The Digital Lowdown

Something for Nothing

In the good old days, a record label took about 85% of the pie and the artist got 15% (if they were lucky). However, the label was responsible for paying advances, recording fees, distribution, promotion and marketing costs.  Essentially they were a bank giving a loan to the artist.  The label took all the risk and, by their logic, were entitled to the lion's share of revenue that resulted from album sales.

In today's digital world,  Artists and labels are using digital distributors to get their content on the digital music services.  But the tables are turned.  The distributor is earning 15-25% of the revenue.  In some cases, it is a flat fee for service.  (For those albums earning less than these flat fees, it is arguable that distributor is actually receiving 100% of the revenue.  But that's a subject for a future entry.)

And here's where the squeeze play is happening.  Many labels are not really labels.  They don't have a marketing, promotion or PR department.  Therefore, digital distributors are being asked to provide more and more marketing services for their meager revenue share.  Some distributors are trying to upsell marketing services as an add-on.  But with these services, many artists still expect to pay no upfront costs and for such fees to be recouped from royalties.  

There are several flaws with such requests:

1. Digital distributors are already spending a lot of money getting the albums to their worldwide networks of music services.  The overhead for such companies is very large.  The costs involved are very substantial and are barely offset by the distribution percentage.  Our company is small by comparison and I can assure you that our investment per album is very significant.
2. To front marketing costs would mean that the distributor is taking 100% of the risk for their 20% distribution fee.
3. If an artist is unwilling to spend even $500 to market their artist, what does that say about their confidence in their product.  What business is expected to launch and succeed without a least a little capital expenditure.
4. To recoup a modest marketing campaign of $1000, an album would have to generate over 700 track downloads.  I can tell you from experience that we represent many albums that do not generate even this small amount of sales.  In such a case, the distributor is left holding the bag.

Distributors are not set up to be finance companies.  The conventional model of big labels acting as a banker and assuming all the risk does not apply to digital distribution companies.  If a content provider were willing to make it a 50/50 deal, I am sure that most distributors would be much more willing to take a bigger risk.

Finally, I'd like to quote one of my favorite musicians, Billy Preston:  "Nothin' from nothin' leaves nothin'/You gotta have somethin'/If you wanna be with me..."

Japanese Music Company Columbia Music Ent Inks Global Digital Music Distribution Deal w BFM Digital

Columbia Music Entertainment (CME), the oldest recording company in Japan, has signed a deal with BFM Digital to represent its Nipponphone and Denon catalogs for global digital distribution exclusive of Japan. BFM Digital (http://www.bfmdigital.com) is a leading digital music aggregator and distributor of independent music.

This important partnership marks the first time CME will be utilizing a U.S. aggregator to distribute their catalog. It represents a major shift in CME's global digital distribution strategy as they seek to strengthen their revenue streams outside of Japan.

The deal continues BFM partnerships with major independent Japanese labels with top selling artists, and brings an impressive catalogue of Japanese music to an already extensive list of digital content. Some of the notable CME artists thaBFM will now be distributing include: 

Hibari Misora, an extremely successful artist selling over 68 million records worldwide Saori Yano, a rising jazz saxophone star Hamutsun Serve with Big Baby, who opened Madonna's 2008 tour, Sticky & Sweet, and have gained wide popularity through their series of dancing music videos (available on YouTube).

"Columbia Music Entertainment has a remarkably rich history dating back to their first release in 1910. Since the current demand for Japanese pop and traditional music extends far beyond the borders of Japan, we are very excited to help bring their catalog to a wider audience via our global network of digital music services," comments Steven Corn, CEO of BFM Digital.

The first albums and music videos will be available in May with additional content becoming live shortly thereafter.

Hamutsun's Music Video Space Warrier

Latest News from BFM Digital

The Magic of Gracenote

Two weeks ago, I was visited by Michael Aczon, a music lawyer friend from San Francisco.  He was in town promoting a new artist of his (Greg Scott).  They gave me their new CD fresh from the manufacturer.  I popped it into my computer and opened up iTunes.  Instead of displaying the album, artist and track names, the playlist merely showed "Track 1", "Track 2", etc.  A couple of hours later, I put the CD into my car stereo.  Lo and behold!  All the info, including track names, were accurately displayed on my screen.

Is this some sort of magic or voodoo?  Nope, it is just a little thing called Gracenote.

There is a lot about the Internet that remains a mystery. In fact, most people barely understand the technology that is part of our every day life.    Fortunately, basic elements of technology do not have to be understood to use them.  We don't need to know how electricity flows or how microprocessors works in order to use our computers.  The same applies to a lot of Internet technology e.g., flash, java, active-x, etc.

One ubiquitous tool that every music lover unknowingly uses is Gracenote.  Whenever a song or album's name is automatically looked up or displayed, Gracenote is usually at work behind the scenes.  Unlike your computer's microprocessor, as a label or artist, it really helps to understand what Gracenote does and how it works. 

Gracenote was originally called CDDB which stood for "CD Database."  It's origins can be traced back to an old filebox with index cards.  A few years ago, I was lucky enough to see this original "database" in their offices. There was nothing high-tech or pretentious about it.  Just a plain, metal filebox (3x5, I think) sitting on top of a file cabinet.  The cards had the CD name, artist and tracks written on them.  Now, the Gracenote database has millions of entries.  They are the preeminent collection of album data as well as lyrics and other information associated with the world's body of recorded works.

The mysterious appearance of the album information on my car radio was indeed unmagical.  All it required was for me to enter in the metadata for the album.  I used the Info window in my iTunes software. Then I merely "Submitted CD Track Names" which is a command found on the Advanced menu.  This information was immediately sent to the Gracenote server.  Two hours later when I inserted the CD into my car, my satellite radio searched the Gracenote database and found the newly entered album.  

Without going into elaborate details, it is very easy to understand how Gracenote works.  It is essentially a recognition program that looks at the number of tracks on a CD, the lengths of each track and the overall length of the CD.  If you have a CD with only a few tracks, it is possible to get a mismatch.  But on a typical CD with 10-15 tracks, these factors create a mathematically, unique footprint.   (Note:  if, by chance, there are two albums with an identical number of tracks each of which are exactly the same length, then the user is prompted with the various album options and asked to select the appropriate one.)

Gracenote technology makes it possible for anyone to update their database.  In the above example, I was able to enter in the information for someone else's album.  (I won't go into all the protections that Gracenote has against false or malicious data entry.  Trust me, they have a lot of safeguards.)  Then this information is made available to Gracenote's worldwide network of subscribed services (of which my satellite radio is one).  This means that every time someone puts in that CD, the artist, album and track info will display.

Even if you gave out an unlabeled, CD-R, the album information would be there if you had previously submitted it to Gracenote.  All it takes is about 5 minutes and you make your album's metadata available to practically every computer, internet player and satellite car radio.  Yet, many new releases that cross my desk which are fully printed and manufactured often show up as unnamed.  

I consider Gracenote to be an amazing, free service to promote your new album. So, the first thing that you should do when your newly manufactured CD arrives is to type in the album and track information.  Then submit this info to Gracenote via your player.  If you can't find the right menu command, keep looking.  I'm sure that your player has this functionality.  Do this before you hit the play button. (By the way, did I say that it's free?)

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For a much more eloquent and accurate description of Gracenote's service, please refer to their FAQ:  

http://www.gracenote.com/company_info/FAQ/FAQs/

SpiralFrog Is Gone, Myspace Music Is Here

I don't know if you would call it the big news of last week.  But the demise of SpiralFrog, an advertising revenue-based music service, certainly is interesting news for anyone following the world of digital music stores. 

Launched in September, 2007, SpiralFrog offered nearly a million tracks for free to users who were willing to view an occasional ad.  Though there were many skeptics, I felt it was important to support this new business model.  Partially, my support is motivated by the saying, "Those who cannot remember the past are condemned to repeat it" (attributed to poet and philosopher George Santayana).  After all it was the major labels brazen refusal to adopt any peer-to-peer business model that lead to the rampant, and still uncontrollable, distribution of free music. 

So with eyes wide open, I reached out to SpiralFrog to strike a deal.  The basic business terms were similar to other subscription models.  Essentially, there is a pool of money each quarter and a content provider gets a pro rata share of a percentage of it.  In SpiralFrog's case, the pool of money was supposed to come from online advertisers in lieu of subscribers.  

The biggest difference with an ad-based versus a subscription service is that the music feels like free in the former.  In fact, it really is free from the user's perspective.  With services like Napster or Rhapsody, there is a monthly subscription fee that users will see on their credit card bills.  But with SpiralFrog, there was no such billing.  Everything was free as long as you watched or clicked on an ad.  (It doesn't really matter that the specifics were a bit more complicated.  This is the basic idea of an ad model.)

What went wrong?  Isn't free good enough?  Obviously not. 

For years, every digital guru has been predicting the eventual success of the subscription model.  A good friend and ex-boss of mine (Gerd Leonhard) has described the future with "music being like water", flowing freely and feeling like free.  Three years ago, David Goldberg (former head of Yahoo Music) declared, at one the ubiquitous digital conferences in LA, that the a la carte model was dead. Most in attendance agreed.  Some, like myself, wondered if this was really an accurate statement since services like iTunes still rule the roost.  The two most successful services, iTunes and AmazonMp3, are still a la carte, permanent download business models.

This doesn't mean that a la carte services are the long term view.  It is quite likely that eventually we'll be consuming music much like any other utility.  In my opinion, that is still probably several years away.  In the meantime, it is important to closely examine the success or failure of the all-you-can-eat services whether they are subscription based or advertising based.  

I don't know what my colleagues first thought of when the news of SpiralFrog hit the wires.  For me, I immediately thought of the newly launched Myspace Music program, another primarily ad-supported model.  I'm happy to say that BFM recently closed our deal with MSM and our content should be appearing there very soon.  So why I am excited to be delivering my content to another ad-supported service just when another ad-support service closes down?  The answers lies in the reasons for SpiralFrog's failure and MSM's likely success.

First of all, the music on MSM is already free.  There is no need for users to click on anything or come back once per month to view ads.  The ads on MSM are always flowing as does the music.  I know that many will say that I am comparing apples to oranges since MSM is not offering tethered downloads like SpiralFrog.  But the vast majority of MS listeners want to do just that:  listen.  They are not interested in a quasi-ownership of the music that requires some action on their part (e.g., a monthly visit or subscription fee).  They want to use MSM to explore and discover new music.  Having DRM-protected downloads that can't be loaded on your ipod or easily transported is of no interest (obviously) to most music consumers. 

Secondly, MSM already has the eyeballs.  Any new service, whether is is a subscription, ad-based or a la carte, has a primary challenge of convincing users to change their buying habit.  "Don't go there, come here."  It was an equally unlikely proposition that SpiralFrog was going to create a new pool of buyers rather than attracting uses who had already become accustomed to using another site.  Their service was only going to survive if they got enough eyeballs (aka ad impressions or clicks) to generate significant ad revenue.  This is a tall order nowadays with so much competition for consumer's attention.  Myspace is already selling billions of ads and generating hundreds of millions of dollars in ad revenue.  This is an advantage that SpiralFrog didn't have.

Thirdly, all of SpiralFrog's revenue was designed to come from advertising.  MSM is aligning with AmazonMP3 to provide it with a download functionality.  For content owners, that is great news.  The success of MSM is not going to be judged solely on the pro rata share of ad revenue that a track has.  Artists will also be able to derive benefit from the additional permanent downloads that MSM will likely create.  Not only does this provide artists with an additional revenue stream, it provides MSM with one, too.  They can generate revenue thru their affiliate relationship with AmazonMP3 as well as their ads.  This is a tremendous advantage that SpiralFrog didn't have.  Offering permanent downloads as an alternative buying option is already quite successful with services like Napster and Rhapsody.  It is not well known, unfortunately, that these services give consumers an option to purchase DRM-free music which can be burned to a CD or put on any MP3 player.  So having this option on MSM is to be expected.

Saying good-bye to SpiralFrog, or any of the many other failed services, is not much fun.  I don't think that their absence will create even a blip at the bigger services.  Yet, experiments such as this are good for the industry and provide lessons to be learned.  I intend to support as many new services as I can and I hope that the creative thinking that spawned SpiralFrog continue to generate new business models.  

IFPI Publishes Digital Music Report for 2008

I don't usually republish articles or other postings in their full form.  But the IFPI Digital Music Report for 2008 just came out.  I consider this IFPI report to be the best source of analyzing the digital music market and Mi2N has just published a very readable version of it. Mi2N is one of my favorite places to get music industry news (www.mi2n.com).  This report is worth reading several times.  Lots of great information here.

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The music industry has transformed its business models, offering consumers an increasing range of new services with leading technology partners. Yet generating value in an environment where 95 per cent of music downloads are illegal and unpaid for is still the biggest challenge for music companies and their commercial partners.

The digital music business internationally saw a sixth year of expansion in 2008, growing by an estimated 25 per cent to US$3.7 billion in trade value. Digital platforms now account for around 20 per cent of recorded music sales, up from 15 per cent in 2007. Recorded music is at the forefront of the online and mobile revolution, generating more revenue in percentage terms through digital platforms than the newspaper (4%), magazine (1%) and film industries (4%) combined.

At the same time, a new generation of music subscription services, social networking sites and new licensing channels is emerging. These were led in 2008 by services like Nokia Comes With Music, MySpace Music and a raft of partnerships with Internet Service Providers (ISPs), such as TDC in Denmark, Neuf Cegetel in France, TeliaSonera in Sweden and BSkyB in the UK.

Despite these developments, the music sector is still overshadowed by the huge amount of unlicensed music distributed online. Collating separate studies in 16 countries over a three-year period, IFPI estimates over 40 billion files were illegally file-shared in 2008, giving a piracy rate of around 95 per cent.

IFPI's Digital Music Report 2009, published today, gives a comprehensive overview of trends in the music business internationally. It shows an industry that has shifted its approach from one based only on unit sales of music to "monetising" access to music across a multitude of channels and platforms.

Single track downloads, up 24 per cent in 2008 to 1.4 billion units globally, continue to drive the online market, but digital albums are also growing healthily (up 36%). The top-selling digital single of 2008 was Lil Wayne's Lollipop with sales of 9.1 million units - 1.8 million more than the 2007 best selling digital single.

The Report also shows how the digital age is expanding the role of music companies in developing and marketing artists and it outlines the progress being made internationally in getting ISPs to cooperate to curb mass-scale copyright infringement on their networks.

John Kennedy, chairman and chief executive of IFPI, says: "The recorded music industry is reinventing itself and its business models. Music companies have changed their whole approach to doing business, reshaped their operations and responded to the dramatic transformation in the way music is distributed and consumed.

"There is a momentous debate going on about the environment on which our business, and all the people working in it, depends. Governments are beginning to accept that, in the debate over "free content" and engaging ISPs in protecting intellectual property rights, doing nothing is not an option if there is to be a future for commercial digital content."

New business models

New "music access" services, such as Nokia's Comes With Music phone, Sony Ericsson's PlayNow plus and Danish ISP TDC's new music service PLAY, emerged in 2008. TDC reports that "churn", the rate at which customers switch to a competitor, dropped significantly since bundling music with its mobile and broadband services.

Partnerships with broadband providers are likely to become more important in the future. TeliaSonera has launched a bundled music service in six countries; Neuf Cegetel runs a similar service in France and BSkyB has announced plans to launch a bundled broadband and music offering in the UK and Ireland.

Advertising-supported services that are free to consumers are also opening up. One of the highest-profile moves in this area was the launch of MySpace Music in the US in September 2008. Several leading music companies have also signed licensing agreements with YouTube, the global market leader in video streaming.

A-la-carte music downloads continue to grow, with AmazonMP3 joining the European market, broadening consumer choice. An increasing number of stores are licensed to sell DRM-free music tracks. In January 2009, iTunes, the leading download store, announced it was making eight million DRM-free tracks available at flexible pricing points.

Music companies are also increasingly licensing music to third parties. One notable success is the games sector, where music games were responsible for 15 per cent of overall game sales in the US in the first half of 2008 (NPD Group). Guitar Hero and its sequels have sold more than 23 million copies in three years, generating more than US$1 billion in North America alone (PWC).

Tackling the problem of digital commerce in the era of "free"

Despite these changes, the Report highlights the critical problem of online piracy, and in particular the impact it is having on the local music sector in markets such as France and Spain. In France in the first half of 2008, album releases by new artists fell by 16 per cent and local repertoire accounted for 10 per cent of albums, compared to 15 per cent in the first half of 2005. In Spain, just one new local artist featured in the Top 50 albums from January to November 2008 - compared to 10 in 2003.

Progress on ISP cooperation

Cooperation from Internet Service Providers holds the key to this problem - something that is increasingly accepted by governments internationally. In 2008 a tipping point was reached, with governments in France and the UK leading the way in looking to ISPs to help bring piracy on their networks under control. In France a draft Creation and Internet Law sets up a system of "graduated response" by which ISPs will write to persistent copyright abusers to educate and warn them about their actions, as a last resort sanctioning them with loss of internet access for between one and 12 months.

Research suggests the graduated response scheme will be effective. Seven in ten (72%) of UK music consumers would stop illegally downloading if told to do so by their ISP (Entertainment Media Research, 2008). Seven in ten (74%) French consumers agree internet account disconnection is a better approach than fines and criminal sanctions (IPSOS, May 2008)

In July 2008 the UK government brokered a joint 'Memorandum of Understanding' between the recording and film industries and the six largest ISPs, binding the parties to work to achieve a significant reduction in unauthorised file-sharing. At the same time, the government initiated a consultation on legislative options to deal with internet piracy.

The momentum for ISP cooperation extends beyond France and the UK. New Zealand will start requiring ISPs to implement a policy of terminating the accounts of repeat infringers in February. Governments are also involved in discussions of the issue in the US, Italy, Australia, Japan, Hong Kong and South Korea.

Click here for the original posting

What is the Value of Music?

As I sit down to write this current column, I am reminded of one that I wrote about 9 months ago called "Does Music Have Value?"  That entry discussed the intrinsic value of music as a retail product versus a marketing tool.  Today, I want to address a different aspect of "value" by precisely rephrasing the question as "what is the value of music?"  

We all have seen the ubiquitous television commercials for MasterCard (i.e., "priceless" is the tag line). Obviously, this does not apply when it comes to spending one's hard earned money on various forms of entertainment.  More often, consumers are being forced to evaluate where they get the most value for their entertainment dollars.  This got me to thinking of an EROI - "Entertainment Return On Investment".  There are many different ways to buy entertainment.  For brevity's sake, let's limit it to a few of the most common:  movies, CDs, DVDs, live music, music downloads.  

What is the EROI of each of these items?  As a mere form of experimentation, let's define EROI as a ratio of experiential hours divided by the cost in dollars.

Movies (EROI = 0.13):  Take the two hours of an average movie experience (including trailers) and divide by $15 (one ticket and one small popcorn).  

CD (EROI = 1.33):  Assume that one listens to a CD 20x (about 1 hr per CD) over many years and divide it by the average cost of $15 per CD

DVD (EROI = 0.75):  Assume a three hour DVD (with features) watched 5x and divided by $20 per DVD

Live Music (EROI = 0.04):  Assume a 3 hour show divided by a $50 ticket

Music Downloads (EROI = 2.00):  Assume a 4 minute track played 30x and divided by $1.00

Obviously, many of my assumptions are purely arbitrary.  Yet, still they are very plausible. I could argue that some of the assumptions are actually conservative.  After all, I still have the very first CD that I purchased (along with the first LP, btw).  It still sounds great.  

Many consumers will gripe about the costs of CDs.  It is a common complaint that CDs have always been priced too high and many fans will further object to the treatment of artists by their label.  I would argue that CDs represent one of the best entertainment value that one could have.  It is remarkable to me that the same people who might complain about paying $15 for a CD would often see more than one movie per month and wind up paying $5 (or more) for a bag of popcorn that is worth 25 cents (or less).  

I am not suggesting that there is no room to discount music.   There are many business models that endeavor to make music feel highly discounted or, even, free.  These new revenue structures are very important for the growth and development of the music business.   However, I believe that it is very important for people to recognize the immense value that recorded music has and not to immediately discount it as an overpriced commodity. 

Video Blog with Gerd Leonhard

My good friend, Gerd Leonhard, is one of the official bloggers of MidemNet.  In the midst of a crazy busy Midem this year, I did a one-minute video interview for his blog.  Weary-eyed, I managed to sound somewhat cogent.  Here it is:

Video Interview at Midem

Midem 2009 - Day 2

Here's a brief update from Cannes...

The bad news is that the attendance is definitely down.  The aisles are empty and there are significantly fewer exhibitors.

But the good news is that there is still a lot of business to transact.  I met with many new music services (both Internet and mobile) and our VP of Labels, Michele Ito, was booked solid with new content meetings.

Obviously, the music business is struggling to find a good business model that balances artist rights, compensation and user friendliness.  It's evident that a lot of companies are doing a lot of thinking and experimentation.  Some of these may not survive till the next Midem.  But I'm sure that many will find a viable customer base.

For myself and BFM, it's still an exciting time.  Nothing at this show quells my enthusiasm for the growth and development of BFM as well as the music industry.  We may not know where the future is head (sorry, Gerd).  Some of the uncertainty is scary, certainly.  But for the most part, it's all good.

Reporting from MidemNet (Cannes, Fr)

Today, I attended MidemNet which is the digital music conference that precedes Midem.  This event attracts a wide variety of digerati, labels and music industry execs.  The dark auditorium and comfortable seats makes it a challenging fight with jet lag.  But fortunately, i slept just enough, had plenty of coffee and even took a morning jog this morning which all combined to keep me alert throughout the day.

Every year, there is generally a "hot" topic that pervades not only the panels, but the intense networking that occurs.  The last couple of years focused on DRM (i.e., digital rights management) and subscription services.  This year, the main subject was fan interactions and how to create a compelling relationship that leads to increased revenue.   I will write a more detailed description of the many specific discussions and ideas presented.  But for now, I can easily summarize the common thread to a successful artist/fan relationship.

It is content...and lots of it!  Releasing one album per year is just not enough to create a loyal customer and combat the attractiveness of free, illegal downloads.  The key is to not provide as much content as you can.  The goal is to gather as much information about your fans as possible (least of which should be an email and cellphone number).

One artist sold a subscription for a year's worth of songs for $50 and then he proceeded to write/post a song per week.  Other artists gave away free downloads in exchange for an email or cellphone number.  

Content does not have to be just music.  Jack Penate, a case study presented at MidemNet, created 100's of short videos as did Soulja Boy Tell 'Em.  These can be short glimpses into rehearsals, gigs, sessions or everyday life.  Photos, blogs, drawings, and poems are all good examples of content that help create and sustain interest.

The lesson that I have always advocated and that all the panelists emphasized is that an artist has to always produce something that motivates a fan to want to come back to you.  Without a ton of content, fans' interest will wane.  

More to come from Cannes.

Au Revoir!

A Holiday Miracle: How To Get 50% Back On Your Marketing Dollars

According an IFPI study, 20% of music on iTunes does not sell even one download.  That is really amazing to me.  One would think that everyone who posts music on iTunes (most likely thru a digital distributor such as myself) would have at least a few friends and family willing to buy a track or two.  Yet, BFM's own quarterly accounting reports showed about 100 labels/artists that had no revenue at all during Q3.

My takeaway from a sad number such as this is that these folks are doing nothing to get the word out about their music.  I mean if you can't convince your Aunt, brother, or your buddies at work to buy a track, then how the hell is a perfect stranger going to find out about your music. Personally, I have posted a few tracks that I recorded.  It gives me a giggle to see if my paltry four tracks will make me the winner of the smallest royalty check each quarter.  Proudly, I can say that I've never hit the very bottom ever.  I've been close.  Why?  That's because I am always mentioning to friends that I have an EP online and a few of them inevitably buy them.

The key to selling music on the digital services is two-fold:  marketing and discoverability.  In reality, it is really all about marketing since that only serves to increase discoverability.  But I will write about the latter in a subsequent column.

Now, I am not about to tell you the magic secret for marketing your music.  Usually, it comes down to marketing 101 techniques and there are plenty of books out there that are great.  I am here to tell you about one of the most powerful marketing techniques that has remained unknown (or ignored) by most artists and labels.  

What if I could tell you of a way to get 50¢ back on every marketing dollar that you spend? ...automatically!  That would be incredible wouldn't it.  Well, here is how you can do this.

Gift ONE track from your album to 100 people. (Do NOT send them the whole album.) iTunes has a very cool feature that lets you buy a track or album and send it to someone as a gift.  It won't cost them anything and they will have to come back to iTunes to download the track.  This accomplishes many things.

First, it exposes your music to 100 people who may not have heard it before.  I know what you are saying:  "I don't know 100 people that I can gift my music to."  That is pure B.S.!  If you add up your co-workers, friends, musicians, family, religious organization, college buddies, etc., you should be able to easily come up with 100 people.  Plus, you can also include your local music promoters, critics,  producers and the people at the supermarket.

Secondly, some of these folks may just buy some more tracks.  I think it is quite likely that this may happen.  Of course, there will be those recipients that are not into your music.  It is equally likely that many of them will like what they hear and will want more.  This is why it is critical not to gift the entire album.  Just do one track and let them come back for more.

Third, one hundred people should be enough to start a bit of a viral effect on your album.  Hopefully, they will each tell a friend about your music and spread the word.

OK, now comes the most obvious objection.  Many of you reading this will say that you don't have $100 to do this.  Well, the good news is that for every $100 you spend, you will only be spending around $50.  That is because you'll get about 75-80% back from your digital distributor in royalty payments.  If you have an 80/20 deal with your distributor and spend $100 at iTunes, that means that you'll get $56 in royalty payments the following accounting period. In reality, your $100 of marketing has only cost you $44!  Where else could you get such a great deal and save 56% on your marketing dollars?

When you made your album, I am sure that you spent money on items that were not essential.  For some, I imagine the beer-budget came close to $100.  Perhaps you rented that amp that you used on only one song.  Or maybe you had to slip some money to a club owner to use their space for a studio.  Regardless of your recording, mastering, and manufacturing budget, I don't think that you wanted to spend all that money only to see it languish at the bottom of the lists on iTunes or to look at the zeroes on your royalty statements.

Lastly, please remember that some of the best digital marketing plans began by giving away free tracks.  That works very nicely if you already have the traffic on your site.  It does not work well if you trying to generate interest from scratch.  If this technique doesn't work, you are out only $44.  But if it does work, you can be proud that you took a proactive step and created a buzz about your album.

Happy Holidays!