Another Band With Another Unique Business Model

from the turning-your-fans-into-promoters dept

Often, when we describe a certain business model put in place by one band that embraces the basic economics of the music industry, someone shows up in the comments to claim "while this might work for musician X, that's an exception... it'll never work for big/small/mainstream/niche/whatever artists." This sort of comment misses the larger point. We are not suggesting a single "business model" for the entire industry. In fact, we're just explaining the economic forces at play, and showing a variety of different business models that embrace those economics. It's those different business models that makes the market so interesting and dynamic and allows bands to stand out from the crowd.

For the latest example, reader James Saunders points us to the band Umphrey's McGee, who implemented a business model for their latest album that helped turn their fans into promoters. Saunders explains the band's "unique plan":
As more people pre-ordered, the band would add more "extras" to the release. There were eight tiers of potential content, each unlocked once a predetermined number of albums were purchased. The result was a massive effort by fans to promote the album for the band; if they got more people to buy it, their own purchase would have more value. I bought my copy over 2 months ago, and I convinced two friends to get it as well. Eventually, all eight tiers were unlocked, so a good number of albums must have been sold. The whole experience offered more to fans than just "music tracks" which could be pirated. Instead they were given a chance to help a band they love reach a wider audience, while at the same time "earning" more for what they were already willing to pay."
This is a neat variation on a similar model we've seen from musicians like Marillion and Jill Sobule to get fans to agree to pay up early in exchange for some benefit. The addition of having different beneficial levels "open up" just adds to the appeal, and it helps turn fans into promoters as well. Again, this is not "the" business model for all bands -- but yet another example of a band recognizing one way to implement a business model that really does focus on connecting with fans and giving them a real reason to buy.

Filed Under: bands, business models, economics, tiers, umphrey's mcgee

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  1. identicon
    Ima Fish, 21 Jan 2009 @ 5:46am

    "while this might work for musician X, that's an exception... it'll never work for big/small/mainstream/niche/whatever artists."

    That is so incredibly asinine I just have to comment. Exactly where is it written that any business requires a single business plan?!

    Does every entrepreneur follow the exact same plan? Nope.

    Does every retailer follow the exact same plan? Nope.

    Do VCs all invest in the exact same business models? Nope.

    So why should musicians be any different? Like anyone else, they should come up with their own models to success.

    It's hard to think that way because the music industry has controlled nearly all music we've heard with an iron fist.

    As I've said before, the biggest obstacle for a new musician is obscurity. Before the internet, the only way a musician could overcome obscurity and become a famous/successful musician was via the music industry. You had to play their game by their rules. If you wanted to get your song on the radio and in the stores, there was no other way.

    With the internet, a musician can gain thousand, heck, millions of followers if he or she is good. You no longer need the promotional arm of a label to do that for you. And you no longer need radio to get expsoure. And you no longer need the label's LP or CD distribution system to get your music to your fans. The current music industry is completely irrelevant to new musicians.

    So what I'm saying is, now that the labels are no longer in control. Musicians are free to do whatever they want to find success. There no longer is one model because that one model is dead.

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