The Shapes of Things to Come
by Chris Juergensen  
 
The record business as we know it is changing into something totally different. I'm going to describe what this means to you and why you should be really, really happy ...
 
 
Nobody's Buying What They're Told to Anymore
 
The Big Labels - The big labels are having a hard time selling CDs. They are panicking because they put a lot of cash into producing, marketing and promoting new releases and the masses aren't biting.  
 
An associate of mine got signed to a record deal last year. The whole package cost the label about six hundred thousand big ones to produce and promote the whole thing and they have only sold about a thousand CDs so far. The music industry is getting nervous. Why do you think this is happening? The answer is simple: the Internet.
 
The Internet - The Internet has become the greatest sales tool since the radio. It offers you an inexpensive way to promote, distribute and market your own CDs and gives you the opportunity to make much more profit per CD than you ever could any other way.  
 
There are millions of music lovers surfing the Web every day searching for music that they want to discover all by themselves. They don't want to be told what to listen to and buy anymore.  
 
There will always be the mainstream market and Tower Records will stay on the street corner. But, let's face it: the Internet offers consumers many more choices, plus the option of listening before they buy anything. You can also browse for hours in your underwear without a clerk calling the cops.
 
Choices - A friend of mine who happens to be one of the greatest guitarists around (he'll get mad at me if I tell you who) and has also been signed to a major label for the last ten years just lost his contract.  
 
As I said before, CDs aren't selling, so artists are losing their contracts right and left. He has the option of shopping around for another contract and could get one without a doubt, but he has decided to do the whole thing himself. His logic is this: he has a big fan base so he can still sell a bunch of CDs without a major label. Granted, he won't be able to sell as many as he could with a big company promoting every release, but he doesn't need to.
 
I'll tell you why. When he was releasing CDs signed to a major label, he was only making about 6% on every CD he sold. By releasing it himself, he makes more like 80% profit. The more CDs he makes and sells, the higher his profit margin will be. Even if he sells only half of what he has in the past, he'll still make much more money. A ton more.
 
Artistic Differences - Prince also did the same thing. The reason I can mention his name is because I don't personally know him. I never discussed this with him and I don't know the specific details (so forgive me if I am not completely accurate), but from what I understand the whole thing started because Prince, being the creative genius he is, wanted to release a lot more material on every CD than the record label wanted him to.  
 
I guess the record label's logic is that, the more songs there are on the CD, the more packaging you need: more plastic, more paper. All these things cost more money and cut into their profit margin. Prince probably just wanted to release CDs that suited his artistic needs and at the same time gave his fans what he assumed they wanted, more Prince per CD.
 
Obviously they couldn't meet eye to eye. Since he already had an enormous fan base, he decided to do his own releases. Prince is a true pioneer. Record companies aren't in the game to create art; they are in it for money. They are very particular about what kind of songs you write, how many minutes each song is, and the order of the songs and the mix of the recording.  
 
For these reasons, true artists have a hard time dealing with producers whom the label decides are best for them. If you don't want to be told what to do, doing it yourself is a great option. With the advent of the Internet, this is becoming an easier undertaking.
 
 
How to Promote Your CD
 
Gigs - This is an easy way to sell your CDs. Bring 'em to your gigs, set 'em up and just take cash on the spot. Or, leave some at the register so people can buy one on the way out. You may want to offer a cut to the club you are playing at. Make sure to mention your CDs during your set, and don't forget to point people to your site for information on your band and concert schedule.
 
Marketing - Without a major deal you will have a rough time selling CDs in stores. You won't have the money for promotion and distributors won't touch anything under five thousand units. If you want to get your CDs in some stores you will have to think of some different marketing strategies.  
 
This is what I did. I went around to some small music schools. You know, the kind that are inside music stores. I offered them 25% on every sale. All they had to do is play the CD in the waiting room when people where waiting for their lessons. Without a doubt the students would ask whose CD was playing. When they found out they could buy it, a lot of them would. It is a "win win" situation for everyone involved and only sets me back 25% on each sale. To put it in a CD shop would set me back between 50% and 60% for distribution and the cut that the store takes.
 
I also pay the musicians on my CD a distribution charge of 25% on each CD that they personally sell. I don't mind letting them make a little money on the deal because, as I said before, I'm making enough profit on the CD to not care too much.  
 
Another thing I did was tie up with an effect maker. HAO, a maker of great stomp boxes, asked me to record a CD demonstrating their distortion boxes. Rather than take money for my studio time, I offered my services for free in exchange for a few hundred CDs that I give away from my site or guitar9.com when anyone buys my new CD, "Prospects."
 
Try to figure out whom you can team up with as a marketing partner. How about a restaurant, car wash, veterinarian, or your local church.  
 
Your Site
 
Important Features - The next thing to do is to get your site up and going. Your site must have three important features: a way to sell your CDs, a way to point people to your gigs where they can buy your CDs, and last but not least, a reason for people to visit your site and leave with a CD ordered or a memo in their schedule book to go to your gig next Friday.  
 
Sell From Your Site - One super easy and cost-effective way of selling from your site is to use PayPal. This system allows visitors to buy from your site using a credit card. PayPal simply charges you a small percentage and credits the rest to your account. You will have to mail each CD out, but can get your girlfriend to do that for you. Another way is to send them to an Internet CD shop that will do everything for you for a slightly larger cut. I'll get into this a little later on.
 
Point People to Your Gigs - This is easy. Post your concert schedule. It helps to include the time, door charge, and address and phone number of the club. I would also link to the club's site if they have one.
 
Reason to Visit - Since no one is promoting you, you're going to have to attract visitors to your site. You are going to have to find a way to make people who don't know anything about you want to become your fan and start a lasting relationship with you through your site. This is what I did: I put my knowledge of the guitar and experience as a teacher to work. I offer free guitar lessons on my site. I cover a bunch of different subjects such as music theory, scale and chord patterns, etc.
 
This is what usually happens. Someone sitting at home is having trouble sleeping because he is confused about the Phrygian scale. He heard someone say that this scale works nicely over a certain kind of dominant chord and can't figure out why. He goes over to his trusty computer with his guitar in hand and punches into his favorite search engine, "phrygian scale over dominant chords."
 
Low and behold, a link pops up for my website. He visits, finds the information he needs, may even e-mail with a question which I will, without fail, e-mail a reply to. He may even listen to one of my tunes, come to one of my gigs, or even buy one of my CDs. To be honest, I don't even mind if he doesn't buy one. I made a friend in the deal and helped an aspiring musician in the process. What could be more rewarding? I have people asking me questions from all over the world, from Russia to Hong Kong and everywhere in between. Spreading knowledge about the guitar is the niche that I fill with my humble site.
 
Net Networking - You will want to promote your site by networking. Link from as many sites as you can. I write articles (just like this one) for different sites from to time to time. No money changes hands but the whole thing works out because the website gets material and I get free promotion. It also helps me get my writing skills in order and organize my ideas on various subjects. Send your CD to Internet radio stations and music review sites.
 
Power in Numbers - You can also try to hook up with musicians like yourself. Seek them out on the web. I tied up with a great guitarist in Brazil by the name of Miguel Mega. I sent him a bunch of my CDs and he sent me a bunch of his. When you buy both of our CDs from either of our sites, you get a discount on them both. We use our fan bases to help each other out. Great way to make friends all over the world.
 
Keeping in Touch - Keep an e-mail list. Most of the sites I mention in this article will provide you with the e-mail addresses of customers who purchase your CDs. You don't want to be pushy but you may want to send out a newsletter when you release your next CD. I offer a newsletter that people can sign up for to get information on new lessons on my site, concert and release dates. Remember, don't bug anyone, if you get on their nerves with daily e-mails it will have the opposite effect.
 
 
Other Methods
 
Internet CD Shops - If you don't want to deal with mailing CDs out to different parts of the world you can use an Internet CD store. I use guitar9.com and CDbaby.com. All you have to do is mail a bunch of CDs to them, and they will sell them and send a check to you from time to time. All you have to do is link from your site to your page on their site and the whole thing comes together pretty easily.
 
The best thing about using a site like one of these is that music lovers browse through, searching for the undiscovered gem and may, by chance, discover you! I can't tell you how rewarding it is when someone I never met in a country I have never been to, buys one of my CDs because he found me in a Web store, listened to a track or two, found something that connected with him in the music that is very much connected with me, and parted with money that he probably worked very hard for. If I were signed to a major label, the whole thing would probably be a lot less rewarding.
 
 
Downloading - You don't even really need to manufacture CDs anymore; you can just sell the data. There are plenty of sites that are designed to do just that. This is how it works: as you probably know by now, anybody can burn CDs at home. You can also print out anything. For this reason, rather then selling your CD, and shipping it around the world, you can simply have customers download both the music and the jacket art and make their own CDs at home.  
 
Why would you want to do this? The answer is very simple: you can save a bunch of money doing it this way because it cuts down production costs. My CD, "Prospects" cost me about $2,500 to just manufacture. What I mostly paid for is mastering, burning the CDs, printing the jacket and labor costs (somebody has to put the jacket in the case and shrink wrap it). Every time I sell one, I have to ship it. As I mentioned before, if I had decided to put it in stores, I would have to pay for distribution and then the CD shop would take a cut.  
 
The download concept eliminates all that. And the best part is this: your selling data, so there is no limit on how much you can sell. That's right, you could technically sell a zillion CDs. The conventional method only allows you sell what you manufacture.  
 
No wonder the major labels and CD shops are sweating, you don't really need them anymore. Go down to the big CD shop on the corner and you'll realize that they have started selling way more merchandise (t-shirts, posters and other stuff). They have to because they are having problems selling the same amount of CDs that they used to, they are trying to make up the difference.
 
Magnatune - There are a bunch of sites that offer downloads. I found a great one: Magnatune. Most sites like MP3.com or garageband.com offer a similar service but the difference is that they do not filter the artists, no quality control. They charge the artists to sign up, if you pay, you're in. They do provide an important service: anyone can market and sell their own music regardless of how it sounds using these sites.  
 
Magnatune is different. John Buckman, the president of Magnatune told me that he only accepts about 2% of submissions (yours truly, one of the lucky ones). For this reason, it is easy to find great music on his site. You are really going to have to search through the other sites for something great. The interesting thing with Magnatune is that they allow the customer to pick how much they want to pay for the CD they download (from five to eighteen dollars). When I first heard that, I figured everyone would only pay the minimum five bucks, but it turns out I was wrong. Most people pay more, looking through my sales records, anywhere from five to ten dollars. I guess they want to support independent artists like myself. Magnatune splits the money with me. What a great concept. Check out the site, you'll find some very creative music.
 
Which Method is Best for you - Technically you could record your music, have it mastered and just send the MP3 data to Magnatune or a similar site. It would cost you way less this way than the traditional method of selling music.  
 
The only disadvantage is that your market would shrink quite a bit. True, since there are no manufacturing costs, you would not have to sell near as many CDs to turn a profit but you would still miss a lot of potential fans.
 
This system works great if you don't or can't gig around. Since I gig somewhat, it is in my best interest to manufacture CDs and sell them at shows (it is hard to get people in clubs to remember an url where they can download your tunes, they usually want your CD on the spot).  
 
And to be honest, there are still a lot of people who just want to buy a CD and don't want to be bothered with manufacturing your CD themselves. The combination of these two methods works great for me, you can decide for yourself which works best for you. I have a strange feeling that downloading will be the way people will buy music in the future but it will take a few years yet.
 
 
A Word on Recording - The same computer technology that made the internet possible has also made recording simple and inexpensive. Ten years ago, not only did you have no place to market, promote and sell your CD, you also had no way to record it without spending some real cash. Computer technology has inspired thousands of engineers to open up studios in their houses or in other small spaces and you can get yourself recorded for a fraction of the cost these days because of this.  
 
As I said in one of my last articles; no matter where you decide to record, make sure you are prepared before you go to the studio. The big and small studios both charge by the hour so make sure you have it together. If you want to research this subject a little more, check out my friend David Chambelin's site: http://www.dbwproductions.com. He produces and records various artists for a very reasonable price. He'll even arrange your stuff and play on it for you. His site offers advice on how to prepare for your session.  
 
Have Fun - The whole thing is a blast. You have nobody to blame if you can't sell any CDs, and that's part of the adventure. You get a chance to use your head, grow in the process and make friends around the world. What could be better than that?
 
Until next time...

There are millions of music lovers surfing the Web every day searching for music that they want to discover all by themselves. They don't want to be told what to listen to and buy anymore.