Tag Archives: Merchandise

Want To Make $50,000 a Year In Music? Start With One Dollar a Day. BY: CHRIS SETH JACKSON

Photo by Glen Edelson

A big part of my blog, How To Run A Band, is to figure out how to actually make money with music. However, I’ve been talking about giving music away for free, buying fancy tablets, and paying for web hosting. If you look at my “financials” page, you’ll notice a downward trend in money for my guinea pig band Shiplosion.

How does a musician make money? Honestly, I don’t know for certain. But, I think I have a couple of ideas. However, these ideas are based more on the individual musician, and not the band as a whole. Why? The individual can make more money and have more control over their finances than an entire band.

Start Earning One Dollar A Day

Photo by rychlepozicky.com

Every day, grab an acoustic guitar and head down to the street corner. Start playing songs and singing with the case open to take tips. Don’t stop until you have at least one dollar.

There you go. $365 for the year.

Are you a drummer? Grab some drums and set up shop on that street corner. I’ve seen kids playing with buckets busking for money. There’s no reason a drummer with a minimal drum kit can’t do the same. (Even though we all know drummers are “special”…)

“$365 a year? That sucks!”, you say.

Yep, that does suck. But that’s $365 more a year than you were previously earning. Being in a band over a 6 year period, I’ve lost way more than $365. Busking every day will earn you more than my band that was playing multiple cities in multiple states 3 days a week for 6 years.

But earning a dollar a day is not the end goal. Once you can successfully earn one dollar a day, how much effort will it take to get to $2 a day? Maybe busk at one additional location? Do some cover tunes? Play for 30 more minutes?

“But I feel like a hippy dumbass. Isn’t this for homeless drug users and not the awesome caliber of musician that I am?”, you ask. (Okay, I asked but pretended it was you.)

If you don’t feel comfortable doing something, don’t do it. However, there’s money on the table that you are ignoring. If you are on tour, busking could be the deciding factor for being able to afford dinner or gas money. Or, more importantly, beer money.

Busking also gives you the coldest, most disinterested crowd on Earth. What better way to learn how to be positive and entertaining regardless of the situation? And if you think you are too great of a musician to resort to busking, I’d say it’s about time you learned some humility. If you’re not completely self-sufficient as a musician, there is plenty of humility yet to be had.

Sweeten The Deal

Photo by Clyde RobinsonYou are now comfortably earning a couple of dollars a day. Now it’s time to turn it up a notch. Create an acoustic CD to sell with your busking.

Don’t go crazy on this. In fact, I’d argue you record, mix, and master it yourself. As cheaply as possible. Your busking isn’t your main musical career, but an additional revenue source. Use CDBaby to print out a limited run of CDs.

With the addition of CD sales, you are now making $5 to $10 a day. You also have an extra CD to add to the merch booth of your main band.

See the pattern?

Start small and constantly add value and content. Don’t overlook small price points. 25 cents from a few thousand people adds up. There is no purchase too small.

Do it every day. Daily. Every day is an opportunity. It’s yours to have or not.

YouTube Busking

Photo by codenamecueballPhysically busking in one area is limited to only that one city and the people only walking by at that particular time. YouTube is global and timeless. Record yourself playing your music daily and throw it out to the world on YouTube. Hell, record yourself while you’re busking on the street.

At the end of your YouTube busking, add a call to action. Give a link to your website and ask for 25 cents. On your site, provide people a way to donate a small amount of money to you. PayPal has options for micro transactions. Use it! The good ol’ long tail theory could net you a bit of cash over the life of this YouTube post.

On top of the daily busking, this additional outlet “could” provide additional revenue. It’s not guaranteed it will, though, so be prepared. However, make your videos interesting enough, you can gain a large following. At that point, you can become a “YouTube Partner” and earn money through ads.

Breaking Down The Numbers

So, doing the above, you’re going to be earning about $5 to $10 a day. You’re going to bitch and whine that that’s impossible to live off of. What you’re not realizing is that I just taught you how to make around $1825 to $3650 extra a year on your music.

It’s not glamorous. It’s not sexy. But it’s money in your pocket.

But, I know you are not satisfied. You want to quit your job. I’m with you on this. I wish I could quit mine. I’m not there yet. However, we need to know the numbers that we need to achieve to quit our day jobs. For me, I’d like $50,000 a year. I’ll use this number to calculate what it would take to be a financially independent musician.

$50,000 divided by 365 days = $137 a day.

That’s it. Earn $137 a day, and you can quit your day job. You are a fraction of the way there using the above techniques, but you will definitely need more money per day to accomplish this task. This figure shows why you can’t entirely rely on your band by itself to generate the income you need.

Your Band Won’t Make The Dough

This point I know you will rail against. “My band will make it! We will become famous.” That’s your ego talking and not your brain. Your band will most likely, by itself, not produce the money you need to get by.

WhiteI was following one of the members of GWAR on Twitter. I was surprised to find that he is a bartender after the GWAR tours end. GWAR packs an awesome crowd at venues and has been doing so for 25 years. Still…bartender. One of his tweets was “I always wanted to be rich and famous. I have one of the two.”

Here’s the breakdown. Let’s say your band plays every weekend, twice a week. That’s 104 shows a year. For you, personally, to make $50,000 a year, you’d need to make $481 a show. Now add your band mates that also want to make $50,000 a year. Total, the band would need to make $1924 a show. Yikes!

Even if you played every day of the year, your band would need to profit $548 per show for everyone to get paid. For every additional person in your band, that is another multiplier to the base salary and profit considerations. That 8 piece Ska band doesn’t sound so thrilling now, does it?

The point is, relying solely on your band to make you a financially independent musician is not feasible. The band is just one more revenue source for you. You need multiple, musical revenue sources to get where you need to be.

You Are Your Own Income Stream

On nights your band isn’t playing, you could hit up open mic nights. Bring your CDs along. Perform and sell. Give lessons for your instrument. I think the going rate for a half hour lesson is about $30. Giving a lesson a day at this price will get you over $10,000 a year. Add the busking, and you are approaching $14,000 a year.

Exclusive Merchandise

Instead of all this daily working, what if you had some merchandise to sell that could do the trick? Easy. Get 365 avid fans. For them, make 365 items that cost $137. These items should be limited edition and never, ever hit the market again. There’s your $50,000.

Fan Base

Or, in the above example, just get 365 fans that are willing to pay $137 on you over the course of a year. Expand that to the popular 1000 True Fans model, and you would need to have each fan pay $50 a year. Do you have $50 worth of content, merchandise, or shows for the year?

This is why growing your e-mail list and treating e-mail like money is so important. Giving away a free CD for an e-mail can net you a positive income flow over a few year period. That network of fans can give you what you need to be successful. If you can grow that e-mail list to 50,000 people, all you would need is $1 a year from each person to quit that day job.

Exhaust All Possibilities

Busking. YouTubing. Lessons. What else can you do? Guitar tabs for 99 cents. Adsense for your free songs. PayPal donations.

What else? Do you have ideas on what can generate money on a daily basis? I think my ideas above could get an artist up to $10,000 a year. What would push it to $50,000?

SOURCE:
Want To Make $50,000 a Year In Music? Start With One Dollar a Day.

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Tour Merchandise Deals: Eight Important Clauses By Heather McDonald

It may not surprise you to know that tour merchandise (like concert t-shirts and stickers) are a significant source of income for many musicians, but what may shock you if you’re from an indie background is how complex tour merchandise deals can become. Instead of having a friend sell your t-shirts at the merch table in the back of club, major tours involve large music merchandising companies that license your band’s name and likeness and produce and sell your stuff, paying you a royalty. Merch deals can be like record label deals, but there are some important differences. Here’s a look a the major points in tour merchandise deals.

1. Tour Merchandise Royalties

Of course, the royalty you’ll be paid by the tour merchandise for selling goods featuring your name, face, album names, logos, artwork and so on is one of the most important points of any merch deal. There are two ways tour merch royalties can be calculated: percentage and splits.

With percentage deals, the musician simply gets a pre-determined percentage of gross sales of their goods. Gross sales usually mean sales minus any taxes and credit card fees paid by the merch manufacturers. In the US, musicians tend to get royalties in the 30% to 35% range, though it can vary, as do foreign royalties (which are usually a bit less than the US rate). If you receive a percentage for your royalties, you can sometimes work a provision into the contract that your royalty rate increase as you reach certain sales thresholds.

Profit splits are usually based on NET sales – so the merch company deducts all of their expenses from the sales income and then splits what is left with the musician at a pre-determined rate – often 85/15 (in the musician’s favor), though again, these rates can vary. Profits splits are common in foreign royalty deals as well as deals for stadium shows and festivals. Additionally, concert bills/programs are nearly always sold on a split, even if the rest of your merch is sold under a percentage deal.

Note that if you opt to have any merch that requires an the merch company to bring in an outside designer (like a jacket specially designed by a well known name in fashion), your royalty rate will be lower on these items than the rest of the merch. Why? Because the merch company has to bear the cost of the outside designer, and the lower royalty rate is their way of recouping the costs.

2. Tour Merchandise Advances

Yes, like a record deal, you DO get an advance on a tour merchandising deal. Before you get excited, you should know that the terms are much worse than record deal advances. Why? Because tour merch advances are usually recoupable by the merch company – meaning you could be on the hook to pay back the advance.

There are a number of circumstances that can put you in the unfortunate position of repaying your merch advance, but most of them are tied to you not touring within the time frame specified in your contract or not playing to audiences of the sizes expected when your deal was signed (we’ll get to performance minimums later, which is closely tied to this). If you decide you want out of the contract, you will have to pay back your advance with interest.

Advances vary in sized depending on your bargaining power, the length of your tour and the size of the venues/size of your fanbase.

Most tour merch advances are paid over the course of your tour, to help you meet your costs and to stop payment if you are failing to meet the terms set out in your contract. You’ll get a lump at the start and the end with one or two payments in the middle.

Your contract should state the amount of your advance and the terms of the advance clearly.

3. Terms

The term of your deal is the length of your deal. For tour merch, you are usually tied down for one album cycle or until your advance has been repaid – whichever is LONGER. Technically speaking, that means if you repay your advance but never release another album, you’re under contract with a tour merch company forever. A good lawyer can help you negotiate exit strategies from the contract, but make sure you are very clear about where the finish line is, or you’ll be stuck with a merch deal for a very long time to come.

4. Hall Fees

Once you get off the bar circuit, you’ll find that many venues charge a percentage of profits for letting you sell your merch in their place – these are called hall fees. Agents negotiate hall fees with the venue when they book your tour, but tour merchandising companies usually put a cap on the hall fees they are willing to pay (often around 30% or so). If your agent negotiates a hall fee that is more than the cap your merch company set, they take the difference out of your royalties.

5. Performance Minimums

Basically, the performance minimum is the number of people that must attend each show to make you compliant with your tour merch deal. Where does the tour merch company get off telling you how many people need to be at your shows? Because the number of people through the door determines how much merch they can sell – more people, more merch sales. Tour merch deals usually measure this in how much they expect to sell “per head” – what is the average spend at the merch stand of each person through the door?

Merch companies don’t count every attendee at a show as counting towards your performance minimum. For instance, no one on your guest list counts. They also count people differently at different venues. Stadium shows are counted most harshly. Even though more people go to stadium shows, they tend to spend less, since they may attract casual fans who aren’t interested in buying anything. Some merch companies try not to count stadium shows towards your deal AT ALL, though a better compromise can usually be reached during the negotiation stage. Remember that falling before your performance minimum can trigger repayment of your advance, so be sure the numbers are realistic before you sign a deal.

6. Artwork Approval

Your deal should specify if (and how and when) you will get to approve the merch thecompany/designer is producing for your shows. Even up and coming artists with little touring track record can get full creative control in merch deals.

7. Exclusivity

You can’t have a deal with two tour manufacturers at the same time, of course. Where exclusivity gets tricky is when you have a separate deal for retail merch and/or your label is planning some kind of merchandise promotion at your show. It is common for merch deals to exclude you from selling any merch within 48 hours of the show within two miles of your venue. You need to make sure that this clause leaves retail stores out of the equation, since you can’t control where a record store selling merch is located in relation to the venue.

Record label promotions, such as a concert shirt giveaway by the local radio station set up by the label, should also be allowed in your contract. However, the tour merch company can – and will – limit the amount of merch you or your label can give away for free before a show.

8. Selling Leftovers

What happens if you don’t sell everything the tour company produces during your tour? The merch company will try to sell it off. You have the right to limit where they can sell the merch and for how much. Your contract should provide you an opportunity to buy the leftover goods at cost plus a small markup (though be sure the contract doesn’t say you HAVE to buy it).

If you don’t want it, the merch company usually reserves the right to try to sell your good (often to a retail store) for up to six months after your tour ends. However, they can’t sell your goods at a cut price. They also can’t purposely manufacture more than you reasonably could have expected to sell on tour just so they have some leftover after the shows end, nor can they make new goods after the shows end. Further, their sell off of your merch should be on a non-exclusive basis, as long as the other terms of your deal have been met, so you are free to make new merch deals.

SOURCE:
Tour Merchandise Deals: Eight Important Clauses


How do I get my record in the stores? By: Mike King

Hi. This answer is based on an article I wrote called ‘How To Get Your CD On (and Back Off!) The Shelves.’ The complete article can be found in the marketing section of the site. You’ll also find an interview with Eric Levin, who runs the independent retail coalition AIMS, as well as the successful Atlanta-based retailer Criminal Records. You may want to check that interview out as well for more on consignment and other options to get your CD in stores.

Finding The Right Retailer

To quote George W. Bush, “It’s hard work” getting your record into stores. For starters, independent retailers are taking a beating from the mass merchants. These ‘Big Box’ chains often offer sale pricing on new artist releases (as low as $7.99!) that independents simply cannot match (more on this subject here:http://www.pitchforkmedia.com/news/06-02/23.shtml). CD sales are slowing, and the mom and pops that have not augmented their CD sales with DVDs, t-shirts, or other tchotchkes are having a really hard time. This, of course, all trickles down to you: independents are taking less of a chance on local talent. Save yourself some time, effort, and money by focusing your efforts on stores that tend to do well with your style of music. I don’t know if you’ve seen High Fidelity (recommended, if you haven’t), but the last thing you want to be doing if your band sounds like Belle and Sebastian is hassle a record store that is run by Jack Black. If the store is nearby, drop in, check out the vibe, see what’s playing when you walk in, talk to the manager, and ask what the best selling records are that week. A lot of indies have email newsletters (Other Music in NYC has a great newsletter, so does Criminal Records in Atlanta) that will give you a good understanding of their demographic and what they are good at selling. Before you do anything, be sure that you set your sites on a store that attracts the type of folks that might like your music.

What Retailers Look For From You

The record industry is truly a symbiotic industry. For a project to be successful, all the marketing elements have to compliment one another, from touring, press, radio, Internet, all the way down to retail – the last stop on the line between marketing and the consumer. This is fundamentally true for big artists and independent artists alike. However, labels and major distributors often use the ‘push through’ marketing strategy at retail: flooding retailers with CDs, discounts, and using large co-op budgets for price and positioning. They spend less time on artist development and actually turning people onto the music before they get to the store. This rarely works anymore for labels and distributors, and will certainly not work for an independent artist who doesn’t have the luxury of a co-op budget. Before you get your CD to the retailer, you need to have the other parts humming. If all your other marketing elements are in place, you’ll have an easier time convincing the manager or buyer to take your CD, and more importantly, you’ll have an easier time selling the disc, which will make the retailer want to buy form you again.

Marketing Elements That Affect Retail

Any successful marketing that you can point out to the store buyer is important, and will make a difference in their decision of if, and how many, records they take from you. But there are some marketing tactics you can use that make a bigger impact than others.

Touring There is no better way to get yourself visibility and develop a word-of-mouth ‘campaign’ then to get out there and play. On a local level, consistent gigs prove to the retailer that you are a serious band and have a fairly good following of potential record buyers. On a national level, it makes good sense for the local indie to carry your record in advance of a gig, with the hopes that folks from the gig will be so into your music that they’ll stop by the store to grab your disc.

Press – Print and Online Another thing that retailers look for is a press story. It’s great if someone gives you a positive gig review in the local weekly, but sometimes it’s even better if you’re reviewed online. One great example is the band Clap Your Hands Say Yeah, who blew up at traditional retail, without a label or distribution deal, after a number of blog postings and a positive review on Pitchforkmedia.com (check out the NPR story on them here: http://www.npr.org/templates/story/story.php?storyId=5023133).

Radio Personally, I have mixed thoughts about radio promotion (for developing artists) and the connection to retail, especially given the limited resources that independent musicians have. While I think it’s never a bad idea for an artist to play an in-studio performance if presented with the opportunity, I think the immediate connection to retail is less than good press or solid tour dates. There are arguments to be made that getting college radio play helps to build your base, which may be true, but I have never seen this affect retail. One band I worked with at Ryko was getting constant play on a major college station in Atlanta, GA (WRAS), and while there’s a great indie store in Atlanta (Criminal Records) the consumers never made the retail connection. There are certainly a lot of other marketing efforts that did not connect in Atlanta, but with the one that did, I saw little results.

Maximizing the Relationship

Once you’ve go your marketing in place and have convinced the buyer to sell some of your discs on consignment (which is the standard way indies will sell your CD), the next step is to work on ways to get folks to: A) know that your record is there, and B) buy it.

Point of Purchase Items (POP) Most indie stores are great about working with you to increase your visibility in their store. Point of purchase items are an obvious way to let folks know the store is carrying your record. Some effective ways to promote your record in store include:

A) Tour posters. If your playing a gig nearby, a tour poster with your club date on it let’s folks know your playing nearby, and that the store is carrying your record. Space is always an issue with posters, be sure to make them relatively small (11x 17 is plenty big).

B) In-store copies. While there may be listening posts at the store, more than likely you’ll have to pay to get your record in them (there are sometimes discretionary spots available at some stores). By sending a couple of in-store copies of your record to a manager or buyer that digs your band is a great way to some added visibility.

C) In-Store Performance. If an in-store performance is promoted properly, there is no better way to sell records of your band on the spot. Conversely, in-stores that are promoted poorly could be embarrassing disasters. Be sure to schedule your in-store at a time of day when folks are around, say 6PM on a Friday as a best-case example. Indies may also help you promote the gig through an ad in the local weekly.

D) Placement and Bin Card. This is really important and frequently overlooked. I don’t know about you, but I tend to lose my mind when I walk into a record store and forget the reason I originally stopped in. Be sure to speak with the buyer or manager to either create a bin card with your band’s name, or suggest that you make one yourself. You need all the visibility you can get, and if someone is in there looking for your CD, you want to make it as easy as possible for someone to find it. Being filed in with the general artist A-Z is the kiss of death.

E) Competitive pricing. Be sure to price your CD low! Again, you are likely going to be working out a consignment deal with the retailer, and you don’t want your CD in there over $10.

SOURCE:
How do I get my record in the stores?  


MC Lars: How An Indie Rap Artist Makes A Living [CHART] by Bruce Houghton / Hypebot

MC Lars: How An Indie Rap Artist Makes A Living [CHART]

 

image from images2.mtv.com

MC Lars beleives in giving his music away free. “In 2006, I read a book by Berklee College of Music professor David Kusek (and Gerd Leonhard), The Future of Music,” wroteLars. “He described a “music as water” paradigm that has come to fruition in 2012 with cloud services… Since then, I’ve been an advocate of free downloading and streaming.”

“What this means then is that in order for artists like me to survive, I must be creative with how I let people hear my music,” he wrote in the Huffington Post.  “47% of my income comes from merchandise, 40% from ticket sales, and13% comes from iTunes, Spotify or other paid music services through the internet. I used a crowdsourced funding site called Kickstarter to produce my last album, with added bonuses of drawings and personalized songs to the highest contributors.”

image from i.huffpost.com

 
Being a musician no longer means simply being a songwriter and performer. One must also know a little bit about business, branding, t-shirt design, social networking, production, publicity, accounting and tour managing.”

SOURCE:
MC Lars: How An Indie Rap Artist Makes A Living [CHART]

 


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