Of course few Garage Bands will rise up to achieve a million or more fans, thus one band generating millions in revenue. That’s not the point. The point is that there are hundreds of thousands of local bands that have a following of a hundred people. Even Jr. High rock bands can sell a few t-shirts and CDs to their friends. It happens every day.

Thus, AudioLife and others use technology to capture the few dollars from the many. Record labels captured the many dollars from the few, and now that less are paying for their main revenue stream (the music) their model is in trouble.

What AudioLife is really doing is allowing tens of thousands of bands to have a legitimate music and merchandise infrastructure for no upfront cost and very little effort. Any band, even your nephew’s silly little Guitar Hero neighborhood gang can get a logo, make a t-shirt and be the envy of their gradeschool. The model is beautiful. They are really creating tens of thousands of “one hit wonders”. Do we need/want that? Probably not, but you wouldn’t think that if you were the up-n-coming dreamers, trying to make it. You want to believe and AudioLife assists in the dream.

Of course many have tried and it remains to be seen if AudioLife, other competitors, or even the record companies will be able to build a profitable business through these fast changing times. But… there is no question that this is the wave of the future.

I hope, with the rest of you, that people stop blaming the “failing” music industry or fruitless technology, and start evolving with the future of the music industry.

Taylor

As for the tools that make every artist think they are their own marketing machine, I agree, and it’s a very good point you have raised here. Seeing endless numbers of widgets doesn’t add value or substance to your brand. the only way these widgets (and the time used to create them) will pay off is by adding authenticity and an interaction with the fanbase. Connecting with Long Tail fans or converting borderline ones will be a wiser use of time than to reciprocate the technologies with a different name across all your social networks.

Lee Jarvis

People pay for music AND the at Nimbit, the age range has NOT shown any specifics on willingness to pay for music…believe it or not. For example, a non-touring artist with a song that accompanied a viral net cartoon sold like crazy to an audience of teenagers. Subsequent releases of complete albums have sold as well. What we have seen is that giving away music drives new fans. New fans drive sales.

Our users range the entire musical gamut. From The Mile After to Tom Rush to Steve Songs to Cindy Morgan. ie: young killer MySpace band to Folk Legend to Kid’s Music to Contemporary Christian. They each appeal to, as well as support , their growing fan-base. Mario has the right idea. Technology is not a replacement for marketing its a tool for marketing. You need to be able to easily collect and track how your campaign is going. Again, that’s why we have built our platform around a set of highly placeable and flexible storefronts. You need to know who bought your music and a way to enhance that buying relationship.

I merged my previous company Artist Development Associates into Nimbit five years ago. ADA had supported independent artists since 1994. All the sales trends we can track all the way back a decade point to a growing middle class of artists. More artists are selling more product directly to fans each year. About 50% of the artists on our platform are selling their music. 20% of our artists are making significantly more than $100 a month. 5% of our artist’s are selling over $1000.

What is even more encouraging is how new styles are developing because there is now an infrastructure to support their development. I was blown away last year at SXSW. The diversity of influences seems to be in hyper drive and I attribute that to these artists creating meaningful income outside of the mainstream music industry. “Viral Marketing” is a label now used as a catch-all for online marketing. Really successful marketing needs to be economical. If you see a great band, the moment you tell another person in a call or email, you are part of a viral marketing campaign. When a friend forwards an MP3 (illegally) it’s viral marketing. I have to say that most of the music I’ve bought over the past couple of years was introduced to me by a friend through an MP3.

I’m not just the President, I still gig 2-3 nights a week. I still tour. I’m in an original funk band right now. Totally under the Radar. I can’t support my family from the income (heck, I’m just the drummer) but I make a couple of grand a month gigging to a growing fan-base. Fans buy at shows and buy online at the site. We try to make a recording or put out a live album once a year. We keep fresh tracks for free and once in a while we’ll put an album up for free and get fans to push it out to new faces.

Bottom line: New music is being created. There is money in it. My band makes more and more money each year. Opportunities come, and we make the best of them. We funnel our fans through our main site using NimbitSkin and through MySpace and Facebook with the NimbitOMT. We track our direct sales vs. our iTunes sales the Nimbit dash. We sell 4:1 direct sales vs. iTunes. People are still paying for music and like to buy the music from the band. Fans are still going out to shows. As the recession kicks in, I believe there is no better time to sell direct and no better time to hit the clubs.

I’m really enjoying this thread. Thanks to everyone for contributing!

I wonder if companies like CD Baby and Tunecore thrive because there are 1,000,000 artists selling 1 download each, or if it’s more like 100 artists selling 10,000 downloads each, or what? I tend to suspect the former. How democratized are the dividends these days?

Does death of the “industry” mean that there’s more money to distribute to the indie folks?

I can relate to the problem at hand. I am an indie musician and have become a social network junkie in the process while writing for my music marketing blog. The main key I have found that has earned us some more album sales is really taking more of a social approach to it.

I remember hearing someone using social networks and comparing it to a party. Your social skills are tested even online. You must conversate and engage a conversation, not just sending emails telling people to check out your music, which is what most people online on Myspace do. Even with that though, Brian is right, Music is a tough sell.

The main reason I have some faith in the Music 2.0 model is that digital sales are still increasing. The avenues are changing by the minute whether selling digitally, licensing your music or even offering some subscription based method of distribution. The hard part for indie artists is trying to find the profitable avenue.

The main question you mentioned is really key:
sufficient demand= time and effort. That balance has to coexist for any business to run profitably. I write for a music marketing blog and I have found it being too cliche for people just saying use social networks and the money rolls in. It really comes down to planning.

I have restructured my train of thought towards creating daily goals and setting some specific numbers and starting from scratch. As musicians with digital distribution, the internet plays a massive role.

We have to be content providers, keyword specialists for targeted sales, active on social networks, and essentially be our own marketing and R&D department while finding a social life away from the computer.

Look forward to hearing some more aritcles, hopefully soon we will both be talking about our revitalized music marketing sales.

I’d love to hear some statistics on this stuff. I don’t know that you’re willing to make public your stats, but, for example, can you give some figures on earnings per account, or downloads per avg. user, etc. Since I exist in a vacuum of speculation I don’t know if we’re talking about 35% of $10 or 35% of $1,000.

Also, what are the demographics of your users these days? The whole “viral marketing” concept doesn’t seem that prevalent among my peers, but perhaps if I were 18 years old then things would be different?