Investing in artists - the human part of the capital attraction equation...

Bruce Warila | Mon, November 10, 2008

More and more artists are seeking advice on how to obtain a substantial investment ($50,000 to $250,000), and artists around the globe are structuring their organizations as small businesses that will generate a return on investment for investors (for fans and for brands that invest in artists).
Prior to writing more about the legal or business things you need to do to obtain an investment, I wanted to touch on the human part of the capital attraction equation.

After reading this list you may say to yourself "WTF, do I have to be a saint to raise money?" The answer is no, maybe you don't. This is my investment checklist, and I believe it's necessary to keep every business option open, especially in the music industry. When an investor is investing in more than a single song (a person or a band), he or she is probably looking for someone that MOST consumer-facing brands would also be comfortable promoting.

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This article originally appeared in Unsprung Media, a blog by Bruce Warilla.

Highlight: Kingsfall

Kingsfall
Genre:Rock / Alternative / Pop
Hometown: Dallas/Ft.Worth, Texas
Fans on Mobile Club:34 (in 3 weeks!)
Keyword: Text Kingsfall to GETME (43863)

Check out their mobile fan club, click here.

Kim Jones, publicist for Kingsfall, has been actively taking advantage of the Kingsfall mobile fan club. Concert dates, news, and a YouTube video are now posted on a mobile webpage. Kingsfall merchandise can also be purchased straight from the phone. They are building their fan club through onstage shoutouts and the Signup Widget on their MySpace, Facebook Fan and Personal pages.

According to Kim Jones, more mobile-based promotions are on the way. "Mobile fan clubs are truly the wave of the future and are an excellent way to keep fans in the loop while allowing them to get great content. I've been approached by a few companies offering mobile services for bands but no one has been able to touch Adva on ease of use, customization options and customer service."

Selling Merchandise to your Mobile Fan Club

You have all heard the term leaving money on the table. Sometimes this refers to a negotiated business deal that you might have done better. But it can also refer to money that's there for the taking if only you ask for it. Your fans are incredibly motivated when they see you at a concert, and merchandise sales remain a powerful money-making opportunity for most music artists. When was the last time you were at a concert that did not have a merch table, no matter what size venue? And at the large music festivals, the merchandising is so important that it's typically removed from the artist to the benefit of the festival organizers.

We all know that convenience and availability are one of the prime motivators for making purchases. It's not just impulse buying, but often merchandise presented to us in a moment when we are ready to buy results in a sale. Selling your merchandise to your fans on their mobile phones is a perfect opportunity to capture this dynamic. The Adva Mobile platform provides three terrific opportunities for you to make money from selling merchandise to your fans.

First, you can sell physical goods like posters, T-shirts, pins and other items on your mobile fan club site. It's easy to set up on the Merchandise setup page on the Artist Portal. Fans pay through PayPal -- a trusted source -- and once the sale is made, the money is transferred to you almost immediately and we send you a notification for you to complete the fulfillment, by shipping out the goods or delivering the goods at the concert.

You don't have to sell goods via PayPal: You can also setup a merchandise item on your mobile fan club, that would hold a link to wherever you want to sell your goods, like iTunes, Napster, and Amazon. Your fans are brought from your mobile website to those storefronts to complete the purchase.

You can experiment and play with it, and present a simple introductory experience to your fans. Tell them that whoever comes to your merch table at the gig and shows their phone with some evidence (SMS or site) that they are aware, or joined your mobile fan club, gets some discount off your merch. Just for fun: nothing big that will upset people, something that would motivate fans to try it out. Eventually they'll discover the gigs and merch page themselves and start buying stuff from you.

 
Coming soon -- ring tones and other small dollar items that fans can pay for on their wireless phone bill. Stay tuned for this new capability to earn money in the next few months.

Everyone who is using the Adva Mobile service to engage their fans should have merchandise for sale on their mobile website.Login NOW to your artist dashboard and put merchandise up for sale. Send an SMS blast out to your fans telling them of its availability, and watch the dollars roll in.

Why doesn't anyone customize the experience?

I've (Jack) recently been giving some thought to why music artists don't offer up merchandise to their fans that is truly unique, limited quantity, and customized. I'm intrigued with two dynamics that seem to make this a no-brainer. First, the cost difference between a limited run item and the unlimited run is inconsequential and easily covered by the fan. For example, a simple T-shirt on one website at $12.95 for one is $10.36 each for 50 and $8.40 each for 250. The $1.96 cost difference between a limited quantity of 50 (and therefore rare and collectible) and unlimited run T-shirts seems small and, to me at least, is a minor risk set by the likelihood that your true fans will want the limited run T-shirt, likely in addition to other T-shirts they buy there also special, rare, and one-of-a-kind.

Second, of course, is that your fans would much rather have something from you that was unique and personal to them, even something that they had to "work at" to obtain. These simple dynamics drive fan loyalty and also can significantly increase revenues for the artists, who can charge more for special run, rare items.

Artists that are selling merchandise on their mobile fan clubs through the Adva Mobile service are increasingly putting personalized, rare, one-of-a-kind items up for sale. Fans appreciate the personal connection they have with their favorite artists through these unique products, and the artist has a virtually unlimited supply of personal relationship building and fan connecting experiences to offer the fan.

To learn more about selling merch, click here.

Tweet, Post or Share?

You may have noticed that recently the footer on your mobile website has changed. Specifically, we've removed 'Share' and 'Post' and replaced those by 'Tweet'.

'Share' meant that fans can tell their friends about your mobile website. It was a tweet that went on their account and carried your friendly name (preceeded by a hash sign) and a link to your site.

'Post' meant sort of a message board where fans would ramble about the band, music or whatever.

Since both of them were really about sharing the experience, and both end up on Twitter (in addition to the mobile website), we've figured it's best and less confusing to merge them into 'Tweet'. Those tweets would go on the fans' Twitter account, tagged with your friendly name and contain a link to your mobile website. When fans come on the mobile 'Tweet' page, we'll present them the Twitter search result on your friendly name.

BTW, if you wanted to substitue the hash mark that preceeds your friendly name with your actual Twitter user ID and '@', you can do that on the 'Fan Posts' page on the artist portal.

Weekly Update 5/14/2009

It's been a great week for us at Adva.

The response for the newsletter last week was overwhelming (>70% of the recepients read the newsletter and many had clicked through to the articles on this blog) mainly due to a new level of quality articles this time.

Even more exciting was the ArtistData partnership announcement, that helps bands leverage their assets (gigs, news and blog posts) from ArtistData to their mobile fan club. And then we announced the partnership with CPN, who are using mobile fan clubs for their musicians (see Joyce Sims' club) and sport entertainers.

There have been quite a few features we introduced this week, some of which we didn't even blog about:

• Uploading exclusive content to grab fans' email addresses and zipcodes (read);
• We've introduced a fix that helped iPhone users to view pages w/o the iPhone hanging on them (read)
• We've also introduced a way for you to create a customised automated email that will get sent to fans who purchased merchandise from you (read)

We had nice media coverage this week from Mobile Entertainment, which was exciting.

There's a lot going on, getting ready to be launched or announced...keep with us: it's gonna get interesting around here =)

Send a custom confirmation email to fans who bought merch from you

Following up when fans buy your merch is important, because it gives the fans confidence that this new mobile system really works. The money is going where it should go (that's you, the musicians) for your merch, and the merch ends up with the fan. It also motivates your fans to buy from you again, as you give them personal attention while you're trying to "deliver the goods". Simply put, it's all about good service.

We've introduced a new feature on the artist portal that allows you to define a custom email that will automatically be sent to the fan once they bought merch from you. You can specify the subject, 'From', content of the email in rich text format, and add an attachment.

You can create a different email for every merch item that is sold, or, you can define an email that will serve as 'master' for all the items sold.

This new feature comes in addition to the email you get (the musician) once an item was sold, which also contains the fans' email address to coordinate the delivery of the goods.

To setup this email, when you add or edit a new merchandise item, see the new blue line at the bottom of the page titled "Confirmation Email".

Hope this all make sense and is helpful, we're open for your feedback!

Now's the time to sell merch on your fans mobile phones! Go sell!