CMU:DIY Lectures

Lecture Notes | Building A Fan Business – Direct To Fan

Published on Wednesday 17 January 2018

These notes accompany the CMU:DIY lecture ‘Building A Fan Business – Direct To Fan’ and provide a beginner’s guide to how artists can build and monetise the fan relationship, creating a direct-to-fan business in the process.

In addition to these notes, you can also download the slides for the ‘Building A Fan Business – Direct To Fan’ lecture HERE.


MAKING MONEY FROM MUSIC
There are three main ways you can make money out of your music. You can…

1. Create and exploit intellectual property.
2. Stage and monetise live performances.
3. Build a fanbase and monetise the fan relationship.

The music industry consists of people and companies who help artists unlock each of these three key revenue streams.

These notes are primarily focused on the latter revenue stream – the direct-to-fan relationship.


THE DIRECT TO FAN RELATIONSHIP
The biggest impact the rise of digital and social channels have had on music is the way they have revolutionised the artist-fan relationship.

The traditional artist-fan relationship
Traditionally an artist didn’t have much of a direct connection with their fans beyond the mosh pit and the fan letter. Artists relied on their primary business partners – principally label and promoter – to reach their fans.

But the label and the promoter didn’t usually have a direct relationship with the fans either, they would in turn rely on retailers and ticket agents. So there were two levels of music industry between the artists and the fan.

This meant that an artist usually needed business partners in order to reach fans, certainly beyond their home town. The artist would deliver some content and a show, and their business partners would find a ‘route to market’ – usually utilising their pre-existing networks – and would then create products to sell to that market.

The modern artist-fan relationship
Today artists have a direct connection with fore fanbase via social and other digital channels. They can talk and sell directly to the core fanbase.

Therefore, when the artist first connects with the music industry, as well as the content and show, they bring with them the initial fanbase and some basic marketing and sales platforms. This changes the role of the business partner.

Now artists need business partners to service and sell to the initial fanbase, to help them grow that fanbase, and – once if and when they have more mainstream fans – to make sure their music is available in more traditional places.


BUILDING A FAN BUSINESS
There are three key stages to every artist’s fan business: you need to build a fanbase, understand your fanbase, and then sell them stuff.

STAGE ONE: BUILD FANBASE
Artists build a fanbase through a combination of gigging, social activity, media coverage, advertising and other marketing tactics.

Artists need to start connecting with new fans online from the outset. With an engaged fanbase online, artists can launch a fledgling direct-to-fan business, while using the current fans to try and reach out and connect to new fans.

Connecting with fans online means social media like Twitter, Facebook, Instagram, Snapchat, YouTube and Soundcloud. Email addresses and permission to email remain important. And further contacts and data may be available via an artist’s ticketing platform and online store.

Social media doesn’t replace the artist website or fan mailing list, both of which remain important. Though platforms like WordPress can make it much easier to set up a website, while services like MailChimp make it much easier to manage email lists. Services like Music Glue, ReverbNation and Bandcamp can then be used to sell to your core fanbase.

STAGE TWO: UNDERSTAND FANBASE
The next stage is understanding your fanbase. You can use the data and analytics provided by your social and other digital channels to try and find out more about your fans.

• Who are they, where are they?
• What do they like?
• How much money will they spend?
• Are they content, merch or live customers?

Dissecting the fanbase
You will ultimately be able to direct your fanbase into committed and devoted fans (your core fanbase) and casual and occasional fans.

Most artists start with casual fans which they need to turn into committed fans (and maybe even devoted fans). Occasional fans will follow depending on the overall size of your ultimate fanbase.

It’s also useful to be able to identify your more affluent fans and quite how much money they have to spend!

Monitoring fans
Among the data and analytics available to artists are social stats (eg Facebook, Twitter), distributor stats (ie streams and downloads), website stats (probably Google Analytics) and email stats (from Mailchimp). The analytics you get from HTML emails via services like MailChimp are the most powerful, allowing you to profile individual fans.

It is easy to get swamped in data. You should always go to data with a question. For example, we posted a video to promote a tour and tweeted a link to it. Did people respond to the tweet? Did they follow the link to the video? Did they watch it? Did they buy a ticket? If not (and they probably didn’t do all of those things), what could and should you do differently next time?

Interacting with fans
Beyond following the stats, you can also use your core fanbase as a market research panel and ask them what they think about your plans and/or what records or shows or merch they’d like to see you do. This might be through more formal surveys or simply via conversations on your social channels.

Where fans seem excited about a project, you can encourage them to order upfront using a pre-order or fan-funding platform like Kickstarter or PledgeMusic, so that you know there is real interest in what you have planned.

STAGE THREE: SELL!
Remember, the ultimate aim is to sell products and services to your fans that they think are exciting. What are those products and services? That depends on you and your fans!


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Words: Chris Cooke – Last updated Jan 2018



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