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Thursday
Mar112010

In Defense Of 1,000 True Fans - Part VII - Ellis Paul - 300 Fans = $100,000 in Contributions The Ultimate Testament to Fan Loyalty

When I first heard that Ellis Paul an artist I have know about for years and seen one a few occasions raised $100,000 I was amazed…I had to get the story.  Here it is.

Ellis Paul is an American singer-songwriter and folk musician. To date, he has released 16 albums and has been the recipient of 14 Boston Music Awards.  He has published a book of original lyrics, poems, and drawings, and released a DVD that includes a live performance, guitar instruction, and a road-trip documentary.  As a touring musician, Ellis plays close to 150 dates each year and his extensive club and coffeehouse touring, together with radio airplay, has brought him a solid national following.

Rachael Klien from Ellis’s management team answered these questions for Ellis while chatting with him on the phone while he drove from Virginia to Atlanta

Ariel Hyatt: Do you believe that 1,000 True Fans is a theory that can work?  

Rachael Klien / Ellis Paul: Yes absolutely, Ellis has sustained his career as a musician for the last 20 years. I would even go so far as to say that this has been his theory from the get go.

Starting out in the Boston Music scene then taking it on the road developing fans one by one. (Mind you. this is before the Internet existed, and back in the cassette tapes days) Ellis got in his car driving city to city creating really loyal fans. He traveled around a lot building each market. Talking to each person before and after shows, staying in touch as he traveled.  People are willing to buy your record spend a couple hundred if they are really committed.

Ellis just left his record label of 15 years to go it on his own. We raised $100,000 in fan contributions from about 300 fans, which we believe to be the ultimate testament to his fan loyalty

AH:  Are you currently making a full-time living as a musician from your music?

RK/ EP: Yes

AH: How many years did it take you from day job to part time job to F/T Musician?

RK/ EP: Full time job for 5 years (did music part time for 5 years) coming out of college quit day job at 26 (now, in his 19th year playing music full time).

AH: Can you give us a breakdown percentage wise of the following:

RK/EP:

A. CD sales? 27%

B. Subscription site? Zero

C. Live shows? 60%

D. Merchandise? 2%

E. Other? Please name what the other categories might be.

Royalties from airplay 11%

AH: If possible (I know you may not want to share this information), can you share the amount of money you have grossed in the last 12 months, broken down by months correlating with market, and promotional, and touring efforts? Don’t mind sharing I think it’s valuable to musicians.

RK/ EP: Ariel we are happy to share this information, Ellis thinks this is valuable to other musicians. But the breakdown I would need a little more time to breakdown

Gross is $270,000 (his expenses are very high so he nets less than half of that)

AH: How many die hard fans, fans that will buy everything and anything from you, would you imagine that you have?

RK/ EP: 2500

AH: How long did it take you to build up this many fans?

RK/ EP: 10 years

 AH:  Do you have a strategy with long-term and short-term goals in place to get to 1,000 true fans or for any future looking aspects of your music career? If so, can you share these goals?

RK/ EP: The direct contact that people get from being with and experiencing the creation of a community. We want to continue to form a tribe around my music and career. Finding ways to connect, special events, blogs, Youtube videos that bring them into my world.

It’s more than the name in the mailing list and a friend on Facebook or MySpace. It’s about getting them involved deeper than just listening to the music.

AH: Have you ever made money from social media sites like Twitter, Facebook, or Ustream? Can you please tell us exactly how and correlate them?

RK/ EP: Not really. We have spread the word about videos, CDs on sale, sent out special downloads. But, we have not used these forms of networking for commerce. Not saying we shouldn’t and we probably will. But I feel a little like this is a place to connect, which is the number one reason they become such loyal fans. The personal and intimate conversation via these sites, helps them to get to know me and want to come to shows, buy CDs and pass my music on to others. 

AH: What are your next steps to continue to help yourself move forward in your own career?

RK/ EP: Trying to branch out and get the next 2500 people. Finding the audience in places we haven’t looked yet. 
Start doing podcasts, more movie placements, getting the songs out there in unconventional ways. We are creating ways now so that we can get the fans involved to a level that they want to pass it around. It’s no secret that the viral nature of the Internet is the key and we are exploring some unique ways to do this.

AH: If you could give a band or artist any type of advice on how to start in social media, what would you advise them to do?

RK/ EP: Connect on a personal level. Create interesting video blogs, do video versions of songs. But really, keep in touch on a personal level THAT is where the casual fan turns into a loyal one. Driving 200 miles to see your shows, going to two shows in a row in the region they live and bringing friends to every show to introduce my music to them.

AH: If you had $500 to spend on marketing and promotion, how would you spend that money?

RK/ EP: Do a really great video for Youtube that is worthy of getting passed around. Maybe even hire someone to get it posted every were possible that helps it catch wind in it’s sails.

AH: Is there anything else you would like to say about 1,000 True Fans?

RK/ EP: The concept is to get locked into being a part of a group. Getting message out that attracts people who affect the members of the tribe.

AH:  How do you use analytics to your advantage? What are your measurable online results, and how do your measures help you with your music career?

RK/ EP: We completely redesigned the website based on the analytics. We were able to see where everyone lands, exits and spends time.

At the moment we are working to get photos and video on the sidebar of the tour page… this is by far the most popular page. So we want the tour page to be interactive so they stay on the site longer and keep clicking stuff that lands them hopefully to buy stuff.

AH: On a scale of 1 to 10, would you say you share a lot (a 10) or are you guarded in what you exposure on social media sites about yourself and your personal life?

RK/ EP: 8

AH: What would you say to a fellow musician, that thinks that Twitter is just sharing “eating a tuna sandwich” and is stupid?

RK/ EP: It’s as stupid or as useful as you want to make it. But I feel if your going to write about a tuna fish sandwich at least post a picture with a bit out of it or write a Haiku about it, with seventeen syllables you can make your tweets interesting and great.

We have seen a difference in each inane tweet. But I am not into just posting things like that. But you know what? People love it for whatever reason.

Nimbit

The platform that Ellis used to help him raise his money was Nimbit.  They have created a case study outlining the actions that the team took and the tools that they used on the Nimbit Platform they have generously allowed me to share it here with you:

Ellis’s Inner Circle: 300 core fans

Ellis’ Outer Circle: 10,000 fans purchasing any new release

Total Reach: 100,000 fan interactions throughout career

Goal: Create a direct to fan relationship with 100k fans that he can sell/promote his new release “The Day After Everything Changed”

Strategy: Solicit core fans to raise funds for recording album. Phased exclusive rollouts direct to fan prior to official 1/12/10 street date. Engage the loyal core fans in the promotion process to maximize new fan capture, reactivate casual fans, and build pre-release buzz.

How Ellis Did It: Step-By-Step Execution:

Before You Ask For Anything: Engage fans on Facebook via FB fan page and via mailing list, website, etc.

Step 1: Set up unique and compelling sponsorship levels ranging from $15 – $10,000 ( the levels started at “Street Busker” for $15 and went up to the “Woody Guthrie Level” for $10,000

Here is an example of how Ellis bundled the offerings for the:  $1,000 “The Johnny Cash Level”

1. Receive an advance copy of Ellis’ new CD personally signed and numbered; including a bonus disc of demos and outtakes of the songs

2. Antje Duvekot will personally sign a copy of her recent release “Big Dream Boulevard” on Black Wolf Records

3. You and a friend will be put on Ellis’ guest list for an Ellis Paul show of your choice

4. Limited edition signed EP of Ellis performing live in the studio at Boston’s WERS

5. One Year membership to Club Passim, the legendary folk room and Ellis’ home venue

6. Ellis will thank you by including your name in the liner notes of the CD booklet

7. Ellis will handwrite and illustrate lyrics to any one Ellis Paul song of your choice, which will be suitable for framing

8. Limited Edition 11x 17 signed and numbered cover artwork from the new album, which will be suitable for framing

Step 2: Send advance copies of new album to every contributor with a personal note and a download card to pass along only to people they knew that are/could become a “true fan.”

Step 3: CD goes on sale exclusively from website and Facebook (Nov-Dec 2009) No digital album available.  Free single download offer available directly in the online store using download codes to track success of promotions and events.

Step 4: Album art features image of picture of Ellis over a lake with a vintage guitar in his hands. Some people think it’s a fake, but it’s from an HD video.  Creative team and Nimbit decide to post video on YouTube (http://bit.ly/4nOAMo) and spread the word around social networks creating viral buzz.  Over 6,000 views help drive traffic to website, increasing sales and exposure.

Step 5: Put download card into all orders of the CD encouraging purchaser to share the music with a friend.

Step 6: Early digital release and promotion with Amazon MP3 (12/15), start radio and press interviews.  EllisPaul.com offers a better, more compelling package than anywhere else which both drives fans to Ellis’ website and increases sales.

Step 8: Digital street date, 1/12/10

Ellis’s Results

“We awakened fans that had been disconnected for many years.  Fans that had not been to see him in 10 years were now coming out to shows and getting reconnected with all his work.

Many donors were just waiting to have an opportunity to help him financially. We made sure they had several copies to spread the word.  And the higher contributors get as many as they want to give away to people.  We do feel we are spreading the music in a more unique and efficient way.  If Ellis was on a record label, we’d have buy the disc from the label at $7 each.   Because the CD costs us so little to manufacture with Nimbit, we’re able to market the CD more rapidly and at lower cost.  Nimbit’s Facebook app, download cards, and other direct to fan platforms helped us get to more of our fans quickly and easily.

What About You?

I hope that this interview inspires you to begin to think differently about just how powerful your fas can be.  Do You Use Nimbit?  Have you bundled products together to sell?  If so I would love to hear your about experience here….



Reader Comments (20)

Dear Ariel, I must really thank you for continuing this series. I know there were a lot of naysayers at the beginning but with each installment it really drives home how powerful the hypothesis is, and how many diverse demographics it delivers results in. Have definitely shifted my own group's efforts towards keeping this model at the forefront of our activities

I've worked with another artist who has been successful with generating music income; her model is very similar. Like Paul, most of her income comes from shows and CD sales. When it is all said and done, the direct route of paying an artist for the music he or she creates makes the most sense.

This approach doesn't always work, and seems to work better for solo singer/songwriters than other acts, but when the financial support is tied directly to the music, the relationship between fan and artist is the easiest for everyone to get their heads around.

It seems pretty much like the Public Radio Method Pledge Drive method, with various "sponsorship levels".

But I am wondering how a musician who nets about $120,000 a year convinces people he really needs their donations in order to pay for recording a new CD.

Given today's extremely affordable, excellent recording technology, it shouldn't take $100,000 to record a great master recording and press the CDs, especially when you have an accomplished performer like Ellis, who is not going to need extensive "takes" or corrections.

Clearly there is good will and loyalty from these fans, and he has worked hard.

But I have to believe that many of those fans who donated earn a lot less than Ellis does.

No problem, as long as they donate knowing the complete financial situation. Do they, really? I was surprised to read how much Ellis nets each year.

Maybe the fans would be, too.

If they donate because they think Ellis cannot afford it without their help, that doesn't feel right to me.

March 11 | Unregistered CommenterGlenn Galen

But I am wondering how a musician who nets about $120,000 a year convinces people he really needs their donations in order to pay for recording a new CD.

I'd be interested in this, too. I've helped out musicians (everything from buying dinner to lending money for a CD) when I thought they had potential and I had more money than they did. But once they are doing better than I am, I no longer feel the need.

So do those who have little income just buy a CD and/or come to a show? Or do they buy expensive sponsorship packages too?

I'd love some more details on the participation level for the fan contributions. How many bites did he get at $1,000? Obviously with 300 fans raising $100,000, the quick math is an average of $333.33/person but seeing more precisely where fans wound up along the spectrum would be great.

March 11 | Unregistered CommenterMW

A musician is succeeding because he has a legitimate business model and knows how to interact with people? WOW!

It amazes me that musicians can't understand that this is exactly how you "make it" in the music biz, yet they continue to write off the notion of its existence time and time again.

Any musician who is following this series and doesn't "get it" needs to get out while they can.

March 11 | Unregistered Commenterevolvor

It amazes me that musicians can't understand that this is exactly how you "make it" in the music biz, yet they continue to write off the notion of its existence time and time again.

But some music and some artists lend themselves to this model better than others.

Consider two equally talented singer/songwriters.

One writes melodic, optimistic music that makes people feel good. Her fans tend to be older and they are used to buying CDs, so she has a devoted fan base that repeatedly comes to her shows (because her music is uplifting and they never tire of it) and they buy all of her CDs.

One writes dark, emotional music which is powerful, but not necessarily something you want to see over and over again. Her fans are younger and much more likely to expect to get their music for free. So although they are big fans, that doesn't translate into a lot of income for her.

Bands that play party/drinking/dance music are more likely to have fans who will come out every week to see them while bands that play artsier music may find they have to comb a much bigger group of fans to pull in the same numbers week after week.

So when you are trying to create a music business that supports you, the kind of music you play, the way you talk to the audience at shows, the way your friendship translates into monetizing opportunities, etc. all play a role.

Talent and even devotion to doing music full-time are often not enough. If you want to look at it from a sales perspective, you may have to start by looking at where the money is and then work backward in terms of how to tap into it.

Here's another aspect of this that I'd like to see discussed:

As your fan base grows, how do you maintain your old fan relationships and also find time to expand to new ones?

Generally artists start out with a small core of supporters who come to all the shows, hang out with them, etc.

On the one hand, the original core wants to see the artists succeed, but on the other hand, they don't necessarily want to lose the access they've grown used to. Nor do they want to find out that that same kind of access now comes with a price.

If you are an old friend, or an early supporter, you don't want to find out your music friend is now too busy to talk to you and maybe you'll have to go through a manager or the like.

You are selling friendships of a sort when you are building a music career, so how do you maintain the intimacy that your early fans may have come to expect?

..."keep in touch on a personal level THAT is where the casual fan turns into a loyal one. Driving 200 miles to see your shows, going to two shows in a row in the region they live and bringing friends to every show to introduce my music to them."

This is important. If your fans are not doing this sort of thing, then you are not yet on your way to the situation Ellis Paul has. I think any artist reading this has to be very honest with themselves when they tally up the size of their typical audience over the past 6 months.

If it is not dramatically increasing, you are not there yet.

As your fan base grows, how do you maintain your old fan relationships and also find time to expand to new ones?

That's a really good question. Audiences are fickle. There are new artists to hear and go see. Audeinces move on, especially if you are not coming up with a steady supply of new material.

The Beatles released three albums in 1964 in the US. That was a lot of good material.

March 11 | Unregistered CommenterGlenn Galen

The Beatles released three albums in 1964 in the US. That was a lot of good material.

I know. Pretty amazing. There was always a Beatles song in heavy rotation on the radio during their recording careers. They were totally woven into Baby Boomers' lives.

Artists who can keep fans coming back show after show often have such a deep catalog of their own material that they can play a different set list every night, which means you can go to many shows each year and never see the same show twice.

Ariel and all, I would like to follow up on some of the comments and questions left here in regards to Ellis' interview. I appreciate them all, and I am happy to provide more info if anyone is interested.

In regards to convincing people to give money to a musician that nets $120,000... actually we left out paying taxes, his net is more like $70K. But none the less regardless of how much he makes we did not need to convince anyone, nor did we ever lead them to believe they would be supporting a starving artist. They know that he drives about 40,000 miles a year to go from show to show, he never calls in sick, he calls fans on their wedding, birthdays and even before they take their final breathe. He will give you guitar tunings if you email him and help you change your flat tire on your car if you're still there when he leaves the show. He'll probably buy you a drink before you buy him one. They are supporting an artist who brings them more than just the songs. He's a friend. He plays 150+ shows a year in venues from 150 cap to 850 cap, and greets everyone who wants to chat with him after the show no matter the size. This is how he retains loyalty for 20 years.The relationship he has with his fans is pretty beautiful!

I also want to make clear they actually were not donating to Ellis, they were buying products and services for what they gave. These are items and services that would not be available to them under other circumstances. We had 3 people contribute $10,000, 4 at $5,000 8 between 1,000 and 2,500 and all the rest from $15-$500. Here is a link to the program so you can take a more detailed look. http://tinyurl.com/yzvfzs4

One couple bought in at $5,000 which was their wedding gift to each other, using the house concert option to have Ellis play at their wedding. Their first date was at an Ellis Paul show.
One of the $10k donors was so happy we sent the email, she had been wondering for 15 years how she could help him. Having him write a song for their daughter was worth the price.
One women from Germany has only seen him live once in Germany, but that one night after the show she advised him to keep a song on an album. He had mentioned during the show he was thinking of eliminating it. He heeded her advice, that song is Speed of Trees and that's what he titled the album. It is one of his most popular songs.

Everyone who participated remarked how pleased they were with everything. As a person who used to handle sponsorships for big arena tours, I know to under promise and over deliver. We did that on many occasions. Keeping them informed along the way, sending them songs unfinished to listen to so they could hear how things were progressing etc etc. When we had to choose the Amazon free song of the day for a promotion we setup, we went to them for their vote on which song to offer. We made them very much a part of the process and they really enjoyed the ride. One person gave $5,000 and did not even want any of the items that go with it, he simply wanted to give Ellis the money so that Ellis could go and do his absolute best work. They are all in this because they want to help Ellis advance his career.

I would like to say that shortly after we sent the email out, the banks crashed. we had barely started to market the program and stopped completely knowing that fans were losing their jobs, 401K's and homes. We did not anticipate raising much more than $20,000. We were surprised when the money continued coming in.

Also, here is a link to some of the reactions from the fans that contributed...
http://tinyurl.com/ykty33q

Regarding the contributions for Ellis' album recording.
We did have credit card charges and various other minor expenses in the execution of the program. We probably had a net of $85,000 to spend. Besides the production, there is the cost of promoting the album, hiring a publicist (which Ellis had never done before) radio promoter, we took out a few select ads in targeted demo, the manufacturing of 10,000 cd's etc etc etc. Keep in mind, this amount of money helps us get some attention to the release so we can try to put some money back in the bank. To make a song a hit in country music for example, they spend one million dollars on one song. So 100K, it sounds like a lot, we raised more money than any record label ever spent on him and are doing our best to spend it wisely, and it goes fast.

Please feel free to comment back here if you have any other questions and thoughts about the program.

March 12 | Unregistered CommenterRachel Klein

Thanks for those numbers. It helps so much for everyone to learn from each other.

I have a question, can the 1000 true-fans theory apply to any product or just to musicians?

March 12 | Unregistered CommenterJON

I have a question, can the 1000 true-fans theory apply to any product or just to musicians?

It's just a way to conceptualize how many people you need to generate $100,000 a year. If you have 1000 people each paying you $100 per year, that's $100,000.

It could be selling anything to them.

And it doesn't have to be 1000 people spending $100. It could be a bigger number of people spending less money, or a smaller number of people spending more money.

You could run a spreadsheet, plug in various numbers of customers and various numbers of spending to see how much you might gross.

I've done something similar by starting with a desired gross income and then working back from that to determine how many fans would need to spend at three different levels: $10 a year, $20 a year, and $100 a year. I made the assumption that a certain number would spend at each level.

Love these articles!! Thanks Ariel!

March 15 | Unregistered CommenterDerek Jordan

@Suzanne

If you start making the 1000 fans concept just a spreadsheet exercise that's applicable to 100,000 one dollar widgets, well you lose the key point: That our goal as indie artists is to develop depth in terms of the relationships with our fans. Yes, of course, you can get $100K 5 cents at a time by selling 2 million Tootsie Rolls, but that is a very different business strategy, and requires a completely different distribution model.

The point is, with compelling music, hard work, and a focus on fans, a 1000 is an attainable number. And I think that the 1000 people don't necessarily spend $100 personally each year, but influence their friends, spouses, etc to come to shows, buy CDs and support an artist.

March 17 | Unregistered CommenterBruce Kaplan

If you start making the 1000 fans concept just a spreadsheet exercise that's applicable to 100,000 one dollar widgets, well you lose the key point: That our goal as indie artists is to develop depth in terms of the relationships with our fans.

Lifetime customer value is a concept that applies in many areas, not just music. Most companies strive to develop long-term relationships. If anything, music has been late to this game.

Ariel

Seriously this series has been an education in itself.

'Eavesdropping' on how others are actually doing the indie muso life is much more authentic than a lot of the hyped marketing courses out there

Cheers - Andy
www.ViralGigs.com

I have stumbled upon a great treasure here on your blog. Thank you for such a great interview and exploring the idea of 1,000 True Fans further.

It was only an hour ago I happened to be reading about this concept for the first time and found the link back to your site.

Wonderful stuff!

Best Wishes,
Lily

May 5 | Unregistered CommenterLily

Dear Ariel,

As someone who’s written wonderful words about the great music coming from singer songwriter Ellis Paul – first I’d like to tell you thank you. I’ve been Ellis Paul's friend and manager since 1992 and his music, words and friendship are jewels in my life. Upon examining the state of the music industry, Ellis and I have realized that far and away the most important connections that we have are not at all on the business side of the equation – it’s the people that love Ellis’ music. They’re more important than the biggest retailer or the most powerful radio station - so we’re starting a campaign to empower the people. Ellis’ new album “The Day After Everything Changed” was completely funded by his fans and is one of the finest he’s ever recorded. Many of Ellis' fans and folks passionate about great songwriting don’t even know that it’s been released. So if you’d like to help support a truly independent artist – here’s how. The lead single track on TDAEC is “Annalee”, and if you go to www.ellispaul.com/free you can download “Annalee” for free. Unlike so many other free song offers – you don’t have to give us your email, sign up or register for anything at all. It’s free for the taking. The small favor we would ask? Please share it with any and all of your friends that would enjoy Ellis’ music. This would help our efforts and help spread the music. This truly is a campaign about the power of the people in the support of independent music and artists.

Please stay in touch.

And thank you.

Ralph Jaccodine, Manager

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