Today’s guest on The Membership Site Success podcast is John Oszajca (pronounced oh-jah-kah).I think the litmus test is: can this exist in the offline world?' - @JohnOszajca Click To Tweet
John is the founder of Music Marketing Manifesto, a program that helps musicians take control of their careers by learning direct response marketing techniques modified for this music market.
Before John became a rockstar in the online marketing world, he was a proper rockstar. Big recording contract with a huge label, Los Angeles lifestyle, the whole nine yards. After seeing success with online business John decided to focus on helping his musician brethren learn how to make money with their music by leveraging the power of the internet without ever having to be beholden to a record label again!
In this episode, John shares what he believes to be the keys to his success including:
– The power of persistence (or stubbornness, depending on how you want to look at it)
– How to use direct response marketing to sell a commodity (music)
– What most artists are doing wrong
Please comment below and rate the podcast on iTunes (it helps me get more fantastic guests like John on the show).
You can connect with John on his Twitter, @JohnOszajca.
Mentioned In This Episode:
1. Clickbank – Marketplace to sell your own digital products or to sell others’ products as an affiliate.
2. The 4-Hour Workweed by Tim Ferris – The book that started my online business journey.
3. Spotify – Listen to unlimited music for a monthly fee.
4. Amanda Palmer – Musician who is unique for her ability to make tons of money with her music!
5. Kickstarter – Crowdfunding platform that allows you to raise money for various entrepreneurial ventures.
5. The Music Marketing Manifesto Podcast – John’s podcast.
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Vic: I think we’re good to go. Can I just get a mic check real quick?
John: Uh, yeah, sorry I was far away from the light but I’m still seeing you, for whatever that’s worth.
Vic: Yeah, let me cue my video.
John: I’m not good with video to be honest. I can’t concentrate when I see people’s faces, It makes me get, I don’t know, out of my own head and not be very good at this stuff.
Vic: That’s interesting. I would think all of your onstage experience would have made you—
John: No, in the real world that’s no problem but there’s just something about the whole internet video thing that makes me start thinking too much about what’s going on on that little screen and not enough about what I need to be talking about.
Vic: Huh, that’s interesting.
John: But yeah, no, sitting in a room talking to an audience of people is not an issue but sitting talking to a little Skype monitor for some reason gets me all scrambled.
Vic: Okay, I just want to say that I can edit anything out basically. I like to keep it casual. Ostensibly the topic is about business and especially about recurring revenue but if you say something that you’re like ‘oh shit, I really wish I hadn’t said that,’ just let me know and I can cut it out and…
John: Cool. It shouldn’t be an issue. I’ve done hundreds of these and I got my talking points down pretty well.
Vic: Okay, sweet. And is there anything you’re not comfortable talking about, like revenue numbers or anything like that? I don’t usually pry but if it just comes up organically or something.
John: It depends what we’re talking about, if it’s somebody else’s project. Yeah, there’s certain revenue numbers I don’t want to talk about and certain ones I don’t mind talking about at all. I guess—you want to be more specific about what you’re looking—what are we talking about here? Are we talking about my broader businesses, are we talking about clients’ music careers, are we talking about my own music career, where is your focus here? It looks like it’s more entrepreneurs, not specifically musicians?
John: Okay, so we’re talking more about my business as the owner of Music Marketing Manifesto and other online businesses today?
John: No, I’m pretty open with that stuff in terms of numbers. I guess I haven’t really talked too much about—I’m just thinking right now, as you’re asking, what are the repercussions of the musicians hearing how much money I’m making from them.
John: No, let’s go through it. If I have any issues with it, I’ll ask you can we retake that part. That’s a good point but it’s never stopped me before so but usually I’m talking about music.
Vic: That’s cool. I won’t bring it up. How about that?
John: I use the numbers in a lot of my sales stuff so I’m not shy to do it. I mean the big talking points are that, and that’s certainly the safe zone, is that I initially ended up, my first online business ended up generating over $2 million in sales and then that was with an e-commerce business that had nothing to do with music and then after that I ended up applying these marketing skills to the music space and using myself as a Guinea pig and then ended up—you know what, without saying anything, let’s just, I’m an open book and then if I don’t like something I’ll let you know and we can retake that bit.
Vic: Okay, cool, so we can just jump right in, basically. Usually the first question that I ask guests is how did you get into online entrepreneurship because it’s a cool thing to do in life but actually, before that you were doing something really, really cool. One of the reasons actually, John, why I wanted to have you on the show is because I was a professional musician before becoming an online entrepreneur and I left that world. I don’t know if it’s for the same reasons because I did classical music, opera, and it’s just a lot of politics and you just practice your head off for ever and ever and you make very little money for a really long time.
You might have a debut when you’re 30-something, after a decade of teaching five- year-olds and you might make some money or you might remain a pauper for your best years and I thought no, I don’t want that. How was it for you in the music world? How’d that go?
John: Well, to be honest at least financially, things went pretty well. I had my rough years like most musicians. You don’t make a lot of money for a very long time unless you sort of get very lucky and I did get very lucky I had that big record deal and this is back when there were still big record deals to have. But certainly in my younger years I was absolutely broke.
I can remember before that record deal, walking around with holes in my shoes and I literally had my pillowcase, I remember, ended up just falling apart and I had no money to go get another pillowcases and dental problems and all kinds of stuff because I was putting everything into just my social life and trying to elevate myself to that next level. In Hollywood all these superficial things seem to really matter and that’s where I was putting all my energy and it paid off. I ended up landing what, at least the trade papers said, was the largest new artist recording contract in history. This is back in 1999, I was a 25-year-old guy and got a really lucrative record deal and publishing deal that went along with that and it looked like I was set to be the next big thing. I was signed to Interscope records. I had Jimmy Iovine as my A&R rep. He’s the CEO of the company, a big deal if you know names in the music industry. And everything looked good but, at the end of the day—I won’t bore you with the details—but the record came out, didn’t sell enough copies and as so often the case, I was dropped. Stuck with it, ended up landing another deal, putting out another record through Warner Brothers and then finally with an independent label. But each time the album did worse than the album before and the writing seemed to be on the wall. The universe seemed to be saying that these things were all just heading in one direction and it wasn’t the one that I wanted to go in.
Vic: And the people who aren’t privy to the music world’s inner workings, basically when you get a record deal, no matter how lucrative it is, it’s basically a debt that you pay off with the prospect of future sales for a record, is that right?
John: Yeah, certainly any money that comes in is first being paid back to the record company so you get this big check and then that’s kind of it. And to be blunt, my advances and everything, when you add up the publishing and record deal—and we’re just talking about the advances here—were several million dollars and I was never going to recoup. Well, I might have if things blew up but once I didn’t become the next biggest act in the United States, I was never going to recoup and—where am I going with this?
Vic: You got signed to a second label.
John: I did—well, there’s even another deal. I got signed to Universal between Interscope and Warner Brothers and it was kind of ridiculous because Universal owns Interscope and they function as different companies. But I got signed to them and as it got closer to the release, I don’t know, just some shuffling around and the record got dropped. And then signed again to Warner Brothers and then finally on an independent label. But again, the money was—a couple million dollars doesn’t actually last as long as you might think it would, especially when you cut it in half and give the government and managers and lawyers and business managers their cuts. And then because—well, I sort of said figuratively you get this one big chunk, they actually do stagger these payments. So you might get a couple hundred grand and then there’s some point in which they’ve got to pay you the next one. So they might start you off with some money, then you turn in the record and you get another check and then the record comes out and they give you another check. And publishing deals are sort of structured the same way. So while that might be a few hundred thousand dollars, you’re never getting this $1 million lump sum that you can just turn around and invest in something. You get a few hundred thousand, you’ve got to stay liquid, you end up spending a good chunk of it, then the next one comes in and you go through the same thing. And again, fast forward a number of years and I had a few hundred grand in the bank, which is better than many but I wasn’t enough to keep me alive for the rest of my life. And I wanted to, like you said, settle down, have kids, have a family, have a decent house. And I just basically started looking for other ways to make money. I knew I needed to do something. I never quit making music or anything but I did sort of shift my focus to, okay, I’ve got to figure something out. It was actually as a musician, this was a while back, like 2006-2005, I don’t know if you remember all those Myspace bots that everybody used to go and essentially spam the world with their ‘hey, check out my album.’
Vic: That was you?
John: That was all of us. I don’t think I knew, at least, a guy in a rock band that didn’t have one of those Myspace bots and that’s all musicians knew how to do. It’s all I did. It’s all anyone ever told me to do, buy one of these bots and they’ll tell the world about your music.
And I would see traffic. I would see thousands of people coming to whatever I pointed them to but I never saw any income as a result of it. But what happened was these bots would break all the time as Myspace would update their platform to be smarter than spam bots and I would spend time in the forums asking ‘when is this going to be fixed, how do I get my bot working again?’ And I would see all these other people that were not musicians in there and it kind of got me curious.
‘What are people doing? Somebody’s making money out there doing this stuff and it’s not me’ and it just got me curious about this world of online business. So I ended up one night, late at night, saw some shiny red headline promising that if I bought a course for a couple hundred bucks they’d teach me how to make millions of dollars in my sleep with little to no effort and I bought the course. It was a paid-advertising based course. I stayed up all night and followed all the steps, plugged everything in and spent $10 on google AdWords.
Woke up the next morning and low and behold I had sold an e-book—just a $20 cookbook, of all things, that I found on Clickbay, one of those copycat cookbook things that seemed kind of interesting back then—and I was just hooked. I couldn’t believe it, oh my god, this really worked. It wasn’t a quote unquote scam. I had spent $10 and made $20 and that was kind of the beginning of a whole new chapter of life. I knew where there was one sale there was many more to come. And it didn’t come instantly, it was a lot, a lot, a lot of hard work and probably consumed 500-1000 books and courses and seminars on marketing. I was dead set on cracking this thing and I did. I ended up ultimately building an online business.
Again, there were many failures along the way but my first real success that took off ended up generating over $2 million in sales. That was with an e-commerce business and I’ve done a number of things since.
Vic: Wow, that’s not bad at all. Basically $2 million, that’s about what you got from your deal, wasn’t it?
John: Yeah, funny enough, it’s just about the same number.
Vic: Okay. Now, the thing with online business, with any business really is that, like you said, you want to have enough to raise kids and feel comfortable for most of your life, for the rest of your life, so an ostensible topic of this show is recurring revenue. So how did you get into the idea that, look, I need to generate money, not just now but month after month at a reasonably consistent rate and what roles has that played in changing the direction of your business from one-off sales maybe to a more recurring model?
John: Well, I still have a healthy dose of one-off sales in my model but I also have, I’d say, about half of my income comes from recurring and half of it comes from new sales. The first product that I put out there—I’m kind of secretive of my niches, we internet marketers are because it’s still an active business—but let’s just say it was a health-related product that had a sort of refillable aspect to it. And while I didn’t hook people into a subscription, I did have those customers constantly coming back buying more and more refills for this product. So again, that was not so much by design that was just like my first project and I would see, wow, I’m making a lot of money just from these people coming back.
And certainly, not only from that experience but you just read about it and it makes common sense, recurring is fantastic. This idea of making a thousand sales and having this automatic money in your bank account each month without the stress of having to find new customers is a wonderful idea. But to back up a little bit, what happened was, once I did have that initial success, again, this a health related product, it wasn’t something I set out to change the world with. It was just something that somebody turned me onto, it was a new product, said ‘hey, check this out, I think you’ll do well with it’ and I set up a site and it took off, this is maybe 2007. And once my finances were in order, once that was successful, I started looking into other projects, ones that I cared more about, was more passionate about and that, of course, was music. So I started taking everything that I had learned in this other business and started applying it to music. Initially I used myself as a guinea pig and then I started helping friends with their campaigns and this sort of accidental career as a music marketing consultant was born. I ended up, in 2009, I launched a site called musicmarketingmanifesto.com.
Technically I’d bought the site and put something out a few years earlier but that was when I really started focusing was 2009. I relaunched it and created a higher-end product. Originally it was a $100 course, now it’s a $150 course in which I teach musicians all this stuff that I have learned along the way and share some of the strategies behind some of the successes I’ve had with artists. I helped an artist set the all-time single-day sales record over at CD Baby.
More recently I helped an artist debut at #5 on Billboard’s blues charts, she became the number one blues artist in America at blues radio. So I’ve got a few bragging points along the way and I take those strategies and I teach it in my courses. Now, once I had put Music Marketing Manifesto out there, I quickly realized I had these people that liked what I had to say so there was this opportunity for recurring income so I created, basically, a mastermind group or program for people who like the model that I teach. I teach a very specific type of marketing, it’s basically direct-response marketing.
Vic: Yeah, direct response.
John: Yeah, but for musicians, there are some nuances to direct response in the music industry that are different to direct response in other spaces. So I created this mastermind group for people that wanted continued learning, basically, new strategies, new plays for their playbook that could compliment that broader strategy of my primary course. And so that’s called the Music Marketing Insider Circle, that’s been around for just over four years now and about half my income comes from that. But I still I don’t think I could do one without the other.
Most of my customers come in as a result of an upsell. They buy Music Marketing Manifesto and then I give them a special deal if they take me up on that mastermind group right then and there, it’s sort of a one-time offer. And most people come through that or these rare promotions that I do once every couple of years. I’ll see these huge membership drives and then things will go kind of stagnant other than these upsells.
So if I didn’t have new customers coming in everyday buying my frontline product, I wouldn’t have new customers coming in buying my recurring, but if I didn’t have the recurring, then I probably wouldn’t be making enough money to live the lifestyle that I want with just that initial product. For what it’s worth, I’m also in the process of creating a website builder for musicians that helps musicians build the type of sites that can facilitate these direct response strategies that I teach. And that’s going to be coming out in probably January or February of next year. We’re pretty much done, we’re just creating the tutorials and all that kind of stuff and then we’ll go into beta and then we’ll go live but that’s obviously completely recurring based.
I’m fairly excited about that, as it’ll be more of a traditional service that is solely based on the recurring model as opposed to the education-based thing, which I think has a shorter life-cycle, a shorter membership stick rate than something like a website.
Vic: Definitely, this is something that I’ve talked with and I’ve pivoted the idea for this podcast because I realized most people think of membership sites as this thing that you log into and you consume videos and pdf content. The traditional idea is it’s an information product but really any kind of recurring revenue in your market is great. And like you said, too, it’s not just the fact that it’s recurring revenue but it’s a funnel that you’re getting, a lot of times, the recurring components coming as an upsell to your frontend product, which presumes that you already have traffic coming to funnel and that you’re optimizing that aspect of your business.
But at this point I just want to bring up something kind of light-hearted because the reason that I wanted to have you on the show and the reason that I got to know you is through a mutual friend of ours. And this was about four years ago, I’m sitting in a bar in Nicaragua, having a beer. I’m sitting and I’m reading The 4-Hour Workweek and this is when I had just left the music world, I was in the opera world and I’m thinking ‘oh man, I know all this stuff about opera, maybe I could teach that.’ And that actually became my first muse in the information product about how to sing opera called How to Sing Opera Now.
It’s still online and still makes sales to this day but, like you, I also am not really doing anything with that now but I plan to circle back around to passion of music and help musicians at some point. But anyways, I’m sitting there and this guy says ‘oh, that’s a cool book’ and I’m like ‘oh yeah, who are you?’ And we wind up chatting and it turned out to be—I don’t know why you came up in conversation, I guess I thought it was really cool that somebody’s helping musicians rather than doing a B2B or something like that—I thought that’s what I want to do and I was like ‘oh, there’s this guy John [unclear]’ and he’s like ‘oh yeah, I know John.’ I was like ‘really?’ He said ‘yeah, we grew up together.’
Vic: I thought holy crap, this is truly a small world. And then I moved to Asia and he was in Asia and we kind of connected and we’ve been really cool ever since, so that’s one of the reasons I wanted to have you on the show. But maybe you can talk a little bit, John, of the complexities, the difficulties of selling a commodity like art and how direct response helps facilitate that or makes it possible to make a good living in a field where traditionally you sort of accept the fact that ‘ugh, I’m going to be a starving artist for forever until I get my quote unquote big break, if I get my big break’ and how you’re kind of changing that paradigm.
John: Sure, well, I’d first probably start off by qualifying a bit, it’s hard. Selling art, selling anything that is not problem-solution based is quite hard. The challenge that certainly musicians are up against is that they’ve got a very cheap product with low profit margins in a world that is just flooded with competition and some challenges when it comes to targeting their audience and no problem-solution to rely on which is what 99% of marketers rely on. There is something somewhat beautiful about it.
Whereas I think that our jobs as marketers with most products is to kind of agitate a pain, just to be honest and direct, but with music, that’s not going to really get us anywhere. So what we’re doing is tapping into pre-existing passions and interests, so one could see some beauty in that, in that we are agitating pleasure points as opposed to pain points with music. But that’s fundamentally the big difference is that with most products, there are people that—there is some pain, they are seeking a solution to some problem and that’s where you step in as the marketer, address the conversation that’s already taking place in their mind to agitate the pain and then give the solution and when you’re selling art that’s not really going to work. Instead you’re trying to create a tribe, you’re trying to create a bond with that prospect and a fairly authentic relationship and you’re just using the internet and these tools the internet offers for scalability that you don’t have in the real world.
Vic: Like day traffic, etcetera?
John: Yeah, absolutely. I mean, as a musician, for example, really all you can do to build that relationship is to go out into the world and play shows over and over and over again and stand at that merch table but you’re hitting up a relatively small number of people. And again, it’s very expensive to get out there and do that for the most part. You’ve got gas and hotels, if you’re a band it’s really expensive if you’re a solo artist hiring a band it’s almost impossibly expensive and it’s taking time away from other income earning opportunities. So it’s just really hard to make that work and then very often you’re playing for six people. Whereas, you can spend a dollar on Facebook and get in front of six people and so it becomes very scalable and you can really create a funnel that sort of mimics that relationship building process that we as humans tend to respond to. And then, once there is that bond and you have created a little bit of reciprocity and hopefully a bit of desire, you can ask that tribe to support you by buying your album. So it’s a little less ‘hey, you need this in your life and therefore you should buy it’ and a little more ‘hey, I represent the things that you value, come along with me and I’ll entertain you and then when I ask for your support I’d appreciate it.’
It’s a little more touchy-feely and organic of a process but again, the internet allows scalability that the real world does not. And so where I think I’m somewhat, or I’d like to think, I’m changing the paradigm is introducing independent artists and kind of the music industry to this concept of ROI, spend a certain about of money on traffic and get a measureable result out the other side and that’s what I’m trying to do. I’m teaching people how to create these funnels and measure things so that they know what their subscriber acquisition costs are, their customer value is and they can make tweaks to that funnel and to that advertising process until they achieve some profitability. And then, again, once they do, the sky’s really the limit there.
Vic: That’s interesting that there’s sort of a twist of the typical buying psychology, it sort of goes from ‘hey, it sucks that this is happening to you, do you want be to solve this problem for you? Yes? Okay, here’s a solution and here’s how much it’ll cost.’ Whereas now, you’re saying we have this really cool club of people who are on the same wavelength. And of course you’re using various psychological triggers to sell anything so you’re saying there’s all these other people just like you and they’re part of this cool club where the music is sort of the excuse to be part of the club and it’s really exclusive and maybe you’d like to join, kind of thing?
Vic: Is there a way for a musician who’s using your techniques to make his revenue recurring, or her revenue?
John: Oh, absolutely. In fact, that’s one of the go-to recommendations for upsells and the stuff that I teach is it’s going to be really, really hard. I’ve seen a few people do it, it always amazes me but it’s going to be really, really hard to even break even just selling an album for $9.99 with paid adds. You can still build that funnel.
There’s a couple sides to this. One, even if you just have that funnel in place and you go out there and you do all these things that we musicians traditionally do, go out and play shows and network and share your story with people, instead of just saying ‘hey, I’m so-and-so, you should check me out,’ which is what most people do and say ‘hey, I’m so-and-so, here’s a flyer’ or ‘let me enter your email address into my phone’ or whatever it is and then get them into that funnel, you’re going to see infinitely better results. And again, you’re going to have that email address to go to over and over again to promote your shows and your future album sales and things like that. So even if you don’t get into paid advertising, you can still dramatically increase your results by just having that funnel on place.
But if you do, it’s going to be really hard to break even or generate any kind of significant amount of money selling a $10 album. So you really do need that upsell in place. You need to be looking at this as you’re feeding this tribe, this fan base, so that you can go to that base over and over again and ask for support in the form of ticket sales, in the form of album sales, in the form of special events, like house concerts. And again, the sky’s the limit.
But at the very least, I think, maybe you’re not a touring artist, maybe you just want to keep yourself alive as a musician and stay relevant but maybe you do have kids and a family and you don’t want to be on the road and pursuing it fulltime, you can still have this funnel in place. But to make it break even, to make it generate profit, you’re going to need some sort of an upsell in place. And a simple way of looking at an upsell for musicians would be, say, a boxed set or something where you’ve got five albums for $30 or something like that. The idea usually with the upsell is you take the same psychology that led to that initial sale and then—I don’t want to say use it against the prospect because that implies something sinister.
But if a person has bought, basically what’s taken place in their mind is they’ve said ‘yes, for all the reasons that you’ve put forth, I agree that your ten songs are worth $10.’ So your songs are worth a dollar a piece and now if you then, on that thank-you page, offer them 60 songs for $30—just to make the math easy—in order to say no, they have to kind of work against the very logic that led to that purchase in the first place. And very often we don’t want to do that, so we go ‘well, I just agreed that ten songs were worth $10 so surely 60 songs is worth $30, I might as well just grab the whole thing now while I’ve got my credit card out.’
So you tend to see some pretty decent upsell conversion rates, around 20-30% is pretty common. Another way of going about that instead of a traditional boxed set is with a membership site and you could do that monthly. Music, again, it doesn’t have this high-assumed value that many products do, especially in a world where we can get it for free, most instances, on our Spotify app or through the pirating site of your choice. But if you create this cool and interactive password-protected membership site, you really can create something special and unique. And I like the idea of charging something minimal. Rather than trying to go after a $4 monthly payment, go after a $30 a year subscription fee where it keeps some of the pressure off of you to have to constantly be doing something, that you don’t have this deadline every month ‘I’ve got to be remembering to put something in there.’ You just need to be providing a lot of value over the course of a year and you can do anything from live internet concerts to releasing special digital tracks, you can take all those archives that all of us have as musicians, all of those old weird photographs and demo tapes and all this stuff and create a pretty cool place for fans to hang out and check out stuff that you don’t necessarily want out there in the marketplace.
And even stuff that wouldn’t have a commercial value, you could make a video that’s not available in YouTube. That video in itself wouldn’t necessarily have any commercial value but it might be immensely valuable to that fan who wouldn’t be able to see it unless they were part of that program. And I think if it was, just say, $30 a year, you get a thousand of those fans into that program and that’s substantial. That’s far more than most budgets for most independent albums these days and to know that that was coming in each and every year would be lifesaving for many musicians.
And that’s just the beginning, we’ve still got those frontline sales coming in, we’ve still got live shows for most of us and other albums and merchandise, anything you can think of, any potential ways to monetize that list, you can still do that. Music licensing is another huge revenue service. But I love the idea of the membership site for musicians to keep some level of consistency coming in and affecting your bottom line each year.
Vic: You got me thinking about Picasso because he was unique in that during his lifetime he was one of the few artists who was actually rich while he was alive. And I’m sure you’ve heard the popular anecdote of him being in a restaurant and a waitress approached him and asks him ‘sir, I’m such a big fan, can you sketch me?’ and he declined. She says ‘no, please, I’m really such a huge fan, I’d just love it so much if you’d sketch me.” So he flips over a napkin and he really quickly sketches her something and she takes it and says ‘wow, this is the most beautiful thing I’ve ever seen.’
And he tells her something like ‘that’ll be $5,000’ or however much he said and she was all taken aback and she grinned, said ‘what do you mean? That took you five minutes.’ He said ‘madam, that took me a whole lifetime.’
John: Yeah, awesome.
Vic: And people don’t appreciate how difficult it is to be a musician. I mean, it sucks. It’s one of the hardest—musicians are some of the hardest working people in the world, I think. It’s a very technical profession, you spend a lot of time just honing these little details.
But the question that I’m leading to with that is, is there a way as a musician to take this perceived commodity and position yourself as a premium musician, I guess you could say, that charges astronomic rates for in-house concerts and astronomic rates for membership to his or her community? I’m sure there’s a way to do that. Have you ever seen it?
John: I mean, I’ve seen it. Yeah, was it Wu-tang Clan? I don’t know what became of it but they had announced they were going to release only one copy of their next album and they were going to charge $1 million for it. Again, I reported on it only when it was first announced, I don’t know what’s come of it, if they’ve done it or not but there’s a fantastic example of doing exactly what you just described. I mean, the key here obviously is you need to be able to create that demand. If you’re just some guy in his bedroom who really hasn’t earned that large fan base or maybe you’ve created a fan base through online marketing but it’s a tentative fan base, you’ve got people’s attention but they don’t really know you because you’re not out there in the world performing and making a big difference, then you’re going to have a hard time charging higher ticket items. Somebody just sent me a press release the other day, they were going to put out an album and release it on iTunes but make the album available exclusively on their website for $500. I don’t know what will come of that but again it’s going to be in direct relationship to the demand that you have.
Take an artist like Amanda Palmer, are you familiar with her?
John: Yeah, she’s been making waves for a couple years now and she’s really, as far as I’m concerned, the most impressive example of a musician utilizing all of these strategies. I don’t know how conscious she is of it, I don’t know if it’s instinctive or something she’s quite calculated about it, I don’t know her personally, but she’s good at it, whatever she’s doing. And she set the record a while back with her Kickstarter campaign, bringing in $1.1 million in support and that was from about 25,000 backers. Which is a big number but it’s not an insurmountable number especially when we compare it to these national acts that might sell half a million copies or something like that of their albums.
And she had everything from donate a dollar all the way up to, I think there was some $10,000 packages. I can’t recall exactly what the bonuses were on that particular campaign but I remember in some previous ones where she also did well doing things like loading up her old iPhone with some exclusive videos and tracks and charging $1,000 for that old iPhone and people took them. I think there were five, it was the whole band had done it or something like that and people were excited to do it. I think she was doing things like painting peoples’ portraits and having dinner with them or something for $10,000 on the most recent $1.1 campaign.
Vic: You— sorry.
John: Yeah, there’s a lot of ways, but again, you’ve got to create—I don’t think there’s a way to trick people into it. You’re not just going to suddenly be a guy coming out of nowhere and then because you’ve got some unique idea of charging a lot of money for something that people are going to do it because you write really neat emails. You need to go out there and touch people and change lives and really make an impact and then when you do, I think, yes, absolutely there are absolutely people who will pay all kinds of money, especially if you have a big enough fan base, you’re going to have some rich guys in there for whom money is not an object and if one of those happens to be one of those die-hard fans of yours, people will pay all kinds of money for all kinds of things and it just needs to make sense. But yeah, it can be done.
Vic: Have you seen any of the musicians that you work with offer services to their fan base that they could charge for on a recurring basis, let’s say like a commitment for a yearly private concert at a chateaux in France? That’s actually a cool idea.
John: No, to be honest, I haven’t seen a ton of it. I’ve had, I don’t even know how many, more than 5000 people come through the doors of MMM over the last few the years and I only get a certain amount of people bothering to write in and tell me exactly how things went. Most people that I’m hearing from are still focused on selling that frontline product, maybe they’ve got a box set as an upsell. I don’t hear too many reports and nothing is actually coming to mind in terms of any specific results or numbers to share when it comes to recurring.
I know there are people doing it but I don’t have any hard data. Most of the numbers that I could give you pertain to selling that initial album and a more static upsell.
Vic: And is it possible for these musicians to—because actually, I thought for myself, I’m a singer/songwriter and my plan is to make it big in the business world and then live the rest of my life writing my music and maybe at some point sell it too. Because it’s kind of a shame if your music’s any good to just keep it to yourself, you want to share it, that’s part of the love of it. And I thought well, but then again, you don’t want to spend all your time like touring, maybe you’re starting a family. Are there any musicians who don’t do any live performances but just from the comfort of their own home studios that are doing well?
John: I certainly hear from people that are making income. I don’t know that anyone’s reported in ‘here’s exactly how much money I’ve made this year but I definitely know there are musicians who are not touring and doing well with these strategies and selling albums and seeing their fan base grow. Where, a lot of the success stories that are coming to mind right now, at least that are popping into my brain, are artists that are really making substantial amounts of money and living off it are artists who usually seem to incorporate house concerts and things like that into it. Because these house concerts are a great way to monetize that list and really turn that customer value or turn that subscriber value way up, where you can charge $200- 1000 to go to somebody’s living room and play for an hour and even moreover you make more fans because they tend to invite their friends and turn it into a party and they all buy more CDs and you get this really cool community going that can be quite lucrative.
I have a friend who is doing this and yeah, he’ll do a lot of shows. I did a podcast interview with him, I think it was my very first one years ago now but somewhere out there in the Music Marketing Manifesto Podcast where we talk about house concerts. And yeah, he’s going and I think it’s three months out of the year he’s touring right now and he’s making a six-figure income if, I’m not mistaken. But he’ll cram a quite a few concerts into each day, go to somebody’s house, rock up, play, hang for an hour, then go to the next one and he’s quite strategic about it but he’s making really good money.
So you definitely can be making really good money but you’ve got to think in relation to how much you’re paying, even if you’re paying $1 per subscriber and even if you had a 10% sales conversion rate which would be very, very high, you’re still just breaking even so you’ve got to get some additional income in there. And even if you have a boxed set and 20 or 30% of those people are buying a $30 boxed set as an upsell your profit margins are still—you’re going to have to have a lot of sales to be making six figures. So where things really kick into high gear is when you start introducing these higher ticket items, I think, into the equation. And to my mind, the best example of that is simple a house concert.
If you’re not the kind of musician that wants to do that, you can just do live shows and if that’s going to be the case, I think it would be smarter to have the geo-targeted list where you instead of building that list across the country or across the world, you focus on your area. So let’s say you live in Los Angeles, let’s just drive traffic in the Los Angeles area and instead of just having a list of 5000 people spread out across the country or the world, you’ve got 5000 people in your area and then you turn to that list and you try to get them to come down to live shows.
And so you might not be making a single $500 house concert sale, but with each email you send out for a live show, you’re generating $500 in income from the venue, it’s sort of a similar equation.
Vic: Yeah, I was curious about that because I thought if you’re an ex-pat or if you’re just living out in the middle of nowhere, how are you going to cater to a geographic location that’s within your reach so that you’re not flying halfway around the world and so the answer to that is geo-targeting with adds, yeah?
John: Exactly, yeah, totally. And you don’t have to engage in that, there’s nothing wrong with casting a broader net but it really just all depends how you plan on monetizing that list. I mean, I haven’t seen a lot of people do it because most musicians, it’s hard enough to get them to release an album every year or two, let alone constantly create product like other sorts of marketers are doing. There are some who are good at it, but I think if you are going to cast a broader net and missed it and not utilized geo-targeting with your advertising, then I think you have to have some kind of a concept in place where you’re going to be monetizing that list multiple times throughout the year but you could do that by selling tickets to an online internet concert.
It really is going to depend on you as an artist, what makes sense for your brand and what makes sense for your audience and what makes sense based on the relationship you have with your audience. You may have, like I say, an audience that is only tentatively engaged, they like something about you and they’re paying attention but they’re not rabid fans. That doesn’t mean you can’t be making money off of those people and keeping that fan base growing and some healthy income coming in, but if you do have that rabid fan base then what you can offer them completely changes and you could be generating a lot more. I don’t know, some artists are going to have fans who will go for that iPhone full of old songs and some are not and we just have to get real about who we are and what kind of a hold we have over our audience and come up with offers that make sense.
Vic: One of the things that I’m hearing from what you’re saying and inferring is that even though music is kind of a commodity and it’s not as easy to sell as something, for example, like the B2B sale where it’s very clear to the business that we need a website so we’re going to hire a web designer, even though that’s the case, if you’re creative and you understand marketing, you can do well. Which sort of implies that as a musician, and I can think of one person in particular right now, a lot of musicians really just balk at the idea that they have to learn that marketing stuff. Almost like, among artists in general, there’s this I guess you could call it snobbyness or just maybe ignorance might be a better word, around the fact that today in 2015 and beyond you have to learn how to market yourself because you cannot rely on a record company to do it for you. You couldn’t rely on them to do it for you in the past or even if they did, you couldn’t rely on the record sales to repay the debt that you’ve taken out.
So if I hear you right, basically as an artist it’s your responsibility to learn how to market yourself properly otherwise people aren’t going to buy from you, they’re not going to hear or consume your art.
John: Yeah, I think so. I think that’s part of the new role of being a musician in this era. I mean, I suppose you could partner with somebody who was more business minded. But, I don’t know, I’ve always been an entrepreneurial sort of guy, I always had something that set me apart from maybe the average musician who’s a little more left-brained. And I’ve always been a bit cynical about what is an attitude amongst many musicians I think you’re sort of touching on.
Yeah, I think a lot of musicians think they’re better than all that, they think they shouldn’t have to do that. They think somehow because they care so much about their art and see how important their songs are that somehow they’re above marketing and anybody who, we used to hear back prior to the internet you were a sellout if you did anything that was going to make money. And now we don’t hear that word thrown around anymore—so much, anyway because everyone’s a sellout. That’s the only way anybody’s making any money is by doing commercials and things like that that used to garnish that title in days past.
But yeah, there’s a lot of people that are cynical about marketing and certainly as somebody that runs ads all day long claiming that I can teach musicians how to make money I get my fair share of snide remarks on these ads and blog posts and things like that. But I don’t know, I think it’s just an excuse from a lot of people who are either scared of the marketing, don’t want to do it, think they’re better than it. It’s great that you have this artistic vision and that you’re holding to it and your trying to share it with the world. Art makes the world go round in many respects.
I have two artist parents and have dedicated my life to the arts and so I certainly see the value there and respect it. But I also think that there’s just a lot of people hiding behind excuses because they don’t know how to deal with the business side of things or they don’t want to deal with the business side of things. But the second you get out of that studio and try to become a professional musician, whether you like it or not, whether you call yourself it or not, you are a business. I guess I think it’s ridiculous that the music business, for as long as it did, existed as a place where the rules of business that apply to every other market in the world did not seem to apply to music.
And now I guess all that’s really happened is that the curtain has fallen and we are now responsible for our own success. We have to function like a traditional business and if you can’t do that, I don’t think you’re going to be successful. If I make computer software and I went out there and said ‘it sucks, I’m pouring my heart and soul into this software and no one cares, they don’t care unless I sell out or I pay for ads’ or whatever other cynical thing you might have against marketing music, I would sound pretty ridiculous. I also think it sounds ridiculous when musicians think that a song is all that should matter.
No, you’re a business and if you’re going to succeed, you need to pay attention to this stuff, you need to function as a business. There’s some basic rules that lead to success. You create a product, you create a solid brand or solid message and you take it to an audience and use marketing to deliver the message. That’s all marketing is, it’s the delivering of a specific message to a specific audience and if you just ignore that and think that the world is just supposed to find you whether you make music or any other product for that matter then you’re being pretty silly.
Vic: I can almost see somebody sitting in their home listening to this right now bristling and I know because I was like this myself. I mean, I couldn’t articulate it as well as we are now and maybe we do sound kind of cynical—we’re realistic, actually, not cynical. I used to think that—maybe you did too at some point, maybe not—but ‘look, these songs are awesome, how can you not see that, how can you not realize that?’ And it’s this identity trap and this is actually one of the benefits of learning how to market, is you learn very fundamental truth and it gets beaten into you until you’re blue in the face that people don’t care about you at all.
You might care about your best friend in a quote unquote unselfish way but fundamentally, even that is selfish. We are selfish creatures. Even right now, you’re doing this podcast because it benefits you and your business, which is why podcasting, by the way, is such a great thing—musicians should podcast—and I’m doing it because it benefits me in my business.
There’s a mutual value exchange that we give to each other. And for some reason, musicians, or all artists, have been fed this malarkey about—it’s almost like a communist utopia where people should support them and that was the system for a really long time, patronage. You create art for a rich patron.
Vic: But that is maybe, thankfully, disappearing and people are starting I think to wake up a little bit to that fact.
John: I think perhaps it’s the result of musicians, again, they’re creative people, they tend to be left-brained people. That’s why they respond to music, that’s why they decide to make a life in music and then when they are confronted with needing to be responsible for marketing it’s very right-brained, so-to-speak, and they get frustrated by it, confused by it and intimidated by it. And many of them instead of embracing it and going ‘gosh, I’m not good at this, I need to find somebody who is or I need to become better at it,’ they just become cynical about it. A lot of people do this in life when they’re not good at something, they’re very critical of others who are good at it.
So I think a lot of musicians are critical who are embracing something that they’re intimidated by or confused by. And again, this is not all musicians. I think it’s a lot of them but my customers, the people who respond to what I’m doing, they’re that 20%, I think, of musicians who absolutely love this stuff. I was that kind of musician, it sounds like you are, or were, I don’t know if you’re still making music.
But as well when there’s so little real information out there, I’m sure you came across your share of where you buy a book on the music industry and it’s just the same old boring crap about, back in our day it was get a EPK together and go email or send packages out to different companies and it’s just boring stuff.
Vic: Hey John, you there?
John: Hey. I am, yeah.
Vic: Sorry, my Wi-Fi cut out.
John: Oh, yours.
Vic: You were saying as a musician you head out to put together a—what did you call it, EPK? What was the abbreviation?
John: I don’t know.
Vic: PPI, EPK or something?
John: Oh right, okay. So you want me to jump in there?
Vic: Yes, please.
John: Okay, I’ll do my best. I’ll back up a little bit further so I can lead into that. Back in our time, you’d buy these books, or whatever it was, on the music industry and you’d get the same old crap about creating whatever—what was it back then—an EPK and then sending it out to people and ultimately just instructing you to take part in this bigger business that didn’t exist. There was no real strategical stuff that I could do to sell albums and function as a business so whenever I came across info that gave me real tools, real instructions like do this and you’ll get this result, I responded.
And I think that’s who my audience is so I don’t really make too many apologies about it. I think the people who are that 20% minority of right-brained musicians are really hungry for this stuff and those are the people that I really respect. That’s the kind of musician I was. Those are the ones that work their asses off.
I used to be a club promoter in Los Angeles leading up to getting my record deal and I did two different nights, one was at the DragonFly—which at the time was one of the biggest rock clubs in Los Angeles, I think they’re still around, I don’t know what they’re doing these days, I don’t think it’s so much of a rock club anymore—and one place that’s no longer there called Goldfinger’s. I did that for a couple years. And I can probably count on one hand the number of times somebody came down to shake my hand and just say I’m so-and-so, I sent you a package and I’d love to play the venue. People would send off packages, I’d get those all the time but the amount of work that people put in was pretty minimal.
And there were people who did it and those people, they were really working it hard and those are the ones that I respected and those are the ones who did well. But the vast majority of musicians, I don’t know, like you said, they put a lot of money into gear, they put a lot of money into developing their skillset but then they just stop and don’t focus on the business side of it. And it’s the business side that’s power and if you truly care about that art and you truly care about the message, then get it out to some people, and whether that’s a bad word or an unsexy word, it’s marketing that’s going to take that message to the masses.
Vic: We were talking about this cynical world view in the artist community and you mentioned software and that got me thinking that actually, you could look at it from a positive perspective because software solves a very specific need within a market. And music doesn’t really solve any specific needs, so you actually have a broader reason to sell, in a sense. You know what I mean? So you can go out there and create, you can’t generate demand, necessarily but you can get in touch with people who already want to feel the emotional experience that you are promising and that sense of belonging.
Abraham Maslow, back—what was it, in the 20s or the 50s, I’m not really sure—he said that once people have their basic needs met, which pretty much all of us do, we really, really need to feel a sense of belonging within a community and feel that we’re understood within that community and that we have a place and if musicians can get in the habit of providing that experience and facilitating it and fostering it, it’s really not that different from being a club promoter but in an online sense, you could even say.
John: Sure, along those lines, I think that really even more than a marketer, which I said earlier, a few minutes ago, that becoming a marketer was part of the new definition of what it meant to be a musician in this era. I think even more so, we need to start to realize I think if we’re going to succeed, at least as independent artists, yes, in many respects a good song is tied into our potential success. But at least as far as the longevity of our careers go, both as independent and mainstream artists, I think that people aren’t responding to just our songs, there are a lot of good songs out there. They’re responding to us as individuals. It’s our personality that they’re buying into, it’s our story that they’re buying into. I was just working on this for a talk that I’m going to be giving shortly, but people aren’t buying albums, they’re buying stories. And if you look back over history at most of the lasting successes and even some more modern successes where we have these artists that go viral, there’s always this simple story that can be summed up in one or two sentences, that thing that you tell somebody else ‘you should check out this band, they’re…’ and it rarely has much to do with their music. Sometimes it does but it’s much more about the lifestyle element that defines that artist, that thing that makes that person the leader of a tribe.
And you’re right, we all want to be part of something and that’s what our music does, it galvanizes people, it helps even reaffirm to our own minds who we are as people. We look at our record collections and our movie collections and our favorite books and we say this is what I stand for and we grab onto others that express those values that we aspire to have in our own lives. And that’s your job, particularly as an independent artist. We’re creating channels, not just songs, we’re creating a channel and if we can create an engaging channel and keep people glued in to a stream of thoughts and values that pertain to one particular idea or lifestyle, then we’re going to have people’s attention and they’re going to be more than willing to support us when we ultimately ask them to buy.
Vic: Man, I have so many questions just even from a selfish point of view that I would love to ask you but we’ve been going pretty long so I don’t want to abuse your time or the listeners’ attention. That was a good one already but maybe you could give a few words of wisdom to the artist out there of any craft, be it dancing music, painting, whatever, who wants to do well in their lives financially, they’re rejecting the starving artist paradigm. They’re saying no, that’s not for me, they still want to do what they do. Do you think you could give some words of wisdom to those people who are getting started?
John: Well, I don’t know if this completely applies to just musicians and I know, obviously, your audience is made up of probably a lot of people who are not musicians.
John: And I think this applies to everybody. I think one of the biggest realizations and something that continues to come into focus as the years go by and I have more and more successes in my online life, is that there’s really no shortcuts. I think we learn this internet stuff, people sell books and courses, myself included, everybody based on suggesting that your—most people buying our stuff have not achieved everything they hoped to achieve and so they’ve got a problem. There’s something missing and so they buy courses and books and all this stuff because you promised to have an answer, a path. And it can become easy for people to feel that there’s a simple solution, that hey, these online marketers, they’ve got a path and if I just follow that blueprint I’m going to be successful and it sort of ends up making internet marketing feel like a trick or a scam or, I don’t know, something other than what it is.
And again, all online marketing is—or all marketing is—is a method of taking a message to a market that is likely to respond, is likely to care and is likely to take action as a result. And again, the thing that I learned and the thing that continues to come into focus is that there’s no shortcuts. It’s not a system that I just do A, B, C, D and I’m going to suddenly make money. I mean, there are some examples of that out there, but for the most part what I’ve learned is that this is just about creating real value in the world and creating a business that can stand on its own out there in the real world.
So if you can get out there and get up on stage and make people want to buy your album or if you can get in front of a room of businessmen and make them want your software, whatever the case may be, then you’ve got something, then you’ve got a business. You’ve a real business and the online marketing is just the study or the craft of reaching more people.
Vic: It’s an art in itself, actually.
John: Yeah, but I see a lot of people just missing the point, they think the marketing is the business, they think that if they master the marketing then they’re going to be successful. But you have to have something of real value to apply the marketing to and I think for people that are struggling or learning or just getting started, that’s usually the missing piece of the puzzle. People come to me all the time, especially when I’m more focused—I’ve done my share of instructing people in the non-music space in the past, it’s been a while since I’ve focused on that space— but they come to the table with crappy products, they come to the table with crappy affiliate products that they don’t know anything about or care about. They’re just looking for decent returns and then they’re following the steps that everyone’s laid out for them but forgetting that it needs to be this core value there as well.
Does that make sense?
Vic: Yeah, I mean, don’t sell crappy crap.
John: Yeah, but even more so, it’s a mindset thing. It’s realizing that if you have a business that can exist out there in the real world, then online marketing is going to be very, very effective for you. If you don’t, online marketing in itself, I don’t know. For most, unless you become one of these super badass kind of CPA marketers which is over my head and something I’ve never succeeded at.
These guys are sort of the fighter pilots of online marketing and I don’t know what they do. But for most of us who are just going out there trying to turn passion into profit, we can’t short cut it. We can’t think that ‘well, if I do what John says then people are just going to buy my CD.’ They’re going to buy your CD if you’re an engaging artist and you do what John says, you know what I mean?
And they’re going to buy your product if your product is really helping them and you’re communicating in a fun and interesting way, but there’s no real shortcut. You’re not going to succeed just because you follow the steps. You have to have real value and be offering the world real value. It’s something that I remember hearing a lot in my early days, people talking about value, you need to offer real value and I never really knew what it meant.
I mean, you understand the concept of offering real value but I think everybody turns and goes, well, this does have real value. But you have to be able to—I think the litmus test is ‘can this exist in the offline world? Would this exist if I had a store front on the main street of town in the prima location? Would people want what I’m selling and would I be able to convince people of its value?’ And if you can, then you can use all these tools that the internet offers to scale up and have a much, much more comfortable lifestyle.
Vic: I like that, the offline litmus test. That’s a really cool filter to apply to whatever you’re working on.
John: Yeah, because taking my first success that I mentioned, selling that cookbook, the CE book, I could never have set up the store selling a cookbook and expected to make much money. And I didn’t make much money online with it. And even if I was going to go set up a bookstore, could I succeed? I don’t know, there’s a lot of competition and is that something that is really lacking in the world. But by contrast and while it’s not a bookstore, you take the record store economy, records stores, they’re all but gone around the world or at least the United States and yet you have the amoebas of the world flourishing because they’ve created something new and of real value that was lacking and I think that that’s what needs to be in place.
I think, again, there’s too many people trying to shortcut it. And I see 90% of the online marketers, when I take a look at what they’re doing, I’m just bored. It’s not a real value or they’re not communicating it in a way that is capturing my attention in a new way.
Vic: John, this has been awesome. Thank you so much for coming on and sharing. Where can people find you online?
John: You can go to musicmarketingmanifesto.com. I suggest anyone who’s a musician and interested in this stuff sign up for the Music Marketing Blueprint. It’s a free video there that will give you a pretty detailed overview of the entire process that I teach and recommend musicians follow. And of course there’s contact information there and social media links and all that stuff, so if anyone’s interested, yeah, find me at musicmarketingmanifesto.com.
Vic: Sweet, thanks so much.
John: Cool, thanks for having me. I really appreciate it.
Vic: That was fun. It was a good one.