The "Art" of Music Merchandising

If the music business is heading toward selling high-end, limited edition items, it may find itself either learning from, or being in direct competition with, the arts and collectibles markets.

But unlike those businesses (which try to position themselves as serving small audiences of discriminating collectors), music has marketed itself as a mass medium. In other words, the more people you reach and the more you sell, the better.

Although we are hearing about music splintering into a collection of niche audiences, music marketing still involves trying to reach as many people as possible to find that core fan base. Even at the indie level, music marketing takes a viral approach. Artists are encouraged to give their music away for free, to have their fans give it away to others, and to promote it on multiple music sites.

While art, fashion, and the luxury markets try to maintain a level of elitism by not promoting themselves to the masses, music, for the most part, does the opposite. Today's music marketing takes its cues from various forms of mass media (i.e., TV, film, print, advertising, high-traffic websites). The underlying principle, even for DIY artists, continues to be exposure. The Internet success stories we are told about generally involve artists who have reached thousands or even millions of people via Twitter or YouTube. After they have achieved a level of Internet fame, they can convert some of those fans into paying customers.

Here is the "new music business" model we hear most often about:

1. Give the masses (the top tier) something for free.
2. Sell casual fans (the second tier) something that isn't available to the masses.
3. Sell the hard core (the third tier) limited edition objects and events for even higher amounts of money.

It's the funnel approach.

Sure, there will always be fans who support unknown artists, but overall, music marketing is still focused on numbers. If 10% of your fans buy your most expensive offering, then the more people you reach, the bigger that 10% will be. Here's a good video that mentions the concept: Why Data Is the Future of Music Biz

In the paragraphs above I have tried to define the current differences between how music "stuff" is being sold and how art is being sold. The current thinking with music is that the fans will buy "stuff" because either they like the music, or they like the artists who create the music, or both. Fans like the music/artists, so they buy the "stuff." The "stuff," in other words, is a physical extension of that relationship. So today's artist is advised to establish the relationship, and then do the selling.

Art, on the other hand, is often sold based on the art itself. While some people collect art based on the artist (and relationships are reinforced by having artists appear at gallery showings), most collectors buy artwork because they like what they see and want to put it in their homes or offices. (It's not always that clear cut. Some buy for investment reasons. Some buy to impress others. Some buy because the piece comes with a good story. But most people who buy something for their homes buy the piece because they like that piece.)

To summarize: Music sells the relationship. Art sells the object.

But what if the quality of music "stuff" improves to such an extent that it offers its own value as design, fashion, or art? Then people may start buying the "stuff" even if they have no interest in the music itself. As more musicians get into the merchandising business, that is likely to happen for at least a few of them.

Given that possibility, it's useful for bands/artists to look beyond music merchandising into the greater world of art/fashion/design.

That brings me to a bit of news from last week. An online art gallery, 20x200, got venture capital funding. Here's what Tony Conrad, a partner in True Ventures, said about the project::

... in just two years since bootstrapping a now cash flow positive 20×200, the site has won the hearts of art lovers, selling over 50,000 prints to date, to a customer list that includes artists, celebrities, and respected collectors from around the world. 20x200’s approach is to sell limited-edition prints and photography at prices low enough to attract first-time collectors, starting at $20 for a print from a run of 200. If you want to start collecting, 20×200 is an awesome place to start. Prints are beautifully produced, packaged, and priced inexpensively. If you are an artist looking to take advantage of the reach of the Internet, 20x200 is the place to reach a deeply engaged, large community of new and experienced art collectors. "The Democratization of Art," trueventures.com, 10/21/09.

And here is a bit more from the New York Times.

Since the Web venture was unveiled in 2007, the company said 20×200 has shipped more than 51,000 prints. In 2008, the Web site took in more than $1.2 million in revenue and was on track to exceed that figure in 2009, the company said."For Online Art Gallery 20x200, An Unlikely Investor," Bits Blog, 10/21/09.

In future blog entries, I'll explore the world of art and collectibles in more depth and what it might mean for the music industry.

Suzanne Lainson
@slainson on Twitter

Can Music Learn from Comic-Con?

As recorded music becomes a promotional tool to sell other music-related stuff, bands are moving into limited edition and collectibles territory. Generally as fans become collectors, they like to communicate and meet up with other collectors.

Although there are groups for vinyl, poster, and music memorabilia collectors, nothing exists on the scale of Comic-Con.

... the term "Comic-Con" doesn't even begin to describe the diversity of SDCCI's [San Diego's Comic-Con International] wall-to-wall programming. Aside from comic books, the convention's schedule includes events devoted to contemporary comic books (and their creators), vintage comic books (and their creators), original artwork (from both categories), science fiction and fantasy literature, animation (both domestic and foreign), genre television shows, pulp magazines, weaponry (both real and faux), genre theatrical (and direct-to-DVD) films, role-playing games, action figures, vintage toys, old time radio shows, video games, glamour art, costumes -- and, oh, I give up (in much the same way I'm now forced to give up my hopes of navigating the con's entire exhibit hall.) Let's just say that, if a topic is considered to be somewhat dispensable and silly in real life, chances are, it's considered to be of primary importance at SDCCI. "The 'Secret Origin' of San Diego's Comic-Con International," Jim Hill Media, 7/7/05.

The original concept behind Comic-Con was to promote comic book art and the professionals who created it rather than to create a merchandising and marketing event.

“I just felt that the cartoonists who entertained the popular masses were not getting their fair share of recognition,” [creator Shel Dorf] said. A convention would celebrate their many contributions.

Dorf, who was 36 then, also remembered what it was like to be a kid burning with a desire to become an artist, and not really knowing how to get there. A convention, he believed, would be a way to let youngsters meet pros, get some advice.

They held a one-day test fair in March of 1970, then the first three-day convention later that summer, in the basement of the U.S. Grant hotel. About 300 people came. "Comic-Con's Dorf watches sadly from the sidelines as T-shirts trump talent," SignOnSanDiego.com, 7/16/06.

The convention has grown into San Diego's largest [attendance capped at about 125,000]. But it was a tough go in the beginning.

The confab itself was so strapped for cash that each year the artists donated work -- which they dutifully sketched out on easels as a small crowd watched -- that were auctioned to help support the gathering. "The early days of Comic-Con," Variety, 7/11/08.

Comic-Con has always appealed to passionate fans, though who they are has expanded considerably.

"We always knew our audience was limited, but I personally felt it was limited not because only those people were interested," [David Glanzer, the organization's director of marketing and public relations] said. "I always felt that our audience was limited because we didn't inform a wider audience about what it was that we had."

He credits the convention's exponential growth through word of mouth buzz, and noted that most people come to the show more than once in their lives....

A 13-member board of directors, most of whom have been long-time fans of the show and were nominated to join the board, officially runs Comic-Con. The convention's office in La Mesa staffs 16-20 full-time and temporary workers, and about 80 volunteers work on various committees that help organize the show. "Charting Comic-Con's Hulk-like growth," San Diego Source, 4/18/08.

In addition to the San Diego event, there are now others around the country.

Gareb Shamus, CEO and founder of Wizard ... tells Marketing Daily that Comic Con started 40 years ago as small events in San Diego and Chicago. Wizard bought the Chicago show 15 years ago, and has been able to grow that from 5,000 to 70,000 attendees in a four-day event. Now, Wizard runs five of the events that bring in some 250,000 people to Toronto, Philadelphia, Chicago, Anaheim, Calif., and New York.

He says that among 700 vendors, Disney, Lego, Hasbro and Wild Planet will be on hand to show new products. "From the toy perspective, the fourth quarter is especially important," he says. "For companies to display their products to fans -- let them see them in a fun, family, cool environment -- is critical." ...

The fan demographic of Comic Con fans has grown beyond its 18- to-34-year-old core. "Now it's growing because as guys are getting older, they are not giving up enjoying these characters they enjoyed as kids -- whether video games, toys or comics -- and as they age they are getting their kids involved, so we are seeing older guys bringing their kids," he says. "Comic Con Is Coming To N.Y. Next Week," MediaPost, 10/12/2009.

While I am raising the idea that if musicians are now in the "stuff-selling business," they might want to have their own version of Comic-Con, Publishers Weekly has asked the same question about book publishing.

Has the San Diego Comic-Con become a possible model for what a contemporary publishing/media convention should be?

Although focused on comics—a sometimes tenuous connection in a show that could easily be called the San Diego Media-Con—the San Diego Comic-Con has emerged as the perfect example of the convergence of all manner of pop cultural phenomena under one roof. It's a big tent, a four-and-a-half-day carnival of panels, press conferences, business meetings, previews and bare-faced hype that has become so popular that San Diego fire marshals were forced to cap attendance at about 125,000. It's not simply that San Diego Comic-Con is popular—it's wildly popular. "San Diego Media-Con: One Big Size Fits All," Publishers Weekly, 8/3/09.

The idea is also catching on with other industries. While there have been sports collectible conventions for a long time, now more teams are getting into the act.

In Denver, the Broncos held their sixth annual Fan Fair in Invesco Field at Mile High this past June. Tickets for a family of five cost $50 total, or adults could procure a weekend pass for $25. What did fans get for the price? They chatted with coaches, players, cheerleaders and even the team mascot. They got autographs, took photos and purchased memorabilia. "Fan conventions on the rise," msnbc.com, 1/15/09.

Since so many people are suggesting that the future of music business involves selling merchandise and limited edition products, I'll be exploring more on that later. Based on what I have already read about collectors/fans, most of them develop an interest in something first, start collecting objects related to that interest, and THEN seek out groups of collectors. But on the other hand, having a place to buy and trade seems to turn these niche interests into more of a pop culture phenomenon. So it will be worth looking at the value of creating music collectible events to give some significance to the direct-to-fan experiments.

But for now, let me close with a few examples of fan conventions. Reading those articles, I've drawn up a list of common elements that seem to go along with launching fan conventions:

1. Have enough fans (generally willing to spend lot of money in pursuit of their hobby) to justify having a convention.
2. Have fans wanting to seek out others with similar interests.
3. Have fans willing to travel to a convention.
4. Have a person or group of people who will organize a convention and, if necessary, nurture it until it reaches a critical mass to maintain some level of momentum.

The book/movie series, Twilight, has generated a devoted group of fans who now have their own convention.
'Twilight' fans bring 'Trek'-like frenzy to conventions

Here are two music-related conventions.

Fans flock to 24th annual Queen convention

5th Annual International Tropical Music Collector’s Fair

Two articles about the Barbie convention.

Two Words: Barbie. Convention.

Collectors Revel at Barbie's 50th Birthday Convention

Suzanne Lainson
@slainson on Twitter

More on Sharing the Artistic Process

Amanda Palmer has tossed out another interesting blog post.

i am shameless, and fearless, when it comes to money and art.

i can’t help it: i come from a street performance background....

if you think i’m going to pass up a chance to put my hat back down in front of the collected audience on my virtual sidewalk and ask them to give their hard-earned money directly to me instead of to roadrunner records, warner music group, ticketmaster, and everyone else out there who’s been shamelessly raping both fan and artist for years, you’re crazy. "Why I am not afraid to take your money," Amanda Palmer blog, 9/29/09.

I've written about Palmer a lot. I particularly like to reference her as someone who is raising issues about the artist and her community. Here's my most recent blog post about the subject: "The Artist and Her Fans." You can also click on the "Amanda Palmer" tag to see other posts where I have used her as an example.

Zoe Keating, another musician using the Internet to increase her visibility, is also contributing to the discussion.

What is great about Twitter is that, like I said in the interview, it allows me to be myself to as many people as possible. Me and my music are the same thing and I've always had this stubborn, egotistical belief that if I just had a chance to get the real me across....people would be interested. The belief that what I'm doing is worthwhile, even if no one hears it, has sustained me through a lot of rejections and hard times. ...

Because there aren't very many mouths to feed, I don't feel any pressure to continually be selling more, more, more. I have never done an ounce of official marketing or publicity. I make enough to pay the mortgage, the bills, go out to dinner and a movie every now and then, go on vacation and save money for the future. I'm not rich, my car is old, but I have enough to live well and not be continually worried about money. That's really all I want. I want to exist and keep making more music. I'm in this for the long haul. Slow and steady is fine by me. "Deep thoughts on my music career," Zoe's Incredibly Interesting Blog, 9/27/09.

Keating has talked how Twitter has increased sales for her.

Keating says that the long-term effects of this rapid ascent in the Twitter-verse are yet to be determined, she did see an immediate jump in business. "Around the time that I went on the [Twitter] Suggested User list, my CD ['One Cello x 16: Natoma'] went to No. 1 on the iTunes classical chart, and it's stayed in the top 20 ever since," she says. "I've also gotten a lot more sales from my Web site, and I get lots of fan mail that says, 'I found out about you from Twitter.'" "TWEET CHILD O' MINE," Billboard.biz, 5/30/09.

And I have also cited Imogen Heap using the Internet to connect with fans. "Fan Interaction the Imogen Heap Way." Here's additional info from her about the process.

"We live in this instant world. It feels wrong to not play anything and keep it all secret," Heap states between sips of water at Toronto's Intercontinental Hotel. "I wanted to share the process in the same way I would with a friend who drops in at the end of a work day; I'd want to play them what I'd been up to." ...

"That turned out to be brilliant for me to look back on and feel my process," remembers Heap, "otherwise one day to the next just feels like you haven't done anything, so it's great to look back at blog No. 1 and see the state of my studio and then see blog 19 when it's finished. The Twitter thing was just my way of filling in the gaps." "Imogen Heap Twitters her way to world dominance," MSN Canada, 9/8/09.

With so many people now attempting to sell themselves and their music via Twitter, I'm not sure there will be enough money to go around. But I do like exploring how all these communication tools might be changing our perception of what it means to be an artist and to create. Here's a relevant quote from an author who interviewed thirty "visual artists, comedians, animators, documentary filmmakers, musicians, writers, and others who’ve pioneered new ways to build a creative career online (and off.)"

[Q] New media is a constantly evolving landscape from trends to platforms, do you expect a few standards to come out of this or are artists forced to constantly change their game plan? And is it important for them to?

[Answer from Kirsner] I think there are some things that are constants, like making people feel like they’re part of your process, involved, and are in some way supporting what you’re doing. But I do agree that there’s a constantly-evolving landscape out there. MySpace was once much more powerful than it is today. E-mail newsletters were once more effective than they are today. And you always have new things, whether it’s Twitter or live video Webcasting from mobile phones with services like Qik, that can be effective ways of communicating with your fan base. "Interview with Scott Kirsner on Fans, Friends & Followers," CineVegas Blog, 3/31/09.

Some people are pointing to interactivity as a way to evolve the art itself, not just as a way for artists to talk to fans.

Media used to be made at what could be described as the “front end” of the process. I produce a song or book and release it to the market where it is consumed and talked about.

A product leads to a conversation…

But now that my cost of experimentation is zilch—and networks enable me to be in constant communication with people who share my interests—the diagram can just as easily be flipped and start at the “back end.” I can talk about and share my ideas with you, and once we have a collective vision of the “thing,” I can produce it (to then have you consume it).

A conversation leads to a product…

Furthermore, if the thing I produce (or we produce) is dispensable (like songs or stories), you might consume more of it and the process can stop being linear altogether… "From product to process," The Storybird blog, 5/28/09.

Looking for more discussion about how the artistic process might be changing, I found this from Scott Adams, creator of the comic strip Dilbert. It doesn't directly address fan input, but it brings up the idea that the creator may put forth a starting point which can then be refined over time.

If you are planning to create some business or other form of entertainment, you will need quality at some point to succeed. But what is more important than quality in the beginning is some intangible element that makes your project inherently interesting before anyone has even sampled it. That initial audience will give you the luxury of time to create quality. "Quality Follows Popularity," Scott Adams Blog, 2/13/2009.

He's essentially reversing the artistic process. Rather than coming up with a wonderful creation first, he's saying, "Come up with an idea, build an audience around it, get their input, and THEN make it better."

As I find more discussions about interactivity and the artistic process, I will add them here or do additional blog entries. I'll close with an excerpt from an interesting article exploring the history of Western art and its relationship to money.

In Arts & Consciousness we have always taught our students that art is intrinsically valuable. We haven’t emphasized the commercial aspects of art, but have instead focused on art’s connection to self-affirmation, health, cultural identity and spiritual truth. We have proceeded from the assertion that if these things are adequately achieved, then money will be received by the artist as a natural and inevitable result of having created new value in the world....

When the recovery from the current crisis occurs, it seems possible that the world will re-discover the value of art as an essential part of culture – not as a coveted object but as living and breathing part of everyday life. "Post-Modernism, Economic Collapse and the Search for Value in Art." Arts and Consciousness, 2/4/09.

If this becomes the case, we may end up not valuing the art as an object or even as an experience, but for its contribution or effectiveness.

And here's a good resource. This paper was published in 2001 to foster a discussion of Silicon Valley as a creative community, but it covers creative communities throughout history. Some of the same concepts can be applied to creativity and the online community.

Suzanne Lainson
@slainson on Twitter

More Metrics Please

In today's LA Times, a spokesperson for TiVo was describing in granular detail the viewing behavior of the new Jay Leno show at 10pm. Apparently 20% of viewers who record the show watch it within an hour -- potentially cutting across other NBC programs. Never mind that time shifting can take all kinds of shapes: maybe these viewers wouldn't have otherwise watched the NBC shows at 11p or midnight. Maybe they were recording Conan while watching Jay. Maybe the fact that they watched within an hour is more about the need to keep up with the topical nature of a daily talk show (one that leverages the latest news for comedic effect) more so than, say, a drama. Watching a chat show a week later is like reading Sunday's paper on Thursday.

But the Leno/TiVo story got me thinking about statistics and analytics... And how few useful data points we have at our fingertips regarding the consumption behavior of music fans. When SoundScan came along in the early 1990s, it signalled the death of (highly subjective) record sales reported by music stores. At the time the labels were dismayed they could no longer manipulate the charts (gasp!) but in the end their corporate parents appreciated the reality check. It reduced some uncertainty when it came to projecting quarterly results, and in the mid 90s BDS and Mediabase brought similar science to radio airplay metrics.

But in an increasingly fragmented culture -- with people experiencing music across radio, CD, iPod, television, desktop, web, mobile, shopping malls and multiple other channels, it is surprising nobody has yet attempted to amalgamate all this data and attach value to it. Doesn't Music 2.0 depend on such quantitative analysis? Wouldn't a composite snapshot of the commercial impact of these channels add some heft to the valuation of, say, a tour sponsorship or a 360 deal with a brand partner?

Why is it that the TV guys have always been more sophisticated about audience measurement? Because they've had to be. That's how they've sold advertising. That's how they've monetized. The Nielsen-driven CPM model is woefully outmoded (arguments about "lean back" versus Hulu-style viewing behavior and the relative value of each abound at media conferences), and yet year after year the networks' upfronts are based on these archaic figures. And the amounts paid "per thousand" get larger each year -- despite the dithering of the digirati. Imagine the M&A analysts at Goldman using abici to determine the valuations of their transactions.

But the upfronts are only part of the story. Behind the scenes, integrated media specialists at the networks and cable/satellite providers are acutely aware of time shifting, Hulu, Apple TV et al, and are optimizing their advertisers' spend against these evolving behaviors. They have become adept at slicing and dicing each channel's audience and offering sophisticated pricing models for each.

So why not music?

Just this week a start-up called Next Big Sound got funded by Foundry Group -- both entrepreneur and investor are based in Boulder. It's no coincidence that the same VC is backing TopSpin Media -- a company dedicated to building clever CRM software that allows artists to engage their fans directly. Clearly part of Foundry Group's investment thesis is that music will at some point re-monetize, and they want to have their fingers in a lot of pies when it happens. Companies like Big Champagne and Band Metrics also measure new types of music consumption behavior -- NBS claims to have captured a quarter billion data points on a half million artists across platforms such as Amazon, iLike, Last.fm and Twitter.

When will we get as granular as the TV guys? When will a music analyst be able to tell a manager or a record label things like (a) when the music was consumed, (b) how much of the song was listened to, (c) what other music was consumed before or after it, (d) what products or websites were visited while the music was being streamed -- assuming a Slacker or Imeem-style playlist in the background while multitasking, (e) what was the click-through rate to related commerce links, (f) if other sites were visited, what were their page views and sales conversion rates, (g) what kind of device was used, and (h) based on the above, what kind of demographic or psychographic information can we infer -- by algorithm -- about said listener?

The technology is there, folks. We had a one-to-one relationship between content provider and music consumer -- or at least the ability to have such a relationship -- long before the TV guys went digital.

Until the data becomes this sophisticated -- and of strategic value to advertisers -- we're gonna keep hearing how the CPM-based "ad supported" music model is dead. It's time for the industry to put away the abacus and get serious about music metrics and valuation.