Merchandising 3.0

Merchandise sales have emerged as an important component to a successful career in the music business. Selling CD’s, shirts, stickers, hats and posters is a great way for an artist to get free advertising from the people who buy and can be a real moneymaker when done correctly.

It does take up front money to get the merchandise designed and printed. The first step to getting a merchandise effort established is to get a screen print set up for the design or designs that will be used. Once the screen print is set up it is time to get price quotes from multiple screen printers. The variables that determine the cost of getting merchandise made include the type of merchandise ordered, quality (100% cotton vs. 50/50 t-shirts for example), quantity and number of colors used in the printing.

A 50% profit margin is a good benchmark for setting a retail price (if it costs $10 sell it for $20). Bundling items together is a good way to increase sales, for example if CD’s and shirts are both $12 bundle both together for $20. Keeping tight records of the merchandise sales and inventory level can be the difference between making and losing money in this effort. Make sure to only give merchandise away for free to people who might help create a buzz by wearing it or are very influential in the music business.

The standard deal for the person manning the merchandise section of the club is 10% of all sales. If $200 worth of merchandise were sold $20 would go to the person selling the merch as a courtesy. Some venues will provide a merch person if the artist doesn’t have their own for the show.

Atist Quote of the Week

“When I hit that note - if I hit it correctly - I'm just as important as Jimi Hendrix, Eric Clapton, or anybody. Because when I hit that note, I hit the umbilical cord of anybody who is listening.”

-Carlos Santana

Digital Mobile

- Sony BMG's Commercial Music Group unveiled a licensing Web site for filmmakers called MovieTunes. The site allows filmmakers to submit the music criteria they need, which a Sony BMG staffer will then use to help find the right song.

- Warner Music UK agreed to license its music to an MP3 store operated by British supermarket chain Tesco. The deal includes custom album bundles, remixes and interactive booklets.

- IODA has agreed to offer RightsFlow's accounting and business management music licensing system for mechanical and DPD licensing to its label clients.

- RoyaltyShare is expanding its digital media management tools to mobile, through a series of deals with mobile content providers. They include LiveWire Mobile, Moderati, SendMe Mobile, Thumbplay, and Zed.

7digital Signs Sony BMG To MP3

U.K. download service 7digital.com has signed a deal with Sony BMG to sell around 250,000 tracks from its catalog in high quality MP3 format.

7digital says it is now the largest DRM-free store in the U.K., with a total of four million tracks. It has now signed up all the majors to the MP3 format following an agreement with Universal Music this month.

The London-based digital music service launched the Sony BMG catalog (Sept. 16) on its site today, in addition to launching new stores with localized content in Italy (it.7digital.com), Austria (at.7digital.com) and Portugal (pt.7digital.com). A pan-European store also launches today featuring catalog that has been cleared for the whole of Europe; 7digital has existing services in the U.K., Ireland, Germany, France and Spain.

CEO Ben Drury also announced plans to launch in North America in the fourth quarter of 2008. No date is confirmed, although Drury told Billboard.biz they will open an office in San Francisco.

"We already operate in the U.S. in a small capacity on the business-to-business side," said Drury at a London press conference today. "As the market moves to MP3, the U.S. has become more interesting to us and we have been getting more [web] traffic in the U.S."

Drury says the American launch will focus on building through partners such as social networks and other companies. As well as selling tracks direct to consumers, 7digital also delivers audio and video on behalf of record labels, artists, film and TV companies, as well as retail and brand partners.

The download store has been a major advocate of MP3 and Drury says he believes the U.K. launch of an MP3 service by Amazon "will promote choice" for download formats and he predicts a "backlash" against digital rights management.

Around 200,000 customers who previously purchased Sony BMG music in the WMA format from 7digital.com will be able to upgrade the tracks to MP3. "I think that's a very consumer friendly thing for Sony BMG to do," said Drury.

He contrasted the 7digital approach to MP3 with the protected music files sold on Apple's iTunes store and other mobile and subscription services. "People are a lot more likely to purchase albums in MP3," said Drury, adding that the format has helped boost the average transaction on 7digital.com to £4.50 ($8.03).

"Consumers see DRM as somewhat of a hindrance when purchasing legal digital music," said Drury in a statement. "The availability of all of the big four music labels in high-quality MP3 is fantastic news for the UK music fan - everything they now buy from us they can be sure will work on all their devices. We've seen a huge increase in sales since making MP3 downloads available on 7digital.com."

The company also outlined plans for a new partner program and application programming interface (API).

The API platform will allow third-party developers to create their own download and streaming services. The partner program is designed for non-developers who can use widgets that can play music on Web Sites and blogs and provide a link for fans to purchase tracks at 7digital.com. Partners will earn commission for tracks and albums they sell.

The announcement follows U.K. supermarket chain Tesco's partnership with Warner Music U.K. to sell MP3s via www.tescodigital.com.

Tesco's service has all the majors on board and currently has 3.3 million tracks in total. Around half of them are sold in MP3 format.

Music business is still game amid the gloom

What the popularity of games such as SingStar and Guitar Hero show is how games have matured, moving from teenagers’ bedrooms into the living room. Just as Doctor Who reinvented family viewing, the new generation of games reinvented family entertainment.

What the music games also reveal is a route to revival for the beleaguered music business.

The appeal of music has always been far more than listening to recordings or the radio; it involves going to gigs and festivals – and singing into the shower head. While only a minority can play or sing well enough to be taken seriously as performers, music games tap into the desire of the rest of the population to be rock stars. And because people cannot pirate the technology easily, the games and the songs can be priced to generate a sustainable income.


The interest is clear from the number of songs that people are prepared to download – 20 million in the case of Guitar Hero. The most frequently purchased download by SingStar customers is Bonnie Tyler’s Total Eclipse of the Heart. Both games are racing to announce tie-ups with familiar bands – SingStar will release a Queen-themed game next year, a few months after Guitar Hero’s Metallica special edition.

Computer games will not be enough, in isolation, to solve the structural problems facing the music industry but by tapping into people’s true relationship with music, it demonstrates that the day the music dies is a long, long way off.

Artist Quote of the Week

“Going out and playing music - that's what I do. I don't do much else.”

- Dave Grohl

Promoting Your Band 2.0

A website is always a safe bet for getting ur name out there. Simply buy a domain name (or use a free web space provider - however yourname.com looks more serious than geocities.com/yourname) and build the website yourself or pay somebody else to do it. It may cost but it really is worth the time and money if you make it good and advertise it right. Some good things to include on your website are MP3's, biography, gig dates (no matter how small and low key) and any other information you can think of. Then get it into as many search engines as you can. Its amazing how many people will look at your website simply by stumbling across it in Yahoo or Google. A website is always a worthy investment if you're serious.


If you already have a few fans, or even friends who like your music, its always a good idea to get them to do the promotion for you. Print flyers, stickers, make demo tapes, anything, and get people to hand them around or give them to their friends. Its a very effective way of spreading the word, through a Street Team. It is how Linkin Park started out and look at how successful they are today. If your friends and fans are willing, also get them to post on message boards or go in chat rooms of music websites. Promotion teams are very effective.


Go into chat rooms and message boards on the websites of other, already well known bands and tell the whole internet about you. Most message boards of well known bands have 10 000 + members, so just imagine how many people will see your name and check you out. It works, again, it is a method often used by signed and unsigned bands who need more recognition. It works for other bands and it will work for you, try it out.


Like anything, you won't get anywhere without a little hard work from yourselves. You won't get yourself recognised by sitting there waiting for it to happen. Spread the word about yourselves, pin up flyers wherever you can, advertise your gigs in newspapers, basically anything you can think of. If people like your music they will soon spread the word themselves and you will quickly get a loyal following which will keep growing as long as you are willing to put in the work yourselves.

You can't rely on other people to do everything for you and you can't expect things to just magically take off for you overnight. It may take a while but in the end its worth all the hard work.