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Modern record labels have to spend so much time battling for playlist additions, bannering and other features on the dominant DSPs, that it can often be forgotten to develop a direct to consumer pathway for their music.

It can be a difficult and sometimes expensive channel to set up, but one that can pay a multitude of dividends in the long run. So why go D2C?
 

You release how you like, when you like

If you want to release immediately at 3am on a Tuesday, then you can. There is no 5-day processing time, no strict style guide or genre definitions (however I should stress where possible, you should aim to release on all platforms at the same time). 

When carefully-planned premieres happen a week early, things can move very quickly, and with the return to ‘on-air, on-sale’, you need to be reactive. If you get a massive premiere, or a DJ jumps the gun and plays your tune two weeks early, then you’re in a position to get it live and post the links immediately to avoid missing out on any potential sales generated by the early hype.

 

Income

In the age of micro payments, maximising all of your potential revenue is vital. Cuts taken by DSPs vary considerably, but if you’re selling music on your own store, run & built by you, you are keeping 100% of that income. It is always slightly unsettling that independent releases are feeding into the profits of some of the richest companies in the world…

Development costs for setting up and running a webstore can be high at first. But balance that against 30-50% of the revenue from all of your sales over the next few years and it can look far more appealing. Shop around and speak to various developers, but it’s worth noting that building a good CMS system from the ground up will help you in the long run. 

Physical is where you can really notice a big difference. Shipping fees, storage fees and wastage all take their toll on your finances. Imagine if you could do all of that from your own store.

If you can’t afford the upfront costs, then services like bandcamp are bridging that gap, with a lower % than you’ll find on most stores. Developing a store on here can build a loyal fanbase with most of the benefits of your own store.

 

Quality Control 

There is a lot of debate over the best formats for your music, however 256 KBPS AAC or 320 MP3 rarely, if ever, come out on top. 

Unfortunately, you are stuck with the encoding formats of choice of the big stores. However, on your own site, you can sell in 24/32 bit WAV, FLAC – whatever you choose. If your artist wants to have their album only available in 32-bit WAV, then so be it. Obviously I would think this through before doing so…

For physical, you can ensure that each copy sent out is in the best condition, along with the MP3’s and even a hand-written note from the label or artist. All of this goes a long way to developing a lasting relationship between the customer and the label/artist.

Signed pre-orders, shop exclusives & bundles are all ways to draw customers in to be buying from you as opposed to Amazon or HMV.

 

The Data Goldmine 

Arguably just as valuable as the extra revenue is the enormous amount of data that you can collect from your customers. Along with email addresses, where they live, their buying habits, how much they are willing to spend etc. are all valuable metrics to help you focus your marketing. You’ll need to collect all of this in accordance with legislation like the UK’s Data Protection Act, so seek some more details on this before doing so.

I’m sure I’m preaching to the choir, but a good mailing list is a goldmine, and an often-neglected piece of the puzzle. Create retargeting lists, segment it into each artist for targeted mailers, and create custom audiences on Facebook, then lookalike custom audiences to widen your net further. 

Running your own store, you’ll be able to add conversion tracking to your site (something a lot of the big stores don’t allow) – therefore judging the success of your advertising campaigns becomes much more enlightened.

You’ll soon find that conversion rates for your advertising campaigns are in a much better place.
 

There is no debating that a good presence (and support from) the key stores is essential for a label to thrive, however the more that can be done to be self-sufficient puts you in good stead for the ever-changing landscape of the modern music industry.

 

This is the latest in a series of posts from key industry influencers from the world over, whom you’ll be able to meet at Midem 2017. Our UK ambassador posts are coordinated by Plan It Music‘s David Riley, in association with Motive Unknown.

Image © urbancow/Getty Images


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About Author

Romy Harber

Romy Harber is Hospital Records' Label Manager & Head Of Digital.

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