From a purely business perspective, here are some of the major things you have going against you:
1. High production costs.
2. Small Profit Margins.
3. Infinite amounts of competition.
The reality… It’s just damn hard to make a million dollars 10 bucks at a time, especially when it can easily cost you tens of thousands of dollars to get your album recorded and manufactured, and every long haired dude who knows a couple of bar chords has a band of his own.
…and yet, recording and releasing albums is paramount to the process.
Did you know that many authors release books, purely as loss leaders for much larger (and more lucrative) business models?
It’s true, many authors, particularly in the self help and financial markets, release books purely to establish credibility and greater reach within their market. They see the book as the tool that will generate opportunities for additional revenue such as consulting and live events.
Much in the same way, to make a substantial living as a musician, you really should be considering revenue streams beyond simply selling albums.
Let’s look at some numbers…
Let’s say you’d like to make $60,000 a year.
To generate that income by selling albums (working off of $10 profit per album), you would need to sell 6,000 albums annually. Okay, it’s possible. But you’re going to have to really grind it out to move that kind of volume as an independent artist.
Conversely, let’s say you sold 1000 albums annually – I think most of us would agree that that’s a fairly reachable goal.
If you’ve been generating leads like I teach in Music Marketing Manifesto, you could offer your fans additional, higher end items such as merchandise and private concerts, and still reach your financial goals with only a fraction of the traffic.
Let’s look at those numbers again when we add a back end…
1000 front end albums at $10 = $10,000
If 30% of those customers bought some merch, (let’s say a $30 T-shirt) That’s 300 X $30 = $9000.00
If 10% of your front end customers paid to have you play a private concert for, let’s say $450 (very doable by the way), that would be an additional $45,000.
That would bring the total earnings to $64,000 a year and you’d only need to generate one sixth of the total number of customers you would need to generate if selling albums alone.
Now, you can shift these numbers around anyway you like, but I’m sure you can see the potential here.
Look at your album as the tool with which you establish credibility, reach within your market, and create life long fans. Make your living on the back end.
It really is all in the way you approach your music career.
Another way to add a huge revenue stream to your business model is with music licensing.
For example, I recently got a track of mine placed as the end credit song for the film “What Happens In Vegas”, starring Ashton Kutcher and Cameron Diaz. The combined fees on that placement alone were $60,000, and that’s before royalties. I still get hefty checks every quarter on that film and probably will for many years to come.
If you look at things from a purely business perspective, that is $60,000 for a single sale.
And now you’re probably saying to yourself, now hold on… That’s not a customer, that’s a giant Hollywood movie licensing your music, the process is totally different… isn’t it?
Selling comes down to a few basic things.
1. Find your market.
2. Find out what they want.
3. Offer it to them.
Landing a placement in a film or television show is not all that different. Knowing who the music supervisors are, what they are looking for, and how to approach them, can seriously increase your chances of getting your music licensed, which in turn might dramatically change your financial picture. Better yet, the right music placement might bring in royalties for years.
Here is a link to a video that will show you some of the key things you need to focus on when trying to get your music licensed.
There is no opt-in required or anything like that. Just go here to watch the video now.
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