Traits of a Healthy Music Business

Provoked by the tantalizing and mostly ambiguous news about Ticketmaster proposing to reinvent itself, I began thinking about what it really takes to create a successful music business today. These days, the things that surround your product are almost more important than the product itself (DISCLAIMER: This is not an excuse to release crappy products or music).

There are a lot of choices out there for passionate music consumers right now, and it’s surely a buyers’ market. Below are several traits that I believe are key to giving new music businesses (or any business for that matter), viability in such a market. Keep in mind that you should be thinking about your own band as a type of music business. You need to:

1. Have an easily identifyable competitive advantage.
2. Constantly strive to increase your product’s viral nature.
3. Create a social object through which people can build genuine connections and relationships.
4. Create a synergy amongst your products that points to your core competency.

A few words about each.

1. Easily identifyable competitive advantage. What sets you apart from everyone else in your industry? What makes you better, and what is the incentive for customers to come to you over someone else? For musicians, your default competitive advantage is your original creative work. Unfortunately, this doesn’t mean that just because you write original music, people will listen to it. You will need to work doubly hard to brand your work and market it. Make sure everything you do contributes to the same, simple, clear message about who you are and what you do. Think Radiohead, N.I.N., Tom Waits, and yes, AC/DC. They have created brands for themselves by sending simple and consistent messages about what they do.

2. Increase the viral natural. Make it easy to adopt your product. Don’t ask customers to do anything you wouldn’t do. Don’t add any unnecessary steps to using your product/service. Here are two great examples of websites that make it really easy to use their product and both of them do it extremely well.

• Posterous (you don’t even have to sign up to start using it anymore).

• The Mountain Goats’ “Satanic Messiah” EP (This website is the definition of breaking barriers)

Take some serious time to think about how you can simplify what you offer. And again, the best way to do this is to not ask anyone to do something you wouldn’t want to do. Posterous took a step off getting started by getting rid of the sign-up. This increases the number of people who will take a chance with their time and try out your product.

The Mountain Goats made it easy to get their newest album through whatever means you prefer, and in different formats. For free. With the option for loyal supporters to donate. Notice the simplicity of both these sites. In just a couple seconds you know what they offer, whether you want it, and how to get what you want. That is viral nature.

3. Create a Social Object. It’s no news that we are social creatures. Much of what we buy and consume has more to do with community and identity than it does represent any kind of actual need. Music itself is a social object. But to compete in a diluted market, musicians need to go further than just creating good music. Find creative ways to build communities around your work. Of course, take advantage of all the social media and music communities online. But don’t stop there. Do the straddle.  Take your community offline. Make your live shows events rather than just gigs. Give the people who love your stuff ways and reasons to spread it to others. The band Guster sold 90,000 copies of their first two independent albums through the help of fans alone.

4. Create synergy. This goes back to the idea of building a consistent and simple message around what you do. Everything you do, and I mean everything, should somehow enhance what is already there. If your messages are confusing, you are driving people away.

Make sure that everything you do is creating value. If you are offering new products or services, make sure they both align with (value-wise) and enhance what you already offer. A simple illustration of this is how when a musician releases a new album (a good one, that is), the interest in back catalog inevitably increases. Make your back catalog easy to get.

Regarding your marketing efforts, try to create a positive feedback loop. Make sure you are where your potential fans are. This means having a presence on more than one website, and driving them to your main website. Some of your fans are on Facebook, some are on MySpace, some are on newer and smaller niche sites. A couple don’t use the internet and hang out at that hipster coffee shop a few blocks from you. The point is, find out where your potential customers are hiding and create a kind of positive feedback loop so that the people who should and want to hear your music can’t escape it.

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I hope this spurs some good thinking about how to approach your music from a music business perspective. These are the traits I think are most important, but I bet some of you have more ideas. Please post them below - we read all of your comments and they inspire us!