Nicholas Lovell is the founder of Gamesbrief, a blog dedicated to the business of games, as well as the author of a growing list of books about making money in the games industry and other digital media.
“Martin Mills is a successful entrepreneur who has built the Beggar’s Group into a successful global music label with international stars on his roster. That’s why it is so depressing to see him using his Midem stage to press for governments to resist..
I know what I would rather see Martin do.”
Nicholas is currently writing a book, The Curve, about how to use the web to give stuff away from free, to build relationships with your biggest fans and to charge them lots of money for things they value. It will be published by Penguin in late 2013.
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- Why not do both? As I’m pretty sure he does. Sounds like an artificial battle line, there.
“So the real answer lies in creating bespoke offerings that lets 15% of your audience pay 50% of your revenue, or more… charging a substantial premium for expensive, limited edition, signed, numbered, exclusive, special editions.”
- This *can* work in some cases, but definitely doesn’t for all artists. It also presumes you’ve already managed to sustain investment in building a fanbase to a size where 15% is a significant number of people.
Can I ask why you think it doesn’t work for all artists? I genuinely think that any artist that can’t mobilise this business model in the 21st Century is in real trouble.
I also don’t think that 15% needs to be that big a number, if each of them is spending hundreds, thousands or tens of thousands of dollars. That thinking is trapped in the era where prices were fixed and the only way to make more revenue was to drive volume. We are moving into an era where that is only one way to drive revenue: moving people along the demand curve may be a lot more effective.
The main example Martin Mills used in his speech was the differing rates of tax that different kinds of businesses are expected to pay. I don’t see how a fairer tax regime means extra government protection. If Google, Apple, Amazon and other tech behemoths are paying a pittance in tax does that not simply equate to government protection of their interests?
Well, I could point to a number of somewhat underwhelming responses to premium/special editions which we’ve released!
You could of course argue that we didn’t get the product offering right in those cases, and that’s probably true for some.
But if there’s a generalisation to be made, it’s that it’s a whole lot easier to sell these products to artists with an established long-term following (>2 years, at the very least), than to fans of new artists, where the demand seems less. Certainly we’ve had examples of ‘popular current artist + good product + solid marketing’ which have underperformed, despite having no obvious inherent weaknesses.
The biggest successes have mostly come with artists who are 6+ years into their career, where the fan relationship is a lot less transient; there is definitely great opportunity here.
So, the challenge then becomes: how to span the gap from years 2-6, when the initial buzz (and advance) of album 1 has dissipated slightly, but you still need money to come in for the next 4 years.
I don’t think you can discard the need to still generate income from recorded music over this period; realistically it looks like streaming models (where the user pays for access) will overtake product sales, but the current services need to do more to reach a mass userbase. Spotify/Deezer/etc’s offering is such unbelievable value (£10 per month for all music ever) that it feels like it has a chance, but awareness of these services is still relatively low; certainly compared to the iTunes App Store, or Playstation Network.
@Daniel. It’s interesting that you focus on artists after they have been signed. The actual life cycle of an artist starts much earlier, before labels and businesses get involved, which is where much of the advantage of the Internet comes into play. (I do believe that the Internet is better for creators than it is for gatekeepers and distributors).
You say “you need the money to keep coming in” during years 2-6, which is a fascinating point. Can I ask what quantum you think that needs to be: £50,000 per annum? £5,000,000? In between? Higher?
@Michael,
Tax may be an example, but it did not seem to be the thrust of his argument at all. The thrust seemed to be that “I know of no way that the investment of time and money that is needed for new music to be made can happen, other than in the monetization of how people listen to recorded music” and “if government erodes or removes our ability to do that, it will ultimately rob listeners of their new music”.
I disagree with both of his statements.