I started this article two days ago (which isn’t quite correct because I started writing it about a week ago), though I have yet to come to the main part – the lessons themselves. Hope you enjoy, have your read.
Lessons from Outer Space
First of all, don’t moan how much you have to pay. Others share your problem as you can see. It’s only the dimensions which are different. Btw, any software company is working on several projects simultaneously. Otherwise the risk of failed sales negotiations is too high.
Secondly, clever companies selling high quality can find people willing to invest. Actually, there are two kind of fans they have: investors and customers. Find people who believe in you. Fans who are willing to pay more than others just to experience something unique and special. In music, these are collectors and investors. Then there are customers. But be prepared, more people will share your CDs and downloads privately than buy them. Most probably it will be necessary to find other customers. Same with software providers: It’s a small percentage of negotiations resulting in sales. Although, if you deliver great presales performance and high expertise you will be recommended.
Another problem is that software customers never pay in advance. However, they are familiar with your product, quite often they were involved in development. The most supportive users at the customer are those who find their specific requirements realised. Still, the software must be fully tested and free of failures even under extreme conditions to be paid at all. In music industry, the customer is expected to pay without knowing the product. No tests allowed.
The workaround to that in software industries is to define so called milestones within a project. It’s similar to release a string of EPs culminating in a larger volume. Each time a milestone is met in terms of time and quality, the customer is to pay a part of the total price. It’s kind of difficult to compare software and music industries here. A system provider might add and rearrange to meet the milestone. An artist can’t. Really? Not really. It’s nothing new to have audio material newly mastered or remixed because the artist didn’t like it. You don’t have to re-arrange your tracks to death just because your fans want something else. Find a good balance. True fans do reward quality. And there are plenty of ways to involve them while re-working the tracks.
But where is anything for free?
Software providers actually offer several products – and the software is only one of them. It’s the flagship. It’s what nobody else can do like they do. The software’s benefits are the reason for buying it. It’s a unique experience. Another reason massively important is credibility. Apart from word of mouth there is only one way that works in convincing potential customers:
Potential customers are sending RFPs (Requests for Proposal) to a selected group of providers. Sometimes, within a few days only you have to answer catalogues of questions – once, I happened to receive and work on one of about 300 pages. During several rounds of pitches, the group of providers becomes smaller and smaller. You’re writing proposals, calculating rough numbers, and repeatedly joining workshops and pitches. It’s an awful and time consuming work.
Most of all, no contract is signed yet. Apart from an NDA (Non Disclosure Agreement), that is. Therefore, the potential customer often doesn’t pay anything. Anytime you might fail and be kicked out. Actually, in the end the customer might even do the project on their own, based on the consulting services all selected software providers delivered.
I think you got it: There are consulting services and papers the software providers are just offering to advertise and sell their unique product that finally cashes in. They cash in on commercial licences of the software. It’s even absolutely useful to give free licences to users working at the customer’s side (if the software allows for that).
Ask yourself – what products do you deliver? It’s downloads, CDs (maybe vinyl), live music, merchandising. You should consider sharing downloads for free as long as it is for private use. Hard copies are too expensive in the making – they are suitable for bundling with anything that promises a unique experience to someone who is willing to invest.
I won’t dare to calculate how much money I spent in collecting Prince. This is a real loss in revenues. Not the bizarre one defined by music industry when it comes to “online piracy”.
Try to find more resources. Either those that will provide services you otherwise would have to pay for (e.g. studios and manufacturers of instruments). In exchange, they will receive exposure from this collaboration. It’s advertising. Or, resources that support you by financial means: sponsors and people who are using your tracks commercially (there are much more opportunities than you might think). Or, add another “business unit” to your “portfolio”: You may offer workshops in DIY marketing, instrumental & technical clinics, house concerts, very limited recordings for business customers etc.
Conclusion: Before recording anything or starting any project like a tour, calculate your cost, find people willing to invest, and receive the funding to it. Then start your project which should be paid in advance. Afterwards, it hopefully won’t be necessary to pay any debts (except for older ones…). Get that download distributed as widespread as possible – and it’s perfect to have a strategy at hand. Then, actively exploit your work commercially. Be creative about it.