

    Ani DiFranco and String Cheese/Madison House have always been role models for me in terms of DIY artists.

    Here's a really good article from 2004 that goes into a lot of detail about DiFranco's business.

    http://www.inc.com/magazine/20040901/difranco.html

    link to this | view in chronology ]

  • identicon
    Mojo Bone, 31 Oct 2009 @ 1:42pm

    Good to know that a subscription model's getting some traction, but I wouldn't consider a living wage any that doesn't provide for living independently, sans roommates. As an artist, I do care about income, and even more about outlays, but when folks start talking about sell-through, my eyes glaze over. I think this is a fundamental problem with artists; for most of us, our minds just don't work that way, and if they did, we wouldn't be very good musicians. Small wonder so many of us end up getting stiffed by lawyers and accountants. The reason I think the biz is in the hole it's in today has nothing to do with internets and downloaders/freeloaders. The problem is that we let the lawyers and accountants take over. If I can find one true fan who also happens to be an accountant, I can take on the world.

    link to this | view in chronology ]

  • identicon
    1DandyTroll, 31 Oct 2009 @ 3:53pm

    Just imagine what he could've made if not for the virtual regional borders, that only exists due to the music and movie mafiaa outfits. Kinda of ironic that content creators on the music and movie can't sell their stuff to any which country they want to, and that only because of "inhouse rules" within the business' itself. At least authors doesn't need to suffer that crap at least.

    link to this | view in chronology ]

  • identicon
    cc, 1 Nov 2009 @ 4:18am

    Not quite relevant to this story, but in the spirit of the blog all the same: there's a surprisingly open-minded post on the BBC that has got a few things right, if anyone cares to read it:

    http://news.bbc.co.uk/1/hi/entertainment/8330633.stm

    link to this | view in chronology ]

  • identicon
    Prime Speaker, 1 Nov 2009 @ 9:18am

    On track

    From my experience of direct response marketing, these numbers are on track

    link to this | view in chronology ]

  • identicon
    cc, 2 Nov 2009 @ 2:32am

    On the other hand...

    I'm sure you must remember the lovely Lily Allen. Well, she's now setting up her own record label. This may bring her previous actions into question -- was she really expressing her opinion as an artist or as the to-be owner of a record label?

    http://www.clashmusic.com/news/lily-allen-to-set-up-record-company

    link to this | view in chronology ]

  • icon
    Suzanne Lainson (profile), 5 Nov 2009 @ 12:41pm

    A really good discussion why the 1000 True Fans idea may be harder than it looks

    link to this | view in chronology ]


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