Music marketing and free samples

Music marketing and free samples

Speaking of musicians using their unpaid promotional appearances as “free samples,” here’s an interesting aside about music marketing.

From the record companies’ point of view, these unpaid appearances on television and radio programs are geared to promote the sale of their new CD. After all, the label gets to keep the bulk of the revenue from album sales. (A big chunk goes to the retailer, and a sliver goes to the artists, music publishers, etc.)

But the artists themselves are much more interested in plugging their upcoming live performances. Many fans don’t realize it, but most artists (even huge acts like the Rolling Stones) earn the vast majority of their income (like 80-90%!) from their live gigs, not from the sale of CDs. (Unless they have their own label, of course, which many artists now do.)

That’s why record labels are so freaked out about plunging CD sales — and why they’re absolutely rabid about “free” music downloads. Downloads bypass the record companies completely, cutting deep into their most important revenue stream: album sales. So it hits them right in the wallet. It’s killing their bottom line, and no one has figured out a way to recapture that revenue.

From the artist’s point of view, a CD could (almost) be considered a “sample.” The artist’s goal is to sell out their concerts, to “put fannies in the seats” as the saying goes. At $60-100+ per ticket, with the artists keeping a huge chunk of that revenue, it’s easy to see why top acts can earn hundreds of millions of dollars in a single tour.

That’s why most musicians are happy to get up at the crack of dawn to play a few tunes — for free — on Imus in the Morning or Today. Sure, they love to play. But it’s really another chance to stir up interest in their live gigs, by giving away another “free sample.”

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