Tuesday, October 27, 2009

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

4 comments:

  1. Suzanne, I've thought a lot about this too. Mainly, how can band merch be disguised as fashion/art. And could you convince people who've never heard of a band, or who aren't particularly fond of an artist to buy a piece of their merchandise.

    the band's name would have to double as a fashion label of sorts. or maybe bands could create two separate lines of merch: one that emphasizes the band's name/album title/tour dates for the actual fans and another line with less emphasis on the above and more abstract/universal/subtle designs for the nonbelievers.

    band-created artwork (photo books, small art prints) could also be something else that could be appreciated alone as art and not necessarily represent a pledge of allegiance to the band for the purchaser.

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  2. I'm hoping to explore all of that as I go. I'll try to pull together info about how people in the fashion/design/arts industries market themselves and find customers.

    I think approaching it from the point of view of having products that you aren't trying to pitch to everyone is part of the deal.

    I know that with fashion designers, they start out developing a small market. If they are successful, they may then create a lower-priced line to sell to more people in a wider variety of outlets. That's exactly the opposite of what music is doing, which is giving away stuff for free and then trying to upsell.

    It's probably easier to establish yourself as a quality brand, and then introduce a lower-quality line, than to start as a mass brand and then go up, though it has been done with cars.

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  3. This is the same guy from over at Techdirt. Afterhaving read your post, ther is a distinct difference between the music business now and the art business now. What you seem to be proposing is almost a throwback to the old patronage system of the middle ages. But the reason that that system is not used is because the modern one works so much better for everyone. If you want to make some sort of exclusive music that only really rich people can afford but everyone would like why? so you find seven rich peaple to pay you $10,000 for your unique work=$70,000 or find 1 million common people to pay you $1 for your work =$1,000,000. The math seems pretty clear to me. With modern technology, that system works, and can be exploited in so many ways. With art, the scarce goods are valuable because the are scarce. period. there are only so many Kandenskies out there. even prints. with mkusic, it's not the same.

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  4. I think musicians hoping to enter the limited edition market will find the same challenges that all artists do. That's why I am exploring concept. Some people think selling limited editions will give musicians an income stream to replace what they have lost from CDs.

    Before they head that direction, they might as well learn from those who have already gone that way.

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