‘The music industry is leaving billions on the table because we frustrate fans’


mark-meharry-wide The following blog comes from Mark Meharry, CEO of Music Glue (pictured inset). Music Glue is a direct-to-fan platform which enables artists to sell tickets, music, merchandise, experiences and more from a single integrated website. Its clients include Red Hot Chili Peppers, Flume, Metallica, Mumford & Sons and Zara Larsson (pictured).

Music retail is broken.

It’s 2016 and consumers have migrated from the high street to the mobile phone, and despite all of our technological advances we have now managed to create a retail experience for music fans that is considerably worse than it was 30 years ago.

As an industry we are leaving £/$/€ billions on the table because we frustrate fans.

When you consider that retail [merchandise, CDs, tickets, etc] still accounts for the vast majority of all income into the industry (and will do so for the foreseeable future) this statement should alarm you, because it alarms me.

The youth market has disengaged with music retail. If this continues unchecked we risk alienating consumers forever; and once they go, they may never come back.

The problem is vast, deep rooted, complex and highly nuanced. So, where are we and how did we get here?

Let’s go back in time 30 years to a simple ‘supply chain’ world, when music retail was uncomplicated.

Consumers would walk into a local record store, listen to new music, flick through the vinyl racks, peruse the range of T-shirts and posters, chat with the clerk and other customers, then make a purchase that could include concert tickets.

Music formats changed, but the basic paradigm remained consistent.

Then Napster hit, followed swiftly by the iTunes Store, and everything changed forever. Physical retailers started to fail and traditional retail collapsed.

“The promise of D2c was utopian. However, the execution and delivery were terrible.”

By the mid-noughties a new model appeared called Direct to Consumer (D2C) and a bunch of companies emerged promising a brand new world embracing a shift in consumer behaviour toward the direct relationship with the artist.

We flocked to these new D2C services, with artists, managers and labels becoming global retailers overnight.

The promise was utopian. However, the execution and delivery were terrible.

We were sold automated end-to-end solutions, yet quickly discovered that behind the scenes there were humans processing orders instead of robots.

As the tech companies scaled, so did the problems. Fans complained. Artists complained. Managers complained.

Companies like Trinity Street and TopSpin crumbled under the weight of universal disappointment and inefficient order processing.

Unsurprisingly, Amazon evolved into the ‘go to’ destination for physical music products – for both consumers and the recorded music industry. Jeff Bezos got it right.

Direct to Fan ticketing appeared, merch companies built their own e-commerce solutions, the majors started owning D2C rights and subsequently either built their own systems or acquired multiple technologies with aspirations of integration.

The severe fragmentation of the music industry was then reflected online and the importance of the consumer experience was completely ignored.

We complained about the royalty rates paid by streaming services, yet left £/$/€ billions on the table by frustrating the very fans that fuel the entire industry, fans that want to give us their money – but cannot.

“I challenge you to actually buy something from the artists you work with, without wanting to hit your computer.”

That is where we are now.

If I go to the website of almost every band on the planet with the intention of buying a pre-order vinyl album, an MP3, a ticket or a T-shirt, I am sent to four different stores, forced to enter my credit card four times, create four different accounts with companies I do not want to be associated with and deal with four different customer support centres chasing the delivery of my orders.

Try it yourself: I challenge you to actually buy something from the artists you work with, without wanting to hit your computer.

Even better, try doing it on your mobile phone! It doesn’t work. The music industry has broken every rule in e-commerce; we have effectively broken the internet!

So how important is this ‘artist direct retail channel’? A good question, that we can now answer.

At Music Glue we know the marketing reach the artist has into market:

  • We know that when we go on sale for a tour at the same time as all other outlets, and we all keep selling until we sell out, the artist’s Music Glue website always sells on average 70% of the tickets. Every time. No matter the size or genre;
  • We also know that 1 in 3 customers buying directly from an artist will buy more than one item;
  • We know that when merch is bundled with tickets, on average an artist will sell an additional £19 of merch per ticket;
  • We know customers on average buy 2.4 tickets and that over a 5 year period will return and buy an additional £53 of products;
  • We have been doing this a long time and also know that these numbers are all going up!

So what does the future look like?

If we work together and address this issue then the future is bright. Very bright. We must understand customers better and start affording them the respect and ease of use they have now come to expect from e-commerce.

Amazon have set a very high bar, but that is the bar we must now rise to.

Sending fans away to separate stores when they want to give us their money has got to stop.

Fans don’t care about our fragmented industry, they just want to buy stuff. We must now make it easier for them to do so.Music Business Worldwide

Related Posts

  • willbuckley

    Amazing. Mr. Meharry gets it.

  • The biggest problem IS buying music on the Internet. You have artists that sell some of their music directly, some through the record label that may own rights to a particular work, and some through a site like Amazon or the worse, Ebay. The biggest problem is that for digital music downloads, each site has its own way of distribution. And for a guy like me that thinks mp3 is like nails on a chalkboard, digital on-line is next to useless. If I am gonna pay for music, I really want a piece of hard media like a CD or record. Sounds pretty good is not the same as the real thing. One time I downloaded what was supposed to be a WAV file….it turned out to be an mp3 file converted to wave.

    Many of the sites that sell music on-line often use Flash player which I cannot seem to get to upgrade after version 20, it won’t install. Others make you download a program just to download a song. Some sites are still living in the DRM world. I don’t use iTunes.

    I usually buy my music in the record store, sometimes at a retailer like Target or Wal-Mart. Sometimes I buy brand new vinyl at the record store. 2/3 rds of what I buy is older music from the 70’s and the 80’s, purchased on discogs, ebay and amazon. I also buy cds from a company that has paper print catalogs.

  • And then there is the other problem of artists that are not the artist or websites that look legit but are selling pirated stuff and pretending to be the artist.

    • PineappleOnFire

      I’m sorry but I don’t understand this comment at all. It’s pretty easy to spot an official site vs a fan site. I work with tons and tons of artists and have never in my life known of a single one who sold their music on eBay. iTunes, Amazon, bandcamp, SoundCloud- yes. A band store on eBay? That’s a new one for me. Record labels will often have their own stores but they don’t tell artists they can’t sell their music, elsewhere. No label is going to restrict income that way, it would be stupid. Amazon has MP3, which you’ve said you don’t like, but they also have vinyl and CDs, and is super easy to use. Major retailers have virtually no selection of music, especially if you want something made later than a week ago, so that must not be very helpful to you. I don’t really understand why you’ve had so much trouble. It’s really not that hard.

  • If I want the music on an mp3 player or portable device, it is much easier to buy a CD and convert it on my own.

  • sam

    so i’m being told that the internet is broken and we are losing millions, with literally zero evidence, by a guy who sells direct-to-fan services. i smell a rat

    • PineappleOnFire

      He may have his own motivation for writing this but as someone who spends a good amount of time on band websites it’s very true that there isn’t a well-made, cohesive retail experience integrated into most artist websites- even for really big artists.

  • Lindsey Wines

    Is music retail broken or is it that the record labels don’t know how to engage with consumers across the platform. The average millennial is not going to consume music the way a gen-x would. Millennials are now being targeted by every company and the companies are wanting to know how we think/consume products. The article points out 30 years ago that the simple supply chain when it only involved the distributor, retailer, record store, etc.

    Second, to consider is D2C services. This put all the power into the artists, managers, and labels making the overnight retailers. However, they quickly noticed that it was not the business they were in for and it was a lot harder than it seemed. I think that the industry more than often tries to take on tasks especially if they can wear many different hats and be strategic about their budget.

    The other challenge that was ran into was the process of actually buying something from the artist’s website. I even find this true when I try to buy a song or t-shirt off their website. Like it says by the 5th time I have entered my credit card, signed up for newsletters, and entered my other information this seriously makes me want to hit my computer.

    Overall, I think the craft has not been completely mastered by anyone yet. I really hope that Music Glue can be an industry leader and make a move strategically to help artists sell their merchandise and music in an easy, simple way.