The New Music (Industry) Economy

I am seeing three types of musicians right now, from those coming over to Gen Y Rock Stars, on other great music industry sites and out at conferences and events. These 3 type of musicians I break down as:

1. Still obsessed with the old model of getting a deal and having their music heard by that one person that can change your life.
2. Pure artists that have no knack for business and unfortunately will not break through today’s market.
3. Artists that get it, or at least want to get it.

First let me clarify that there is still a need for the first group. Some artists need the big systems and marketing assistance that big corporations and major labels still have power over. Imagine a Britney Spears or Jonas Brothers. The pop model still needs that big push.

The middle group is the group that I guess I offend. And it sucks because most of the time their music is great but will never be heard beyond friend circles, local shows and Pro Tools sessions.

The last group I love. They understand that file sharing didn’t kill the music industry, it changed it. Below is a clip from West Coast and Pimp My Ride Legend Xzibit from the Mo’nique show where he talks about coming up in the old model and now adapting into the new music economy – one not controlled by labels but by musicians and fans. (Skip to about 1:20 to get to the new music stuff.)

Kevin wrote a very inspiring piece a few weeks back on the Question of the Decade and he hit on some outstanding points. This includes attention spans, consumers insight into value and trends from an album centric industry to a single and EP centric one.

This is really important to understand. Albums are not obsolete, but much like the industry they are changing. If you want to compete for attention and dollars you need to do a few things great (and to the pure artists, I am not talking about music today, I am assuming that the music is good/great).

Create A New Mindset

The first degree to success is shifting your mentality from scarcity to abundance. In the old industry your goal was to build your fan base, but internally you would always look for that one person, that A&R, the manager, the lawyer, the rich uncle that would hear your music and all your dreams would com true and your problems will go away. This is a scarcity mindset because in reality one man cannot make your dreams come true. Even artist co-signs aren’t worth what they once were.

The abundance mindset is knowing that there is an audience that wants to not only hear your music but get involved in creating a community and culture with you and your music. People organically have an emotional connection to music. They share this with friends, family and strangers. Your goal is to get them involved in the process and in your life.

Your mindset also needs to change to being business oriented with this community. Think about the Twilight Saga. Look at the way they have create a community and a culture. Then look at the business plan. They are not scared to hock lunchboxes, t-shirts, calendars, etc and fans line up for hours to get into the theaters. They wear t-shirts to choose sides – Team Jacob vs Team Tayor.

As a musician your job is to get ears and eyeballs into your world.

Creating Products Beyond A Plastic Disc

The second piece of the equation is having products that can sustain your lifestyle. Do some basic math. If the only product you are selling is a $10 CD, where you profit $7, how many do you have to sell to earn $100,000 this year?

Just over 14,000. Now if you are in a group of 4, to each earn $100,000 you need to sell 57,000.

As an indie artist that is hard as hell.

Now let’s add some products into the mix. How many $25 bundles that have an entire catalog of music, instrumentals, acapellas and some videos would you need to sell to do the same thing. First of all your margins are close to 100% if you are delivering digitally. Your 14,000 number shoots down to 4,000. For a group of 4 its only 16,000.

Is that more obtainable?

Now add some shirts, licensed products, beat making instructional videos, DVD’s, Drop Cards and countless other products with high margins and low overhead.

Your goal is to excite your fans. You get them excited with products. Products they can hold. Products they can share. Products that create a culture they can get excited about. Check out this example from Panacea and how they added value way beyond a digital download or a CD.

Creating Content To Attract Eyeballs

The last point we’ll hit today is getting traffic and new fans. This is where all artists get stuck. They typically resort to SPAM or have the Field of Dreams model.

Listen, everyone is so damn sidetracked that they are not just going to stumble upon your website. Get over it.

Your goal is to make some noise. The easiest way to do this is to find places that are already making noise and add value to those networks. This includes some real work. Just like I am guest posting now – I do like 4-5 times a week to expand my network. What are you doing?

Look for blogs, forums, networks and communities that are ripe with people that you feel would dig your tracks and see how you can play a part in delivering value to them. Teach them something, add to conversations, point people to cool links, share news, shoot videos and show them that you are a part of the community and that you have some cool stuff to offer. Once you do, the traffic will start flowing and so will the opportunities.

What Group Are You In?

Where do you see yourself as a musician or artist? If you really think one person is going to hand you your dreams on a platinum platter, let us know. If you are working every waking hour to make something happen, we want to hear from you too.

If you would like to learn what we are doing with real artists and helping them to make a living in today’s music business, we would love for you to check out the New Music Economy, a new training course from Gen-Y Rock Stars.

Are you ready to join the New Music Economy?

This guest post was written by Greg Rollett from Gen-Y Rock Stars. Gen-Y Rock Stars is a music marketing site for the next generation of rock stars. You can also follow him on Twitter or join the New Music Economy.

Disclosure: This post contains affiliate links to Greg’s course the New Music Economy. If you purchase I will earn a commission.