The following checklist was provided by IODA’s VP of Marketing Tim Mitchell at a recent NARIP program at which a digital distribution contract was negotiated. These are the most important items to keep in mind when making such a deal.
Case Study: A band (or artist) that did it right.
A few of IODA’s successes discussed during NARIP’s program (with details of execution) include Pigeon John, Tokyo Police Club and Frank Black.
How To Evaluate A Digital DistributorThis is not an easy decision to make. Here are some things to consider:
- Market power: size and time in the market matter (collective bargaining)
- Technology platform: extremely important.
- Innovative marketing: extremely important, and not just account management, but innovative marketing for the new way music is consumed and sold.
- Mobile expertise: this is the third platform and is growing faster than any other sector.
- International coverage: you don’t need to license your music to foreign labels.
- As always, it boils down to execution and the people you work with.
Checklist of Must-Haves in a Digital Distributor
- Coverage of all the key accounts
- Reputation, especially with partner
- See above… it all applies
- Genre and territory specialization matters
- Technology: I can’t overstate this… this is a technology business
How To Build Digital Sales
- Rule #1 – it’s not secondary to your physical business – don’t make it an afterthought
- You will have a longer shelf-live on digital…. think about the ramifications
- Remember – – almost anyone anywhere can now buy your music… expand your circle
- Lead-times are just as important, if not more important
- Move your marketing into the digital realm – it’s NOT the same game
How To Make the Most of Your Digital Distributor
Lead time, lead time, lead time. Sprint, for example, asks for 24 weeks to set up a big release. IODA has quarterly presentations at iTunes – that’s months in advance. Engage with them, it’s a partnership, not a typical label / distributor relationship
How To Grow A Fan Base (or email list)
- Cohesive marketing plan
- Understand cost / benefit — think like a big company, i.e. what is your “acquisition cost” per customer? Sounds corporate, but it’s true
Fee Ranges For Various Services
- IODA’s Promonet Pro Service: $200 for a new release
- A full digital campaign via IODA Marketing Services ranges from $800 to $2000, depending.
- Mobile short-codes: can be very expensive, partner with you distributor.
- D2C: Fee varies, IODA is doing these for a share of revenue.
- List Management: Varies… think metrics… watch your numbers!
- Widgets and other Web-crap: beware!
Digital Deals To Augment Live Efforts
- Mobile list management and short-code promotions / sms services
- Jambase, Attendio and other online tour sites
- Time-based feature-placement on Digital Retailers based on tour-dates
Top 5 Digital Distribution Deal Points
- Understand basic revenue-sharing structures: % net, % retail, wholesale vs. retail, “PPD”, “Penny rate.” Be able to “count all the money.”
- Watch out for publishing and who clears in which territory.
- Mobile is a whole other beast – be careful.
- Rate and term aren’t the only things to consider: marketing guarantees, channel control, guaranteed release, etc.
Systematic Approach to Breaking A Band
- Data is your friend. Your gut might be good, but numbers don’t lie.
- Understand marketing nuts and bolts, including what works and what doesn’t. Remember, you are building a brand.
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Recordings of the panels from NARIP’s Art of the Music Deal: What Happens Before Your $ign On The Dotted Line? – including the one on which Tim Mitchell (author of this article) was a guest speaker – are available now in the NARIP Store. Click here to buy now, listen and learn!
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