It’s funny. The Internet has made things easier by providing musicians the opportunity to market and promote themselves without the backing of a record label, yet at the same time it’s made it harder by giving music fans so much choice that it’s more difficult to stand out.
Sure, you can break yourself online by being innovative on platforms like YouTube, Twitter, snapchat (has there been a snapchat musician yet?), Instagram, Vine etc but inevitably those artists still need major label backing to make the transition from viral sensation to recording artist.
A recent article published a study reporting that record labels are spending around $500,000 on marketing to break one of their artists nationally and up to $2million for global campaigns. Considering its a struggle these days for an act to sell more than 100,000 units that’s a lot of money to be spending on promotion. Obviously those costs are offset by the labels taking cuts of the artists’ endorsements, tour income etc (360 deals) but those revenue streams are dependent on the artist’s music breaking into the mainstream.
It’s really hard to break an act in today’s climate. We went the independent route with 3AM Tokyo (Yep, bringing that album up again!) and it was an interesting and expensive experiment. Just for radio promotion alone it was north of $20k, the single “Can We Kick It” peaked in the low 30s on the MediaBase Top 40 chart (MediaBase takes into account every single radio station in the US. Now that’s pretty dope, we were the only release in the Top 40 that was on an independent label. It’s also a pretty good example of how much money you need just to get to that level. However. No one pays attention to the MediaBase charts, it’s all about Billboard (Billboard only take into account certain radio stations). To get on the Billboard charts you’re looking at spending even more money and if you’re independent forget it, even with the required funds you just won’t have the connections or radio promotion departments that the record labels have. This isn’t a slant on how radio works, it’s just the reality. You can’t get in if you’re not with the big boys. Now back to the money that was spent on the radio promotion for “Can We Kick It”, you want to know how many sales, streams or video plays all those radio spins gained? Not much. Certainly not enough to cover the costs of the promo. Not terribly inspiring for the independent musician is it?
This is where the benefits of social media and the Internet come into play. If you are independent you keep all the profits. That means you only need to sell/stream a fraction of what a major label act does to make the same amount of money, not to mention the money you’d make from doing shows. The average music listener spends around $100 on music a year (the exact figure is out there somewhere). With just 1000 fans you could make a decent amount of money, especially considering artists with a smaller cult following tend to have more intimate relationships with their fans which leads to the fans spending more money on them.
Of course with only 1000 fans you can’t really tour anywhere which is why you may need a bigger fan base, unless you don’t want to perform gigs and gigs are where the money’s at. We were chatting with a senior figure at one of the biggest publishing companies in the world and they were telling us one of their acts (who we happened to be friendly with) don’t even spend that much time in the studio anymore because they make so much more money from performing. Now this act broke online which led to them signing a major label deal before putting out a few albums so it’s hard to know whether the people they perform to were fans before or after the deal but this swings us back to the point that you kinda do still need major label backing to put a big dent in the industry.
All of this comes down to what an artist deems as success. You could be a solely touring act that doesn’t release records but builds up a fan base by grinding, playing show after show in city after city and make a living from it. You could equally be that artist who has 1000 fans online who are willing to spend $100 or more a year on your music and merchandise and make a decent living from that. But if you want to be known worldwide you need a major label and their financial backing. Their connections and infrastructure are unparalleled and combined with a savvy Internet game they can break an artist all over the world.
So to answer, to break a new artist into the big time you need money and lots of it, preferably a record labels money too! Money alone isn’t the answer but it allows artists to get their music on radio and launch viral campaigns to target the kind of audience their music warrants. We’re already starting to see deals where the label ends up in up reducing their role to being investors in artists and offering their distribution resources in return for a profit share. Don’t be surprised to see similar plays from companies like Google, Apple, Spotify and Microsoft in the future- investing in musicians and using their vast amounts of user data to help connect musicians with consumers. That’s another post topic though…
Have a great weekend