Unsprung Media

I read most of the music business blogs out there, and I read a lot of comments that readers post on many of these blogs.  I believe it’s a common misconception that new-music-business bloggers generally advise artists to give away all their music for free.  So, I am declaring my position here, along with guidelines for implementing a Free Song Strategy.

General Comments on Making Songs Available for Free
The day you enable fans to download your songs without paying for them - will NOT be the day you experience a massive spike in traffic.  In fact, nothing will change.  Those that really wanted to obtain your music for free already did so.

More than 50% of the population will buy your songs if they like your music.  Digital music revenue is growing not shrinking.  There is no survey or statistical evidence that demonstrates that FANS that share/borrow/demo/steal music will NEVER buy music from the artists they like.  

When people get older they have less time to share/borrow/demo/steal music; instead they opt for uniformity and convenience; this is when you will convert the other 50% of the population into purchasers.

There is a lot of dribble out there about the growth of BitTorrent/file sharing and the percentage of demonstration (stolen) music within MP3 players - ignore this.  There are bigger picture concerns that labels and artists should be focused on.  The only thing these surveys tell me is that a lot of people are test-driving a lot of music.

You are NOT training an entire generation of music consumers that music should be free.  You are declaring to the world that you may try my music prior to buying it.  However, you should also be declaring that your music is available for purchase on every digital music store on earth.  “PLEASE BUY AFTER YOU TRY” should be your message.

It is EXTREMELY difficult to run a profitable business when you are relying upon selling $.99 cent downloads that are sold by stores that take a cut of your revenue; irregardless of your size and popularity.  MP3 downloads will NOT be the last digital product this industry creates.  If you focus on seizing every bit of download revenue you can obtain, you will be hurting your chances to increase your popularity; which will hurt your chances of selling high-margin digital products when they arrive.  Focus on popularity not on selling $.99 cent MP3s.

Reasons Why You Must Make Some Music Available For Free
For a lot people - the MP3 player is their radio, and this is a rapidly growing segment of the population.  If you want to be on this radio - you have to make free songs available for download.  You cannot expect people to buy your music until they are fans of your music.

Falling in love with songs is a complex process; although widgets help, it rarely happens by listening to songs played through a widget that is tied to the Internet.  In a recent post I use this equation: Listeners * Frequency * Conversion Rate = Fans.  If you have a few minutes, you should read this post.

Someday soon every device (MP3 player, car stereo, cell phone, home stereo, computer, etc.) will be tied to music recommendation engines.  Recommendation engines will be the most convenient way to attach HUGE pools of songs to devices.  Many of these engines rely upon DATA to make recommendations.  If you the artist, or if your songs are VOID of data - it will take forever for you and your songs to FILTER their way up the data-driven recommendation ladder.  It is essential that you work to accumulate P-SPINS (plays) if you want the advantage as these systems come on line.  

Strategies For Setting Songs Free
Flood the world with versions.  This is not 1995 - it’s 2008.  Release multiple versions of your songs.  Release versions of your songs that have lower encoding rates than the versions you sell.  Some people say encoding rates don’t matter to consumers.  It does and it will.  Have you ever cranked up an MP3 encoded at 128KBPS - it sounds like shit in the car.

Release multiple mixes.  Chances are - if you are looking for a record deal - your best songs are going to be rerecorded, remixed and repackaged under the guidance of a label.  This is one of the versions/mix/packages that you will ask people to purchase.

Labeling matters.  Put your encoding rate and the word DEMO right onto the label of your MP3s.  This matters, especially to people that are freaks about uniformity and sound quality.  This segment will be happy to upgrade when they fall in love with your music.

Clip the end.  You could clip off the last ten seconds of your song.  I wouldn’t do this, but I’ve seen it done.  

Append a message.  Once again, it's 2008.  You have the tools to tag the end of a song with a five second message - try it out.  Find someone sexy to speak your name and your song names for tags that can be stitched onto the end of each song.  Get creative and make your end-tags into a puzzle.

Glue songs together.  Sandwich multiple songs together with no ID tags in-between songs.  I guess you would call this your free songcast, podcast, or song-sandwich.

Hold back some songs.  You don’t have to enable the download button on every song/version.  Use caution when applying this strategy.  If you only have one great song, you probably have to cut loose a version of this song to accumulate P-SPINS.

Find a sponsor - this may be annoying, but tagging the end of song with a soft message or placing an ad into a song-sandwich could be an interesting revenue source for you.  

Consider trading for something such as an email address for the free version of your song.  To find tools and widgets that will help you implement and manage a Free Song Strategy, check out ReverbNation.

What would it take for an independent artist that is not on the radio to generate $100,000 a year in net income from digital music revenue?  The answer is 5,000,000 P-SPINS.  

SPINS ON THE RADIO
A spin on FM, satellite or Internet radio occurs when a radio station plays a song. Every spin generates a number of impressions.  For example, if 50,000 listeners on average are tuned in to a radio station when an artist’s song is “spun”, the artist receives 50,000 impressions from that one spin.  On that same radio station 20 spins would yield 1,000,000 overlapping and/or unique impressions.  

CONVERTING LISTENERS TO FANS
People are listeners first; they become fans through repeated exposure, filtering and imprinting.  The conversion from listener to fan is a complex process.  100% of the people that are repeatedly exposed to a song do not become fans and buyers of a particular song. 

• The number of exposures during a given time period is called Frequency.  
• The rate that listeners convert to fans is called the Conversion Rate.
• Listeners * Frequency * Conversion Rate = Fans.
• 500,000 Listeners * 10 (spins within a time period) * 2% Conversion Rate = 100,000 Fans

SPINS OFF THE RADIO ARE P-SPINS
Getting on mass-market radio isn’t easy. Most artists have to rely on Personal Play Spins or P-SPINS for exposure.  A P-SPIN can occur anywhere there’s a PLAY button tethered to one of your songs.  A P-SPIN can occur on MySpace, FaceBook, ReverbNation, Last.FM, iLike, your website, or within any widget carrying your music. The easiest place for a P-SPIN to occur FREQUENTLY is on a listener’s laptop or iPod.  

P-SPINS ARE MORE VALUABLE THAN RADIO IMPRESSIONS
Presumably, a listener is already motivated to press the PLAY button that causes a P-SPIN to occur.  The listener has found or obtained your song, and/or some level of filtering and/or imprinting has already occurred.  In addition, the effort required to purchase your song is minimal, as the ability to convert from a listener to a fan/purchaser is just a click away. 

UN-TETHERED P-SPINS DRIVE FREQUENCY
Remember this equation: Listeners * Frequency * Conversion Rate = Fans.  It’s always nice to see your P-SPIN numbers going up on a site where you don’t have to give your music away.  However, to convert many listeners to fans you need the FREQUENCY that only comes from un-tethered P-SPINS.  Un-tethered P-SPINS are the spins that occur on laptops or iPods that can be disconnected from the Internet.  When it comes to racking up P-SPINS nothing beats being in “heavy rotation” (most frequently played) on devices that can be used anytime/anyplace.

DIGITAL MUSIC CONSUMERS BUY DIGITAL MUSIC
I have not seen survey or statistical data that demonstrates what percentage of FANS actually purchase digital music instead of test-driving it.  There’s lots of information that shows that consumers have lots of stolen (for the purpose of trying) music, but what about those consumers that become fans?  At what rate do FANS convert to purchasers of music?  For the analysis I did here, I used 50% as the percentage of FANS that will eventually buy your music.  

AVERAGE FAN SPENDING PER ARTIST PER YEAR ON DIGITAL MUSIC
For this analysis I am carrying $3.00 per artist, per year.  Given that most digital music consumers are spending less than $250 per year on all artists, I believe that it’s safe to assume that $3.00 per year is an appropriate average for all artists combined.

THE MATH
Click here to download the spreadsheet.  Try your own assumptions.

THINGS YOU HAVE CONTROL OVER
Listeners * Frequency * Conversion Rate = Fans

• Listeners - one of the simplest strategies you can pursue to increase listeners is to be everywhere and anywhere on the Internet.  
• Frequency - set your songs free.  You need frequency/spins to convert listeners into fans.  The best way to increase frequency is to be in as many un-tethered devices (MP3 players for example) as possible.
• Conversion Rate - the percentage rate in which listeners convert to fans - you can improve this rate by improving your songs.  I have always maintained that a great producer is invaluable to improving the quality of your music.
• % Paid to a digital aggregator - try to push your fans to the store that charges you a flat annual fee instead of stores that extract percentages from your sales (coming soon).

THE SUBSTITUTION PROBLEM
I have been talking about how substitution is a far greater challenge to the music industry than replication.  As the use of digital music grows you will have less and less control over reaching Listeners and/or boosting Frequency (from the equation above).  The number of Listener will grow, but so will the number of songs attached to the shuffle, reverse and forward buttons.  Since we are talking about multiplication, you could argue that the equation will balance out.  However, the number of places digital music consumers hang out already challenges your ability to REACH listeners; this challenge is also part of the solution (hint).

DISCLAIMER
I am not an expert on radio promotion (not even close).  The purpose of my writing is to test my assumptions.  If you have any contradictory facts, figures or thoughts - blast away.  I intentionally left off all other revenue sources.  However, you should expect the potential for other revenue sources to be substantial when you have reached 5,000,000 P-SPINS.  Create your own projections by counting your P-SPINS to date and comparing that number to the digital music revenue you generated over the same time period.

This is a graphical comment on yesterday's announcement that Universal is stopping artists from posting full songs on MySpace.  You can read about the announcement on Wired's website.

When I thought about Universal's edict in terms of the artist mentioned - Colbie Caillat, I thought - Colbie and her signing to Universal, plus Universal's proclamation - fits into a model every artist should think about.

The graph below illustrates round estimates for one artist.
Fan = someone that would buy a ticket, buy music, and/or seriously support the artist. 

During the WHAT EVER IT TAKES phase, all of your MP3s should be free.  You need to get that first 200,000 fans listening to your music and spreading the word.

Once you get ON THE RADAR, some portion of the population will buy your songs because using platforms like iTunes is more convenient.

Somewhere between ON THE RADAR and ON YOUR WAY a record label gets involved and a logical attempt is made to stop the free-song-party.  However, some portion of the population will continue to obtain your songs for free.

Once you become ESTABLISHED, the larger percentage of your songs will be paid for.

Once you become a ROCK STAR you can do what ever you want!

Note: when I refer to "paid", I am referring to all forms of paid music, not just MP3 downloads.  The MP3 download business is a model that will be disrupted by new recorded-music products and services in the future.  

I realize Universal is halting full-song streaming on MySpace; however, this is an attempt to get "paid" for music by somebody, or some company (Fox).  30 seconds sells songs on iTunes; 90 seconds should get the job done?

My version of what Bob Lefsetz calls stunting is to spend money giving away music.  One of the things I am measuring is the effectiveness of various keyword campaigns using Google AdWords.  I have noted that the competition pitching FREE MUSIC is intense!  Is this the wisdom of crowds telling us there's money in FREE MUSIC? 

 
THIS IS MY ADVICE TO ARTISTS ON FREE MUSIC:
iPods are the new radio, and getting spins on the radio is one of the best ways for an artist to obtain recognition.  If an artist is unrecognized, he or she will never be able to sell the things that will make him or her money (tickets, shirts, premium music, etc.).  Holding out for MP3 download revenue doesn't make sense when an artist needs spins on the “radio” to get noticed.  I believe it should be the goal of every new artist to be in 200,000+ iPods.

Will giving away your songs spell doom for the music industry or your career?  Absolutely not.  You will never make money selling MP3s.  The industry will introduce new products that will restore profitability to artists and labels.  The only thing you gain by holding out for download revenue is to slow the spread of your music and that's a mistake. 

NOTES ON MY GOOGLE CAMPAIGN

CLICK TO ENLARGE May ad is in the red square.  My bid is .50 cents a click (temporary test), my cost-per-click (CPC) is averaging around .30 cents.  I am hoping to convert 10% of the clickers into fans.  Furthermore, I am hoping that the music is shared widely; thus driving down my fan acquisition cost (FAC).  You will also see that I use the sentence "Recorded in a top studio."  Does this matter to anyone?  I will let you know.  We are running multiple variations of the same ad.  I should know in about a week.  Also, just about every clicker downloads some music.

REASON ONE
MARKETERS SAY IT IS, SO THEREFORE IT SHOULD BE.
In our society marketers can convince us to do just about anything. Marketers drive style, attitudes, perceptions, commitments, actions and even the language we use. Anything that is marketed long enough becomes culture. From diet drinks to hybrid vehicles, we can be guided into anything.

So, the other day I was reading my own blog for inconsistencies and mistakes (I always find them), and I decided to glance at the block of text advertisements that Google had pushed onto my page. Every advertisements was pushing FREE MUSIC (circled in red).

 
Every one of these companies is pushing FREE MUSIC because they believe that's what people want. They believe they are communicating a value proposition that will resonate with a target audience.

All I can say is: smoking is healthy, guns save lives, shorts should be below the knees, breasts should be firm, erections should last for hours, margarine is better than butter. If you hear it enough, everyone believes it, and it becomes culture. Hopefully FREE MUSIC will go the way cigarettes are going now.

Lots of artists ask us if they should give away songs as a strategy to build popularity? Our answer to this question is: if you believe it helps to give away a few songs, then you should only give away low resolution MP3s...

The digital music landscape is changing rapidly. Eventually, everyone will understand the difference between a low resolution MP3 and a high resolution MP3. The difference between a low and a high resolution MP3 is the rate in which the MP3 is encoded at. Right now, iTunes sells protected tracks that are encoded at 128 kbps. Soon, we believe iTunes will be selling every track as unprotected MP3s encoded at 256 kbps or higher.

We know consumers, and no consumer will want to have the inferior version of your song that you gave away for free. After a while, if a fan likes your song, they are going to upgrade to the higher resolution version. Moreover, higher resolution tracks are going to sound better in a room or on a car stereo, and unavoidably, this is what the industry will convince consumers.

If you want to pursue this strategy, we suggest that you put the low resolution encoding rate right into the track name of your song. For example, if your song were titled Butterfly, you would name the track 80KBPSversion-Butterfly or 128KBPSversion-Butterfly. Doing this lets your fans know that there is another version available.