A Few Thoughts on T-Shirts

The core of all music merchandising is the T-shirt.

And yet, when I went to look for examples of great music T-shirt design, I found remarkably little. There are some classics, like the Rolling Stones tongue logo, but a lot of the designs, even the famous ones, aren't particularly good art. They have become famous because of the bands or the shows, not as free-standing art.

Why are some a hit and others a bust within a similar category? Matt Hautau, vice president, licensing and marketing, for Signatures Network, believes it's difficult to pinpoint why. "We've always found that album sales have absolutely nothing to do with the ability for an artist to really build and support a merchandising program. We have artists who have sold, and who sell, tens of millions [in record sales], but for whatever reason, the connection with that artist is about pure music—not about who that artist is necessarily. Then [there are] other artists whose album sales are good, but they've got that extra offering that seems to resonate with the consumer."

Defining that "extra something" image wise, to whom it relates and translating the two to an actual product or product line is the formula that goes into today's music artist branding. Like all brands, some are well thought out and executed, and others are disastrous. (Although for many music artists, disastrous can simply translate to mediocre junk.) "Selling Branded Merchandise in Music Industry," brandchannel.com, 6/6/05.

Which opens up a lot of opportunity for music T-shirts. Make your shirt designs particularly memorable and chances are people will buy them even if they haven't heard your music or come to any of your shows.

According to Impressions, a clothing industry trade publication, Americans spend around $40 billion a year on decorated apparel. At CafePress, a Web site that lets anyone customize and sell merchandise, users sold more than $100 million in goods in 2007—pocketing $20 million in profits—and overall sales are growing an average of 60 percent a year.

As you might expect, the T-shirt economy is a long tail phenomenon, with comparatively few people making a full-time living while millions earn only a few hundred or thousand bucks a year. On the high revenue end, you've got companies like BustedTees—an offshoot of the funny-video portal CollegeHumor—which, with a staff of eight, expects to clear a 20 percent profit on sales of 350,000-plus shirts for 2008. In the middle are outfits like RightWingStuff, which hawks T-shirts mocking the left. And on the far end of the tail are people like David Friedman, a New York photographer who cooks up three or four witty ideas a year—like his series of T-shirts adorned with fictional corporate logos that are blurrily 'pixelated,' as if on reality TV—and makes just enough money to cover his hosting fees, plus a bit of pocket change. "Clive Thompson on How T-Shirts Keep Online Content Free," Wired, 11/24/08.

To give you some ideas, here's a list of top T-shirt designers.

The most logical place to start for your first T-shirt is your band logo. Hopefully you've picked a good one.

The next logical design might be based on an album cover. Not necessarily a duplicate of the cover, because that might involve more than one color printing, which can get expensive. But perhaps a simpler design using the cover as a theme.

If you have minimal graphics skill and don't want to hire a designer, you might look at royalty-free clip art. Dover carries a nice collection of designs.

Another way to get some creative T-shirt ideas is to invite fans to contribute them. Amanda Palmer has an extensive clothing page on her website. The first T-shirt on the page, Beach Ninja, was designed by a fan. Another example: the T-shirt for Danielle Ate the Sandwich was designed by a fan.

There's considerably more to explore if you plan to make T-shirts a major part of your music income. Here are a few resources.

How to start a Clothing Company

T-Shirt Magazine

Tee Biz

PopCultureTees

Suzanne Lainson
@slainson on Twitter

UPDATE, 7/31/09
To inspire you: ThinkGeek :: Meh Hoodie

UPDATE, 11/28/09
"47 Essential Resources for T-Shirt Designers," GoMediaZine, 11/24/08.

UPDATE, 10/23/10
Read about someone who started out making pins and working part-time in a silk screening business and record shop. Then he started designing t-shirts for bands and was in a band himself. Eventually he went full-time into creating his own t-shirt company that sells his branded cupcake t-shirts nationally. Johnny CupCakes / Story

Selling "Stuff" Part Two: Fulfillment

If you are going to get serious about selling products online, you'll have think about how you'll get them to your customers. To give you an idea of all that goes into the process, here's one company's list of steps. Fulfillment Services

If you are doing a relatively low level of business, you can handle the shipping out of your house. The popularity of eBay has turned a lot of people into shipping experts. From-the-home shipping as been facilitated with priority mail and free priority boxes, labels you print yourself, scales that calculate postage, and so on.

To give you a sense of what you'll deal with if you do your own shipping, here is what Yahoo has made available about using UPS. Shipping Manager Overview

If you need bulk shipping supplies, you might want to check Sam's Club or Costco. You can also comparison shop for supplies online. Here are several sources, though you should do your own search once you determine what you need.
ULINE
PackagingSupplies.com
Papermart

There are a lot of tricks that online commerce experts have learned over the years which you can apply. For example, it used to be that direct marketers would offer attractive product prices and then inflate shipping charges to pad the sale. Now that free shipping is popular, the products might be priced higher to cover the difference.

Here's a resource specifically directed to musicians. Should you handle fulfillment for the merchandising webpage yourself?

If you decide your merchandising business is big enough to outsource fulfillment services, you'll find many companies that do this. For example: Fulfillment by Amazon - Let Amazon Ship for You

Some companies specialize in working with bands. Here are two examples.

Musictoday

Musictoday couldn't possibly coordinate orders of this scale, complexity, and precision without state-of-the-art warehouse-management software and equipment, such as handheld scanners and a $200,000 automated packing machine. The logistics are made even gnarlier by the special offers that bundle in exclusive knick-knacks and routinely turn the sale of a single CD into a shopping spree. It's a fine example of Capshaw's vision of the symbiotic artist-fan relationship--fans get special items, the artist gets the profits. But that kind of customization creates a fulfillment nightmare that would challenge any retailer--and bring a hungover band to its knees. All the more amazing that Musictoday boasts 'a 98.4% to 99.8% accuracy rate,' according to COO Del Wood.

The other side of the warehouse is like the stash of some obsessive-compulsive collector: 30,000 items from about 400 clients. The shelves, lined with different-colored bins, keep going and going. Ramones flip-flops. Cans of Arnold Palmer iced tea. AC/DC boxer shorts. And behind a locked door, pricier items, like a $5,000 lithograph signed by the Stones. The inventory, too, is organized for maximum efficiency, with the fastest-moving items on the front racks, within easy reach--"nose to knees," as Hubbard says. "Way Behind The Music," Fast Company, 12/19/07

Factory Merchandising

In traditional online merch contracts, the band authorizes the merch company to sell an exclusive item, and that company then pursues sales online. The merch company manufactures the merch and/or receives the merch from the band, then sells it and takes a percentage of the total sales. The usual rate is around 30% of the total sale. With our arrangement, the band retains complete control over what is being sold, and how the sales are made. The products are sold through the bands own website, so there is no need to license the merchandise rights to another company. The band simply decides which items to list for sale, and our fulfillment company fills the orders made through the band's website.

... The fulfillment company charges exactly HALF of what most companies charge for fulfillment services: only 15% of the total sale. That means on a $15 t-shirt sale, they only take $2.25 to package and ship the order and handle all payments and returns. Secondly, prices at Factory Merchandising are consistently lower than those of other merch companies. Even though this arrangement is made available through Factory Merchandising, we will not charge an additional fee for the service. The manufacturing costs are the same as they are for tour merch. In addition, since we already have the screens for the band's designs, there won't be an additional set-up fee to make the merch for the store. As an example, suppose you sell a t-shirt online for $15. The manufacturing cost for a one color shirt is only $4.25, and the fulfillment company only takes $2.25 to ship the order. That sale returns $8.50 to the band, a much higher return than most bands receive for their online merch.

Here are other companies that provide music merchandise and fulfillment.
BUYSWAG
nimbit
Zambooie
Audiolife

Here's another list. Fulfillment | The Indie Band Survival Guide

My discussion of music merchandise fulfillment is by no means comprehensive. There are many resources available from experts in direct marketing, online commerce, and retailing. My purpose is to make people aware of the complexities involved. This is important if everyone in the music business heads this direction.

Suzanne Lainson
@slainson on Twitter

Selling "Stuff" Part One: Direct-to-Fan

Artists/bands have traditionally made their income from three sources: recorded music, performance, and merchandise.

Because digital music can be copied so easily and fans can find ways to get it for free, recorded music is no longer as reliable as a source of income as it once was. To make up the difference, bands are now looking to sell more goods/services/experiences that can't be easily copied.

For the next few blog posts, I'm going to be exploring different aspects of hard good sales.

Let's start with what is now being called "direct-to-fan" marketing. It's not exactly new. Some bands have been doing this since the earliest days of online commerce (and, of course, at shows well before that). They have been selling T-shirts, CDs, and merchandise from their websites. What appears to have changed is that rather than this being a side business, some artists/bands are viewing it as a primary business.

Lately I have been telling people that direct-to-fan sales is just another name for direct marketing. Why? Because there are already significant resources available within this sector. If the future of the music business is selling stuff directly to fans, music marketers should take advantage of the decades of experience and research already out there. Whatever merchandising and marketing services, products, or advice you may need, you will likely find it in the direct marketing industry.

Sure, there are some areas of direct-to-fan marketing that are more music-specific (e.g., music files, fan communities and interaction, ticket sales). But other tools (e.g., email marketing, shopping carts) aren't industry specific.

One topic which gets discussed a lot within direct marketing circles, but not so much during direct-to-fan discussions, is database marketing. Much of music marketing still operates at a basic level (e.g., capturing fan names, addresses, and emails). Music business articles and conferences aren't addressing more complex issues (e.g., purchase behavior, lifetime customer value, retention rates). One reason for this, I am sure, is that a lot of bands have short life spans, so people aren't thinking of selling to fans over a period of years.

But a few music marketing companies have grown into fairly complex operations that can outlive individual bands. Therefore they have reason to develop relationships with fans that might last for years and to utilize more sophisticated tools.

Madison House, for example, started as a booking agency. It expanded into a management company for String Cheese Incident. Over time it created a record label, a ticketing agency, a merchandise company, a travel agency, a design company, and a PR firm.

An even bigger operation is Musictoday, which was started in 2000 by Dave Matthews's manager, Coran Chapshaw.

Along the way, Capshaw built the mechanism for recording live shows (ATO Records, which now boasts more than a dozen acts, including David Gray and My Morning Jacket) and selling shirts, CDs, and tickets (Red Light Management).

Those early CDs contained the seed of what Musictoday would eventually become, in the form of a mail-order insert for merchandise. Capshaw and the band were designing and selling their own goods and pocketing "the retail spread." As that business expanded, it outgrew the spare room at Trax. Then, in the late 1990s, they began offering items online--and the bigger picture revealed itself. The infrastructure had fallen into place for a much bigger operation. "I realized that we could do it with more than just Dave Matthews," says Capshaw. "We had the potential to help other bands." "Way Behind The Music," Fast Company, 12/19/07

The article describes what the company does: "Musictoday's 200 employees are responsible for emailing fans, processing orders, printing tickets, mailing merchandise, fielding complaints, monitoring message boards--all of it."

What distinguishes Musictoday's approach from more traditional direct marketing is its emphasis on band personality.

"We believe that direct-to-fan relationship is stronger, more loyal, more long lasting,” says [chief of staff Nathan] Hubbard. “Coran had the vision to say, ‘Passionate music fans want to interact directly with the artist, both at the show, but also online,’ and so built the infrastructure to help not just the Dave Matthews Band fans, but ultimately fans of all kinds of artists.”

Part of what appeals to artists in this deal is Musictoday’s discretion: Rarely is it obvious that some company in Crozet is running the online store. Look carefully on the official Internet stores for artists as diverse as Bob Dylan, Eminem, Christina Aguilera or Le Tigre—scroll to the bottom and you’ll find an unobtrusive tag, “Powered by Musictoday.” That’s it, though. There’s no other evidence that the poster, the t-shirt, the cd you bought will be shipped to your door from the humble ConAgra building. "The music machine," C-Ville, 8/28/06

Still, even with the personalization of marketing services, Musictoday is about database marketing.

... there's a compelling lesson here for any company that makes a product: If you control a piece of the transaction, you understand more about your customers. By aggregating fan data that artists haven't usually been privy to, Musictoday can help shape decisions such as where to tour, advertise, or deploy superfans to evangelize. Considering that an estimated 60% of concert tickets typically go unsold every year, that kind of targeting is no small contribution. "We're able to say to artists, 'We know more about your fans than you do,'" says Nathan Hubbard, 31, who runs Musictoday as Capshaw's chief of staff. "'Let's put our heads together and figure out how to monetize this relationship.'" "Way Behind The Music," Fast Company, 12/19/07

Live Nation wanted access to those fan relationships and databases, so it bought 51% of Musictoday in 2006. Said Live Nation CEO Michael Rapino:

We're doing more consumer segmentation. We know that the average fan went to one or two shows last year, and the avid fan went to five. We know 30% of the population attended a live show. Who are they? What's the commonality between the teens and 40-year-olds? What else do those fans want to consume? "The Music Man," Fast Company, 12/19/07

A new company that is also going after some of this market is Topspin Media. It's developing online tools to help artists/bands to do more direct marketing themselves.

But unlike Musictoday, it doesn't mail out packages. According to its website, "Topspin is more about demand generation than demand fulfillment. We approach marketing on three fronts: direct (email and the like), viral (quality driving organic person-to-person marketing), and targeted (such as targeted paid placement)."

I will be covering fulfillment and other aspects of hard goods sales in upcoming blog entries.

Suzanne Lainson
@slainson on Twitter

New Music Business Models

Here's a dance I've seen conducted quite a few times in the past year:

An artist experiments with a new way to make money and has some success. This innovation is cited by some industry observers as an example of the future of music business.

Skeptics respond by saying the idea isn't scalable and won't work for most artists. Therefore it isn't really any sort of new business model at all.

The observers counter it was just an example, not a blueprint for every band.

Then I respond (I can be a skeptic) by saying that for them to expect every band to come up with an original money-making idea is not realistic. Bands look to each other for any promising ideas. For example, if one has success with giveaways, they all do it. If one has success with street teams, they all do it. (Speaking of which, how come we don't hear much about street teams anymore?) If one has success on a new website, before long millions of bands will be there. What was once a clever idea becomes standard operating procedure until it doesn't work anymore and everyone moves on in search of the next great music promotional idea.

Therefore, to spare people a lot of wasted effort, I'll explore some of the ideas currently being tossed around as new music business models and discuss their limitations.

1. Give music away for free to fans who buy an item (e.g., a collectible box, a T-shirt, a poster).
In other words, sell "stuff" fans will buy. Forget about selling the music.

This can make sense for some musicians, especially those who have the talent to design the "stuff" themselves. But other musicians shake their heads and say, "What does selling 'stuff' that have to do with music? If fans don't want to support the music itself, then what's the point?"

This is such a big topic, I plan to go into it in more detail in future blog posts. Suffice it to say that selling "stuff" is a separate business from creating music, so it's not a business that comes naturally to all artists/bands.

2. The special event.
Some artists are offering special events for a fee. Here are two widely cited examples.

Jill Sobule posted this as one of her sponsorship levels. "$5,000 — Diamond Level: I will come and do a house concert for you. Invite your friends, serve some drinks, bring me out and I sing." Jill's Next Record!

Josh Freese offered low end packages that included a phone call or a lunch all the way up to $10,000, $20,000, and $75,000 packages. “Josh Freese. What are you doin’? This summer,” Topspin, 2/20/09.

Freese was so successful that he found he was spending a lot of time on these events and not so much on his music itself.

I’m driving back to the Cheesecake Factory for the 11th time this month, and I’m turning down other work because, yeah, I’ve got a guy flying down from Canada. People will call me for a session, but I can’t show up because I’ve got to give someone a tour of the Queen Mary and a drum lesson, and then they gotta come over and pick stuff out of my closet. "Drummer Josh Freese Sells Himself, Famous Friends, Dinner at Sizzler to Promote His New Album," OC Weekly, 6/25/09.

To make this strategy work on an on-going basis, you've got to calculate what your time is worth. You don't want to price a special concert less than what you would normally charge to play a private party anyway. On the other hand, if you want encourage people to book you for private events, packaging the concept as a sponsorship and charging the same amount or a little bit more might be a good marketing tactic.

3. Rent-a-friend.
Some musicians have become known as personalities as much or more than they are known for their music. Amanda Palmer has become the role model for this. (I've cited her a number of times, so search for her name in this blog to see what she has been up to.)

In many respects it is the essence of social marketing. The artist cultivates a group of fans who are more than happy to chip in (via sponsorships, purchases, or subscriptions) to keep things rolling.

The primary limitation for this is personality. Some artists are social and know how to keep a crowd happy. Think of them as cheerleaders. But other artists are more introspective and can't engage in multiple conversations with fans.

Again, an example of musicians moving away from the music itself and into another occupation which may or may not be more lucrative than what they are currently doing for financial support.

4. The garage sale/auction.
Palmer pulled this off quite well. She held a three-hour online auction of random stuff and made $6000. Amanda Palmer Made $19K in 10 Hours on Twitter

There's really nothing stopping every band from doing this online or offline. People have garage sales and auctions all the time. But generally two things have to happen for this to work. One, you've got to have some level of fame or some exceptional junk to sell. Two, this has to be an infrequent occurrence to be special. Otherwise you're basically in the eBay or resale business. If you are holding a sale on a weekly basis, that IS your job, and your celebrity cache is likely to go down.


So there's a look at some of the new music business models making the rounds. With the exception of the private concerts, these ideas aren't really about music. And that can be a major dilemma. People who took up music because they wanted to write songs, sing, and play instruments may feel like they are spending too much time on non-music projects. And if it comes to that, maybe they should just look for the most lucrative day jobs they can find (which may have nothing to do with music or fan management) and use that income to support their music. It's not as glamorous as running an online party, but it might make more financial sense.

Another issue that has been raised by the skeptics is the whether these new music business models are gimmicks. The topic doesn't come up so much when we're just talking about music. Music delivery systems themselves remain relatively static (i.e., CDs, MP3s, vinyl, live shows). People aren't trying to come up with new products every week. There is variety, but it comes from the music itself.

However, when bands/artists feel pushed to come up with non-music ideas, there probably will be a high level of churn as innovators experiment and then move on to something else. So every time a new marketing technique gets touted, we'll ask if it is here to stay or is just a gimmick to generate some publicity.

Suzanne Lainson
@slainson on Twitter

UPDATE 7/14/09
Here's a great example of why the Amanda Palmer model probably won't work for most artists. She just posted this on Twitter.

"what was s'posed to be 1 benefit show @ #comiccon has turned into 3 signings, a naked drawing class, a perfume unveiling & a ninja uke gig."

UPDATE 7/27/09
I missed this article until now, but it confirms what I am saying.

After a series of re-tweets, many more followers, who may or may not have known she was a musician, were following the conversation. Palmer got 400 pre-orders - 200 that night, 200 the next day - for a T-shirt that had nothing to do with music (it read, 'Don't Stand Up For What's Right, Stand Up For What's Wrong' ... a phrase that is all but certainly not part of any merchandising contracts, by the way). Proof that people responded to Amanda for reasons other than her music can be seen in SoundScan sales data for her September 2008 solo album, Who Killed Amanda Palmer. Since the May 15, 2009, Twitter conversation and T-shirt sale, there has been no discernable effect on album sales. "Lessons Learned From Twitter Windfalls," Billboard.biz, 7/01/09

UPDATE 7/13/10
About the site RentAFriend:

While some of the suggested uses for the site do seem pretty practical (having someone show you around town or teach you a skill), many of them seem a bit like a crutch. Has social networking changed real-life interaction to the point where we need to pay someone to be a real-time friend? "Stuff We Didn’t Know About Until Today: You Can Rent A Friend," TIME NewsFeed, 7/6/10.

Some of what musicians are encouraged to do for income seems very close to the RentAFriend concept.

When the Rock Star Invites You to Her Party

Quite a few people have picked up on Amanda Palmer's story.
Amanda Palmer Made $19K in 10 Hours on Twitter

Some people are excited because she appears to validate that idea artists don't need major labels anymore.

Others are excited because her experience appears to validate social media, and Twitter in particular.

And still others see it as a model for the music business of the future. I've got some thoughts about that. But since this is a short week and people are still processing Michael Jackson's death, I'll save those comments for a future blog entry.

For now I'd just like to toss out my take on the Amanda Palmer experiment.

Palmer sold T-shirts. Lots of artists sell T-shirts, so that part of her money-raising effort wasn't unique. People buy T-shirts to (1) show support for the artist, (2) because they like the design, (3) to show they attended a show, or some combination of those reasons.

What made Palmer's spur-of-the moment T-shirt sale work, I think, was that it was an insider's club formed by people staying home on Friday night cruising Twitter. And what gave the club status was that a music celebrity created it and invited people to join.

Think about it. How many times do people who are home on a Friday night get to say they were cooler than the folks who went out? Now, rather than missing all the action, they were part of a party. And they have their very own T-shirt to prove it. And even more important, the T-shirt comes with a story: the night they hung out with Palmer online. This was not a T-shirt sold by some roadie at a show. This was a T-shirt they helped to create, or at least inspire.

Similarly, the online auction was also an insider's club. Fans got to make suggestions about what Palmer could sell (like chewed postcards). I'd venture to say that people were buying the stuff primarily to interact with Palmer. If someone else was selling Palmer's stuff, I doubt there would have been nearly as much interest.

And then finally the studio party. The first 200 to respond on Twitter got in. Since Palmer is often announcing short notice gatherings, fans who want to participate in them need to keep tuned into Palmer's messages. Again, an insider's club for those who want to play.

The Amanda Palmer experience is kind of like a reality TV show that the fans get to join.

Suzanne Lainson
@slainson on Twitter