Music Marketing Matters: Price Points & Transition

Music Marketing Matters is a weekly feature that delivers ideas, case studies, and actionable advice for artists to market their music more creatively. For more on its inception, click here.  

Price is a key component in the marketing mix, with music marketing being no exception. And yet, for the past decade, those who control a majority of the pricing mechanisms in the recorded music business have clung on to unfeasible price points for their outdated product.  

Music: The price is wrong, right?

Music Price Points: A State of Flux

Historically, the price of a standard, single CD album release could be as high as $18. Most leveled out between $12-15, but the larger retailers could and would push the price to that upper breaking point. Moreover, if music fans couldn’t find the CD they wanted so badly readily accessible in their area, they would pay those prices. Supply and demand: limited supply, rampant demand. 

As we all know by now, MP3′s changed all of that. A price point of $18 (or more) nowadays represents only one of two things:

1) A super-deluxe edition of a release, bursting with physical extras and bonus content or,

2) A massively out of touch retailer who will shortly be shuttering their music section.

Manufacturing plastic discs is more expensive than moving another copy of a digital file. When the marginal cost of a sale tends towards zero, it becomes impossible to justify applying the pricing mechanisms of physical products to the now dominant digital sales environment. At the other end of the scale, enormous artists like Lady Gaga and Radiohead offer their releases for cents, or nothing, causing further confusion in the marketplace.

What is the true value of digital music?

 

Setting the Right Price

Thumbs Down Music Pricing?

The right price is, of course, the minimum amount you can set that both elicits an impulse to buy and provides you with some level of profit. Set too high and the former takes a hit, limiting sales. Set too low and your music becomes a ‘loss leader’, with you eating the cost of creating the music in the hope of longer term success.

Price setting for music is a lot tougher than it sounds and has no clear rules. 

Follow the industry standard of $7.99 to $9.99 and the chances are you price out a lot of potential new fans, unwilling to risk traditional amounts on what is an unknown quantity. Follow the recent trends towards budget pricing – $2.99 to $4.99 – and you have a much better chance of convincing newcomers to throw a few bucks in your direction, yet you now have to sell at least twice as many albums to hit the same amount.

What to do? In my opinion, this is where your creativity must come to the fore.

As we examined in last week’s ‘Diversify Your Product’, there is far more potential for your artistic offerings than just the music, so why not bring that to your marketing mix? Adding value with varied product offerings is one of the only ways to justify to your end buyer that their purchase decision satisfies. Ignoring the moral argument of art’s value to the world, which is for another day, this  is a matter of psychology. Give your buyer a compelling reason to find the right price point and shell out their hard earned green.

Some suggested levels to guide your price setting:

  • Entry level: Your lowest acceptable price. Bare bones, just the music (perhaps not even all of it, if you can stand to separate out tracks into smaller album ‘nuggets’), worth-a-shot pricing.
  •  Sweeten the deal: Add a dollar to the entry level, offer some simple yet intriguing extra. A bonus track, access to video content, insights into the making of the album. Given the small price increase, this is likely to be digital content and something that you can easily provide at little extra cost.
  • Fans, friends, and family: As you move away from the entry level prices, your buyer in the mid-range is more likely to be the core of your audience. Good fans and your acquaintances who are happy to support your music at a more traditional price point, but the majority of whom will not be buying deluxe. Here you start to introduce physical products, if you can afford to do so, giving buyers the full release, art, and anything that you can relating to it. As this price point covers a lot of your audience, who might have different listening preferences, you will probably be offering several different product option at this level.
  • Invest in art: Some can afford to spend more and will happily push the boat out just to give musicians they like that extra boost. If your highest price point is $9.99, though, that’s all they will be able to chip in. Offer your next package at $5 to $10 more, subject to the make up of your later pricing, and throw in some significant personal extras, such as handwritten lyrics, a personal video conference performance of the release, extra merchandise. This is the level at which you start to emphasize just how much difference this extra investment means to your career as a musician. You can also play around with quality of download from this point upwards. Being an audiophile may yet bounce back as a purchase consideration.
  • Deluxe: Not everything from the recording industry’s past is a heinous assault on the wallet of fans, the deluxe expanded editions of albums being a case in point (those that came out at the same time as standard editions, of course). Some dedicated  fans are truly interested in listening to acoustic versions, alternate takes, making of commentary, and all manner of other extras that cost you very little to offer, yet mean enough to others for you to achieve this upsell.
  • Super Deluxe (and above): What ya got? Plan out as many additional product offerings as you can and go to work to satisfy those with money to burn and the passion to spend it on your work. Introduce packages with all available merchandise types, content extras, access to future performances, meet & greets… whatever you can stretch to that will give the buyer a truly special experience. Even if you get no takers, this is a relative value effect for those considering the lower price points that you have offered.

Over To You…

Pricing is more of an art than a science, so the creativity that you bring to offering a variety of price points will experience varying degrees of success. As ever, your contributions make the difference, so please weigh in with thoughts here in the comments section.

As an artist, what have you found to be the most compelling price points for those who buy your music? Were these acceptable to you as the creator? 

As a fan, what price music? Would you pay more if your favorite artists offered a better product at a higher price?

July 9, 2012 by 3 Comments
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Music Marketing Matters: Diversifying Your ‘Product’

Free Air GuitarLast week I got a bee in my bonnet – yes, my part time job is subbing for Little Bo Peep… what of it? – about the lack of creativity in marketing music.

Rather than just whinge and whine, though, I thought I should probably make an effort to turn things around.

“Be the change that you want to see in the world” and all that motivational malarkey…

 

Music Marketing Matters

And it matters especially on Mondays, which is when I’ll be publishing my contributions to moving music marketing forward.

I have two simple goals for this series:

1. Provide ideas to market your music that offer something new and are practical for you to act upon,

2. Highlight examples of artists who are pushing the envelope in marketing their creations.

Today I can hopefully deliver on both of these, with a look at Amanda Palmer’s recent ~$1.2 million Kickstarter haul and what you can adopt from her methods.

 

Diversify Your Product

Whether or not you agree that music is a product, if you are striving to be any kind of career musician then you need to accept that it is vital to market your art according to similar principles that govern product and service marketing.

Standalone products are only sufficient if they have vast mass market appeal, which is something that rarely applies to music  (how many artists have made the big time with just one release, on one format?) So it falls upon you to offer your fans a wider variety. Not only variety in ways to experience your music, but also the live experience, the fan experience, and even varying the type of art that you make available.

Music Product Diversity - Even more than a record store

Image Source: Mela Sogono

Circling back to the curious case of Amanda Palmer, this million grossing Kickstarter campaign was a tour-de-force of artistic diversity. Here are some concrete actions that you can  pull from her success:

  • Format diversity - Know your audience. In many cases they will vary from pure digital downloaders to geeky speccy nerdy collectors (these are the folks that you especially need!). You need to offer a cheap and easy format for the former, a beautifully crafted limited edition vinyl for the latter, and anything in between that caters to what you know to be attractive to those purchasing your wares. Put out informal polls on social media, talk to your fans, ask in an e-mail newsletter… whatever it takes to find out what diversity people want and how you can give it to them.
  • Build in real world connections - It’s all too easy to be pulled into the digital world and build relationships exclusively with fans online. Palmer offered tangible real world connections to fans in cities across the world, baked into the decision to purchase her new music. Play to the themes of your music and match as many physical events to it as you can afford to deliver. Sound expensive? Cut your cloth accordingly and tailor events to where your fans can gather. Also note, people will often pay more for a real event… and they will feel more invested in your music for having done so. This is especially true if you make a visible effort to make the event special for them personally (song dedications, personalised gifts, private meet and greets…what else would you include?)
  • You are more than music - Heresy, I know, but you have a lot more to offer. What’s more, your fans know it and are more likely to part with their cash if you serve it up for them. Don’t panic, music is still at the core of what you do. But offer art work, lyrics/poetry, personal inspirations in the form of unique merchandise, video content, the work of others that you admire or with whom you have collaborated, and you start to stand out  from the crowd. You also have something to offer at higher price points, providing those who want to spend more a reason to do so. Look at Palmer’s art books as just one compelling example. For bonus points here, make some of the alternative products you offer limited edition. Those who snag them will feel an extra sense of accomplishment as your fan; those who do not will be on increased alert for the next time.
  • Make it community-based - What characterizes Palmer’s online successes (and they are very much in the plural) in particular is the sense of belonging that she evokes in fans. They remain fanatical (in the positive sense), yet there exists a kinship, a degree of equality, in their relationship with her. True, she has built this up over many years, but it can and should be applied right down to the level of brand new artists building fan bases in small towns.This is also a concept that can be applied to your product diversity. How can you make your live appearances more of a communal affair, rather than limit them to artist broadcasting? Playing more intimate gigs like house parties or word-of-mouth outdoor gatherings brings you closer to your audience. Bringing in fans to help you organize such events, with special access for them and a few friends, makes your music more communal. In the short term, these tiny events placed alongside larger, more standard shows, breed a healthy symbiosis between attendance of the two. Longer term, you’re making memories for fans on a one-to-one level, and their emotional investment is far more likely to yield a financial one.
  • Expand into other audiences – Less related to product offering, but nonetheless a useful action point to take from this example, is the idea of branching out into the audiences of other artists and creators. Collaboration is often a smart way to do this, as it breeds unique creations that are of interest to both sets of fans. Reciprocal offerings are another, with a contribution from one artist to your next project and you providing something for them in a similar fashion. Palmer offered books, art work, scripts, photography, and all manner of extras from fellow creators, ensuring cross over into many new networks.

Admittedly, Amanda Palmer has an established base of fans and  can already reach many more people than most independent musicians. But it was the diverse offerings and alignment of them with fan passions that helped her to move from a good Kickstarter campaign to a phenomenal one. $1 million is out of reach, but a healthy return on your investment in music is not.

Take away: Understand your fans’ desires, create a wide range of ways to cater to them at multiple price points, then deliver with passion and flexibility across as many networks as possible.

 

Over to you…

What did I miss? Are there better ways to diversify what you offer to your fans? 

Does the notion of having to go beyond the provision of music offend you as an artist? 

Let’s go at it in the comments section here. We’ll learn from one another and possibly have a good old scrap in the process! 

July 2, 2012 by 9 Comments
Filed Under: Case Studies, Marketing, Success Stories Tagged With: , , , , , , , , , , , , , , , ,

Marketing Music: Past, Present, and Future

 

Think about music differently

Image Source: FrikiPix.com

This business of music… it troubles me. 

Not for the age old tension between artistic endeavor and monetary gain (which has troubled me for decades) but for the current lack of invention in delivering music to the masses.

At a time when digital channels open up routes to an audience for almost every conceivable genre, we see ever more artists falling back on the tried and trusted promotional routines of the boom years, flogging them to within an inch of their life for increasingly diminishing returns.

If something is irreparably broken, there comes a time to break down and replace it, rather than patching up another hole and convincing oneself that it will hold out for another passage of use. In some cases, the same applies to an entire business model.

 

“Every act of creation is, first of all, an act of destruction.”

~ Pablo Picasso

 

Creators Lacking Creativity

For an industry that thrives on the creative spark and connecting with its audience, there is a distinct lack of creativity when it comes to actually marketing music to people. From tired album release cycles to sweeping dismissals of digital business models, the record industry of the 21st century clings doggedly to the practices of decades ago.

Musicians must now apply the same freedom of thought that powers their art to the marketing of their music. 

There are almost no limits now to what you can attempt, in terms of releasing your music and encouraging people to buy into your work with cold, hard cash. Financial constraints may always apply but everything else is up for grabs. Free platforms, publicity, and free access to people have opened up the doors of opportunity, with the biggest decision being which ones to select and where to spend the majority of your most valuable resource, time.

 

The Past

In the past, a record label held sway over almost every aspect of marketing your music. With distribution of physical product and limited media channels being the main concerns of disseminating music efficiently to fans around the world, getting signed to a label was at the core of every artist’s career plan.

No longer. Most labels are now  the very epitome of the problem at the heart of the music industry; that same unwillingness to accept that the ‘golden age’ of $15+ albums and radio play payola is dead and gone. Not to discount the labels that do seek out innovative new models, which I warmly applaud, but any look at the latest reformed act from those halcyon days, being dragged out for one last milking in the cash cow shed, will bear out the continued focus of mid/major record companies on music marketing past.

That’s the past. And partially the present, which is a frustratingly sullen plod towards the inevitability of a digital music market place, hamstrung at almost every turn by those seeking to turn back the clock. A transition phase that is agonizingly – tantalizingly? – fluctuating between business models old and new. 

 

The Future

What interests me most is where we can take the release, marketing, and enjoyment of music in the years to come. Let those clinging to the past wallow in declining sales of physical and increasingly ineffective marketing campaigns. As they sink, let us focus our efforts on innovating.

Innovation means improvement. It means introducing better ways of working, through creative thought and testing out ideas. Some will fail, some will be of moderate success. Here and there, though, an idea will be a runaway success and forge a new path for other musicians to follow, like the massive exposure for Daria Musk with her Google+ concerts or Amanda Palmer’s Kickstarter millions.

Yes yes, I know, talk is cheap. Everything I have written thus far is purely conceptual and lacks any practical, actionable advice. Which is why I will now be dedicating every Monday to ‘Music Marketing Matters’ , a series of posts in which I’ll focus on one idea that you can apply to marketing your music, in a way that will help you stand out from the crowd.

I can’t promise success.

I can’t promise a step by step guide to implementing every part of the thoughts that we’ll unpack.

I can promise ideas that will stimulate discussion and help us to move music marketing forward, together.

So jump on the e-mail subscription option to the top left of the page here and we’ll get the ideas rolling from next week. Let me know in the comments if you have an idea you’d like me to spend some time exploring.

June 29, 2012 by 3 Comments
Filed Under: Marketing, Opinion Tagged With: , , , , , , ,
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