Music Xray's Blog - 2012 July

How much should it cost to acquire a fan and how do you know when it’s too much?

Posted by Mike McCready | July 27th, 2012 | 17 Responses

What most call “promotion” is really just another way of talking about the time, effort, and money spent acquiring fans. Aside from making great music, building an engaged fan base is probably the single most important thing you need to do as an independent musician. Only then will you have true financial independence and artistic freedom. You should change the way you think about promotion and you must invest in developing a fan base. -Mike McCready

In order to know how much you should spend to acquire a new fan (I’m talking about engaged fans, not the random Twitter follower or Facebook “liker”), you should have a rough idea how much an engaged fan is worth to you over the first year, and perhaps over the course of your career.

(Get in on the Fan Match pre-launch)

I realize that can sound unrealistic. But, while not exact, you can make some fairly easy assumptions; like what if 30% of your engaged fans buys each of your new songs or begins listening to them on heavy rotation on Spotify (or the other streaming services)? Then, what if 50% of your fans show up to at least one gig per year. What if 10% of them buy a T-shirt or some other merch item you sell? If you hone your assumptions to the point where they are somewhat accurate (is it really 30% or is it a bit more/less?), you should be able to predict with at least a little precision how much revenue you’ll generate in a given year.

While you’re doing that, you can also estimate your costs that are directly the result of having the fans (amount to make and buy the merchandise, cost of your CDs, cost of distribution to the digital platforms etc.). The amount of money you have left is your margin. As a general rule, as long as you can acquire each fan for less money than you earn on average from each fan, you’re not paying too much. This may sound cold and unlike the warm and fuzzy relationships you actually build with your fans, but this is how you must think of it because it’s your business. You must think about it kind of like you would think about any investment. But the awesome thing about this investment is you have a high degree of control over how it pays off. If you keep making good music, sell creative and quality merch and hold events which your fans can attend (and all sorts of other things), you can create a much more valuable business with fewer fans than another artist might despite having more fans.

Now, imagine you could go into a record label, a publishing company, or a group of independent investors and you were able to tell them how much it costs you to acquire each newly engaged fan and how much an engaged fan is worth.

Imagine being able to say to yourself,

“My band has 100 engaged fans.

“We net about $70 per year on average from each of our fans.

“So, right now, we have revenue of $7,000 per year.

“But, in order to pay ourselves, record the new music, buy some new equipment, and rent a touring van, we need to have $300,000 of revenue in a year.”

If you do that math, you see that you need about 4,185 more engaged fans to generate that kind of money. What should you do? I do realize this is a simplified equation, but you get my point…

Music Xray’s new service, Fan Match was built to help answer this question.

Let’s say you invest $100 in a new Fan Match campaign. The song of your choice will be sent to 300 potential fans – people who have already told us they like your style and your genre. Then, once they’ve heard your music, we give them the opportunity to become a direct fan of yours at the click of a button. When that happens, you receive their email address and can get directly in contact with that fan. You can manage that relationship however you generally manage your engaged fan relationships.

Now, let’s say that your music is compelling enough that 30% of those who hear it like it enough to become a direct fan. That means that for $100, you would acquire 30 engaged fans. In other words, each fan cost you $3.33 to acquire. That’s a really good deal if each engaged fan is worth $70 to you over the course of a year, not to mention the value of an engaged fan over the course of your career.

Remember though, in our scenario, you need 4,185 additional fans to reach your revenue goal. At $3.33 each, acquiring 4,185 fans will cost you $13,936 via Fan Match.

The point is, you’ll have a projected yearly income of $300,000 if all your assumptions hold true. So, that’s a really good deal!

Obviously, not many struggling musicians have an investible $13,936 on hand. But, if you are able to achieve that on your own, you should.

On the other hand, if you don’t have that kind of cash to invest up front, the good thing about Fan Match is that you can buy small campaigns and see how it goes. Build your base step by step. Learn what works and what doesn’t. You may decide after your first campaign that for the next one, you should use a different song which may acquire new fans more readily and that will drive down your acquisition costs (you’ll acquire more fans for less money). You can do this little by little.

Building an engaged fan base is probably the single most important thing you need as an independent musician. Only if you invest in acquiring one will you ever have true financial independence and artistic freedom. You must invest in developing a fan base. That investment can be made in time (often years), sweat, tears, and money or you can now make that investment via Music Xray. Let us do the heavy lifting and you go back to making great music!.

You can even run small campaigns to test (or prove) your band’s viability. A small Fan Match campaign can be used simply to learn what your fan acquisition costs are and then you can share that information with a label, a publisher, or a group of investors.

Being able to demonstrate your band’s viability in this way, with real numbers, is revolutionary. It’s never been done before and having this kind of information should make it a lot easier to test, identify and demonstrate the merit of investment in the careers of performing musicians and recording artists.

At the very minimum,run a Fan Match campaign simply to find out where you stand. Its is easy for you to acquire fans? If so, keep going. If not, you may need to make some changes or improvements until you’re ready to compete for the attention of music fans. Or maybe you just need to work a different song. We’ve been letting musicians into our pre-launch sessions slowly and to each of you who take advantage of this early offer, we’re giving $25 in credit to spend on submissions plus a lot of personalized attention from our staff as we usher you through your first Fan Match campaign.

Mike McCready
Co-founder & CEO
Music Xray

For Music Fans: Alert about upgrade from Focus Groups to Fan Match

Posted by Mike McCready | July 25th, 2012 | 6 Responses

This is just a quick note to anyone who has an account as a Fan on Music Xray. That includes those with Artist accounts but who also participate as listeners in Focus Groups.

We’re introducing a major upgrade to our Focus Groups product.

In fact, it’s such an upgrade that we’re changing its name to Fan Match. I’ll tell you all about that below but first, I want to alert you to a change you’ll notice when you log in to your account.

The upgrade requires that you log in and connect your Music Xray account to your Facebook account and grant our application a few permissions. (Click here if you have forgotten your password and need to reset it). The first obvious consequence of this is that in order to continue using your Music Xray Fan account, you must have a Facebook account. I know that will upset some of you. I’m really sorry about that. We are driven to make the best possible product and in this case, integrating some social features simply made the product better and more useful. That is to say, it generates better music discovery for fans and it delivers better fan acquisition data to musicians.

Here’s the thing, although Music Xray appears to be asking for a lot of permissions, these are pretty standard for any app that integreates with Facebook. We’re never going to post anything to your wall on your behalf unless you ask us to (direct posting to Facebook from within Music Xray, but you control the posting). In order for that to work properly, you give Music Xray permission to trigger that post if you request it.

Additionally, the new version of Focus Groups will target you much more precisely based upon your music tastes. We ask you to update your taste information on the following screen (after Facebook integration), but part of the Facebook integration enables our software to stay up to date on your taste trends and listening habits. That way, when we have new music to send you, it will be something as closely related as possible to what you like. Notice the tag line for Fan Match.

Also note, we do not collect any other kind of data nor do we share any data with anyone. The only observer of any of your data is a computer at Music Xray that uses the data to make correlations and connections between songs. It’s pretty cool. You can turn off these permissions at any time in the future if you don’t continue to love Music Xray.

Changes in compensation for listening

In the new version of this product, listeners will still be paid for their participation but we have to do a reset on compensation. With the launch of Fan Match, fans will all start receiving ten cents per listen. Opportunities for increases will be introduced in short succession of version 1 of the product, so stay tuned. I also understand that this change will be upsetting to some of you who have reached the higher badge status and were being paid 45 cents or more per listen. The hard truth is that while useful and interesting for some, Focus Groups wasn’t a compelling product. It wasn’t providing musicians with the kind of valuable feedback we had intended. Focus Groups were performing as intended. It’s just that the feedback they were generating wasn’t earthshattering. Our Focus Groups product was not taking things to the next level for the digital music space. So, in order to correct that, we had to re-imagine the entire product. In so doing, we had to start from scratch and change the angle a bit. To those of you who may feel disappointed, I am sorry. You can delete your account from the “settings” section if you feel you must.

I hope you’ll stick around.

Oh, and one last thing…, Music Xray is growing like crazy but we’re still small compared to where we’ll be soon, especially with all this fan engagement starting to occur on the site. You’ll see a couple buttons on your dashboard. If you like what we’re doing, please click on them! You can earn ongoing affiliate fees, as well as help build Fan Match as one of the best ways to discover new bands and music.

Please log in to connect your Facebook account now.

Mike McCready

Co-founder & CEO

Music Xray

Is Music Xray a Scam? Is it Legit? What the heck is this thing?

Posted by Mike McCready | July 23rd, 2012 | 5 Responses

I’m going to delve into a topic we hear about from time to time. It’s when a potential user objects to using Music Xray because they suspect it’s a scam of some sort, or that Music Xray takes advantage of the aspirations of millions of musicians by charging them to take a shot at something they have almost no chance of achieving.

I could go on about all the obvious evidence to the contrary (and I will below this paragraph), but I want to start by saying that the only way you’re going to know with 100% certainty that Music Xray performs as advertised is to give it a try (for free, of course). When you open a free account as an artist, we give you a $4 credit, which enables you to get a free submission. There are many submission opportunities on the site that only cost $4. If you click here and scroll down you can see many of them. At the time of this writing, there appear to be about eighty opportunities of this type. When they say “free”, it means there is no submission fee and you only pay the transaction fee of $4. When you apply your $4 credit that we give you when you open the account, you pay nothing, so you can see for yourself if this thing really works. We’re also giving you a samplefree Fan Match campaign, so you can test our other service out too. If you decide you don’t like them, don’t use them again. No strings. No catches. Really.

So, now let’s address head-on the subject of Music Xray’s legitimacy.

Before Music Xray, getting to a decision maker in the music industry required knowing someone or gaining access to someone, usually through a painstaking networking process that could take weeks or months to pan out. When you did finally get your music into the hands of the decision maker, you frequently had to be the guy or gal following up, calling, asking, “Have you listened yet? What did you think?” Then, in the best of cases, you could only do that so often. It’s not like you had five opportunities like that lined up every day, right?

Sure, there were tip sheets but even after you sent in your CD, bio, pics, etc., you still rarely even received acknowledgement they had been received, let alone received a response in return. That process was also very expensive because while you did all that work, you had to pay rent and feed yourself, not to mention sacrifice time and energy you could have spent doing what you do best; make music.

So, Music Xray has created an online set of tools that A&R professionals, talent buyers, agents, managers, program directors, publishers, music supervisors, and music podcasters use to identify opportunity-appropriate and high potential songs and talent. Once we could demonstrate it was working, we achieved the engagement of a sizable part of the industry; then slowly, we opened the doors to independent musicians everywhere. If you’re just hearing about us, welcome. We’ve been here for a couple years, proving ourselves, getting ready for the big time.

Sure, Music Xray charges a few bucks and we don’t apologize for that. We get a result for you that, via any other means, costs you a lot more time and money. There’s no mystery to it. We are simply able to reduce the time and money it costs by combining some new technology with the efficiencies and capabilities of the Internet. We don’t create the opportunities. We don’t create the music. So, we don’t get paid when a deal between you and an industry professional gets done. Your deals are yours.

Our job is to find the opportunities and bring the industry professionals and decision makers to the table. To do that, we provide them with a compelling set of online tools that helps them do their job more effectively and efficiently – to the extent that professionals who are not using Music Xray are finding themselves at a professional disadvantage vs. those who are. We keep the industry professionals engaged with a great product. The platform we’ve built (and continue to build) is complex and expensive. So is keeping the lights on while providing a second-to-none user support team. Even so, we’re able to keep your costs very low. Due to Music Xray, you can pursue many more opportunities simultaneously and at a lower cost.

We have created a system for musicians via which getting to a decision maker is no longer about who-you-know. Isn’t a level playing field exactly what independent musicians had been demanding for decades? Doesn’t everyone want a sure-fire way of getting their music to the ears of the professionals who matter?

Being able to reach them immediately, at the click of a button, and for a few dollars sure beats the old way. If you don’t think so, don’t sweat it. You don’t have to stop doing it the old way in order to give Music Xray a try.

One day, doing it the old way will seem as strange to people as an accountant in today’s world still using an abacus to calculate their clients’ taxes. Those guys either switched over to new technology or they were long ago outcompeted by accountants using calculators and computers.

If Music Xray doesn’t save you time and money, we’re doing it wrong. Our service is one that reduces inefficiency and creates transparency in an industry that historically has been murky and sometimes completely opaque. Industry professionals and musicians alike are finding Music Xray refreshing. Check for yourself. Do a live Twitter search for musicxray.

If you have questions about Music Xray’s business model, the submission fees, or just think you should never pay anyone to hear your music, click here.

If you have questions about what exactly happens when you submit a song via Music Xray click here.

Lastly, and only to drive the point home, you can see an extensive list of success stories here. Those success stories include major label signings, major motion picture placement, major and cable network television placement, contestants on The Voice who started at Music Xray and so on. Between 50 and 70 songs per day are selected for opportunities via Music Xray EACH DAY.

And if that’s still not enough to adequately answer the question, one can note some of our investors: They include Digital Assets Deployment, True Global Ventures / Dušan Stojanović / David Rose, Wharton Professor Josh Eliashberg, New York investor Hal Vogel and so on. Reputable investors examine companies carefully before investing. They do not invest in companies that are not providing true value or companies they fear may be exposed for operating less than 100% above board. If something like that were to happen, it would ruin their investment. In the meantime, the company would never reach profitability if it didn’t generate satisfied users who find value in the service. Reputable investors wouldn’t touch a company with a ten-foot pole if they suspected it of running a scam.

And that says nothing of the marquee brand name companies that work with Music Xray. MTV, RCA (Sony), Sire (Warner), Parlophone (EMI), The Voice, NBC’s Jimmy Lloyd Songwriting Showcase etc. These are not typically companies that would work with ill-reputed businesses. But they are companies that are forward-thinking and want to use the latest technologies to help them identify new songs and talent.

If you still have questions, get in touch with our team via support@musicxray.com and we’ll be happy to provide additional information. Bookmark this post and consider sharing it with fellow musicians. As a small company, we don’t have big PR budgets. Help us make sure all musicians know about a music tech company leveling the playing field by posting this to Facebook, Twitter, or just getting involved in our affiliate program and earning some money to offset your submission costs here on Music Xray.

Thanks,

Mike McCready

Co-founder & CEO

Music Xray

What happens when you submit a song via Music Xray?

Posted by Mike McCready | July 19th, 2012 | 10 Responses

Here at Music Xray, we’re all about transparency and about managing expectations. Sometimes people ask why they occasionally get the same response from different music industry professionals. So, we thought we’d take this opportunity to peek behind the curtain.

When an industry professional receives a song, they can hear the track, read any lyrics you’ve uploaded, read your bio, see your video (if you have one), check your Next Big Sound statistics, view the rest of your profile and songs on Music Xray (if they choose) and then, they are presented with three choices: Select, Hold, and Not Select.

Obviously, the more information you fill out in your song presentation profiles, the better impression you make with industry professionals. You should always include your lyrics, a photo or an image and even a video if you have one. You should always put your best foot forward.

Select: If your song is selected, you are alerted via email that your song has been selected and a pathway to communicate with the industry professional is opened. That allows you to begin a dialog and to close the deal. It’s important however to be respectful, patient, and courteous. You would be surprised to learn how many deals go south after a song has already been selected simply due to the industry professional deciding they’d rather not work with the artist. Remember, there are a lot of songs and artists out there, and while you should seek and expect a good deal, being “easy to work with” and “low maintenance” goes a long way.

Hold: This simply means the industry professional has put their decision on hold. You are free to continue to submit your song elsewhere. When your song is on hold, the industry professional will receive an email every 10 days reminding them they have your song on hold and that you are awaiting a final decision. Keep in mind that songs can remain on hold for a long time. This is especially true in television and film. It can take 18 months sometimes between when music supervisors begin looking for music and when the movie is done and final music selection begins.

Not Select: When an industry professional does not select a song, they are prompted with the screen you see in the image to the right. There, they can write their own reason for not selecting the song, or they can choose from one of the standard, but polite responses we provide. We provide these short answers because they are typical reasons songs are often not selected and part of what makes our system so appealing to industry professionals is that we make it so quick and easy.

We acknowledge that such a short response can sometimes be underwhelming to the submitter. It’s important to remember that before Music Xray, getting a guaranteed listen from an industry professional much less a response of any kind was unheard of. We will continue to make improvements where / as we can. In the meantime, if you’re seeking a longer and more detailed response to your song, we provide you a way to submit to industry professionals for song critiques and career coaching. When you submit to those drop boxes, you can expect much more detailed responses and perhaps even enter a dialog with the professional on the other side.

Once the industry professional has made their choice, we show them the next screen where they are asked to rate your song on each of five separate criteria. These ratings do not go directly back to you because we’ve found that industry professionals may sugar-coat their ratings if they know you will see them. Instead, we show you the average of the ratings once your song has been submitted to five separate opportunities and five professionals have rated your song.

That way, no industry professional is singled out for their rating and we feel an average of five ratings gives you an accurate reflection of how your track is being received by the industry. If you don’t like the ratings you’re receiving, you must face the fact that the ratings come from professionals you’ve selected. Presumabaly they are into your style and genre or you would not have submitted your music to them in the first place. It’s kind of hard to argue that the ratings aren’t an accurate reflection of how your music is perceived. If your ratings are good, keep submitting. If they are bad, consider getting some help from other industry professionals or consider submitting another track in the future.

Lastly, the ratings are used by the industry professionals themselves. They can log in to the “collective ratings” section of their account and see the ratings of all the other professionals and they can adjust the filters to suit what they are seeking. For example, they can adjust the filters to show them all the songs that have been reviewed and rated by at least 10 other industry professionals in the past month. They can also adjust the filters to show them only the songs that get high ratings on certain criteria. If hit potential isn’t important to a particular industry professional, they can adjust
the filter to disregard hit potential as a search criteria.

This feature enables the industry professionals to leverage each others’ filtering capability and expertise. Many of the deals that get done on Music Xray are a direct result of professionals finding the tracks they are seeking in this section, so for you, having multiple good ratings from five or more industry professionals can be the key to getting contacted when you least expect it. This is called “crowd-sourcing” and Music Xray is the only company to ever have successfully crowd-sourced the music industry. It’s pretty amazing when you think about it. Industry professionals visit this section of the site daily to scoop the cream off the top.

So, there you go… a peek behind the curtain at Music Xray. I hope this was interesting and helpful. If it was, please click the little Facebook “like” button below or the share options and help us spread the word.

Thanks,

Mike McCready

Co-founder & CEO

Music Xray

How much time & effort do you spend acquiring new fans?

Posted by Mike McCready | July 17th, 2012 | 6 Responses

How much time and money do you spend trying to acquire new fans online? Think about it. Remember, while you’re doing it, you have to feed yourself and you have to pay rent. Time is money.

Now ask yourself, do you enjoy the process? Do you ever get the feeling people aren’t just waiting around for you to tell them about a new song you’ve recorded? It can be hard to break through all the noise just to get the attention of potential fans, right?

Identifying, engaging, and monetizing new fans is one of the hardest tasks musicians face and it’s why we’ve built a new service within Music Xray called Fan Match.

In short, it matches you and your music with likely fans.

Be one of the first to try this new service. We’ve got 150 slots open.

Thousands upon thousands of music fans are already part of Music Xray. We initially opened Music Xray to fans a couple years ago when we needed random music lovers to participate in focus groups. We know all about their tastes and a lot of their demographic information.

So, here’s how Fan Match works:

You choose a song you’d like people to hear.

For every dollar you pay us, we guarantee three potential fans will hear your track.

Upon hearing your track they can decide if they want to become a direct fan of yours (in which case you get their email address and can establish a direct relationship with them just like all your other fans).

Upon hearing your track, they can also decide to tip you.

How do you know if this is a good service and if it’s worth it?

Let’s say you spend $100 today to acquire new fans (via any method you choose). Can you guarantee that 300 new people will hear your music? Not just any new people; but people who are into your style and genre and who are open to hearing and discovering new songs and bands.

Can you do it again tomorrow and the next day and the next day? It takes a lot of work.

That’s why we thought someone should build a better way.

Look, if only 10% of the new people who hear your music decide they really like it enough to offer you their email address; well, that’s 30 new fans with whom you would then have a direct relationship. Divide that into $100 and it comes out to having cost you $3.33 per new fan.

If 20% decide to give you their email address, then it will have cost you only $1.66 per new fan.

So, logically, the more compelling your music is, the more fans you’ll convert from among the 300 we target for you. The more fans you acquire, the less it’s costing you per fan. Thus the correlation is that the better your music is, the more fans you’ll acquire for less money.

Plus, you might even inspire some of those fans to tell their friends and jump-start your own little organic unit. It’s a new product. We don’t want to oversell it. At the same time, we think itless it will cost you to acquire a new fan. And that doesn’t even consider the fact that some of those new fans will tell their friends and bring you even more fans, giving you more bang for your buck.

How much is each fan worth to you in the first year? What about over the lifetime of the relationship? How many CDs, downloads, t-shirts, and tickets to your gigs do you have to sell each one before you make back that $3.33 (assuming you only converted 10% of those who heard your music)? You would probably make that back plus a lot more fairly soon, wouldn’t you? And some of those fans will last a lifetime and pay you again and again over the course of your career.

But then, let’s consider this… what if we can encourage one of every ten fans you acquire to give you a tip. Not much; maybe only a dollar. So, for every 30 fans you acquire, you might make $3 in tips. Lets do that math.

$100 cost to acquire 30 fans

minus $3 in tips

equals $97 (the true cost of acquiring the fans)

See how the tips offset your costs? What if your music were so good it inspires fans to give you more than $100 in tips? Suddenly, your fan acquisition costs went down to nothing.

But, for the purposes of this exercise, let’s stick with a more probable reality and say it will cost $3 per each fan acquired. Remember, this will depend on how compelling your music is.

Can you do that for less anywhere else? If so, you should. If you can’t, it would be a bad decision not to use Fan Match and any other musicians who target the same audience as you would be getting an advantage over you by using Fan Match if you aren’t.

Here’s the kicker. If your music is really, really good you can acquire fans for less than other musicians. If it’s not as compelling as it could be, you won’t acquire as many fans per dollar spent. But you’ll never know your cost per fan until you try Fan Match and if you don’t know what it costs to acquire a fan, you don’t know if you can even make a living as a musician.

Fan Match can be an indicator of your viability as a business. It can predict your ability to make a living while at the same time helping you do so.

Be one of the first to try this new service. We’ve got 150 slots open.

See the video below for a succinct explanation of how Fan Match works. And please help us get this information out there by clickingthe “like” button below the video or the “share” feature.