Facebook Messenger Bots and Custom SMS Apps.
Not the best headline perhaps but let’s talk about why they have caught the attention of some of the biggest names in the music industry: 50 Cent, Aerosmith, Hardwell, Olly Murs, Axwell /\ Ingrosso, and Bastille, to name a few.
Before we dive in, I want to share a quick story. Last year, I went to a house concert in Knoxville, Tennessee, and after the set, I went up to the lead singer.
As we were making small talk, I asked what I thought was a casual question about the music industry: “What’s working right now?” She stared at me for a second before responding, “I don’t know.” Her lack of clarity isn’t peculiar. In fact, after hundreds of conversations with musicians over the last three years, that answer is the one I hear more often than not.
The emotional overtones range from cautious optimism–“I don’t know, but I believe we will eventually figure it out”–to determination–“I don’t know but I’ve come too far to give up–to anger–“I don’t know, and I’m pissed that I have invested so much of my life and have so little to show for it.”
I try to offer a compliment or word of encouragement, and find something on the merch table to buy. I hope small kindnesses will sustain them on the road ahead.
Back to the question at hand: What is working right now?
Is there another industry in the world that can match the music industry’s complexity and confusion about itself? Probably not. And when you are trying to thrive in a complex ecosystem, it’s smart to get back to the basics.
My Closeup.fm co-founder Nathan and I talk a lot about Kevin Kelly’s article “1,000 True Fans.” Some of you are already rolling your eyes, but I hope you’ll hear me out.
Here’s the key excerpt:
Here’s how the math works. You need to meet two criteria. First, you have to create enough each year that you can earn, on average, $100 profit from each true fan. That is easier to do in some arts and businesses than others, but it is a good creative challenge in every area because it is always easier and better to give your existing customers more, than it is to find new fans.
Second, you must have a direct relationship with your fans. That is, they must pay you directly. You get to keep all of their support, unlike the small percent of their fees you might get from a music label, publisher, studio, retailer, or other intermediate. If you keep the full $100 of each true fan, then you need only 1,000 of them to earn $100,000 per year. That’s a living for most folks.
You must build direct relationship with your fans.
When you stop and think about how easy it is to transfer money these days with Snapchat, Square, Facebook, Paypal, or Apple Pay, doesn’t it become clear that indirect payment is one of the most thorny problems in the entertainment industry?
You’re dealing with large, inefficient corporations who stand to make more money by sitting on profit shares owed to artists. Those payment schedules of Net-60, Net-90, and Net-180 certainly don’t happen by accident.
Six months later, you’re still waiting to receive the money you earned. And weird delays or contractual disputes can push back payday even more. No wonder it’s hard to make ends meet! The money must pass through too many hands before a small percentage finally shows up in your bank account.
Some of those hands belong to people who create value for you and your career. Some belong to people who don’t give two craps about you.
Be that as it may, you can wrest some control out of those hands by establishing direct relationships with your hands.
But you may need a paradigm shift.
Companies like Patreon, Kickstarter, PledgeMusic, and NoiseTrade have created some really cool opportunities in that regard.
We have the technology. Now we need the paradigm shift to go with it.
Let’s quickly revisit Kelly’s math: “If you were to get $100 in profit from each loyal fan, you only need 1,000 loyal fans to make $100,000.”
I know it’s not cool to focus overly much on money. It’s all about the music and the art, right?
Yet money is the elephant in the room. We think about it all the time because we need it to live. We need rent money, gas money, food money, single-origin Ethiopian varietal pour-over money.
What’s working right now? Earning loyal fans one at a time, building a direct relationship with them, and giving them a chance to care about you and your art and support you financially. You know this already, and the paradigm shift comes not with the idea of growing your fanbase but with the idea of direct communication.
You must change the numbers.
How easy is it for you to talk to the fans who can and will pay you to play music, write stories, and draw cartoons?
As an advertising platform, Facebook works brilliantly. As a communication tool, not so much. These days, with Facebook, you have to pay to talk to your fans.
Email is better. Email open rates tend to be higher than Facebook’s organic reach, but even a killer open rate of say 40% still leaves 60% of your fans in the dark about your new song, EP, headlining tour, pub crawl, pop-up concert, playlist, PledgeMusic campaign, Kickstarter, contest, giveaway, t-shirts, and side project.
You’re probably missing at least 60% of your fans with every. single. Off.
Ouch. Those numbers don’t work out in your favor most of the time.
Those numbers work against your getting paid in a timely fashion, and they work against your engagement with the fans you’ve already got.
You must change the numbers in order for them to work out in your favor.
Imagine that you’re holding a string with a series of knots in it. Every knot is a person, unopened email, meeting, payment schedule, accounting department, and missed call.
What if you could bypass all of those knots?
What if you could take the two loose ends of the string—your fans on one end, and you, your career, and your livelihood, on the other—and touch them together?
Facebook Messenger Bots and custom SMS apps are one way that Closeup.fm is helping artists form direct relationships with their fans.
We don’t think they are the be-all, end-all solution to all of the entertainment industry’s woes. They are a part of the mix, a mix that must focus on meaningful relationships.
The entertainment industry is all about relationships. It always has been. Those relationships can be more and less complex, and the fair exchange of value, the monetary support that flows from fans to artists, can be more and less direct too.
What’s working right now? Earning one true fan at a time and keeping in touch. Using a bot or app makes that significantly easier (and less expensive). Business is hard enough without all of those extra knots in the string.
So make it easier on yourself.
I wish I had been quicker on the draw that night when I was talking to that artist. I wish I had said this: “You are so talented, and it sounds like things have been rough. Maybe I can make this next season easier for you.”
If this blog post struck a chord with you, you can learn more here: closeup.fm.