Unless you have been living in a cave the past six years, you have at least a passing understanding of the existence of social media. Social media allows its users to reach out to friends, acquaintances, or followers with what is happening. This could be in the form of a picture, event posting, or a simple message (i.e. â€“ Eating a ham sandwich right now #ToTEs AwEsOmE!!!!!). A few of the relevant social media sites for music include Facebook, Twitter, Foursquare, Superglued, and GetGlue. While it is important to understand the existence of these sites, it is even more important to understand how these new tools can be embraced by the music industry to help drive revenue.
No matter how good your band is, nobody will listen if they have not heard of it.Â While radio used to be major driver for music discovery, social media has opened the doors to help creators connect with fans. These fan connections help build future revenue in the form of track/album downloads, merchandise, and ticket sales. While it seems as though radio and social media reach the same goal, social mediaâ€™s reach is much more broad than the reach of even the most powerful radio antennae. This is because the new fan can now instantaneously reach out to their friends who may be all over the world.
According to a 2009 report from Neilson, consumers rely on their friendâ€™s recommendations much more than any other outlet. Furthermore, recent data from ChompOn (similar to Groupon) states a Facebook â€śshareâ€ť is worth $14, a â€ślikeâ€ť is worth $8, a tweet on twitter $5, and a twitter follow $2 for its participating companies. While this may not directly translate to music, it is important to realize the importance that awareness means to sales. Social media gets people involved, and people like to see the things with which they associate succeed.
So what are some of these social media tools? Excluding some major development from Apple or Google, current outlets cover a wide berth. One could use services like Bandcamp, Reverbnation, and Rootmusic to create band pages and push those pages onto Facebook. Some services allow simple streams of music in connection with tour date announcements. Other push services allow fans to purchase songs, merch, or tickets directly through the Facebook fan page or on the artistâ€™s main web page. Services like Superglued and GetGlue allow fans to find out about, purchase tickets to, and share information concerning upcoming shows with friends and followers on twitter, foursquare, and facebook.
Recent news from Ticketfly suggests Facebook is a major driver of ticket sales. With white label ticketing services offering built-in web applications for home pages or social media pages, this is a new way for artists to keep money in their pockets. By selling music, merch, or tickets directly through your own website, you can skip the percentages taken out by digital retail stores or distributors.
Twitter is another popular social media outlet. This microblogging platform is a promotional tool. You donâ€™t get paid when somebody retweets something, but you do get the word out. The on-demand music streaming site Rdio even teamed up with the Grammys to promote the awards show and the participating artists through twitter. This led to the most watched Grammys since 2001. Rdio allows users to tweet song samples and even allows Rdio users to hear full clips.
This is important because streaming revenue is becoming more important, and generally the song that is given away for free often becomes the best selling track on an album. Spotify, which is trying to enter the US market, has over 1 million paying subscribers out of its 10 million subscribers across most of Europe. At $.01 per stream, that revenue could become a huge part of any businessâ€™ balance sheet.
These are just a few of the options available for generating revenues with social media. There are plenty other out there (like crowd funding a new project with RocketHub or Kickstarter and promoting it using social media), so be creative. With a commanding use of social media and other web based applications, artists and their teams can reach more people than ever before. While album sales may be going down, there is a whole world of revenues just waiting to be captured. Donâ€™t leave money on the table. Go out and capture it!