This is a guest post by Berklee Online music business instructor Chandler Coyle. Chandler is one-half of the fan experience agency Music Geek Services and is also the publisher of the The Coyle Report, a free weekly music marketing newsletter.
Using eye-opening data from PledgeMusic (see details of our PledgeMusic integration here!), Chandler urges musicians to think differently about their next release, and to tap into the desire for their superfans to support them.
"Superfans. These are some of the most interesting men and women in the music industry right now and they’re particularly important to artists."
– Benji Rogers, Founder and President of PledgeMusic
You are a recording artist. You are planning your next album project. For your previous album in 2012 you pre-sold it solely via iTunes. It did pretty well. You pre-sold 1,594 albums via iTunes. In gross revenue terms that’s $9.99 x 1,594 = $15,924.06. Not bad for selling a 1’s and 0’s digital representation of your album. (Yes, iTunes takes a ~30% cut of that, but let’s talk gross revenue in this article to keep things really simple.)
Have you read the news recently? Download sales are declining. Think about it, when was the last time you bought a download from iTunes? You have a feeling that you may not sell as many pre-orders for this upcoming album as a portion of your fanbase would just prefer to stream your new album via Spotify or their favorite streaming service.
But, you knew that, so in the time since your last release in 2012, you have been working really hard at fan engagement. You feel that you have developed a solid relationship with your core fans, your superfans. You are forecasting that 1,500 fans would support you in the next album’s pre-order.
If you went the iTunes route again: $9.99 x 1,500 = $14,985.00. Again, not bad for a bunch of digital copies. Wait! Wouldn’t your superfans be willing to support you above and beyond $9.99/album? Yes. Yes they would.
PledgeMusic frequently touts that artists who run pre-order campaigns through their platform see an average per pledge amount of $61.00/pledge. Some fans will opt for the $10 download just like iTunes, but when given the opportunity to support the artist in a bigger way some fans will opt for the $150 VIP Meet n’ Greet which includes the download and Vinyl LP.
Let’s re-do our forecast using PledgeMusic’s $61/pledge:
$61.00 x 1,500 = $91,500
Holy crap! That’s nearly $100,000.00! That’s over 6x greater than a digital only pre-order via iTunes. Why did this happen? Well, you tapped into the desire for your superfans to support you. Your core fans have always wanted to support you in a big way, but you had not been letting them.
Remember that Nielsen study that came out in 2013 about there being billions of dollars left on the table by the music industry? Your direct-to-fan album pre-orders are included in that. It is up to you to decide whether you want to leave the money on the table or if you want to serve your superfans with the experience they desire.
Yes, you can finally earn the money you deserve from developing such a strong bond with your superfans.
What? Could you repeat your question? “What if I only have 150 superfans that would pledge during a PledgeMusic pre-order?”. Ah, yes, you wonder if this scales up and down. My experience is that it does. I worked with an artist who had ~150 orders during a PledgeMusic campaign. They actually saw a average per pledge amount of > $100.00. So, in their case, it was $100.00 x 150 = $15,000. Even at the system average — $61 x 150 = $9,150.00 — you are still doing much better than an iTunes pre-order.
Using the stated PledgeMusic system average of $61/pledge, here’s a chart that shows how a digital-only iTunes pre-order would compare with a PledgeMusic pre-order campaign:
Making money as a musician is tough. That's why you keep 100% of your hard-earned revenues when you sell music, merch & tickets through your Bandzoogle website. Sign up free now!