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Connect Feature MEME

Connect Fundamental FlawThe biggest fundamental flaw of the OLD AND NEW music business is that the creators and/or owners of the creations have no freaking idea who their customers are.

 

(Pssst, you’re the creator).

 

 

Yes, they have demographics, but they don’t have their contact information so they don’t REALLY know who they are exactly. It also means they can only reach out via mass media like TV and Terrestrial Radio.

 

Which costs millions.

But nobody is listening to the radio and certainly, nobody is watching music videos on TV anymore. Not like they used to.

 

Connect Mass Media MEME

 

 

Therefore, record sales suck.

 

Therefore, few new superstars are being created.

 

 

 

 

Half the artists who were in the top 10 grossing tours of 2016 were over 55-years-old because the market is largely unaware of the new talent. This is because nobody is listening to radio and watching videos on TV.

 

It’s also because the new artists aren’t trying to connect with their fans. They want to be rockstars like their heroes.

 

The world would be VASTLY different for indies, signed artists, and labels if they would stop “doing what they’ve always done” and expecting different results.

 

Connect Crazy MEME 2

 

 

Ahem, that’s the very definition of crazy.

 

 

 

 

Let me tell you a crazy story.

 

QUESTION: For decades and decades the richest people in Texas were in what industry exactly?

 

If you guessed the oil business, you’d be correct! The richest oil families in Texas are multi-billionaires and have been for quite some time.

 

Connect Oil TREATEDBack in the early to mid 90’s a now famous Texan decided to build a widget. He spent the money to hire the team to design the widget. He spent more money prototyping that widget to work out the kinks and get it functioning properly. He spent more money leasing the manufacturing space, hiring the manufacturing experts, purchasing the manufacturing equipment, and the necessary components to put that widget into mass production. Then he spent a literal fortune promoting that creation to ensure he was systematically penetrating the minds of consumers.

 

 

 

He created the product then he created the demand for the product.

Connect Texan

 

 

 

 

 

But this future-shaping, trend-setting Texan did one super important thing different.

 

 

You see, for centuries all the widget makers, that is to say all the creators, sold their creations through distribution. Typically, a creator would sell their product for half price to the distributor. Then, the distributor marks up the price to the full market value so they can make their profit. But these distributors don’t actually create anything. That was how it always worked if you wanted to sell anything. Clothing makers sold Connect Distributor Collagethrough huge distributors like Macy’s and Nordstrom’s.  Toys were sold through distributors like K-Mart, Target, and Toys-R-Us. Automakers sold through local privately-owned dealerships. Electronic parts makers sold their parts to original equipment manufacturers via huge multi-hundred-million-dollar publicly traded distribution companies. Airline and Cruise companies needed local travel agents to distribute their services. Farms and food companies sold their products to brick and mortar local grocery distribution companies like Kroger.

 

But our famous Texan was asking the right questions.

 

 

Why was it worth selling your product to a distributor for half the market value anymore?

 

What exactly did a distributor bring to the table thatConnect Distributor Valuable MEME 2 made it worth letting them stick their hands that far down the creator’s pocket?

 

Answer: A relationship with the customer. For some it was a relationship with millions of customers which made for some very powerful and profitable distributors.

 

They knew the end-users!

 

Back in the day, if your creation wasn’t in distribution you didn’t sell anything, period. So, it was mission critical. It was the way our fathers did it, and their fathers did it, and their fathers and so on.

 

That’s a super tough nut to crack, you know. All that history.

 

But our Texan didn’t want to sell his $1,000 widget to a distributor for $500. He felt that if he was the one smart enough to create the widget and courageous enough to take the risk of designing, prototyping, manufacturing, and marketing the product he should get 100% of the money for it!

 

Seems fair.

Connect 100 Percent of the Money MEMEPlus, distributors show exactly zero brand love. Macy’s is just as happy to sell a customer Wrangler jeans over Levi’s. They don’t care what you buy, they just want you to buy!

 

 

 

 

But there was another way.

 

A way to bypass the distributor now because we had this new thing called the internet. (I feel like you should say that line in Dr. Evil’s voice using your fingers as air quotes; In-ter-net).

 

Connect Dr Evil

 

 

The internet would allow a creator who formerly had to pay big money to advertise via mass media (like darts in the dark if you ask me considering today’s alternatives) to connect and create a relationship with their customer.

 

 

 

 

Think about that.

 

That creator could have complete control over their customer’s experience.

 

That creator could become profitable faster because they’d have to sell half as many products to make the same amount of money that they would collect via distribution.

 

CONNECT Dell Computer Logo

 

You’ve probably figured out that our mystery genius is Michael Dell of Austin, TX. He became the first computer manufacturer to utilize the internet as a tool to create a direct relationship with the end-user/customer that he worked so hard and paid so much to reach.

 

 

 

 

His plan worked because within 7 years, Dell became the richest man in Texas.

 

That was in the late 90’s and early 2,000’s.

 

As of last year, according to Forbes Magazine, Michael Dell is worth 19.1 billion dollars. The nearest oil family is worth a paltry 8.9 billion. Poor babies.

 

Connect Michael Dell Forbes

That tells me the plan REALLY worked.

 

But the story doesn’t end there because Dell changed the world.

 

 

 

 

For decades if you were an electronic component manufacturer and your components were in an Apple product, you HAD to go through distribution because they had a relationship with your end-user that you couldn’t have. So, you sold your $1 diode for .50 cents and made money in the massive amounts of volume.

 

But after Dell Computer, you built a website and the engineers at Apple could contact you directly about questions, feedback, new products, ideas, etc. Little by little over the following 15 years the parts companies refused to renegotiate their distribution contracts because they didn’t need them anymore. They now possessed the one thing they used to pay the distributor for; a relationship with Apple (aka their end user). As a result, those multi-hundred-million-dollar-publicly-traded distribution companies imploded over time.

 

Connect Intel Logo

All gone.

 

All the local travel agencies vanished seemingly overnight.

 

Now consumers could access cruise lines and airline companies directly to purchase tickets without paying a commission because they didn’t need the travel agent anymore.

 

 

Did you notice how quickly the brand name outlet malls popped up around America? Companies like Levis, Coach, Hilfiger, Reebok, etc. couldn’t sell direct on their own but they damn sure could if they clustered with the other brand names and gave consumers a beehive of multiple brand names which sold their products discounted prices from the distributors.

 

Connect Outlet MallsCompanies that didn’t adapt like K-Mart and Sears fell into crippling debt.

 

How about the auto industry? GM purchased back tons of once privately owned dealerships because the consumers were only coming on the car lot to test drive the vehicle they wanted to purchase. The consumers didn’t need the salesmen for knowledge. Shockingly, consumers were literally more educated on the product than the salesman when it came to options on the vehicles. Why? Because the end user could research the product directly on the manufacturer’s website.

 

Wow.

 

Mind Blown.

 

It all happened because one really smart guy was able to adapt in a changing environment.

 

One clever person was asking the right questions even though he didn’t have all the answers yet.

Connect Adapt MEME

 

QUESTION: What does Spotify, Pandora, and iTunes have that the labels, signed artists, and indie artists don’t have?

 

ANSWER: A relationship with their customers.

 

 

 

Which is a relationship with the label’s customers.

 

Also a relationship with your customers.

 

The labels aren’t adapting because distribution is always how they’ve done it. Just like all those other computer companies back in the late 90’s.

 

Make sense, right?

 

Which means these distributors have tons of information on these customers that would help artists and labels make more money.

 

But they won’t share that information with labels and artists.

 

Connect They Wont Share

 

Why won’t they share that information with you, the signed artists, and the labels?

 

Because the second they do, they would become irrelevant, just like travel agents.

 

Wow.

 

I wonder how the world will change after artists, labels, managers, and publishers open their eyes like Michael Dell and take total control of our precious creations?

 

 

 

Stay

 

In

 

Tune.

 

 

If you liked this article, please LIKE and SHARE it right now.

Flaws Gun Pointing

The record business is rife with fatal flaws. Even in the heyday there were huge mistakes constantly made by major record labels and those flaws are showing big time Flaws Flawed eggin the new music industry.

 

 If you ask any CEO from any company in any industry on any part of this planet what their most valuable asset is, they will tell you it’s their customer list.

 

 

Yes, their people are important but you can’t pay good people without cash flow from customers.

Yes, their intellectual property is hugely important, but you can’t monetize intellectual property without customers.

 

Maybe you’re a fan of Chevy, Ford, Toyota, Dodge, Porsche, BMW, etc.flaws automakers

From the perspective of the CEO’s of any company, you are a customer, maybe even a loyal customer.

 

Artist “fans” are called “customers” in every other business.

 

Get it?

Businesses go to GREAT lengths not only to build and maintain customer lists but also to DEEPEN the relationships with those customers.

Think about your Kroger or Ralph’s (grocery store) discount card.  They offer discounts in exchange for information on your buying habits.

 

flaws discount card

They KNOW if you like 1% milk or 2% milk.

They KNOW what kind of beer you like.

 

They KNOW when you prefer to shop, how much you normally spend, and what products you normally spend your money on.

 

Now, if we put a gun to Tim McGraw’s head, Katy Perry’s head, AC/DC’s heads, Jay-Z’s head, or Daft Punk’s helmets, they couldn’t tell us who’s buying their music.

The fatal flaw is they don’t know who their customers are!

 

If you don’t have a customer list, not only is it impossible to identify who the customers are, you certainly can’t contact them.

 

If you cannot directly contact the customers, you have to spend MILLIONS of dollars on what they call “Branding Campaigns” (that’s super expensive advertising in plain English).

Branding Campaigns put an artist everywhere there is to be for a few weeks at a time to plug the new release and continue to promote it.

 

People, Us, Vanity Fair, Country Weekly, Taste of Country, blogs, nationwide radio, Letterman, Fallon, Ellen, Seth Meyers, GMA, Today Show, Newspapers, blah, blah, blah.

 

But what of the artists who don’t have million dollar budgets?

 

DSC_5393

What about the artist you USED to have million dollar budgets?

 

Even with a million dollar brand name (think any former major label artists who no longer have a major label) the sales will suffer simply because the customers don’t know the product is available.

What if there was a way to “capture” contact information that would become a customer list?

 

An artist with an active customer list could:

  • Deepen relationships with customers creating a tribe-like following.flaws iceberg
  • Offer exclusive content to make customers feel like they’re “in-crowd”.
  • Monetize it by changing to a subscribership business model (think Netflix).
  • Inform the customers of new content on YouTube and grow the subscribership.
  • Then Monetize YouTube (creating another cash register).
  • Inform the customers of any contests the artist is having.
  • Inform the customers of upcoming concerts.
  • Disseminate any images or content offering social proof of awesomeness.
  • Cross promote other artists
  • Obtain Corporate Sponsorships
  • Monetize it through sales on the artist’s web store.

Some of you hate this idea but I’ll bet if you were famous you would at least entertain the idea of a clothing line, or perfume scent wouldn’t you?

The tremendous power that direct customer contact will bring to an artist was demonstrated quite clearly by Taylor Swift in 2014.

flaws taylor swift 1989

 

We have probably the biggest superstar on the planet who released a new record but she switched genres.

 

Yeah, yeah some will argue that Taylor Swift was never really “country” but the point is that all Taylor’s previous records were promoted on Country Radio and “1989” wasn’t.

 

 

Country radio felt that Taylor abandoned country music and moved WAY too far into the pop world and therefore refused to promote it by spinning her new singles.

Come to think of it, in Nashville, I haven’t heard ANY Taylor Swift songs on country radio for quite some time which is crazy considering they are continuing to spin every single ever put out by her country peers like Tim McGraw, Kenny Chesney, Carrie Underwood, etc.

Here’s the point, she still had the bestselling record of 2014.flaws social media nails

 

This was true because her fans KNEW the record was coming via her social media.  This is huge because while I’m sure most of you are plugging away at your social media, “Swifties” feel like they have a special connection with Taylor.

 

That’s the key.

 

Don’t fool yourself on the power of her superstardom either, it was the connection.

 

Want proof?

 

George Michael was a superstar stadium act that had sold 25 million albums and 15 million singles with Wham! before he ever got his solo deal with Columbia.  His first solo release was “Faith” which sold a whopping 25 million copies. In September of 1990 George released his 2nd solo effort entitled “Listen Without Prejudice Vol. 1” (arguably considered his artistic masterpiece).

flaws george michael

 

 

George was sour at the fact that the Sony Corporation had purchased CBS records. He tried to exercise a “Key Man Clause” in his contract once artist beloved CBS Records President Walter Yetnikoff was replaced with Tommy Mattola in 1990.  Tommy took that action personally and detested George’s artistic refusal to appear in any videos to promote the record. As a result, Sony chose not to promote “Listen Without Prejudice Vol. 1” and it sold a disappointing 8 million units.

What would have happened if George had been able to contact his 25 million customers?

 

Want to know how you capture this information?

 

There are 2 primary ways (depending on the age of your audience) that you can capture customer contact data and begin to build your list.

1 way is called a “Squeeze Page”. flaws_Twitter_Squeeze_Page

A squeeze page is designed to “squeeze” the contact information out of a potential customer (usually a name and email address) while allowing the customer to “opt in” to email driven marketing initiatives.

The idea is you offer what my friend Rick Barker calls an “ethical bribe” by exchanging a free track(s) for the contact information.

I mean, you need to know where to send the customer’s free track right?

 

Here are a few links to some squeeze pages we have created at Daredevil Production, LLC. I recommend you experience some of these as a consumer. You can always UNSUBSCRIBE at the bottom of each email address if you want.

  • GiftFromJohnny.com (this is to a free download of my bestselling Twitter Book which you are welcome to have if you don’t already own it)Flaws_Ty_Herndon_Squeeze_Page
  • GiftFromTy.com (this is a free track from Platinum country artist Ty Herndon)

 

 

While there is an art to structuring a squeeze page that will optimize conversions, it can totally be mastered.  Check out companies like Lead Pages to help you capture that info and store it.  (If you have any problems, simply give us a flaws lead pagescall and we are happy to help you set up your own squeeze page.)

 

 

 

A second methodology which is extremely effective for younger audiences (not so much for audiences over 50) is the text capture methodology.flaws call loop logo

Check out companies like Call Loop. They offer the ability for your customers to text a “key word” and receive instant downloads of your music.

Now you have their phone number.

 

Text messages have a 99% open rate.iphones

 

Whoa.

So imagine you’re playing a live show and you own the crowd. From the stage you instruct everyone to “Raise their phones in the air for a FREE track!” and just like that you get 50 phone numbers.

 

Did you rock the house?

 

Did you leave your audience wanting more?

 

Does your show feel like an event?

 

Would they LOVE a text from you 1 week before your next show?Flaws no fatal flaws

 

I’ll bet they would.

 

As an independent artist, you can avoid fatal flaws.

 

Stay In Tune.

 

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