This photo provided by designwallah under a Creative Commons License

In the midst of my “4P’s of Marketing” series, I thought a dose of reality, aka “what this all means for me in the real world” would be helpful.

For those that know me personally, you undoubtedly know that I think the world is a very small place.  From running into the first person I met at college while on the tram at Gatwick airport, to meeting a co-worker’s girlfriend at a bar who has worked with my uncle (a professional photographer) before, this theory has been proven over and over again.

It was again proven true last night, when I met Andrew from Half Fiction. One of the three partners is a guy by the name of Sage, and in addition to having at least one person in common through a few degrees of separation (See? Small world!), he is the inspiration for this post.

Sage is involved with a number of projects, one of which is Ready Fire Aim.  Kind enough to send me their electronic press kit, I took a stroll around the RFA website and happened upon this blog post.

By way of a preface, I write from the perspective of a marketer who has been obsessed and involved (the playing and listening kind, not creepy ‘involved’ romantically kind) with music her entire life.  Sage’s perspective is that of a performer, and someone making a living off of their art. Excerpts provided below (emphasis mine), but you really should go read the whole thing here.

….I am going to say however that it is seriously hard fucking work rehearsing non stop and trying to work to pay the bills and have any kind of personal life at all. I call it rockstar 2.0–all work and very little play.

The days of letting the label do all the work while the artist gets fucked up, throws TVs out the window of expensive hotel suites and does irreparable damage to the room are long gone. GOOD RIDDANCE. The middle man is no longer required. What is required is that every band leader think like a brand manager. That every artist must also come correct with an unlimited supply of elbow grease and a multi-tool in his/her back pocket is also a given, but the truth is that no amount of work on the part of the artist can compensate for one crucial factor–the only thing that REALLY TRULY MATTERS regardless of label support, management, agenting or directing from ‘on high’–THE FANS and their support.

In the last 2 weeks for some strange reason I have been contacted by more people who are saying that they have bought or want to buy my record, love the music and listen to it all the time and are telling all their friends about it than in the last 2 years combined… Not only does this make me want to keep working, it makes me want to please my fans. It makes me want to work harder longer and more intensely to make them happy and keep making music-music they laugh, cry, dance, make out, have sex, meet/break up with boyfriends and girlfriends, cook dinner, drive and dance in their undies lip-synching into their hairbrush to. In other words, music to live life to–a partner/soundtrack to whatever it is that they are doing. The digital revolution makes that possible...

In a perfect world there would be no free downloading and I would be paid a fair wage for my work. Music is free and a whole generation now thinks of their media as a portable, constitutional, God ordained, inalienable right. You can either play a Lars Ulrich… or you can adapt, roll with the change-by-the-hour tide of technology and figure out a way to get people to WANT to pay you… I’m not sure why or how that is going to happen en masse but for my part as long as i can continue to engage my fans on a one-to-one level and initiate real contact between artist and consumer of art (fan has egomaniacal connotations to me so I’m going to try and stop using it) who is a REAL person on the other end of the phone, keyboard or social media platform then I will consider myself a successful artist.

…That means that the labels really ARE irrelevant as long as I outsource carefully and creatively certain aspects of the business to individuals who know how to do that better than me. That means that the fat bloated days of rockstar entitlement to bad behavior, mountains of drugs and waiting rooms of young women (and the fat bloated middlemen who plied them with it all so they could ROB THEM BLIND while they were drunk, high and fucking their brains out in extravagant hotels they were unwittingly paying for) are gone for good–replaced with the leaner meaner rockstar 2.0 approach of DIY ingenuity and hard work, the very things that made America great. See rock and roll IS America. Rock and Roll has become what our parents and grandparents did to put food on the table and roofs over our heads–just another job. It’s come full circle to being willing to do the work, play the game and write the songs that make the whole world sing from some ‘Alice down the rabbit hole’ wanderland that it has been for the last 4 decades.

In the end it all comes down to one person reaching out and touching another (consensually of course) and the honest exchange of some dollars for doughnuts as my dad would say, and to that end, my dear reader YOU are the most important part of the equation-not me. And so on this, the moment before I go and play the most strategically critical show of my life, the one for which I have rehearsed for 15 years I want to thank you for not only reading my drivel but for buying my music, telling your friends, for dancing mostly naked in front of mirrors and writing to tell me about it. YOU give me a reason to keep working non-stop all day and night, sweating my tits off in a shoebox rehearsal space at 10 in the morning 3 times a week after staying up til 4am editing and posting videos on my 20+ social media platforms. . . and for that I am EXTREMELY grateful! IT’S A BEAUTIFUL THING.

In case you’re too lazy to click on the blog post, Sage posts Beautiful Thing as a track at the end of the entry. Listen here.

What’s the point?

The point is that it’s about the music and the fans… it’s ALWAYS been about the music and the fans. For awhile, the business got in the way. Now? The business model is broken, and it’s back to the music and the fans.

Go through and read about how to figure out what your product is, how to price it (that post was a struggle to write), and then learn about where to put it and how to market it… but relate it to your life. Relate it to your art, and make it work for you.

The first two posts in this series outlined how to define your overall goals as well as determining what your product will be.

This post covers how to price your product.

To review:

Product – What are you going to sell?
Price – How much are you going to sell it for?
Place – Where are you going to sell it?
Promotion – How are you going to get the word out?

History

Price has changed drastically over the last 10 years for the music industry.  Records used to sell millions of copies at $15 (or more) a pop, and 360° record deals were far less popular.

Musicians didn’t have as much power before as they do today.  The dream of being signed to a big label and making millions was most often the quickest (and hardest) way to riches.  Artists “doing their own thing” were few and far between, and for the most part, musicians were at the mercy of “big business” to make their fortunes (if that was their goal).

The world has changed.

Today, musicians have more power than ever.  Companies now exist to let artists do much of the work they used to hire people to do themselves… if they choose that path.  On top of the resources available, our lives as consumers have fragmented. Our attention spans have shortened and we expect the companies we do business with, including our favorite artists, to slice and dice their content and make it available where we want it, when we want it.

How Does This Affect My Prices?

Photo provided under a Creative Commons license by marie-ll

I’m going to go ahead and say that every business struggles with how to price their products.

A number of factors going into determining your price, and these factors can fluctuate, sometimes making pricing feel like trying to kill a pesky mosquito -  chasing the annoying thing around the room, numerous close calls and escapes, and a rush of satisfaction when you finally nail it.

On top of outside influences from the market, there are many different pricing strategies to choose from, each with their own pros and cons.

What Is My Price?

I’ll stop sounding like a textbook, and instead give you two good questions to ask yourself when trying to decide “how much will I sell my products for?”:

1. What do these products or services cost me to produce?
2. What are the typical market rates for similar products or services?

A good place to start determining your price(s) is to take your answers from the “What is My Product” post and separate your answers into categories.  I’ve taken the answers from our live hip hop band and done exactly that below:

Q: What do I pay money for now, music-wise?

A: Music, t-shirts/schwag, concert to tickets, limited/deluxe edition CD’s.

Q: What do I want to buy, but currently can’t, from my favorite bands?

A: Recording session, face-to-face interviews, concert tickets

Q: How can I add value to my fan’s lives?

A: Music lessons, recording sessions, meet-and-greets, online connections, charity events

Q: What makes me different?

A: Female band, themed shows

Q: Out of the answers above, which ones can I make money from?

A: My music, concert tickets, t-shirts/schwag, Limited Edition/Deluxe CD’s, auction off signed merch.

As you can see, a few patterns emerge.  Our hip hop band sees their major revenue streams coming from:

• Selling their music
• Putting out Limited Edition/Deluxe CD’s
• Performing concerts
• Selling merch
• Selling their time and teaching lessons
• Selling their time and helping artists record

Now it’s time to apply those two questions above:

1. What do these products or services cost me to produce?
2. What are the typical market rates for similar products or services?

We asked these questions for merch as an example.

Q: What do these products or services cost me to produce?

A: For merch, we want to sell t-shirts, baseball caps and stickers.  We’ll hire a designer to design each item, then send the designs off to the printing shop for creation. They’ll then be shipped to the final destination, which will vary per show.

We’ll have to pay the following costs: design costs, print costs, shipping costs and possibly storage costs.

Q: What are the typical market rates for similar products or services?

A: T-shirts typically retail for anywhere between $15-30.  Baseball caps sell for $30-40.  The stickers will come in different sizes, and be sold for anywhere between $5-7.50.

Now comes the math. You need to figure out what your total costs will be, and compare them to what the current prices are for similar items.

Before coming to your final number, or thinking this is all hopeless because your costs are larger than what people tend to buy the products for, consider a few points:

Quantity is a factor – Make sure to talk to the company doing your production work about price breaks for ordering higher quantities. Sometimes this is applicable (like with the stickers), and sometimes it’s not. Make sure to ask in any case, especially if this is new to you.

Demand is a factor – If there is a lot of demand for your items, either because everyone wants to have one and they’re willing to buy one, or everyone wants to have one and the item is scarce, you may be able to charge above the market price for that item – leaving more money in your pocket than normal.  Keep an accurate log of how much your items are selling and how quickly and you’ll be able to more easily spot these trends.

Notes

I’m by no means a pricing expert, and within the music industry (well, the record industry actually), pricing is especially hard as the cost of the item and the amount people are willing to pay (these days, sometimes $0) may be drastically different.

It never hurts to ask around. What are similar artists doing? How are they pricing their products? Do you see things they’re doing right or wrong (in your opinion)?? Learn from the people around you and don’t be afraid to ask questions!

Here are some resources, some academic, and some just information that may be good to know when you’re reading this series:

• New Hope for Monthly Music Subscriptions
• The Global Decline of P2P
• USB Uzi’s – The “New Hot Thing”??
• Artist-Specific Social Networks

Have something to say? A story to share about how you figured out how to price your work or time? Leave them in the comments!

Next up… “Place – It’s More Than MySpace”