Up-and-Coming Label Illustrates How to Sell Infinite Goods in the Internet Age

from the true-fans dept

The New York Times has an interesting profile of Fueled by Ramen, a record label that has managed to thrive at a time a lot of other labels are struggling. The label seems to be practicing several of the principles we've talked about here on Techdirt. First, they seem to understand that the secret to success for a band is to build up a core of serious fans. Fueled by Ramen encourages its bands to engage with their fans online, doing frequent blog posts and studio updates. And the label has apparently mastered the type of viral marketing that builds excitement among the most devoted fans. Second, it has kept expenses low. It produced Panic at the Disco's debut album for just $18,000, allowing it to make its money back even if the album doesn't sell hundreds of thousands of copies. Finally, it seems to understand that the real money is in using the music as a way to market the band, and to use the band's popularity to sell scarce goods related to the band. For example, the label's bands tour aggressively, and the label has "a merchandise company that sells band T-shirts at stores like Hot Topic, as well as on its Web site." As the costs of music distribution continue to drop, it will be increasingly difficult to turn a profit on music itself. But people who recognize that the music is a way to build the band's popularity in order to sell other stuff, for which marginal cost isn't dropping toward zero, will do just fine. Fueled by Ramen is still largely in the CD-selling business, so they're not all the way there yet, but their success at a time when more traditional labels are floundering suggests that they're moving in the right direction.


Reader Comments (rss)

(Flattened / Threaded)

  •  
    identicon
    barren waste, May 8th, 2008 @ 10:25am

    You gotta love...

    ...it when people succeed where big business says you can't. You also have to love the name Fueled by Ramen...

     

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    Tom Enders, May 8th, 2008 @ 10:33am

    Fueled By Bamboozled

    I went to Bamboozled this past Sunday at the Meadowlands. I saw more Fueled by Ramen gear (shirts, hats, bags, etc.) being worn and carried then any other individual entity (band or label). I'll bet all that marketing of scarce goods doesn't hurt.

     

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    Gunnar, May 8th, 2008 @ 10:40am

    I wouldn't call them up-and-coming label. They had Jimmy Eat World, Less than Jake and Yellowcard before Fall Out Boy broke out and Panic at the Disco joined the lineup.

     

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    Matt, May 8th, 2008 @ 10:51am

    Fall out boy is only on it cause Pete wentz (spelling?) the bassist of FOB owns it.

     

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    CVPunk, May 8th, 2008 @ 11:25am

    funny...

    What Fueled by Ramen is doing is nothing new in the punk community. There are labels like Punkcore Records that take it a step further offering you choices of vinyl, cd, or digital download from their site.

     

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    Rick, May 8th, 2008 @ 11:35am

    Not just labels....

    I help manage a band that is re-forming after many years and we've been able to do it all on our own. While we do take marketing cues from labels like this, as well as TechDirt's insight, the manufacturing and digital distribution is handled very well by Tunecore ( tunecore.com). We can even distribute CDs ourselves, via Amazon and CDBaby without having to deal with the obstacles the majors have put up.

    I'm glad we dumped our label in the 90s, it wasn't worth it for pennies per album sold. The industry is changing, for the better. The major labels can go to the same place they created and spend some time with their mentor, Satan.

     

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    Anonymous Coward, May 8th, 2008 @ 12:30pm

    If you like a different approach to music...

    If you like a different approach to music then check out: http://www.sellaband.com/

    They have great bands like Electric Eel Shock, So What, BulletProof Messenger, Radius, Confused5, SolidTube, and others.

     

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    magscanner, May 8th, 2008 @ 12:34pm

    Scare goods

    I think you meant to say "scarce goods" rather than "scare goods related to the band" up there in the text. God knows there are some bands that pretty scary, and some goods likewise.

     

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    kurokun, May 8th, 2008 @ 12:50pm

    More bands

    TMBG (They Might Be Giants) does something similar..."The Else" is available as vinyl (not sure about their other albums), and most of their music can be downloaded...although it's through iTunes (blech). They also have a myspace page, a youtube channel, and various other blogs and pages and the like.

     

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    Anonymous Coward, May 8th, 2008 @ 12:51pm

    Music Sales

    "Fueled by Ramen is still largely in the CD-selling business, so they're not all the way there "

    God fordide a record label sell CDs

     

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    Pitabred, May 8th, 2008 @ 12:52pm

    Selling CD's

    You seem to mention selling CD's with disdain... some people still like having a physical disc. It may not be the majority of their profit, and it's definitely not their only profit, but why should they NOT sell CD's? It's obvious people will pay for them. Even if they have the mp3's, as long as they charge a fair price (and their site shows that they price around $10, which is really close to what I'd pay and consider a fair trade).

     

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      Mike (profile), May 9th, 2008 @ 3:27am

      Re: Selling CD's

      You seem to mention selling CD's with disdain... some people still like having a physical disc.

      I can't speak for Tim, but I don't think he actually he's talking down about CDs. He's saying that the focus of the company is still too CD-based, and hasn't gone far enough into recognizing that it needs to be selling the overall experience of the band (which can include CDs).

       

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    MFZB, May 8th, 2008 @ 12:57pm

    Pete Wentz...

    ...owns Decaydance, an imprint of Fueled By Ramen...The drummer from Less Than Jake is Co-Owner of Fueled By Ramen, and Wentz doesn't own anything with regards to Fueled By Ramen.

     

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    cram, May 8th, 2008 @ 10:05pm

    CDs

    Hi Pitabred

    Techdirt people want CDs to disappear because they don't fit into their infinite goods plan for musicians. That's why you'll see physical media being dissed all the time here.

     

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      Mike (profile), May 9th, 2008 @ 3:26am

      Re: CDs

      Techdirt people want CDs to disappear because they don't fit into their infinite goods plan for musicians. That's why you'll see physical media being dissed all the time here.

      Huh? Not at *all*. In fact, I'm a big fan of CDs and still buy them all the time.

      CDs absolutely fit into the plan. They're scarce goods, and you can sell scarce goods.

       

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    identicon
    cram, May 9th, 2008 @ 5:02am

    CDs

    Hi Mike

    So you are not against selling CDS? Man, I never. I always thought you were against selling music on CDs.

     

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      Mike (profile), May 10th, 2008 @ 1:48am

      Re: CDs

      So you are not against selling CDS? Man, I never. I always thought you were against selling music on CDs.

      Why would I be against selling CDs? They're a scarce good. I think it's a perfectly good scarce good to sell, though, you should *also* be giving away just the music for free. But offer a compelling CD package to buy and many people will do that too.

       

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    identicon
    nipseyrussell, May 9th, 2008 @ 9:10am

    what the hell are you talking about? why would somebody be 'against selling cds'??????

     

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