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The new Report Card

February 2, 2010 in marketing, music business by George | 4 comments

I still wake up on Wednesdays with a little shudder. You see, Wednesdays are (and, I guess, always will be) soundscan days. Back when there was still a record business, you got your report card every Wednesday morning. I remember so well hauling my pale ass out of bed and using the sweet dial up modem to log in to SS. 90% of the time, this was immediately followed by an “ugh.” The numbers were rarely what you wanted them to be (for more on SS’s continued irrelevance, read this).

Numbers indelibly etched in my brain, off to the office I’d go. I’d hit the fax (yes, fax) machine to look for the radio and press reports from the indies, and check my inbox (and by that I mean a little box in which paper reports were inserted) for internal press and radio reports. Ugh. Ugh.

Wednesdays sucked!

And, typically (almost always) with each subsequent week after the initial numbers, Wednesdays sucked exponentially more. You see, 99% of the time, the only week you might have any type of non-ugh reaction over SS numbers and other reports was that first week.

From there the numbers tended to drop precipitously. In fact, it was often considered a win if your SS numbers only halved from week 1 to week 2. Same with the other reports: radio and press (linked, and, in many respects, taking their cues from SS) tended to start with optimism (“So and so from such and such magazine/newspaper/radio station really likes the record, and promises to listen!!!”), and got increasingly depressing (“So and so says they’re on deadline/add week, but they’re going to try to listen;” “So and so doesn’t really dig it/feel the heat/will give it a review instead of a feature/will try it on the specialty show, but won’t add yet”).

Here’s roughly what the report card looked like:

What my scrawl is saying is that in week 1 if your SS number was 1000, by week 2 you’d often decrease that number by 75% (so, from 1k down to 250); the press and radio interest would decrease by half. Week 3 would continue apace with your SS numbers being a tenth (in this case, 100) of the first week, while radio and press interest was 25% of what it had been in week one. This is probably a little dramatic in order to make a point, but it’s not that dramatic, and this is, sadly, often exactly what it looked/looks like).

Can you imagine how hard it became to do this week after week? Don’t get me wrong, I (and many more others) had weeks where the SS numbers went up, press went crazy, radio added the song, etc. But, for every one of these, there were literally dozens where it went the way I described above.

Just from a psychological standpoint, it caused a ton of psychic torment; rather than being excited and finding ways to create energy and positivity about a project, you were left sugar coating: “The numbers weren’t that bad;” “Hey, we laid a foundation for the next record.”

This type of laying it on thick was particularly important in terms of artist relations. You had to present things in some sort of positive light to artists or they’d lose their minds; they’d just spent many moons and much blood, sweat, and tears creating a piece of art, and entrusted it to you, and to tell them that the general response to their work was, “meh” was simply cruel. (In hindsight, it was equally cruel to sugar coat, but I wasn’t as evolved as I am now (hah!)).

In any case, as the negativity began to become almost endemic, the process became surreal: what were we doing? What is real?

Happily, we have a new report card, and it’s sort of the inverse of the above.

Below is a quick (I know, given the looks of it, it’s hard to believe that I didn’t labor over it; I have a gift) list of some of what I feel are the more important elements that should be on your new report card.

[The legend to my map: email addresses; twitter followers; Facebook fans; Google Analytics (you should look at visitors, time on site, bounce rate, etc. Also, you should be looking at Google Alerts); downloads; subscriptions (i.e. people subscribing to some offering, ala Kristin Hersh's Strange Angels). The calculation is just an example. Here, I've got week 1 as "X," and the subsequent weeks' numbers increasing by 20, 30 and 40% of X. So, if week one, you have 100 email subscribers, by week 2 you want 120, and so forth. This is arbitrary. You should set whatever goals are difficult but attainable, and you should adjust as the weeks go by.]

Couple of things to note: 1. You can do this daily. 2. You should measure what I’ve suggested, but you should also have your own things you’re measuring; I’m sure I’ve left off some obvious things (one thing I’d love to be able to measure is how effectively your music is being shared, I know Topspin is making some great strides with this; another is gig attendees/number of gigs played – you need to measure this!).

The big distinction, however, between the old skool report card and the new skool report card is the shift from pessimism to optimism it represents.

Where the old skool report axiomatically led to depression due to the inexorable decline in numbers (SS, reviews, spins), the new skool report axiomatically leads to hope (and thus energy): if you haven’t increased – even by a teeny bit – your email subscribers, etc., something is wrong.

The good news now is that once you realize that something is wrong you can take strides to fix it.

Not getting enough email subscribers? Do you have an email-for-content widget rocking on your site; have you done what you need in terms of SEO to make sure people know you have a site; are you leveraging Twitter or FB to go to where people already are congregating and giving them a decent value proposition to go to your site; etc.

You know what your “remedy” was for bad ss numbers? Spend more co-op dollars. Fuck. Bad radio numbers? Payola. Double Fuck. Bad press? Cry. Sigh.

Again, the real beauty of this new type of report card is that it should be exciting and encouraging. You can see incremental progress, and, most importantly, you (band, manager) are in control.

This is vastly different than placing your hopes/destiny in the hands of a sales rep, publicist, promo person, label.

You note that nowhere on this new report card is a category for radio play or press reviews. You know why? They don’t matter. Yes, a teeny bit of an exaggeration, but even if they might matter a bit (and, really, only for artists who are already established) – you largely can’t control them. Please focus on what you can control. I did, by the way put Google Alerts as a measurement; think of this as your press report, and when you see that someone blogged about your work (via Google Alerts), respond/comment, etc. Remember, markets are conversations/relationships.

In a comment to my earlier post about The Leveling I was gently criticized for not supplying specific enough instruction in my writing. Well, as much as I agree with Mr. Godin’s statement about not drawing maps, I guess this is an attempt at something resembling a map.

Map:
What you have to do is figure out what you need to measure (I’ve tried to give you some ideas). This should lead to an overall strategy (i.e. big picture goals), and this should lead to action plans (i.e. small, daily steps that help you hit those goals).

Don’t try to go from 0 email subscribers to 1000 in a week, and then deem it a failure when/if you don’t hit that. Try to go from 0 to 25 in a week. Before you can get any, you have to do some work (as above, email-for-content widget, SEO, etc. – these are elements of an action plan that lead to success at a strategy of getting more email subscribers).

Measure your progress weekly. Use a google sheet that can be updated each week. Have a band meeting and look at the numbers. Assess what’s working, and what’s not. Where things are working, there is energy; do more. Where things aren’t (no addition of FB fans, etc.), figure out what actions you can take to change it.

Do this for three months, you’ll be shocked by the results.

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What I’m on about: Why VRM matters to the music business

December 30, 2009 in music business by George | No comments

I apologize for my sort of recent obsession with all things VRM. It’s actually not very recent; it takes me longer than the average bear to organize my thoughts on these types of topics, and so I mull and mull in the scary silence of my brain until things start to emerge. Once they do emerge…oh boy, stand back, because all that pent up crap in my brain starts spewing forth. These types of happy explosions of interest and connection are what I live for.

So, all that preamble behind, you, Dear Reader, will have to suffer through more of this VRM hullabaloo (or not; I would understand completely if you un-RSS me, stop following…really, it’s cool, and actually very consistent with everything I’m talking about: you the customer (though I by no means think of you in that way) have the power – not digging my scene, by all means find one you do).

I had a conversation today with one of the smarter people in the music business, Dick Huey, in which I was going over some details of a project I’m working on. Dick was correctly pointing out some issues when I rudely interrupted him and said, “All I’m trying to do is move the needle here. I just want desperately for customers to have more control over where they buy/how they interact with the music that moves them, because I believe that will benefit the artists.”

I continued, my eyes rolling slightly back in my head, “How do we defend the fact that we give credence and validity and importance to “filters,” and send traffic to them, and reward them for traffic, but then when one of these filters does their job and compels a customer to want to engage with something, we require the customer to take a series of unnecessary steps to do so.” Want to buy a book, album, whatever from a trusted source….shoot them over to Amazon/iTunes.

We go from providing the customer with tools to learn about something of importance, and even interact generally (a song sample, a sample chapter), but then don’t provide them with the choice to complete the transaction. Instead, we add in layers of transaction cost to complete the process. The percentage of people who get interested in a product, but don’t complete the transaction on a site where they can is massive (we know this because we can see people who abandon shopping carts with items in them). So consider how exponentially more massive is the percentage of people who never bother to leave a site where they’ve discovered a product, but can’t complete the transaction in order to go to another site, (potentially) enter in new CC information, complete the transaction, etc.

We’ve walled ourselves into this bad CRM world, where Amazon, eBay, or iTunes are the default. As Doc Searls says, “…customers need easy and secure means for expressing demand, with money on the table… Intermediaries can be involved, but they must be substitutable. If they’re not, we’ve just got eBay and Amazon all over again.”

The problem with these default intermediaries is they create arbitrary and capricious terms that become the de facto standard. iTunes keeps 30% of the transaction. This, therefore, becomes the default; content holders are conditioned to “OK” similar terms because they’ve been established by Apple. The problem? These terms don’t necessarily make sense. Apple themselves said for many years that they were losing money on the iTunes store. That was OK by them because they could leverage the sale of music to sell higher-margin items (iPods, iPhones, laptops, etc.). But, if you’re in the business where you’re not using music as a loss-leader, in addition to being insane, you’re probably fucked by these terms. Don’t believe me? How well are the music entities that have had to abide by the terms that Apple established as the terms doing? Not so hot.

The key to VRM is that the customers manage their vendors; the customer puts out a RFP and then selects in what manner, and with whom they’ll interact. I have no delusions that that scenario is gonna get here any time soon. It will arrive, and sooner than people think (to a degree it’s here: Kalido; Informatica).

What I think will lead use closer to there, vis-à-vis music, is for the vendors (in this case, record labels/ content holders) to see “money on the table demand.” This will motivate these content holders to help create systems that allow for the transactions to occur across a vast amount of vendors.

Right now, it’s like pulling a garage door through water. Not only do these content holders demand potentially untenable Apple-esque terms, they want the intermediary to build — at the intermediaries sole expense and risk — the mechanisms to sell the content holders’ wares. Please, for a moment, think about the insanity of this. Think about how well Coca-Cola would have done had they made it fucking impossible for vendors who wanted to sell their product to do so!

In any case, back to Dick for a minute. I finished my rant by saying something along the lines of, “This is about way more than a deal for me; it’s about opening up markets so that we can sustain this whole enterprise of creating, selling, enjoying music.”

That is the particular windmill I’ve been tilting at all my life. What’s making me spur Rocinante with ever-increasing gusto is that this time I’m pretty sure that windmill is going down. Whose with me? Sancho?

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Correlation (or lack thereof) between audio quality and sales

November 13, 2009 in music business by George | 5 comments

While it pains me to say it, based on a whole lot of years of experience, I see very little correlation between how well-recorded a record is and how well it sells.

I was talking about this with someone recently, and was inspired to draw the diagram below to try and explain it. Yes, it looks like something a convicted serial killer might scrawl on a jail cell wall, but I never said I could draw.

Essentially, it’s just stating that unless you’re 2 standard deviations (shitty sounding at the left end of the tail, and amazing sounding at the right) from the mean with respect to your sound quality, it will have little to no impact on sales. 1 standard deviation (noticeably bad on the left; noticeably good on the right) has less, and everything under the big part of the curve has zero impact.

It goes back to “remark-ability.” If your record sounds so amazingly good or bad that people are remarking on it, there’s a chance for there to be a negative or positive correlation to sales (“You gotta get this record and listen to it on headphone”; “Don’t buy it, that record is unlisten-able.”)

Yes, there is a small sector of audiophiles out there who buy things based upon what The Absolute Sound says, but ask them how well the DVD-A or SACD market is working out.

Just a thought. But keep it in mind, because unless every dollar you spend on recording correlates to attraction and retention of customers, that’s a dollar better spent on marketing.

Here’s the chart:

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Coin a Phrase: The “Downsell”

November 4, 2009 in marketing, music business by George | 11 comments

We all know about the upsell: Mass Merchants, etc. lure you into their store with a low-cost item (too often, CDs) in the hopes that you leave with some high-margin item like a washing machine.

The “Downsell” is different. As I’ve discussed, the music business is now the merch business, and the way to go is to create a vast and sometimes over-the-top (like the awesome Josh Freese campaign) product array with some big-ticket (and high-margin) items that create awareness and drive people to the artist’s Site.

The reality, of course, is that most customers will look at the big-ticket item, but won’t buy. The psychology is sort of interesting. A customer is made aware of the site via the big-ticket item (Mr. Freese got a bit of press about his campaign, if you recall), looks at it, but can’t afford it/doesn’t want to spend so much. However, all of a sudden a CD/download priced at $10 seems like a bargain when compared with the big-ticket item priced in the hundreds (or thousands) of dollars.

It’s what economists call “the importance of being unimportant.”

The good news, of course, is that in addition to (for the time being, until everyone does this) creating awareness and driving traffic to an artist’s site, these big-ticket items have a high margin; you don’t have to sell too many of them to make material $. All the while, the majority of people who can’t/won’t pay for the big ticket item now are not only aware of the core product (the CD/download), but are predisposed to buy something because it appears to be a bargain.

Hence, the “Downsell.”

We’re doing this with Carly Simon’s new CD, and it’s working. It ain’t perfect, and we’ve got a long way to go (and it very much is an effort in refining), but the proof of concept is there.

It’s so important to think this way. The whole notion of just selling a CD/download is increasingly quaint (remember, the music business is the merch business).

Also, it’s crucial to not leave money on the table with respect to your core fans. The people — whether it’s 100 or 10,000 — who will buy whatever you throw at them, should not just be thrown a CD/download.

Doing so leaves a fortune on the table.

If you’re a true fan, and your favorite artist presents you with an offering that is personal/deluxe/etc., you’re not going to think twice about paying more for it. Yet, too often we as content providers don’t give these fans the opportunity to pay more.

As my three-year old says just before being chastised for doing so: “Stupid.”

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Reflections on the 2009 Future of Music Policy Summit

October 10, 2009 in music business by George | 8 comments

OK, a day or so after my panel at the fantastic Future of Music Policy Summit, and I want to try and toss out a few thoughts.

First off, while I’m typically not real big on conferences, I can enthusiastically recommend this one. The values of the conference and the caliber of speakers/workshops makes this – in my mind – the go-to conference. Get yourself registered for 2010 asap.

So, my panel was entitled New Musician’s Toolbox. I moderated, and the panelists were: Duncan Freeman, founder, Band Metrics; Charlie McEnerney, Host + Producer, Well-Rounded Radio/Musicians for Music 2.0; and Alexis Rodich, Director of Marketing and Partner Relations, BandsinTown. Excellent panelists all, and certainly people/companies committed to adding value. I urge you to check out each of these companies.

I think what really hit me about the conference was that it’s the first time where I felt like the expectations of the attendees wasn’t completely whacked. I’ve been doing these conferences for longer than I care to remember, and, in fact, it was after a conference where I spoke, in which, simply because I had the suffix “A&R” attached to my name, that my panel was over-crowded with a teeming mass of demo-wielding aspirants attempting to fast track themselves to a record deal, that I decided to write my first book telling people that foisting a demo on a fatigued record label executive in the hopes that this would somehow further your career may not be the very best strategy.

None of that at this panel.

Instead, rather than perceived access being the factor that motivated people to come to the panel, it appeared to me that information was what was being sought. And, again, not information for how to get signed to a label, but rather information that they (the panel attendees) could use in order to further their own ventures.

This is a pretty seismic shift.

I’ve seen it coming for some time, but — like the lake being over taken by algae that doubles in size every day — it seems like the progress is now inexorable and exponential. Artists realize there’s no looking back, and – importantly – there is beginning to emerge some principles and best practices for the way forward. While these principles and pieces are still formative, you can kind of feel people assembling the disparate elements in a manner that makes sense given their individual situations; building on the wisdom of others and customizing.

On my panel we had many of the important pieces: Band Metrics represents the crucial analytic piece that bands must familiarize themselves with (if you can’t measure it, it doesn’t exist (yes, that’s what she said)). I believe each of us on the panel said something along the lines of, “You must familiarize yourselves with SEO and analytics.” Band Metrics makes this easy and useful; they’re on to something.

BandsinTown brings the element of live performance. In this era of all things online, too often bands sort of downplay the importance of playing live. I’ve written ad nauseam on the importance of balancing (Straddling) your off line world with your online world. BandsinTown offers important solutions. (I kind of think Band Metrics and BandsinTown may want to collaborate.)

Well Rounded Radio represents the continued importance of media, even as it evolves from a teeny group of gatekeepers at magazines/radio/etc. to a more bottoms-up decentralized-but-connected trusted sources with voices. Charlie made some important points about how you must think in terms of psychographic affiliations rather than just assuming you’re marketing to people who like music that is similar to yours, and thus they will like yours too.

This idea was best summed up by the excellent artist, Vienna Teng who, from the audience, told of the fact that her music was being used with some frequency in some sort of anime mash up; and that this occurred without her really having anything to do with it. However, measuring this impact, and discerning the sources of interest (via analytics) allows you to then react with some form of plan to maximize these elements of light.

Terms popping around the panel:
Social Forensics
Sentiment Analysis
1000 True Fans

If there was anything I felt lacking in our panel (and, I would guess, it was covered in others) was that essential to an artist’s tool box is the ability to sell directly from their own site and capture information from this process. I, naturally, gave a shout to Topspin and CASH for this particular breed of functionality.

Additionally, something related to this that must be in the artist’s toolbox is some way to develop (source), manufacture, and sell merch. This is a decidedly non-trivial issue as the music business, more and more, becomes the merch business. Shout out here to PAID.

Once these elements coalesce a bit more systems are going to emerge. The inspiring thing to me is that we no longer really have to pound the fist on the table and command (beg) artists to not worry about getting signed to a label. Artists – at least at this conference – didn’t seem the least bit concerned/interested in this. Rather, the interest seemed to be about strategic partnerships and best practices.

Here’s to the dawn of a new era, here’s to the Future of Music Policy Summit, and, yeah, raise a toast to St. Joe Strummer.

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