Music Funding 101

CD Sales

All bands and sponsors are going to initially be thinking about the sales of the CD, and how it affects (or is affected by) a sponsorship. The good news is that the idea of CD sales is too advanced for it to be considered by new bands or by most sponsors, at least in this article. CD sales are the last thing to happen in (and most difficult part of) the music business. And by CD sales, I mean real in-store distribution regionally or nationally, through a distribution account, selling over ten thousand copies in a calendar year. Since even most indie record labels never get this quantity, and neither do most major label acts (about two hundred and eighty out of three hundred), it's good to assume that a new band with a small sponsorship won't be able to either. Note: I'm not talking about individual CD sales at shows, or about copies given away; those can (and should) always happen in large amounts.

Real distribution and in-store CD sales require either strong airplay on commercial stations for several months, or intense repetitive touring for years. And this is on top of an indie or major distribution agreement. All of this is too much for a new indie band to handle, and sponsors can't help because they are untrained in this area. Even if a band could sell twenty thousand units nationally in a year, that would be too few "impressions" to really benefit a sponsor, who may need twenty thousand impressions in a week in a single market. CD sales are critical for regular record companies, of course, because that's where they get most of their money from. These labels just don't have money coming in from many other sources.

Sponsored bands, however, do. A sponsored band, by definition, has money paid to it from a sponsor (that's the goal of TalentFunding.com). A sponsored band can do all the exposure activities that get the name of the sponsor and band in front of the fans, and avoid the very difficult (and boring) job of following through on sales accounts with distributors and retail stores. What a win-win! Matter of fact, I'd say this is the single biggest reason for a band to pursue a sponsorship.

But let's get back to individual CD sales at shows. This is where a band will make the majority of its money, unless they have a sponsorship big enough to get a salary from the sponsor directly. If the shows are free (no cover charges at the door), then the CD's, as well as everything else the band has (stickers, posters, shirts), should all be on sale at a "merch" table. Also, two people should be devoted to selling the merchandise; one behind the table, and one who circulates throughout the crowd and offers every single person a CD (and who also has change right there to give.) Having these people will double or triple the CD and merchandise sales that would occur otherwise. I'd even suggest giving these two helpers half of the money that they take in; they'll sell twice as much (commission is amazing!)

If the shows are paid shows (with cover charges at the door), then you want as many people coming in as possible. So the main effort should be giving away the items around town the week before the show (along with lot of street marketing). Use any assistants you have to do the street marketing, before using them for merchandise club sales. Having them for both, of course, is best.

Now with very large regional and national sponsorships, it is indeed possible to pursue real CD sales using distribution agreements. These campaigns need to have skilled people controlling them; they cannot be setup by just the band or the sponsor. Either experienced quarterbacks or record label people need to handle these operations.

Next Article: How Many Sponsors?
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