Creating a Merit-Based Music Economy: Compulsory or Blanket Licensing for Interactive Subscription Services
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B4. The Gig-Centered Business Model

The key to making a music act's business work is synchronization. Music is a product with variety and change, rather than a staple purchase like laundry detergent or breakfast cereal. People don't purchase the same CD over and over again, and they don't usually go see the same act perform over and over again, unless the act is the Grateful Dead.

In order to make sure the business strategy is complete, the promotion and distribution need to match up -- wherever and whenever you are spending money to promote the act, the distribution must be in place to take advantage of that market awareness, and vice versa. Promotion without distribution leads to fan frustration and no sales. Distribution without promotion leads to retail frustration and no sales. In both cases, you get no sales.

In the major business, the label must carefully coordinate the radio promotion with other forms of promotion, and to make sure the distribution is also coordinated. Radio promotion campaigns that may be regionally targeted need the retail distribution to be targeted to the same regions at the same time.

In the grass roots market, widespread promotion and distribution is not available. But whatever limited capabilities do exist still need to be synchronized in a similar manner in order to work together.

The essential tool for this synchronization is the gig itself, which is localized in both space and time, and so it can serve as a focus for everything in the grass roots business.

Once a gig is booked (usually a few months in advance), everything else shapes itself around that. Of course, the information goes out to the mailing list, whether a group of several gigs or just one gig at a time. But a lot more should be happening as well.

CDs: First of all, gigs are the most likely opportunities for grass roots acts to sell their CDs. Retail is difficult because unaffiliated acts usually are relegated to consignment deals handled directly in person. (You drop off some CDs without immediate payment, at an agreed price, and you get a receipt to that effect. You come back at a later time and if any are sold, you get paid for them. You can retrieve unsold units at any time as well.)

For an act touring regionally, consignment isn't usually an option until you get to town. If you have enough time, and a local music store is amenable, you might be able to get a few copies in there while you're around, and if you expect to return to the same venue later on, you could leave them until then. It's useful to have your CD sitting there next to all those big stars -- it gives you a sense of legitimacy in the eyes of the consumer. The gig is generally the only circumstance that brings you through (since you act as your own personal distributor), and thus the gig schedule is a big factor in whether consignment is even possible.

Nowadays, of course, there is also the direct mail option, via snail mail with check or over the Web with credit card. That makes things easier, but doesn't get your CD in the rack in the store. Part of the value of being in the store is promotion, but it needs to be there a while to really kick in, in conjunction with other press and live appearances.

The one place where promotion is most powerful for the CD is at the performance itself. And, it's a lot easier to complete the transaction immediately with cash or credit card, just like a retail store.

Local Radio: One thing that becomes more possible with a gig, even when you can't get into a controlled rotation, is an interview with a local radio show host. These are usually at smaller stations with more eclectic programming formats -- college and public stations with support from revenue other than advertising.

These stations often don't play the CD much at other times, but when there is a gig coming up, and they can feature the artist live on the air, there is a mutual benefit. This is the radio promotion that counts the most, because it is local in both time and space, and focused on the gig, which is where you're going to sell those CDs. The gig legitimizes the radio appearance, and the radio appearance legitimizes and promotes the gig.

Posters: Some local venues not only will put your poster or flyer on their own bulletin board, but they may put them up elsewhere in the area, especially on college campuses. If you send a bunch of them to the venue presenter a few weeks in advance, you can get timely promotion in spots where the presenter knows the audience already tends to look.

Local Press: There are small local or college papers that will sometimes provide publicity (either a feature article or perhaps a CD review with gig notice), if you develop a relationship with them beforehand. Even if you don't get press the first time, once in a while you can get a follow-up review, or get the editorial person to attend the gig, or at least take notice for the next time around.

Whatever press you do get is always more valuable to readers if they can act on the information -- and in the grass roots, the gig is generally what they act on. CD direct-order info is not unheard of, or a URL to a web site for further info these days, but the gig is usually the thing that triggers it all. If you have consignment at a local retail store, and can get that info into the press, even better. But without the gig, the press won't happen. Without the gig, pretty much nothing happens.

To be sure, majors will do similar things in conjunction with large tours, and this is a part of the "tour support" expense. And they do these things on a much larger scale, with national radio promotion and distribution that translates into national press, etc. But the nation-wide strategy is not easily available to the grass roots artist for retail CDs.

That makes a big difference, because CDs are the one musical product an act has to sell that is mass-producible, and thus has the potential for higher profits (economists call this "higher productivity").

Things like T-shirts may add to it, while we're at it, because they can sell alongside the CDs with a higher profit margin. If the act develops any chic appeal, this can be profitable, but until the act reaches that tipping point, merchandise won't be as popular, and can actually lose money if used too much as free promotion. Either way, they are attached to the gigs as the main point of sale or promotion.

The gig is the lifeblood of the grass roots artist.

Without the gigs, nothing else falls into place. They don't necessarily support the artist all by themselves with performance fees, but they trigger the entire variety of revenue that the artist will collect, as well as the promotion that draws the audience. Then, CDs substantially enhance the earning power of those gigs.

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