Metrics And Your Music Business

Posted by Faza on July 17, 2009 under Music business |

It seems the numbers issue is the topic of the day. Recently I’ve come across several posts discussing Internet metrics and what they mean to us, musicians.

Nick Fitzsimmons of Penny Distribution recently asked John Doe @ KnowTheMusicBiz what metrics an artist can “use to demonstrate an improvement in performance from album to album”. John Doe’s answer is pretty non-commital - along the lines of “do what you’re doing and don’t worry about the payback”, which irks me no end as you’ll have noticed in my last post. I thought however, that I might try to formulate an answer of my own, for what it’s worth.

First off, Nick’s question begs another: demonstrate improvement to whom? Business partners? The media? Your fans? Yourself? All these people will be interested in vastly different things. Business partners will want to know if doing business with you will be good for them - if they’re a record label or a publisher, they’ll want to know how many recordings you actually sold (so they’ll know how much money they can hope to make off you). If they’re booking agents or promoters, they’ll want to know how many tickets you’re selling. The only people who may be interested in Internet metrics will be advertisers and they’ll want to know how many people are visiting your site. The media will want to know things that can make a good story. Who knows what fans will want to know? As for yourself, you need to know things that have a direct effect on your business.

You should be aware that metrics of any kind are only as useful as the conclusions you can draw from them. Any large business will have a staff of people to crunch numbers and translate them into meaningful policy aids, but the quality of their reports will depend on what they’re working with and whether it is relevant.

Not to get in to deep, let’s assume you are doing it all yourself. You want to know what numbers are relevant to your career. Are Internet metrics of any use? If so, which ones?

I will be frank: most aren’t and those that may be will depend on the availability of other data. Consider e-mail subscriptions: it’s fine to have lots of people on your mailing list, but it does nothing for your business if these people aren’t actually buying anything. The metrics will tell you how many people received your communications and possibly even how many read them, but they won’t tell you how many of them then take action. MySpace or Facebook friends and Twitter followers are even less useful - people who frequent social media sites by nature have a lot of things going on. They may be following several bands (or more) and have tons of normal friends/acquaintances as well. Even if your message does reach them, it is likely to be lost in all the other information they are flooded with. Direct-to-fan communication does not necessarily evoke fan involvement.

Aside: To get an idea of how metrics can be misinterpreted, have a read of what Kate Bradley of Outlandos Music wrote recently. My Mom Wants Your Fans, she calls it. I’d laugh if such a view wasn’t frightening, when said with a straight face. Kate’s Mom isn’t a threat to me, or any other musician, simply because she’s probably not in the same business as us. It doesn’t matter how many Twitter followers someone has, if they are not competing in our line of business (just like Britney Spears isn’t competing with Viridian - or Arnold Schwarzenegger for that matter). Social networking may generate short-lived micro-celebrities, but that has nothing do with us.

What metrics are really useful to the music business? The same old ones, I’m afraid - sales. Whether it’s recordings, tickets, merchandise or whatever, what really matters to your business is how much money you’re making and whether it’s enough to continue doing what you do. You can interpolate this over other data, to judge the effectiveness of your campaigns - so that, for example, you learn that 50% of people who received an e-mail blast about an upcoming show actually came, but the value of this data will be statistical. You can make general assumptions based on the numbers, but you cannot count on your predictions being correct.

Just to wrap up, let me tackle the issue of macro statistics for a moment, since it recently came up in an Artists House Music post. The question was one of the relevance of music industry statistcs to our music business. Andrew Goodrich makes a point that most small-scale music businesses (such as DIY artists or small independent labels) may not really find their own situation reflected in these and as such these statistics may not be very relevant to what you do. My view is that they’re worth looking at nonetheless. The trends illustrated therein may not apply directly to your business, but should give an indication of possible opportunities or threats that should be looked into. Of course, the general principles still apply: sound business consists primarily in knowing where your money’s coming from, where it’s going and how much. Awareness of where the industry in general is going may help you stay ahead of the game, provided it does not blind you to the here and now.

Update: I must confess to ignoring my own prescriptions, as I am getting a kick out of watching the view-count on this post rise at an alarming rate. Then again, the Cynical Musician blog is not a business venture - I do it for myself and out of a misplaced sense of charity (make of that what you will). And again, if I ever decide to put ads on here (which would transform it into a business venture), these stats will suddenly become relevant. So I guess it’s okay…

Further update: Check out this quick report on using fan-related data, as discussed by a New Music Seminar panel recently, courtesy of Billboard.biz. Note especially the proposed ideas for leveraging information and the caveat related to overuse of direct-to-fan communication.