A very close family member is studying through an outstanding music business program. He will be degreed shortly and recently completed a summer internship. He was so privileged to study in the hottest music town in the Midwest, Nashville TN. While coaching and consulting him, I became fascinated with the business of music. Here are a few of my thoughts and observations that I learned through my friend’s vocation.
The music business has changed. It’s no longer about selling albums and CDs. When is the last time anyone purchased one of these? Mic Hype @mic.com quoted that an artist who is unsigned with a label will need 180,000 streams per month to make minimum wage. A label signed artists needs 1,117,021 per month to earn minimum wage. Google Play is the best way for an artist to make money via streaming, with each stream clocking in at .0073 for signed artists and .0179 for unsigned. Spotify, on the other hand, is one of the most popular streaming services around but is the least lucrative for artists. Spotify takes an unsigned artist 180,000 plays to do what Google Play does in 70,391 according to Brittney McKenna’s April 15th 2015 article.
This brings me to the subject of my blog and how it ties to my own business, ALTru Solution, LLC. Don’t worry, I’ll get there! A musician, and especially an LLC or INC or K or S owner/partner of a band must be an entrepreneur and a salesman first, musician second. A professional musician is a performer and a salesman. Michael Masterson quotes in his book Ready Fire Aim, “The big mistake most wannabe entrepreneurs make in launching a new business is not spending 80% of their time selling. They spend most of their time, attention, energy, and capital on things such as setting up an office, designing logo, printing business cards, filing forms, writing contracts, and refining the product. They have the impression that they are doing things in a logical order – getting everything just right before they open their doors. The fact is, they are wasting valuable resources on secondary and tertiary endeavors.” Masterson cites so many examples of Harvard graduate entrepreneurs who start a business but look down their nose at sales and salesman. Universities teach marketing but do a piss poor job of teaching the number one characteristic of a sound business start-up; owner generated sales!
The same holds true with a garage band. It they stay in the garage and don’t actively knock on doors looking for a venue to play, they are wasting valuable resources. If the band members/owners consider themselves musicians and not salesman, they are doomed to fail. Just how do they achieve 40m – 50m streams per month? Well, most don’t. They must rely on merchandise and/or endorsements which are the prominent money makers. After the band has agreed on the sound and genre (basic product), an upstart band should form what we in business call an optimal selling strategy or OSS. Take AC/DC, an upstart band just becoming big when I first saw them on July 1st, 1979 at St Louis Kiel auditorium. They opened for Triumph and Morning Star. Rhys Left quotes this from a 3/16/2015 blog @essm.net. Guitarists Angus Young, famous for his stage schoolboy uniform and (late) brother Malcolm Young do not rely on traditional power chord shapes in creating their sound. They take a unique approach by using open chord shapes but removing notes to shape their bone crunching riffs. They take all the “thirds” out of the open chord shape, leaving us with the root note and the fifth note of the scale. Therefore, we end up with a power chord in a non-traditional shape. That’s it! The basic product the band believed in. Now they had to sell it.
By the time I saw them, some 6 years after the band’s formation, the basic product was tested and perfected, not in a garage but any place they could perform. The OSS, again quoting Ready Fire Aim
· What other products can we sell? Between 1975 and 2014 AC/DC released 16 studio albums (14 available worldwide and 2 released only in Australia), 2 soundtrack albums, 4 live albums, 11 video albums, and 2 box set albums. Although a large number of AC/DC singles have been released, the band always refused to release any greatest hits-type packages
· How can we make the offer more enticing? The 1979 show was the first time I had ever seen crowd diving (Angus Young of course) and the first time I had ever seen wireless pickups on a guitar. Young never stop bouncing his head and moving across he stage from the first note to the last. He is a performer playing a simple yet unique style of guitar. A sound that went on to become a brand.
· How can we make the advertising copy more compelling? Album and CD covers were big business in the day. The publicity evolved as marketing evolved. The basic product stayed the same earning AC/DC so many hits that always make me crank it up!
· What other media should we test? AC/DC refused to let their music be streamed. They were late to the party and did not put their catalogue on iTunes until late 2012. iTunes is 3rd with a 10% share behind Spotify at number one with 40% and Pandora at #3 with 21% according to @digitalmusicnews.com blog date January 18, 2018. Spotify pays artists the least but if you want exposure, Spotify is the best venue in 2018.
I acted on my idea of starting ALTru Solution on 8/1/2018. I spent the month working tirelessly on testing my product, An RCDD and executive consulting service. I telephoned, visited, and emailed clients every day. During off hours, I created social media and consulted help from my friend in the music business who proved invaluable with web site creation and logo design. In short, I delegated the filing, paperwork, web site, logo. It was only during the last week of August when reviewing Masterson’s book, Ready Fire Aim, did I remember business cards that I probably should have when I roll out my product and company at this year’s BICSI conference in San Antonio. He was making fun of upstarts who do this first which prompted be to jump on Vista Print and pay expedited freight. I guess God has a plan and so far, he is leading me down a very good patch with the help of family, friends, and associates. Please let me know how I can help!