Ok Go Explains There Are Lots Of Ways To Make Money If You Can Get Fans
from the everything's-possible dept
Over the last few years, we've covered many of the moves by the band Ok Go -- to build up a fanbase often with the help of amazingly viral videos, ditch their major record label (EMI), and explore new business model opportunities. In the last few days, two different members of Ok Go explained a bit more of the band's thinking in two separate places, and both are worth reading. First up, we have Tim Nordwind, who did an interview with Hypebot, where he explained the band's general view on file sharing:Obviously we'd love for anyone who has our music to buy a copy. But again, we're realistic enough to know that most music can be found online for free. And trying to block people's access to it isn't good for bands or music. If music is going to be free, then musicians will simply have to find alternative methods to make a living in the music business. People are spending money on music, but it's on the technology to play it. They spend hundreds of dollars on Ipods, but then fill it with 80 gigs of free music. That's ok, but it's just a different world now, and bands must learn to adjust.Elsewhere in the interview, he talks about the importance of making fans happy and how the band realizes that there are lots of different ways to make money, rather than just selling music directly:
Our videos have opened up many more opportunities for us to make the things we want to make, and to chase our best and wildest ideas. Yes, we need to figure out how to make a living in a world where people don't buy music anymore. But really, we've been doing that for the last ten years. Things like licensing, touring, merch, and also now making videos through corporate sponsorship have all allowed us to keep the lights on and continue making music.Separately, last Friday, Damian Kulash wrote a nice writeup in the Wall Street Journal all about how bands can, should and will make money going forward. In many ways the piece reminds me a bit of my future of music business models post from earlier this year -- and Kulash even uses many of the same examples in his article (Corey Smith, Amanda Palmer, Josh Freese, etc.). It's a really worthwhile read as well. He starts by pointing out that for a little over half a century, the record labels had the world convinced that the "music" industry really was just the "recorded music" industry:
For a decade, analysts have been hyperventilating about the demise of the music industry. But music isn't going away. We're just moving out of the brief period--a flash in history's pan--when an artist could expect to make a living selling records alone. Music is as old as humanity itself, and just as difficult to define. It's an ephemeral, temporal and subjective experience.But, he notes, that time is now gone, thanks in large part to the internet. But that doesn't mean the music business is in trouble. Just the business of selling recorded music. But there's lots of things musicians can sell. He highlights Corey Smith and Smith's ability to make millions by giving away his music for free, and then touring. But he also points out that touring isn't for everyone. He covers how corporate licensing has become a bigger and bigger opportunity for bands that are getting popular. While he doesn't highlight the specific economics of it, what he's really talking about is that if your band is big, you can sell your fan's attention -- which is something Ok Go has done successfully by getting corporate sponsorship of their videos. As he notes, the sponsors provide more money than the record labels with many fewer strings:
For several decades, though, from about World War II until sometime in the last 10 years, the recording industry managed to successfully and profitably pin it down to a stable, if circular, definition: Music was recordings of music. Records not only made it possible for musicians to connect with listeners anywhere, at any time, but offered a discrete package for commoditization. It was the perfect bottling of lightning: A powerful experience could be packaged in plastic and then bought and sold like any other commercial product.
These days, money coming from a record label often comes with more embedded creative restrictions than the marketing dollars of other industries. A record label typically measures success in number of records sold. Outside sponsors, by contrast, tend to take a broader view of success. The measuring stick could be mentions in the press, traffic to a website, email addresses collected or views of online videos. Artists have meaningful, direct, and emotional access to our fans, and at a time when capturing the public's attention is increasingly difficult for the army of competing marketers, that access is a big asset.Of course, that only works if you have a big enough fanbase, but that doesn't mean there aren't things that less well known bands can use to make money as well. He talks about an up-and-coming band in LA that doesn't even have a manager that was able make money:
...
Now when we need funding for a large project, we look for a sponsor. A couple weeks ago, my band held an eight-mile musical street parade through Los Angeles, courtesy of Range Rover. They brought no cars, signage or branding; they just asked that we credit them in the documentation of it. A few weeks earlier, we released a music video made in partnership with Samsung, and in February, one was underwritten by State Farm.
We had complete creative control in the productions. At the end of each clip we thanked the company involved, and genuinely, because we truly are thankful. We got the money we needed to make what we want, our fans enjoyed our videos for free, and our corporate Medicis got what their marketing departments were after: millions of eyes and goodwill from our fans. While most bands struggle to wrestle modest video budgets from labels that see videos as loss leaders, ours wind up making us a profit.
The unsigned and unmanaged Los Angeles band Killola toured last summer and offered deluxe USB packages that included full albums, live recordings and access to two future private online concerts for $40 per piece. Killola grossed $18,000 and wound up in the black for their tour. Mr. Donnelly says, "I can't imagine they'll be ordering their yacht anytime soon, but traditionally bands at that point in their careers aren't even breaking even on tour."The point, Kulash, notes, is that there's a lot of things a band can sell, focusing on "selling themselves." And, the thing he doesn't mention is that, when you're focusing on selling the overall experience that is "you" as a musician or a band, it's something that can't be freely copied. People can copy the music all they want, but they can't copy you. "You" are a scarce good that can't be "pirated." That's exactly what more and more musicians are figuring out these days, and it's helping to make many more artists profitable. And, no, it doesn't mean that any artist can make money. But it certainly looks like any artist that understands this can do a hell of a lot better than they would have otherwise, if they just relied on the old way of making money in the music business.
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Filed Under: business models, experience, music, ok go, sponsorship, tours
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Wrong
"What America, and the entire world should be really concerned about right now is not if musicians are making money because, really, who gives a f-k about them - but whether the three big labels, which constitute nearly the entire music industry and which are responsible for 90% of GDP in this country, are making enough money to shit goldbricks over the rest of you miserable slaves." - anonymous RIAA executive.
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Puleaze. A few years ago when the majors still owned the market, the music industry was a $14 billion a year industry.
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haha
WHY NOT outsource musicians and acting
OH WAIT they make more tv and movies up in canada cause its too expensive to be made in the USA....
wink wink nudge nudge.
"YOUR NOT REALIZING ONE THING....
The rest of the world no longer needs labels.
IN time pioneer one like productions will grow and the networks will cry cause they will have to pay $$$ to get liscensing for stuff we all can watch free." --Anonymous Human being
THIS IS THE END GAME
and if i am to eventually get capped to 25gb it will be god damn 25gb of fucking free shit i watch."
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I apologize for the following post:
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And what happens when the cloning begins, Mike? Then what will artists sell?!?! Cloning will ruin the music industry!
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But with all the sheep we will have wandering around the scotts are going to be very happy ... ;)
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It puts artists in the unfortunate place of having to whore out their real lives in order to pay for their music.
It is incredibly disappointing to see that so called fans aren't able to bring themselves to part with a few dollars to support their favorite artists. Instead, the artist has to hope like heck that he can find a few people to pay a lot of money for a meet and greet or some other odd social event unrelated to the music, because that is the only thing people will pay for anymore.
I can picture the future musician: "I would make some more great music, but I have to go take some guy to the roller skating rink for two hours to be able to make my car payment. Maybe I will write music next month instead".
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Now they are put in the position of chasing the mythical Jackalope (the thing, not the band). They have to find the one person out of maybe 1000 who will give them enough money to continue for another day. Now just being a good musician isn't enough. They have to be somehow personally entertaining to someone who isn't paying for music, they are paying for a game of air hockey and beer at the local pub.
Worse yet, as more and more artists offer the same thing, the market will get flooded with offers, meaning that laws of supply and demand will come into it. With a very small market of people willing or able to pay for special things and a larger and larger field of artists having to slut out their time for cash, the market price drops. Finally, like everything else in the scarcities market, it stops being scarce enough to matter.
Maybe at that point, they will just go back to selling music.
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Again, weird that you would say this. 10 years ago, they had to find the record company that would pay (used loosely) for them to continue to produce music. It was MUCH harder to do. Countless big name bands will tell you their stories of eating crackers and living in a van so they could play two shows every night and somehow some talent scout happened to need to use the restroom in the club that night and heard the band playing.
...and then the record company took all of the money and they sold millions of records and never recouped...oops, I'm off topic.
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Worse yet, as more and more artists offer the same thing, the market will get flooded with offers, meaning that laws of supply and demand will come into it.
You put your finger on the real point - but don't seem to understand. The problem these days is that there are far too many people trying to make a living from music. In this market it is inevitable that most will fail.
In the past the record labels acted as gatekeepers and controlled the number of musicians trying to make a living - nowadays the public does it directly.
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1) Sell records (let me give you a hint here - music is WAY older than any recorded media)
2) Charity
3) Selling meet and greet opportunities
There have been hundreds of other WORKING business models explored on this site. Why not work in a few of them to make a living? Have you seen the recent commercials featuring Pomplamoose?
Even worse, this makes an assumption right from the beginning that may not be true. You are saying that musicians SHOULD be able to make a living from their music. Now, let me be clear - I think they should be able to. I think their contribution to society is important and that should be rewarded and encouraged - and our society seems to think that money is the way to do that (perhaps I don't agree with that part). However, it is not clear that society as a whole agrees with that statement.
Historically, music was free - it was a way to passing down history and culture and people did not make a full living off of it. The idea that someone can live off of making music is a pretty new concept in our history. Claiming that we owe these artists a living for what they have produced is odd. We do not owe anyone a living - most people have to work for a living and sometimes they work really hard and come up empty. If I decided to put a billboard outside your house, is it reasonable for me to charge you for looking at it? Would you pay? Would it be ok for the government to tax you for it? But I worked really, really hard on it...
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You guys had a nice free run; 10 years. But the landscape for you is changing very quickly. And at this very moment work is being finalized on our own tech, that will monetize recorded music far into the future.
Hope you'll be able to adapt to the change.
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They can't be as tired as I am of having cigar-chomping, txakoli-sipping empty suits who work for record labels, "performance rights" organizations, and trade groups telling me what music I can listen to and how much of my money needs to fill their coffers.
The market establishes itself. And currently, the market has come to the obvious conclusion that infinite goods are free. All the wishful thinking in the world will never change that.
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I love how our friend here blames the messenger. Dude, it's not about "should." It's explain what *has already happened* and suggesting ways to deal with it in a manner that makes you more money.
We've had this conversation before, and we've noted that the artists who work with you are not making money (you've stated that upfront). Yet, the artists who have worked with me, seem to be doing quite well.
So, um, why should people listen to you? I'm honestly curious.
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That's not the future of music. That's been the reality of it since the record companies entered the game. Many great musicians have had to choose to make a living over their art. They could not get a golden ticket from a record company. The internet actually seems to level the playing field quite a bit by making recording, distribution, and generation of a fan-base something that can be done by anyone who can produce good music and come up with a creative business plan. That sounds like a better world to me.
Oh, and find me the great song in which the artist will say:
"I would never have written this without someone paying me to". Most great art seems to be motivated by something other than money.
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If they aren't then it isn't their fault - it's your fault
I've spent more on music this year than ever before. The biggest single part the money has gone to musopen to fund orchestral recordings that will be released to the public domain.
The next biggest chunk was spent on a weekend singing course with one of my favourite musicians.
After that comes spending on live concerts plus CDs bought at the concerts from the musicians (the only way I buy physical CDs these days).
Finally there was a relatively small amount spent on paid for downloads from a site that charges reasonable prices (a tenth of iTunes prices).
If you can't make a living out of this spend then the problem is yours not mine.
The real problem for musicians these days is that there are really too many of them trying to make a living. Since the internet has lowered the entry barriers the numbers of would be musicians has rocketed. In these circumstances most will inevitably struggle - but it isn't the fans' fault.
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How do you fund the orchestral recordings? You work. What happens when perhaps you run a little short of money, and you can cough up the major dough required to make these recordings (and to keep all those musicians paid and living)? The music dies.
Now, if someone came in with some risk capital, and financed the recording of the music, and sold it at a reasonable market price to recoup their risk, and to make enough money to also pay for the musicians, wouldn't it be better? Each of one us could buy a $10 download from Itunes or whatever and we could all enjoy the music, happy knowing that we contributed to making things work out? They call those risk capital guys "record labels". You tech types call them "venture capitalists" or "Incubators".
See, what you did was be the 1 in X that overspent incredibly to allow the freeloaders to enjoy the music. The funny part is that one day you will realize it, and you will stop spending money for other people to enjoy. You work hard for your money, it should be for yourself, not the 100 or 1000 freeloaders who didn't bother to pay for something.
See, you aren't a fan, you are a fool. The fool and his money are soon parted, but the smart man eats the feast laid on by others. When you realize that you have been a fool, things will change.
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The only thing that would contribute to is a monstrous organization that sues single mothers for $2 million for swapping 24 songs online, then gloating about destroying her life. I don't mind paying artists. I will never pay a record label.
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(from the Fat FAQ page)
"What the fuck is the RIAA and is Fat part of it?
They are the Recording Industry Association of America. Are we a member? Not only no, but FUCK NO! We spent three years having our label's name (which was mispelled) removed from their members list. A year went by, then our name showed up again on their fucking list! Who are these sonsabitches?! Needless to say, we're in the process of having our name removed again, but they aren't being too cooperative."
or Quote Unquote Records...
read the "about us" here
http://www.quoteunquoterecords.com/info.htm
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Not that all of them do, mind you, but I tend to avoid all labels on general principle.
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No No No No No!
The music I funded will go straight to the public domain. It will be free. Anyone can use it any way they want. That is what I chose to do with my money. Your way is the old way and it doesn't deliver free music. Now that copying costs nothing the old way makes no sense at all.
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Then I can't afford to buy your rented music - bu the free (as in freedom) music that I funded is still available to me.
BTW the cost of the recording was shared between many people - so my contribution was no greater than what it used to cost to buy a domestic HiFi system plus a few records...
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I hope I never sink to that way of thinking.
I'm very happy that the music I funded can be enjoyed by many other people. That is precisely what I did it for.
Your philosophy seems to be founded on selfishness.
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I think it is inevitable that most musicians will struggle. That is just simple economics. Earning a living from music is such an attractive proposition that it will always be oversubscribed. What has happened recently is that the internet has enabled more musicians to make a living - and as a byproduct even more are trying.
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I just had a really validating weekend: we had a cd release party where we said "No one goes home without a cd - pay what you want. 25 cds went out the door and we averaged exactly we'd normally charge, $15 each. But the folks that paid less, were just as excited (maybe more) than the folks who paid $25.
On top of that, a fan who has been wanted to donate for years, received an inheritance and donated $2000.00 and said "Make more art and music!"
You have to give them a reason to buy.
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1) Marketing to corporations to fund Music videos
2) Web Based resources for bands starting out in the new music business broken out by
2a) Sales of online music (as long as this lasts)
2b) Tee shirts and other manufacturing-drop shipping
2c) Bulk and short run CD + DVD pressing
2d) Online promotion of shows
2e) Online Promotion of bands
etc
TechDirt could become the central resource for new bands online.
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Corporations aren't going to fund many videos. They want return, and in a billion video universe, there is likely no return. Remember, the new music world is a chaotic system with no leading players, no leading sources, and little in the way of true eyeball (or ear hole) aggregation. It is a high level noise floor with little sticking above the noise.
For the rest of it, you keep falling in the same trap. There is little indication that there is an ongoing market for any of that stuff. As the noise floor continues to rise, fewer and fewer individual acts or bands will make enough for it to really matter. If millions of "musicians" are all offering t-shirts and mugs and other junk, will any of them really make any money doing it?
If you think there is a market for such a central system, make it yourself. Just don't quit school to do it.
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Masnick = paid shill
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Re: Masnick = paid shill
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Masnick is a piracy advocate because he knows it means more money for himself.
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There is no big pirate conspiracy. Who has gotten rich off of piracy other than large corporations who practice illegal corporate espionage? Some would argue that Microsoft was founded and subsequently succeeded because of piracy
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I was thinking about offering him a time share under the golden gate ... the one across the street from that now defunct record store.
"There is no big pirate conspiracy."
Shhh!! Stop denying it!!! he will figure out you are denying it because there really is a big pirate conspiracy.
(do I need to put a sarc tag in?)
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Re: Re: Re: Masnick = paid shill
I love the bizarre conspiracy theories of clueless record label people who don't actually have any knowledge of what we do as a company.
Masnick is a piracy advocate because he knows it means more money for himself.
I've never advocated "piracy" at all, and why would I? And, I find it pretty funny that you think "advocating for piracy" means more money. From whom exactly?
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Oh, Oh, Oh, (dave waves hands) pick me, pick me!!!
For the artists.
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Re: Masnick = paid shill
Heh. Did you not read the part where he didn't sign a traditional label deal at all, but more or less hired the company to handle marketing & distribution for a fair revenue split? In other words, yes, he did hire the services he needed.
Furthermore,Kulash states explicitly that there is a problem in replacing the risk capital function that a label provided for emerging artists.
That's because I covered his very next part where he gave examples of where that IS happening and the new ways to get that capital.
o wonder people are being to realise that Mike Masnick is nothing more than the paid whore of the economic interests of Silicon Valley.
Heh. The reality is the opposite is happening. I hear from more and more content creators on a daily basis about how much what I've written about has helped them succeed themselves.
And I'm really curious about how I'm a "paid shill". For whom?!?
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Re: Masnick = paid shill
Maybe he could. You don't know what other benefits he's getting from a label. Who are you to tell him how he should run his business? (And yes, music is art, but if you're trying to make money from it it becomes a business.)
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So will hookers, the people that pick food from plants, and people who post Anonymously on blogs :)
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OK Go and similar stuff
It's a shame. Techdirt would be so much more valuable if it stopped groveling to the "artistic" world.
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