How to make money in the digital age

[Bonegavel]

This is an interesting era in which to create and sell music, literature, software, or any other item which can be easily/cheaply reproduced and distributed. As we all know, the old models are being assaulted with digital downloads and many artists are struggling to find new ways to sell their creations.

This article (http://www.techdirt.com/articles/20080522/1545021204.shtml) got me to thinking about it enough to start a thread.

As I often find, the comments section brings up great points and is better than the article itself, IMHO.

As a potential seller of my own creative endeavors, it is interesting to me too see how this is evolving and where it will end up.

One comment echoed my own thoughts that most creative folks that were/are used to larger royalties (but not the Stephen King's of the world) may have to go back to working a 9-5 and doing the creative like the rest of us: weekends and nights. So much content is out there and free (legally) that paying for it in the traditional sense just doesn't make sense.

I had to read the article twice before I understood what the author meant by "infinite vs scarce" resources (I'm no economist) and this has nothing to do with Piracy and refers to the availability of a product or service.

I used to think that micropayments would be the solution (or at least a large part) to all of this, but I now think that MPs will only be part of the answer.

I like what Trent Reznor has done with Ghosts. He made most of his money by selling limited edition physical products. The whole In Rainbows thing I think was just a gimmick and not seriously thought out.

Right now the whole thing feels like the business plan of the Underpants Gnomes:

Step 1: Create Stuff
Step 2: ?
Step 3: Profit

Anyone have any personal experience with this side of things? Where do you think this is headed?

[MacroGuru]

Actually, while working at my last employer who taught people about it, there biggest push was information being sold online. It is cheap, no warehouse needed, no inventory needed.

I am actually in the process of starting an e-book just for this purpose.

Trust me, carrying inventory and selling it online SUCKS....

[ShaneTheMaster]

Step 1: Create Stuff
Step 2: ?
Step 3: Profit



Wasn't this an episode of Southpark?

[Desnudo]

This is an interesting era in which to create and sell music, literature, software, or any other item which can be easily/cheaply reproduced and distributed. As we all know, the old models are being assaulted with digital downloads and many artists are struggling to find new ways to sell their creations.

This article (http://www.techdirt.com/articles/20080522/1545021204.shtml) got me to thinking about it enough to start a thread.

As I often find, the comments section brings up great points and is better than the article itself, IMHO.

As a potential seller of my own creative endeavors, it is interesting to me too see how this is evolving and where it will end up.

One comment echoed my own thoughts that most creative folks that were/are used to larger royalties (but not the Stephen King's of the world) may have to go back to working a 9-5 and doing the creative like the rest of us: weekends and nights. So much content is out there and free (legally) that paying for it in the traditional sense just doesn't make sense.

I had to read the article twice before I understood what the author meant by "infinite vs scarce" resources (I'm no economist) and this has nothing to do with Piracy and refers to the availability of a product or service.

I used to think that micropayments would be the solution (or at least a large part) to all of this, but I now think that MPs will only be part of the answer.

I like what Trent Reznor has done with Ghosts. He made most of his money by selling limited edition physical products. The whole In Rainbows thing I think was just a gimmick and not seriously thought out.

Right now the whole thing feels like the business plan of the Underpants Gnomes:

Step 1: Create Stuff
Step 2: ?
Step 3: Profit

Anyone have any personal experience with this side of things? Where do you think this is headed?

I think Radiohead has shown a viable model. I don't believe artists will have to take 9 to 5 jobs. People will figure out how to get paid for their work. The impact will likely be felt by the middle man - the record companies, etc..

[Bonegavel]

Wasn't this an episode of Southpark?

Yes, the underpants gnomes episode.

[JediKooter]

Come on, everyone knows that Al Gore invented the internet for two things: porn and sharing recipes.

[KWhit]

I think Radiohead has shown a viable model. I don't believe artists will have to take 9 to 5 jobs. People will figure out how to get paid for their work. The impact will likely be felt by the middle man - the record companies, etc..

I don't know about the whole 9-5 part, but I'm not sure that the Radiohead model will work going forward. It worked for them because they're already well known, but for Joe Sixpack Garageband out there trying to make it today, I'm not sure how they will break in and gain enough fans to make a living without today's marketing record label model.

(Not that I'm defending the record companies - I just don't know how it will all work out).

[Desnudo]

I don't know about the whole 9-5 part, but I'm not sure that the Radiohead model will work going forward. It worked for them because they're already well known, but for Joe Sixpack Garageband out there trying to make it today, I'm not sure how they will break in and gain enough fans to make a living without today's marketing record label model.

(Not that I'm defending the record companies - I just don't know how it will all work out).

Can't you argue that the internet provides a medium for those bands to become famous, while they may toil in obscurity for their entire career without it?

If a band is any good, I think it's much easier for them to be recognized as such today.

[BrianD]

Can't you argue that the internet provides a medium for those bands to become famous, while they may toil in obscurity for their entire career without it?

If a band is any good, I think it's much easier for them to be recognized as such today.

The Internet provides a medium for everyone to do everything. The market gets flooded with product of various levels. There is better access to the good stuff, but there is a lot of crap to wade through to find it.

[KWhit]

The Internet provides a medium for everyone to do everything. The market gets flooded with product of various levels. There is better access to the good stuff, but there is a lot of crap to wade through to find it.

Yeah, that's kind of my thinking as well. It's always been hard for people to break into these kinds of industries. And the internet has a weird way of celebritizing the wacky and ridiculous instead of the talented.

So I see a lot more people like that Chocolate Rain guy "breaking through" and becoming famous on the internet, but I don't see it happen as often to a real talented singer or artist. But maybe it's happening, and I'm just not seeing it.

[Fidatelo]

I'm guessing someone like Ronald Jenkees would be a good person to ask. He's obviously becoming quite well-known for his music, has released a couple CD's, etc. How has he fared thus far?

[Raiders Army]

I thought this thread was about conterfeiting.

[BrianD]

Yeah, that's kind of my thinking as well. It's always been hard for people to break into these kinds of industries. And the internet has a weird way of celebritizing the wacky and ridiculous instead of the talented.

So I see a lot more people like that Chocolate Rain guy "breaking through" and becoming famous on the internet, but I don't see it happen as often to a real talented singer or artist. But maybe it's happening, and I'm just not seeing it.

The wacky do gain notoriety for a few days, but I'd bet they don't profit much by it. I'm not sure how one would make much money in this way via the Internet. There is enough free decent content that people aren't often willing to see out and pay for the good stuff. Seems like the best way is a history of giving away good free stuff until enough people know you that you can "sell out" and start getting paid. Lots of work for an uncertain payout.

[Young Drachma]

Branding is still a huge thing and notoriety and reaching out to an audience beyond a niche is still difficult to do. I mean, text sims are a good example. They're still a very small niche that beyond ourselves and maybe those few people we interact with, no one really knows about them.

You'd think there would be massive appeal for such things, just because of the bounty of choices we have in the marketplace, but...alas, the marketplace isn't necessarily full of people just waiting to find stuff.

Why is search so lucrative? Because the 'net is a freakin' mess and it's hard to find what you're looking for. Capitalizing on people's need to seek what they're looking for, has made Google what it is.

[Bonegavel]

Focusing on music for a second, the current methods that are in-play right now are:

The traditional: record company, radio-play, purchase CD, download mp3 (amazon, iTunes, etc)

NIN: bypass record company, sell a limited number of high price special pieces, have a physical product (cd) if they want to pay for it, download for fee (high quality) download free (mp3, low quality). This works for established artists with the rare exception.

In Rainbows: download free and pay what you want.

Indie Labels: record your own stuff and post it somewhere (free or for fee). I don't imagine many people are making a living off of this type of scenario.

Established artists (that came up through the record company system) can still make a ton of money by touring and merchandise.

Any other models out there?

[cthomer5000]

The whole In Rainbows thing I think was just a gimmick and not seriously thought out.

You do realize they made like 10 million dollars in the first WEEK of online sales, right?

[cthomer5000]

Trying to take a serious look at the end of this I will have a clue about, here's my thoughts on music.

Indie labels with an artist-first approach will keep on chugging along as-is. These are labels that simply find bands they like, pay them to release their stuff, help market them etc. If the bands are motivated to begin with and will tour to support the stuff, it's really a symbiotic relationship. Once in a while an independent label stumbles upon someone who either crosses over to real popularity, or at least large popularity on an indie scale. An example of a big indie band would be Arcade Fire, signed to Merge records.

The keys here are:

1. The label not taking on too many artists. You need a fairly restricted release schedule by bands you actually believe in order to go ahead and try to push them to (specialized) radio, etc.

2. Bands with natural work ethics are going to help themselves and the label a lot. Many bands DO build reputations simply because they're great live acts, or bands can go out as an opening act of another band on the label etc. There are tons of bands making a decent living as full-time musicaions that most this board has never heard of. There are many more artists doing it than i've ever heard of. There are even more artists doing it than those artists have heard of.

3. Limited print runs and definitely willingness to sell digitally. I'm sure Merge records does not go out and print 50,000 copies of anything right off the bat. And i'm also sure most of their physical sales are online direct through them. But there stuff is also available electronically through other outlets.


Good music rises to the top. Actual good music, even on a small label, will spread by word of mouth, then through reviews (online or published). This is not something a majority of major label releases have going for them. Flat-out, most major (rock) labels are far too occupied with asking themselves "does this sound like something i'd hear on major rock radio?" rather than "is this any good?"


I could go on and on about this... but im feeling lazy at the moment. I believe quality-driven small labels who try first to release good music, then work on correctly market that music will keep succeeding. Try to make art, and if it becomes popular...it's basically a bonus.

Maybe long-term this will lead back to a regionaliziation of music. More-so than it is now anyway. I think we're going to have fewer big acts and many more successful musicaions who are not even close to household names.

I think in many ways we're going to be heading sort of back in time to a singles-driven, touring-driven music industry.

[Mac Howard]

I've struggled to make the internet work for 8 years now with computer software. I simply don't have the answer on how to make it more than moderately successful.

The myth used to be that no one knows how big you are on the net. The truth is just the opposite. Not only will you be massively outmarketed by the big guys but the insecurity still felt by many about internet companies - is this company a scam from China :rolleyes: - means you have an additional disadvantage to overcome compared with the off-line world.

And if you do achieve success then you suddenly find that piracy takes care of that. You'll note that the big successes in the text sim world - FM and CM - are not sold as downloadable games.

If anyone really knows how to make significant income from a product sold as a downloadable item should send me private message :)

[Shkspr]

You do realize they made like 10 million dollars in the first WEEK of online sales, right?

And you realize that the $10 million estimate came from multiplying the results of an Internet poll by the "exaggerated" (as reported by the band's manager) estimated number of copies floating about the Internet, right? ;)

[Bonegavel]

And you realize that the $10 million estimate came from multiplying the results of an Internet poll by the "exaggerated" (as reported by the band's manager) estimated number of copies floating about the Internet, right? ;)

Exactly. They didn't release numbers and a short time later they released it on CD and sold it through normal channels. IMHO, it was nothing more than a viral marketing campaign. I would never have heard of this album if it hadn't been for the "download free and pay what you want" thing. Worked well in that regard, I guess.

[bob]

I think it is difficult to compare music with other forms of content like movies, TV shows, or books that could be given away free on the internet in these discussions because musicians make most of their money on concerts, not album sales.

[Drake]

The internet is great for getting your stuff out there, but as Mac suggests, making money is a completely different matter. I've been releasing novels under a Creative Commons license via my blog for about six months now.

Money I've made to date: $0
(of course, I'm not charging anything, either.)

Downloads through various venues: a little over 2,000 copies through the venues that *I* can monitor...meaning that if someone else puts it up and doesn't tell me, I can't track what their traffic looks like, obviously.

What that means is that I don't ever expect to quit my day job to write full time. On the other hand, that's 2,000 eyeballs on my work that I didn't have six months ago, and that's plenty of payoff for me. (Well, getting fan mail is nice, too. Odd, but nice.)