The other day I went to my favorite Mexican restaurant for lunch.  It is a quaint little “mom and pop” shop that makes some great food, has an awesome atmosphere, and plays great Latin music.

I noticed they had a sign by the cash register that said:

Join Our Email List

Get 20% Off Your Meal

Get Great Coupons and Chances to Win Prizes

That sign made me realize that so many artists offer me nothing to join their email lists, and you know what?…It greatly reduces the chance I will.

Seems my homegrown Mexican entrepreneurs know more about marketing than most entertainers.

Musicians undervalue the power of the email list.  It is a direct connection to your consumers. It is a way to tell them about your new album, so they buy it. Inform them about upcoming shows, so they go. Showcase your newest merchandise, so they wear it. And to like, follow and join your social media networks so you can keep them informed and connected.

Most of you looking for a record deal have no idea that labels place a lot of weight on your mailing and social lists. Why? Because they know if you can get 2,000 people to follow you on your nothing budget than their $500,000 check would get exponentially more fans interested, which leads to more money.

Even those of you who want to make it on your own have no idea the power of an email list. That list is a great way to keep your fans coming to shows and buying into your brand. It is also a great selling tool to help you get money from sponsors who want to put a link on your site, a banner at your show, or a tattoo on your drummer’s forehead. And the more names you have, chances are the larger the paycheck.

Basically put, in today’s marketing world the email list is gold, so you have to work hard to get people to join it.

Remember it is a business transaction and every exchange with a consumer (even when there is no money involved) requires you to give them something for their currency, even if that currency is their email. Offer them a few free tracks, a free concert ticket, a chance to win something cool and there is a greater chance they will join your cause.

Never underestimate the power of consumer information and the email list is a great way to get it.

 

 

Editors Note: The following is an academic paper I presented in a managerial economics course while working towards my MBA. I have included it in its entirety with citations, only edited to reflect the launch of Beats Music.  

Beats Music has tossed their hat into the streaming market. The popular company, known for their high-priced headphones, follows Apple, who jumped into the streaming ring in the fall of 2013. These two companies are attempting to capitalize on a market estimated to rise from $5 billion this year to $46 billion by 2018, and is currently dominated only by a handful of companies including Spotify, Pandora, and Google Play (Snider, 2014).

Streaming is encroaching heavily on the market for digital downloads, which has many in the music industry concerned. Billboard reported on January 3rd of this year that digital track sales fell 5.7% while digital albums fell 0.1%, which is a historic first since iTunes opened their doors. Industry managers and pundits alike have concluded that the consumers growing appetite for streaming is most likely the culprit (Christman, 2014).

From an economics perspective what the music industry, particularly the digital sales sector, is witnessing is a leftward shift in the demand curve brought about by a combination of the price of related goods (streaming) and changing consumer tastes. This demand shift will continue as more and more solid brands such as Beats, Apple, Spotify, Pandora, and Google ramp up their advertising to sway consumers into paid subscriptions, which, in turn, will lead to a decrease in demand for digital downloads (a substitute good).

In conventional economics, such a shift would lead to unsold inventories held by retailers, which would inherently lead to a decrease in the price by retailers as they attempt to achieve the new equilibrium. While this is certainly possible, it is also equally likely that this will not happen as companies such as iTunes and Amazon do not carry a physical inventory of digital downloads and have less of an incentive to reduce costs to unload excess product and achieve their new equilibrium point. Instead we may find that they attempt to shift the demand curve towards the right and back in their favor through more advertising and entering more untapped global markets.

References

Christman, E. (2014, January 3). Digital Music Sales Decrease For First Time in 2013. Billboard. Retrieved January 13, 2014, from http://www.billboard.com/biz/articles/news/digital-and-mobile/5855162/digital-music-sales-decrease-for-first-time-in-2013

Snider, M. (2014, January 11). First Take: New Beats Music may spur streaming growth. USA Today. Retrieved January 13, 2014, from http://www.usatoday.com/story/tech/personal/2014/01/11/first-take-look-at-beats-music/4430383/