Ok Go Explains There Are Lots Of Ways To Make Money If You Can Get Fans

from the everything's-possible dept

Over the last few years, we've covered many of the moves by the band Ok Go -- to build up a fanbase often with the help of amazingly viral videos, ditch their major record label (EMI), and explore new business model opportunities. In the last few days, two different members of Ok Go explained a bit more of the band's thinking in two separate places, and both are worth reading. First up, we have Tim Nordwind, who did an interview with Hypebot, where he explained the band's general view on file sharing:

Obviously we'd love for anyone who has our music to buy a copy. But again, we're realistic enough to know that most music can be found online for free. And trying to block people's access to it isn't good for bands or music. If music is going to be free, then musicians will simply have to find alternative methods to make a living in the music business. People are spending money on music, but it's on the technology to play it. They spend hundreds of dollars on Ipods, but then fill it with 80 gigs of free music. That's ok, but it's just a different world now, and bands must learn to adjust.

Elsewhere in the interview, he talks about the importance of making fans happy and how the band realizes that there are lots of different ways to make money, rather than just selling music directly:

Our videos have opened up many more opportunities for us to make the things we want to make, and to chase our best and wildest ideas. Yes, we need to figure out how to make a living in a world where people don't buy music anymore. But really, we've been doing that for the last ten years. Things like licensing, touring, merch, and also now making videos through corporate sponsorship have all allowed us to keep the lights on and continue making music.

Separately, last Friday, Damian Kulash wrote a nice writeup in the Wall Street Journal all about how bands can, should and will make money going forward. In many ways the piece reminds me a bit of my future of music business models post from earlier this year -- and Kulash even uses many of the same examples in his article (Corey Smith, Amanda Palmer, Josh Freese, etc.). It's a really worthwhile read as well. He starts by pointing out that for a little over half a century, the record labels had the world convinced that the "music" industry really was just the "recorded music" industry:

For a decade, analysts have been hyperventilating about the demise of the music industry. But music isn't going away. We're just moving out of the brief period--a flash in history's pan--when an artist could expect to make a living selling records alone. Music is as old as humanity itself, and just as difficult to define. It's an ephemeral, temporal and subjective experience.

For several decades, though, from about World War II until sometime in the last 10 years, the recording industry managed to successfully and profitably pin it down to a stable, if circular, definition: Music was recordings of music. Records not only made it possible for musicians to connect with listeners anywhere, at any time, but offered a discrete package for commoditization. It was the perfect bottling of lightning: A powerful experience could be packaged in plastic and then bought and sold like any other commercial product.

But, he notes, that time is now gone, thanks in large part to the internet. But that doesn't mean the music business is in trouble. Just the business of selling recorded music. But there's lots of things musicians can sell. He highlights Corey Smith and Smith's ability to make millions by giving away his music for free, and then touring. But he also points out that touring isn't for everyone. He covers how corporate licensing has become a bigger and bigger opportunity for bands that are getting popular. While he doesn't highlight the specific economics of it, what he's really talking about is that if your band is big, you can sell your fan's attention -- which is something Ok Go has done successfully by getting corporate sponsorship of their videos. As he notes, the sponsors provide more money than the record labels with many fewer strings:

These days, money coming from a record label often comes with more embedded creative restrictions than the marketing dollars of other industries. A record label typically measures success in number of records sold. Outside sponsors, by contrast, tend to take a broader view of success. The measuring stick could be mentions in the press, traffic to a website, email addresses collected or views of online videos. Artists have meaningful, direct, and emotional access to our fans, and at a time when capturing the public's attention is increasingly difficult for the army of competing marketers, that access is a big asset.

...

Now when we need funding for a large project, we look for a sponsor. A couple weeks ago, my band held an eight-mile musical street parade through Los Angeles, courtesy of Range Rover. They brought no cars, signage or branding; they just asked that we credit them in the documentation of it. A few weeks earlier, we released a music video made in partnership with Samsung, and in February, one was underwritten by State Farm.

We had complete creative control in the productions. At the end of each clip we thanked the company involved, and genuinely, because we truly are thankful. We got the money we needed to make what we want, our fans enjoyed our videos for free, and our corporate Medicis got what their marketing departments were after: millions of eyes and goodwill from our fans. While most bands struggle to wrestle modest video budgets from labels that see videos as loss leaders, ours wind up making us a profit.

Of course, that only works if you have a big enough fanbase, but that doesn't mean there aren't things that less well known bands can use to make money as well. He talks about an up-and-coming band in LA that doesn't even have a manager that was able make money:

The unsigned and unmanaged Los Angeles band Killola toured last summer and offered deluxe USB packages that included full albums, live recordings and access to two future private online concerts for $40 per piece. Killola grossed $18,000 and wound up in the black for their tour. Mr. Donnelly says, "I can't imagine they'll be ordering their yacht anytime soon, but traditionally bands at that point in their careers aren't even breaking even on tour."

The point, Kulash, notes, is that there's a lot of things a band can sell, focusing on "selling themselves." And, the thing he doesn't mention is that, when you're focusing on selling the overall experience that is "you" as a musician or a band, it's something that can't be freely copied. People can copy the music all they want, but they can't copy you. "You" are a scarce good that can't be "pirated." That's exactly what more and more musicians are figuring out these days, and it's helping to make many more artists profitable. And, no, it doesn't mean that any artist can make money. But it certainly looks like any artist that understands this can do a hell of a lot better than they would have otherwise, if they just relied on the old way of making money in the music business.

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Here's the problem with funding 2011's government using 2010's budget: When the 2010 budget passed, neither financial regulation nor health-care reform had passed. And so the 2010 budget didn't include the new funds necessary to support their implementation. We're not talking about a lot of money here, of course, but certainly some. And for the health of these bills, it's important money.

But after the collapse of the omnibus spending bill, the Democrats have moved to funding the government using a resolution that simply continues 2010's funding levels. And that means starving some of their signature accomplishments of implementation funds. This hasn't been lost on Republicans, of course: Mitch McConnell's key argument for turning GOP senators who'd pledged to vote for the omnibus was that it included funds for health-care reform. The Democrats, however, seemed less attuned to this dimension of the funding fight. And even those who do see the problem aren't making much noise about it: Though there was lots of tough talk in recent months about how Democrays would risk a government shutdown rather than seeing their accomplishments defunded, that didn't prove true, at least this time.

Top Stories

The Census Bureau will announce which states gained and lost House seats today, reports Charles Babington: "The 2010 census report coming out Tuesday will include a boatload of good political news for Republicans and grim data for Democrats hoping to re-elect President Barack Obama and rebound from last month's devastating elections. The population continues to shift from Democratic-leaning Rust Belt states to Republican-leaning Sun Belt states, a trend the Census Bureau will detail in its once-a-decade report to the president. Political clout shifts, too, because the nation must reapportion the 435 House districts to make them roughly equal in population, based on the latest census figures. The biggest gainer will be Texas, a GOP-dominated state expected to gain up to four new House seats."

The federal funding resolution Congress is considering doesn't include money for the implementation of health-care reform, report Jessica Holzer and Josh Mitchell: "Democrats last week sought $1 billion to expand federal agencies to cope with health-care demands as part of a proposed $1.1 trillion spending bill. That measure died after Senate Republicans closed ranks against it under pressure from conservative activists...Congressional Republicans have said they will try to defund enactment of the health-care law's least popular provisions, particularly Internal Revenue Service efforts to enforce the requirement that most Americans carry health insurance."

Nor for FinReg, reports Pat Garofalo: "The resolution does not include funding for the implementation of the Dodd-Frank financial reform law. Under the omnibus, the Securities and Exchange Commission would have seen its budget increase to $1.3 billion from $1.1 billion, and the CFTC would have gone from $169 million to $286 million. Already, the SEC has halted implementation of a variety of measures under the law as it waits for funding."

The FCC is set to enact "net neutrality" rules, reports Cecilia Kang: "Federal regulators are poised to enact controversial new rules affecting Internet access, marking the government's strongest move yet to ensure that Facebook updates, Google searches and Skype calls reach consumers' homes unimpeded. Under the regulations, companies that carry the Internet into American homes would not be allowed to block Web sites that offer rival services, nor would they be permitted to play favorites by dividing delivery of Internet content into fast and slow lanes. The rules are set to win passage in a vote Tuesday by the Federal Communications Commission, after a majority of the panel's five members said they planned to vote in favor of the measure."

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Surf-rock interlude: Surfer Blood plays "Twin Peaks".

Still to come: Regulators are taking aim at executive pay; Mark Warner and Saxby Chambliss will push a deficit-reduction package; Bill Gates and Randi Weingarten talk education reform; and an infant learns to drive.

Economy

Sens. Mark Warner (D-Va.) and Saxby Chambliss (R-Ga.) will introduce a debt reduction package in the next Congress, reports Heidi Przybyla: "Senators Mark Warner and Saxby Chambliss will seek to put the U.S. debt atop the agenda early in next year's Congress by proposing legislation to slash government spending, reduce popular tax breaks and trim entitlement programs. Warner, a Virginia Democrat, and Chambliss, a Georgia Republican, have been working over the past six months to court a group of 25 senators from both sides of the political aisle in hopes of gathering support for their bill, Warner said today in an interview. The legislation is based on a plan by the co-chairs of President Barack Obama's debt-reduction panel that earlier this month failed to get enough support for its recommendations to be sent to Congress."

The US is considering a crackdown on Wall Street executive pay, report Aaron Lucchetti and Sara Schaefer Munoz: "U.S. regulators are considering whether to require large financial firms to hold onto a chunk of executive pay to discourage the excessive risk-taking that contributed to the financial crisis, according to people familiar with the situation...The discussions by the Federal Reserve, Securities and Exchange Commission and other federal banking agencies are the result of a provision in the Dodd-Frank financial-overhaul law that instructs regulators to prohibit any bonus plan that "encourages inappropriate risks" at financial firms with more than $1 billion in assets."

The Fed is limiting its purchases of Treasury assets: http://bit.ly/ep64hK

The tax compromise provides a preview of new OMB director Jack Lew's style, reports Jackie Calmes: "While the deal drew fire from both parties, liberal Democrats were especially enraged by a two-year extension of Bush-era tax cuts for high incomes and wealthy estates and a reduction in payroll taxes for Social Security. In private caucuses, some turned their anger at the White House on Mr. Lew. 'This is not a package we could have supported if it didn’t take care of the workers who are most vulnerable,' Mr. Lew said in an interview, echoing the pitch he made to Democrats in private...With both Mr. Obama and Republicans vowing to bring down annual deficits swelling the nation’s debt -- in very different ways -- Mr. Lew becomes an even more crucial figure in the cabinet than budget directors typically are."

Public respect for government workers is on the wane, report Karen Tumulty and Ed O'Keefe: "Three-quarters of those who were surveyed in an October Washington Post poll said they believe federal workers get better pay and benefits than people doing similar jobs outside the government, and 52 percent said government employees are overpaid. When the NBC/Wall Street Journal poll this month sampled public opinion on the major proposals that were put forward by the president's deficit and debt reduction commission, the most popular by far - and the only one deemed 'totally acceptable' by a majority of respondents - was freezing the salaries of federal employees and members of Congress for three years."

The St. Louis Fed president calls quantitative easing "moderately successful" so far: http://on.wsj.com/fBbxaE

The spending package's March expiration date won't make raising the debt ceiling easier, writes Stan Collender: "Because the existing debt ceiling currently is assumed to be reached close to the same date the the CR will expire, won't the two issues be combined into a single piece of legislation?...Combining the two issues would certainly be possible and perhaps even likely in a rational world where efficiency is the goal. But in the hyper political and partisan world that will exist in Washington next year, will it really make any sense for the GOP voluntarily to give up one of what it will believe will be its two major points of leverage over the White House? Even if the two need to be dealt with at close to the same time, why would the GOP not use both opportunities to exert influence that it otherwise won't have?"

Tom Coburn's "Wastebook" is misleading, writes Brad Plumer: http://bit.ly/en6ujQ

Adorable infant acquiring life skills interlude: A Russian baby learns to drive.

Health Care

Sen. Tom Coburn is blocking a bill to provide health care to 9/11 first responders: http://politi.co/eFpn6x

The Justice Department is suing Blue Cross Blue Shield on antitrust grounds, reports Reed Abelson: "When the Justice Department filed an antitrust lawsuit against Blue Cross Blue Shield of Michigan in October, the unusual action was widely seen as a warning shot to dominant health insurance carriers in many other states...The case is viewed as a test for the Obama administration’s introduction of the federal health care law, which is aimed at spurring competition and driving down costs. About half the states in the country, including Alabama, Rhode Island and Iowa, share circumstances similar to Michigan’s, in their relationships with a big single insurance carrier."

Domestic Policy

The spending bill Congress is considering will implement a federal pay freeze, reports Stephen Ohlemacher: "Federal workers would face a two-year pay freeze under a spending bill Congress will take up this week to keep the government operating through March 4. The bill would protect student Pell grants, veteran's benefits and a program that helps low-income families pay their heating bills. A small business loan program would be extended...Three weeks ago, President Barack Obama proposed a two-year salary freeze for some 2 million federal workers, seizing on an initiative popular among Republicans. Public employee unions are lobbying lawmakers to reject the pay freeze."

State attorneys general are going to war with Google over privacy concerns, reports Tony Romm: "More legal wrangling could be in store for Google now that it has refused to turn over to state investigators the e-mails and other data it accidentally collected while mapping neighborhoods. The Mountain View, Calif.-based company declined to deliver that trove of information to Connecticut Attorney General and soon-to-be senator Richard Blumenthal by his Friday deadline. That could set up a legal showdown between the two less than a month before Blumenthal is set to become his state’s newest Democratic senator."

Bill Gates and Randi Weingarten discuss school reform: http://bit.ly/fj40lh

The tax compromise will not affect the Social Security trust fund, writes Allan Sloan: "Next year, as you probably know, workers subject to Social Security taxes will pay only 4.2 percent of their "covered wages" -wages up to $106,800 - rather than the normal 6.2 percent. This will reduce Social Security's cash proceeds by $112 billion, according to Congress' Joint Committee on Taxation. What impact will this cash shortfall have on the Social Security trust fund? None. Zero. Zip. How can a $112 billion cut in Social Security revenues not affect the trust fund? Because Treasury will give the trust fund the same amount of bonds it would have gotten had the two-percentage-point tax holiday didn't exist."

Modest proposal interlude: Craig Rowin would like someone to give him $1 million.

Energy

Republicans may actually defend spending on renewable energy, reports Sharon Begley: "This region--Texas, Oklahoma, and on up to the Dakotas--is to wind power what Nebraska is to corn. The investment tax credit for building wind and other renewable installations expires Dec. 31. Once it does, those projects will come to a halt, and thousands of people who are employed in building them will be out of work. Those workers, of course, are the constituents of newly elected officials, the companies behind the projects are crucial economic engines in the districts and states of those legislators, and both are going to give their reps an earful if the projects don’t resume."

The EPA is touting the success of cap and trade in fighting acid rain: http://bit.ly/hM57vU

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams.

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Wednesday, December 22, 2010

Making Money Internet

Ok Go Explains There Are Lots Of Ways To Make Money If You Can Get Fans

from the everything's-possible dept

Julian Assange | Sarah Palin | Fox <b>News</b> | Mike Huckabee | Mediaite

Ben Sherwood - ABC <b>News</b> | Attack Video | Mediaite

Lindsay Lohan accuser fired | <b>News</b> Briefs | EW.com

Julian Assange | Sarah Palin | Fox <b>News</b> | Mike Huckabee | Mediaite

Ben Sherwood - ABC <b>News</b> | Attack Video | Mediaite

Lindsay Lohan accuser fired | <b>News</b> Briefs | EW.com

Julian Assange | Sarah Palin | Fox <b>News</b> | Mike Huckabee | Mediaite

Ben Sherwood - ABC <b>News</b> | Attack Video | Mediaite

Lindsay Lohan accuser fired | <b>News</b> Briefs | EW.com

Julian Assange | Sarah Palin | Fox <b>News</b> | Mike Huckabee | Mediaite

Ben Sherwood - ABC <b>News</b> | Attack Video | Mediaite

Lindsay Lohan accuser fired | <b>News</b> Briefs | EW.com

Julian Assange | Sarah Palin | Fox <b>News</b> | Mike Huckabee | Mediaite

Ben Sherwood - ABC <b>News</b> | Attack Video | Mediaite

Lindsay Lohan accuser fired | <b>News</b> Briefs | EW.com

Julian Assange | Sarah Palin | Fox <b>News</b> | Mike Huckabee | Mediaite

Ben Sherwood - ABC <b>News</b> | Attack Video | Mediaite

Lindsay Lohan accuser fired | <b>News</b> Briefs | EW.com

Julian Assange | Sarah Palin | Fox <b>News</b> | Mike Huckabee | Mediaite

Ben Sherwood - ABC <b>News</b> | Attack Video | Mediaite

Lindsay Lohan accuser fired | <b>News</b> Briefs | EW.com

Julian Assange | Sarah Palin | Fox <b>News</b> | Mike Huckabee | Mediaite

Ben Sherwood - ABC <b>News</b> | Attack Video | Mediaite

Lindsay Lohan accuser fired | <b>News</b> Briefs | EW.com

Julian Assange | Sarah Palin | Fox <b>News</b> | Mike Huckabee | Mediaite

Ben Sherwood - ABC <b>News</b> | Attack Video | Mediaite

Lindsay Lohan accuser fired | <b>News</b> Briefs | EW.com

Julian Assange | Sarah Palin | Fox <b>News</b> | Mike Huckabee | Mediaite

Ben Sherwood - ABC <b>News</b> | Attack Video | Mediaite

Lindsay Lohan accuser fired | <b>News</b> Briefs | EW.com

Julian Assange | Sarah Palin | Fox <b>News</b> | Mike Huckabee | Mediaite

Ben Sherwood - ABC <b>News</b> | Attack Video | Mediaite

Lindsay Lohan accuser fired | <b>News</b> Briefs | EW.com

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