More Bands Experimenting With Free As A Part Of The Business Model

from the good-for-them dept

Eric the Grey writes in to let us know about yet another band understanding the economics facing the music industry. Apparently the band Big Head Todd and the Monsters isn't just giving away free downloads of their new album, but are also giving away 500,000 CDs. They're actually doing it in an interesting way. Somewhat similar to Prince's recent offering to give away CDs with newspapers, BHTM is giving the CDs away via radio stations. Fans could sign up on the band's website for the CDs or get them from radio stations who are being given the CDs in batches to be given away. While giving away physical CDs doesn't make as much sense as just offering the downloads (it's a lot costlier...), it appears that the folks involved with this project understand the basics: "This sort of thing might very well be the future of music distribution. Give away the music, build a bigger fan base [and] generate revenue through live shows, merchandising and other platforms." That, of course, is what plenty of folks have been suggesting for years, while having record label execs insist it would never fly. Where are they now that it's flying? Oh, right, playing dumb.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    GS, Dec 14th, 2007 @ 1:44pm

    I've been a big head fan for years - funny enough I am a huge Prince fan and a big Radiohead fan too - I wonder if it's just the bands that have really cool fans like me that get it or is that just a coincidence????

     

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  2.  
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    David, Dec 14th, 2007 @ 1:58pm

    There are bands out there who understand.

     

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  3.  
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    Eric the Grey, Dec 14th, 2007 @ 3:09pm

    It was a nice surprise in the mail yesterday

    I received my disk from the radio station yesterday in the mail. They've done this over the past few years, but the disks are usually compilations of different artists.

    The give-away disks are sponsored by not only the radio station(s) but in my case by crocs. I'm certain that's how they're paying for them.

    Not only are they giving away their music, they are also allowing recording at their concerts, and trading of that music, providing the venue allows it.

    By the way, it's a great album.


    EtG

     

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  4.  
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    cb, Dec 14th, 2007 @ 9:06pm

    It's called advertising. Same thing, different format.

     

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  5.  
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    PRMan, Dec 15th, 2007 @ 3:05pm

    Yeah, but...

    You can't convince millions of people to fork out money for a crappy Ashlee Simpson album that way.

     

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  6.  
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    GH, Dec 16th, 2007 @ 3:20am

    But what about...

    Bands or artists that are no longer together (or among the living)?? The Doors, The Byrds, ABBA, Elvis, etc.?? What is the benefit to giving away the music when they, obviously, won't perform a concert to generate revenue?? I'm all about EXISTING bands/artists doing this, but what about PAST bands/artists??

     

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  7.  
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    fuse5k, Dec 16th, 2007 @ 5:33am

    one thing mike

    Could you please please stop saying that bands can make money from touring and doing live shows.

    Basically when a band tours they are doing it at a loss 90% of the time. Only the biggest artists, doing sell out arena tours will make any money at all. By the time the crew, promoters, venue owners, tour management and several other middle men get paid you will be lucky if a tour breaks even.

    It really lets down your point in these arguments when you say that suddenly bands are going to make money from doing tours, when since the dawn of time the record companies have been subsidising bands to tour, as advertising for the band. (ever wondered why bands always tour right after they release new material) Hell, if you're not top of the bill then the chances are that the band had to pay to get on the tour.

    Honestly Mike, go have a look on the net, im sure you will be able to find a tour budget somewhere.

    I've mentioned this before, and you've never said a word about it, and continiued to say in your posts that they can make money touring, basically you are making yourself look like an idiot to anyone who knows anything about the recording industry, and seeing as they are the ones you are preaching to in your posts, it looks a bit to me like you are alienating the people you are trying to get to embrace these new business models.

    I totally agree with the rest of your point, just please stop saying that bands can make money touring, because that is simply untrue in the majority of cases.

     

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  8.  
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    Miguel Caetano, Dec 16th, 2007 @ 6:25am

    @fuse5k

    You seem to forget the fact that the slice of revenues bands and artists get from touring is much higher than from record sales. How do you explain that?

     

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  9.  
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    Anonymous Coward, Dec 16th, 2007 @ 7:53am

    Re: @fuse5k

    So michael, what you are saying is that the recording company pays for the tour bus, hotels , tour manager, food, staff, and everything else and then gives money to the band???

    lay off the crack!

    What happens is that when a band gets signed, they receive an advance, this is to cover living expenses and the recording of albums etc. On top of this goes any other expenses associated with the band (think TV advertising, all of the costs described above, tour support fees etc)

    When the band starts selling albums (singles dont make money, they are just another advertising op) they get a royalty rate, this is usually between 15-25% (only the biggest artists will get anywhere near 25%) That means that any profit made by the band goes mostly to the record company.

    However before the band have a penny to take away for themselves they must completely pay off the advance first.

    Basically in the books of the record companies the majority of bands never make any money.

    i think you may be confusing money from the record company with performance rights, which are paid directly to the writers of the songs, which in the pop world is probably someone you have never heard of, and in the "band" scene probably the frontman. In reality, this is usually the only real cash the band get (with the exception of merch)

    though my original point still stands.

    a larger percentage of no money is still no money...

     

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  10.  
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    Lisa McGlaun, Dec 16th, 2007 @ 11:17am

    The Crocs connection to BHTM

    Crocs is on board with the CD because their charity, Soles United, is benefiting from Big Head Todd's Red Rocks concert next summer. The band uses their annual Morrison, CO concert to raise money for good causes. Right now the band is auctioning off VIP packages for the concert. The money raised goes to charity and Souls United has pledged to donate one pair of shoes to a needy person for every ticket sold for the concert. Pretty good if you asked me.

    Thanks for writing about this great band.

     

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  11.  
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    idiot, Dec 16th, 2007 @ 12:54pm

    Fuse5 - Completely WRONG

    @Fuse5k

    You know NOTHING about the music industry, and here it is:

    BANDS MAKE MOST OF THEIR MONEY FROM TOURING WHILE MAKING LITTLE FROM THE ACTUAL CD SALE.

    Why?

    CD's are made and produced by the record company. A laborious process and rather expensive depending on how much time the band takes, and how good they are. Studio time is spendy, producers are spendy.

    The record company does all the promotion and advertising, this includes music videos.

    Now the record company tells the band that the company will get about X% of money to recoup their costs. Once that is meant, the royalties are distributed to X% for Company, X% for band. Everyone makes money and the longer the album or hit song(s) does well the more money that goes to the actual band. So for say Sting, he makes $2000 roughly a day for the song Every Breath You Take, their biggest hit.

    Thats one of the highest royalty paid artists out there.

    Now what motivates a band to go on tour Fuse5?

    Oh, this thing called, (drum roll), MONEY.

    Why would a band go on a tour around the world, playing the same songs, missing loved ones etc, for free?

    They don't. They may take home 15-20% of that shows takes, which can be thousands or tens of thousands of dollars PER SHOW! You dipshit.

    So say if Metallica did a show at Irvine medows and got $100,000 in ticket sales. $80,000 goes to the facility and crew for the band. The bad that night walks away with $5000 each for about 3-4 hours of work.

    Do this for about 200-300 days out of the year.

    That's some serious money and of course my example above was very simply. Usually shows are in the millions.

    So Fuse5, fuck off, you know NOTHING about the music industry or economics.

     

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  12.  
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    Mike (profile), Dec 16th, 2007 @ 1:11pm

    Re: one thing mike

    Could you please please stop saying that bands can make money from touring and doing live shows.

    No, I won't stop saying it, because we've seen plenty of evidence that it's absolutely true that bands make most of their money touring.

    Basically when a band tours they are doing it at a loss 90% of the time.

    Can you point to a stat showing that?

    By the time the crew, promoters, venue owners, tour management and several other middle men get paid you will be lucky if a tour breaks even.

    Ah, so you're describing a situation where you do a bad job managing your touring expenses. Recognize that in most cases, when discussing smaller bands that are touring, they are not hiring a "crew" or "tour management" or promoters. They're building up a following themselves and handling all of that work themselves.

    (ever wondered why bands always tour right after they release new material)

    The reason is because they know they make more money then, because they can build off of the promotion that has gone out on the album. You seem to have reversed the cause-and-effect here.

     

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  13.  
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    Sal Waldorf, Dec 16th, 2007 @ 4:58pm

    Apparently Big Todd is a rich band...

    Nice little article, talking about the 'changing economics' of the music biz...

    But what surprises me that nobody talks about the economics of this promotion. The band gives away 500.000 CDs. Now suppose that the recording was zero dollars (because they did it all at their home studio and a pro tools rig & they did not hire a big name producer), that leave us with the fysical production cost of the CD. Mastering, pressing of the CD, printing the nice booklet, sealing, even at that number of CD's that would cost at least 1 dollar per CD, or half a million dollars total production cost.

    Let's assume the radio-stations sending out the CD's are paying the postage, that still leave the band with a debt half half a million. Are they going to recoup that with those sixty dates? Bear with me for awhile: I've never heard of he band, but hey may have a huge following. So let's assume that those 60 dates attract 500 people per gig who pay 20 each. That's a gross of 600.000 dollars, minus 20% for the promoter, 10% for the house, 15% for the manager, 20% travel and hotels, that leaves the band with less than 200.000 before taxes.

    With already 500.000 spent on CDs, they have to sell a shitload of T-shirts to break even. They can't sell CDs at shows anymore, because - you remember that - hey gave those away.

    Can someone explain the economics of this new model to me? Maybe the band's management can update us on that?

    Sal

     

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  14.  
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    Anonymous Coward, Dec 17th, 2007 @ 10:30am

    “It’s hard to make money by touring. Managers make money, the people in the service organizations make money, the crews make money, but there are so many times when a band spends six or seven months on the road and ends up with very little to show for it, even when a tour is grossing millions of dollars.” —Bud Prager, Manager for Foreigner

     

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  15.  
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    Anonymous Coward, Dec 17th, 2007 @ 10:52am

    Re: Re: one thing mike

    No, I won't stop saying it, because we've seen plenty of evidence that it's absolutely true that bands make most of their money touring.

    First of all, most bands lose money.

    Touring is risky.

    If ticket sales are lacking you still owe for the expenses. The venue costs the same whether there are 10 people there or 10,000. Lots of venues require union labor.

     

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  16.  
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    Matthew R. Bates, Dec 19th, 2007 @ 8:24am

    Re: one thing mike

    There is alot of money to be made in touring.. This is what I do every day of the year. The major caveat is that you have to match your touring expenses to your ability to draw a paying audience.
    Labels subsidize touring acts for a variety of reasons. Tour Support is the industry term for what is in reality a VERY HIGH INTEREST LOAN. Money the label loans a band to act like a retarded rock star comes OFF the top of tour and CD sales income along with fees and a ridiculous amount of interest.
    Lots of large and small acts make a great living touring, but very few immature bands know how to read the touring contracts. U2 supports their own tours and earns all the revenue from it, likewise Rolling Stones, at the other end of the spectrum the Flaming Lips support themselves and do very well without ever even dreaming of selling out an arena or stadium.
    A musical act can do very well touring, but it is an enormous amount of work and requires giving up your ego in lieu of economic reality. That doesn't happen much anywhere in the music industry.
    Matthew

     

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