I recently spoke to Entrepreneur.com. You can check out the article here.
As the article notes, there are many opportunities to make money from music. These opportunities exist for the musician and the entrepreneur, and while the music industry has seen its business convulsed over the last few years, the new business opportunities continue to grow.
There will always be a place for new artists. This provides the music entrepreneur (whether a performer or someone working behind the scenes), with a guarantee of access to the market. However, when coupled with these recent industry developments, the music industry becomes a highly compelling place to be. Just look at some of the changes:
- With the new distribution channels, profitability has increased: you can earn more by selling a $0.99 download than you can by selling a $10 CD and so you can be profitable with a much smaller fan base.
- As there is no need for a physical product, the scalability of some elements of the business are now unlimited. Downloads also mean there are no logistical questions about producing and distributing CDs. Nor do you have to deal with wholesalers, returns, breakages, or a host of other problems.
- In a wired-up world, word of mouth will sell products better than any paid-for advertising. All you need to do is stand in the right place and get swept along by the wave.
- There are new and emerging outlets for music, such as ring tones. Some of these markets can be incredibly lucrative, for instance while a download of a whole track may cost 99 cents, a short snippet sold for use as a cell phone ring tone may cost the equivalent of $9 (yes, that’s nine US dollars, it’s not a typo). Figure out which might generate more income for you.
The entrepreneurs—whether musicians or business people—who will succeed will be those who understand the key relationship is with the fan base (in other words, the income source), and nurture that relationship as an asset of their business. These people will not let their asset depreciate when the band has its inevitable “musical differences”.