
The Dave Matthews Band shows how to make money in the music industry - pchristensen
http://www.slate.com/id/2279757/pagenum/all/
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joshklein
Want a TLDR version? The gist is that unlike the traditional musician business
model (get discovered, get a large amount of money up front, produce shippable
versions of your product), they actually - ya know - work for a living. DMB
incrementally grows their fan base by constantly reaching their customers
directly, and selling them shows instead of records. And while the "record"
business is dying, music isn't going anywhere. Satisfy a core customer need,
work your ass off, and you have a viable business. You don't need to go
raising tons of money to have a huge reach.

Hmm, what other thing does this sound like?

~~~
ABrandt
_Hmm, what other thing does this sound like?_

Yes, yes, yes. Music groups are small businesses and bootstrapping is now a
model that makes sense for many of them. But although there are many parallels
between musicians and startups (labels are the VCs of music etc.), there are
some significant differences. For example, one of the tenets of bootstrapping
is the pivot. If you're not profitable, take what you've learned and change
your direction. For musicians this is far more difficult I believe. Like many
popular artists, DMB's success stems from their unique 'sound'. This sound is
a special mixture of each members personality and is very hard to change up
while still remaining genuine. Founders certainly have a similar effect on
their startups product, but I believe its far easier to hire a new designer
than to stop playing the music you feel in your heart.

tl;dr - Music is business but its also an art. There needs to be a new
bootstrapping methodology tailored towards music.

~~~
ghshephard
Re: Bands Pivoting - Happens all the time. They try out new drummers, new
singers, new bass players. Sometimes they go solo. They keep experimenting,
either with their style, or their bandmates, until they find something that
works for them - both artistically and commercially.

Sometimes it never goes anywhere - but that's true of startups as well.

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qq66
The author seems to make the weird assumption that DMB is somehow not as "big"
as Bon Jovi and so they must be doing something clever to be making as much
money.

That's simply the delusions of an out-of-touch 50 year old. DMB was the most
consistently popular musician of my generation. How to make money in the music
industry? Make music that hundreds of millions of people want to listen to.

~~~
wmf
Also, DMB got famous from the "old" music industry when you could still make
some money by selling CDs. I'm tired of the "now that the label has made me
famous, who needs labels" and "now that I've had N platinum albums, who needs
to sell albums" stories; I'd like to hear about a _new_ artist who succeeded
without help from the industry.

~~~
Umalu
Sufjan Stevens seems to have built a reasonably successful music career
without having a major label deal. His CDs are issued by an indie label
(Asthmatic Kitty) he reportedly co-owns with his stepfather
(<http://en.wikipedia.org/wiki/Asthmatic_Kitty>), and while he doesn't seem to
come close to Dave Matthews in concert revenues, his tours seem to do all
right.

~~~
jswinghammer
Good example. I wasn't aware he did everything on his own. I've been to see
him live and the crowds are always large and very excited.

~~~
jhamburger
Clap Your Hands Say Yeah achieved widespread popularity in the indie scene
through MP3s with a self-release debut, no record deal of any kind.

~~~
jamesbritt
How much of that do you think depends on location? How critical is having a
local (e.g. tri-state) scene?

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healthyhippo
They make money for three reasons:

1\. Their music is excellent and consistent. Dave Matthews is one of the best
songwriters of this generation.

2\. They constantly make concerts exciting by playing completely different
versions of their songs live, with emphasis on improvisation. People go to DMB
concerts two nights in row because they never know what they're going to get.
They won't get a repeat show- they'll get something completely different,
often times. I don't know many other bands who have fans that would go to a
concert two nights in a row.

3\. They also seem to genuinely love touring / performing. They give up a lot
to be on the road that often, and I don't think its money or fame they're
chasing.

~~~
xcjamie
for proof of 3. just check out their drummer. He constantly has a huge smile
on his face during the shows, and they all seem to be having a blast.

Its too bad they're not touring this summer, I've seen them the past 3 years
and their shows never fail to impress

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trotsky
The article (like many of its style) draws strong comparisons to the grateful
dead. They serve as a cautionary tale as well - the road, especially when
defined as year in year out tours, can take a heavy toll. They lost three
keyboardists to drug and alcohol abuse (two directly and one had to leave),
their last one had serious drug problems and their bassist struggled with hep
C and needed a kidney transplant.

Garcia was of course the most famous casualty - he died in rehab due to the
complications of long term abuse. He struggled with addiction for ~20 years
and according to some reports often longed to quit the road entirely in part
because of its effects on his health. In the end the band simply made too much
money - and provided for too many peoples livelihood through their touring
regime - and when met with resistance to stop he simply felt he needed to
soldier on for other's benefit.

It's not all drugs and alcohol either - many musicians find the road punishing
sooner or later for reasons ranging from diet and exercise to alienation and
homesickness. I'm sure a few consultants out there can sympathize.

None of this is to say that a comfortable living can't be made on the road or
that a live music oriented can't counter some of the negative effects piracy
has on artists. But clearly there are some people out there (who are being
held up as the ultimate examples) that might not choose to do it that way
again.

~~~
city41
I'm a huge DMB fan and have seen them many, many times. I can say with
certainty that the quality of DMB shows gets worse every year, as clearly the
band is just plain worn out. I was very happy to hear they are taking 2011
off. Touring every year (and they often do up to three tours a year: summer,
winter and a non-US tour) just can't be good for them.

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runcible_spork
DMB makes money by having an utter sociopath for a manager, a fellow named
Coran Capshaw. Coran would sell his own mother in the slave markets if she
could fetch a few bucks.

~~~
crunchykeith
He raised the price of phish tickets to $70 a pop this tour. He's a maniac and
IS the reason they make so much money.

~~~
timmaah
Phish is like crack to some of my friends. They go to every single show in a
250 mile radius. Year after year. Then complain they are broke.

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RK
I don't know if other bands are doing this, but Phish did live pay-per-view of
their New Year's Eve mini tour for $15-$20 per show. That seems like a very
interesting model.

I love going to see concerts, but can easily imagine paying $x to see some
well videoed live shows in HD.

~~~
taylorlb
Phish and DMB share the same manager

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rick888
Most bands don't have this luxury. They make money because they are popular
and are able to still sell out venues.

~~~
MikeCapone
But how did they become popular? Is the way they did it now blocked for other
musicians, or is it now easier than before to reach potential fans?

~~~
cyanbane
I used to trade CDRs with people from all over the US/World for each show via
snailmail. (I recorded a few shows back in 97/98 on minidisk) The early tape
trading CDR community centered around DMB is one of the most endearing 'net
communities' I have ever been part of (google "Dave Matthews Band CDR
Webring"). Some people might say the band killed that a little when they
started releasing their own copies, but I think a lot of people accepted it
because of the quality of those official copies (to this day they release old
shows in much better audio that the tape traded copies). I have not really
been part of the show trading community for about 7 or 8 years, but it was
great fun traveling from city to city for shows and meeting people you had
traded and discussed stuff with on the net. That is something that certainly
can still be replicated by today's bands. This was also possible not only
because of the music but also the band's charismatic singer. I think people
wanted to trade shows just to see what Dave said in certain instances.

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newmediaclay
Why is the premise of the title and article that DMB makes money and other
bands don't? Plenty of other groups are raking it in.

While record sales might be down, I bet the amount of musicians able to make a
living wage today, solely from music, is much greater than it was in 1990.
This is due to the same technology and disruptiveness that has shaved 10% off
the earnings of the megastars.

The story should be about how smaller bands are now able to be much more
successful, not that a mega-band can still pull $70 million while others have
been reduced to (gasp) $50 million.

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Stormbringer
You know, Hacker News is one of the last places that should be criticising the
'old fashioned' way of making money from music (e.g. contract with recording
studio, make an album, recording studio keeps lion share of the profits).

Why?

Because the 'old fashioned' model of financing a band to produce a record is
directly analogous to the VC model of financing a startup to produce a
product.

Consider: in both cases the investor is taking a large risk, and needs to make
multiple investments because the chance of each one going bust is large, and
correspondingly they are looking for a 20x return (or more) from a 'hit',
because they need to make big dollars from the few that achieve success to pay
for all the ones that fail.

Except that, of course, the evil corps that make up the RIAA did much more for
the artists than VCs ever do for software startups, including (but not limited
to) big marketing pushes of their product.

NB: yes, I'm aware of Courtney Love's rant about how evil the music industry
is: see

<http://www.salon.com/technology/feature/2000/06/14/love>

for an insider point of view.

I just think it is a bit rich to have people who suckle on the teat of VC
money to tell the music industry that _they_ need to change and get with the
times.

I wonder how much that point of view is motivated by the "music should be
free" way of thinking - or as we like to call it "something for nothing and
your money back".

~~~
daeken
Record labels don't invest in artists, they loan them money while taking a
very substantial percentage and ownership. If you take funding and fail, you
don't have to pay it back. Make an album and fail, and they own you.

~~~
Stormbringer
Arguably that is only the case since musicians are less finance/numbers savy
than programmers.

In any case, in America it would be relatively easy to get in the hole to your
music studio to the tune (sic) of 2.2 million dollars, have your record flop,
and then declare bankruptcy to avoid being 'owned'.

------
defeated
Related from a technology standpoint: CASH Music (<http://cashmusic.org/>) is
a non profit dedicated to providing technology to enable a more direct
musician to patron relationship. Lots of artists are going this route, which
is really much more in line with how artists typically made a living up until
the 20th century (i.e. patronage).

------
alanstorm
Could someone forward me the part of the article where it explains how an up
and coming band can use a time machine to go back to an era where they can use
the Recording Industry Promotion Machine to become a national act, such that
they'll be able to build a large enough fan base to support a tour oriented
business plan? Slate seems to be dropping that part in my browser.

------
foljs
> "And while the "record" business is dying, music isn't going anywhere.
> Satisfy a core customer need, work your ass of, and you have a viable
> business."

Well, for some of us, music is what's RECORDED, not live shoes.

I can accept: "well, too bad, traditional recording profits are dwindling,
just man it".

But, "it's no problem, just give live shows" is a stupid answer. At best, it's
a non general enough one.

All those articles and blog posts hammering on the "make money by playing live
shows" theme, feel to my European tastes as written by Texan rednecks, whose
idea of music is Willie Nelson or something... (and DMB is not that far off).

It's 2011: there are tons of groups, music genres etc where it doesn't make
sense to have traditional concerts. And there artistis that don't like to give
them, anyways. Not all musicians want to be onstage, especially in
electronica, ambient, etc genres. Heck, even the Beatles got bored and stopped
playing live mid-career. Oh, and "selling t-shirts and merchandise"? Some
people want to be in the MUSIC business, not that of Matel and Threadless.

~~~
jamesbritt
'But, "it's no problem, just give live shows" is a stupid answer. At best,
it's a non general enough one.'

Hear, hear. This is a problem I've, of late, being trying to sort out, and
would love to hear success stories about musicians or musical outfits that
have a viable business without having to tour.

OTOH, I have no problem with selling related product; in fact, I found the
idea compelling, especially non-traditional delivery means.

But not so much T-shirts and the standard rock memorabilia. "Art" objects,
physical things that are interesting in their own right, whether it be some
aspect of CD/DVD/USB/SD packaging or something more out there.

~~~
foljs
Yes, some kind of "art objects" I can see selling (speaking as an electronica
artist), but t-shirts and typical rock memorabilia seem too gimmicky, like
something a hair metal band would do.

I would also consider artistic/theatrical type shows, like The Residents use
to do --things that are not tied to the typical "come to hear a band playing
their same ole songs live".

~~~
jamesbritt
'I would also consider artistic/theatrical type shows, like The Residents use
to do --things that are not tied to the typical "come to hear a band playing
their same ole songs live".'

I've been contemplating that as well. For ideas on performing don't involve
many live musicians, and I'd like to make the overall experience more engaging
and memorable, ideally involving the audience in some not-too-gimicky way.

Creating something that people can't help talking and writing about for some
time, even after it's well over, could get the buzz of more frequent gigs, but
with (I hope) lower overhead.

And yeah, The Residents are a good example in that vein.

