“Hedging Against Uncertainty In The Music Industry” plus 1 more |
| Hedging Against Uncertainty In The Music Industry Posted: 10 Apr 2020 05:00 AM PDT Let’s face it, the music industry is going through an uncertain period right now. Venues have had to close their doors indefinitely, and artists have been forced into busking online for money. The music industry is resilient though. This isn’t the first time it has been forced to adapt to tremendous change and adversity. No one is immune to the threats of disruption, volatility, and hyper competition that exist in this industry. Despite the fickle nature of the music industry, there are things artists can do to set themselves up for success in the long run. Here are some thoughts on how to weather the storms and come out on top. DiversificationOne of the best ways to protect against the risk and uncertainty of making it in the music industry is by diversifying revenue streams. Many musicians do this already without even realizing because it is almost a requirement for most artists that want to make a living off of their music. Artists that only rely on a single source of revenue are threatened by many forces outside of their control. Over the years there have been plenty of examples of artists and companies being rattled by industry disruption, physical limitations, or other unforeseen occurrences. The rise of music streaming has caused major disruption for the record industry and sharply cut into recorded music sales. If you were an artist that relied heavily on album sales, you would have lost a significant source of income. Live music on the other hand has been a consistent revenue source for many artists. It has seen a lot of growth in recent years, but it too has its weaknesses. Artists that bring in a large portion of revenue from live performances face threats of lost income due to illness or injury. Although artists are extremely resilient individuals (just ask Dave Grohl of the Foo Fighters or Rick Allen of Def Leppard), we all have physical limitations that could cause a temporary or permanent end to a performance career. Other unexpected occurrences can be anything from inclement weather, to acts of terrorism like the Las Vegas shooting tragedy, to unprecedented global events like the current COVID-19 pandemic that has shut down the entire live music industry. Maximizing earnings through multiple different revenue streams offers the best protection against some of these unanticipated risks. Both independent artists and businesses alike can benefit from this strategy. Take a company like Live Nation for example. They bring in revenue from many sources including concert promotion, ticketing, venue ownership, artist management, sponsorship and advertising. This focus on diversification creates stability and enables future growth. There are lots of ways artists can also diversify revenue streams by monetizing their music and brand. Without going into detail on each of these, here are some common sources of revenue for musicians:
This is certainly not an exhaustive list, and artists should explore all of the options available to them. It may even make sense to consider generating income from other industries or skills outside of just music. With a commitment to diversification, there will always be another source of income to fall back on. Content OwnershipArtists should do everything in their power to maintain ownership of their creative content. After all, your greatest asset is the content and music you produce. Protect it at all costs. There may be reasons to give up control over your music, but these decisions should not be taken lightly. Any deal that takes away ownership should add significant value to your overall business. Think like an entrepreneur. Business owners looking to raise money for their venture may take out loans or give up ownership for funding. Artists might be tempted to enter into similar arrangements in the form of record or publishing deals. If it will benefit you to have the added resources and expertise then it may be well worth it. Tread carefully though. Besides, there are many creative ways to raise money these days such as crowdfunding, royalty exchanges, and even celebrity bonds (see Bowie Bonds). Artists should be in control of their other creative content as well whenever possible. There’s a concept in marketing of owned versus shared media. Owned media is that which you have complete control over like a website, newsletter, or podcast. Shared media on the other hand is created on a shared platform like Facebook, YouTube, or Twitter. You have full possession and creative control of your owned media, whereas on shared media the platform makes the rules. The potential risk with shared media is that it susceptible to forces outside your control like the health of the business, government regulation, and cultural trends. To illustrate this point take a look at Myspace. It was the dominant social media platform several years ago, especially among musicians, and has been all but forgotten today. Many new social media competitors emerged since then. It would not be a good strategy to rely on Myspace today as your primary outlet for sharing content. Trends change, technology advances and musicians need to keep up. The more you can be in control of your creative assets the better. Owning your music and content is the simplest way to control your own destiny. Get CreativeMany artists excel at looking at things from a different perspective and solving problems in novel ways. Innovation is a great way to stay ahead of the curve. Don’t just sit around waiting to fall victim from circumstances around you. Be bold and create something brand new! These are certainly unprecedented times, but many artists are rolling with the punches and coming up with unique ways to adapt and keep fans engaged. Live streaming and online offerings have taken off for obvious reasons. Many artists have come up with creative ways to put their own spin on things and engage audiences in new ways like creating a live stream tour or delivering albums with drones. When faced with uncertainty or disruption in any industry, businesses and people must adapt or fall behind. By pushing the boundaries of creativity, the sky is the limit. Go build your own streaming platform, invent a new genre of music, or a way to telepathically broadcast songs into people’s heads. Innovation and creativity can open doors to a brighter future. About Megaphone AgencyMegaphone Agency is a music booking agency based in the Chicago area that represents some of the top new talent in the industry. Want to get in touch? Drop us a line on our Contact Us page. Source: Hedging Against Uncertainty in the Music Industry (http://megaphoneagency.com/hedging-against-uncertainty-in-the-music-industry/) by Jordan Gates - Let’s face it, the music industry is going through an uncertain period right now. Venues have had to close their doors indefinitely, and artists have been forced into busking online for money. The music industry is resilient though.  This posting includes an audio/video/photo media file: Download Now |
| Top 5 Tips For Musicians To Find Success On Patreon Posted: 10 Apr 2020 04:59 AM PDT This blog was original published on Electric Kiwi. In March of 2020, Patreon saw a 21% increase of new creators on their platform, their largest surge since they started in 2013. The music category specifically went up by 25% with over 3,000 new pages from musicians seeking some financial stability through the shut down of the live performance sector. A membership-based model can offer a much-needed financial safety net for musicians to sustain during times of uncertainty like in the COVID-19 pandemic. I’ve seen it first hand with an artist I work with who has a Patreon page ranked in the top 100 for the highest number of patrons, according to Graphtreon. He’s been able to survive comfortably with the monthly income he earns from his fans for the past 2 years since we launched. As much as I love Patreon, I can tell you it’s not easy to grow a membership business. I’ve helped launch Patreon campaigns for two other musicians that flopped while their peers ended up abandoning their pages as well. If you are considering starting your own membership-based business for your music, I will share my top 5 tips for a successful Patreon page. This includes the specific tactic that helped my client grow his Patreon page to reach the top 1% of the music category on the platform. Looking for more insights, strategies and tactics? I wrote an ebook “Patreon for Musicians” where I go more into depth on the topics I cover in this blog and a lot more.
1) Have an established following or fanbase.
One way of improving your chances for success on Patreon is to only start if you’ve already built a fan base on another platform. With no discovery features on Patreon, it is entirely up to you to grow your subscriber base from other channels you’ve established yourself in. Even with a large fanbase on social media or an email list, it may not be enough. One of the campaigns I helped launch in 2018 was for an established artist who had over 100k social media followers and 300k monthly listeners on Spotify. Despite the larger following, we couldn’t get more than 50 people to make the jump in the first few months. Of course, there were many factors at play, but it’s certainly not all about size. For the one Patreon page I helped launch that was successful, he has about half or a third the social media following. I’ve seen a couple of other musicians grow their Patreon pages with even less. Growing a membership page with a smaller following is not impossible, especially if they are highly engaged fans, but it’ll be a harder hill to climb.
2) Start simple.
One of the big mistakes I made in the past was overcomplicating the tier and reward structure. At that time, I believed that you needed to offer fans a polished and fully-built out membership page to impress them. Investing all that time and energy up trying to get it “perfect” before launch is a waste. I realize now that it is not necessary and there are more advantages to starting out simple:
When you’re starting out, set the foundation for your Patreon page with 1 – 3 tiers that offer your core benefits. However, you want to make sure the other elements of your membership page, like the about page, the introduction video and branding, are on point. Offer digital rewards first and hold off on the physical merch until you have a system in place. Patreon does not have features in their platform for you to easily manage and track merch offers if you’re producing your own merch to ship. Remember, it’s better to add and adjust as you go rather than breaking things down to change something already built.
3) Think outside of social media and emails.
Although social media and email marketing are easily accessible channels to reach your fans, they may also not be the most effective in converting them into Patreon members. Email will fare better than social media in regards to conversion rates, but you may need to consider a more personal and direct strategy to persuade them to join. It could be using a text message marketing tool like SuperPhone and Community or even sending a DM (direct message) to fans one by one on Instagram. For the first Patreon page I helped launch back in 2017, the conversion rates from using SuperPhone was significantly higher for recruiting patrons than email and social media combined. Using the latter, we ended up with about 19 patrons in our first wave of promotion. After sending out a mass direct text message through SuperPhone to around 500 fans, it jumped up to around 65 for a 9% conversion rate! Assuming you have fans with a strong emotional connection to your brand, direct messaging fans individually can be surprisingly effective. It’s not scalable, but that personal one-to-one interaction is why I’ve seen it work so well for my client to grow his membership business.
4) Give fans what they want.
According to Patreon, the most popular benefits across all creators are:
You’ll be in good shape if you offer these types of perks with your membership page, but you might want to find out from your fans directly. To get more specific, asking fans on social media can help generate ideas on what they want to see. For your current patrons, use the built-in polling feature on Patreon. There are also exit surveys in Patreon that are sent to fans who delete their subscriptions. Although no one wants to lose a paying member, this is an opportunity to see if there’s anything you do to improve the membership experience on Patreon. This is another reason why you want to start simple. You can incorporate feedback from your fans as you grow so your Patreon page is built around benefits they’re more likely to be excited about.
5) Don’t get discouraged. Stay motivated and have patience.
Even with the right strategy and game plan, growing on a new platform is going to take time and patience. There’s a lot of challenges involved so it’s something you must commit to if you want to be successful. This means don’t get discouraged when you don’t see the results you were hoping for after first announcing your Patreon. According to the data I gathered from Graphtreon, music creators with over 10 patrons make up 28% of the total music category population on the Patreon. That means the other 72%, or 9,000 Patreon pages, in the music category do not have more than 10 fans supporting their page! I know everyone reading this can get more than 10 patrons if they really put the energy into it. But if you’re not motivated enough to be consistent, there’s no way it’s going to work. ConclusionI hope this blog has provided you with useful insights on how you can become successful on Patreon. As an advocate of the membership model for musicians, I’ve seen the positive impact it has had for my client. He struggled throughout his 20+ year career to earn a sustainable income from music without having to do endless tours and shows. If you want to start with a membership-based model for your music, the good news is it doesn’t cost anything to set up or launch a page. Patreon only earns money if you’re able to generate an income from fans on their platform. To get started, head over to Patreon. If you’re looking for additional help with Patreon, check out my new eBook – Patreon for Musicians. I breakdown everything for you in my ebook where you’ll learn:
David “D4” Nguyen is a freelance music marketer and content creator for D4 Music Marketing, an online resource he created to help aspiring and emerging independent artists improve their chances of making a living off music. As a non-musician, his interest in music is fueled by its power to connect us and change lives for the better, like it did for him. You can read more of his work and follow his journey at D4 Music Marketing.
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