How many Facebook fans do you need to make a living out of your "product"?

Photo by Toni Rosado [toni@scannerfm.com]

I recently read a great article on "What The Number Of Facebook Likes Says About Musicians".

Even though musicians may not be comfortable with comparing their music to a product, it is interesting to see the correlation between the number of likes on their fan page and their success.

The above article orders numbers of like with success of the band. Here is how it is split with real-life examples:

• less than 1000 fans: "Unless someone comes along to shake them up and makes them pay attention to their business, they will not be going anywhere anytime soon." That's the case for most amateur bands (like mine with 319 fans) who plays for fun.

• 2k-5k:"They’re a local band who care enough to put some effort into their career." Like for the parisian band "The Parisians" who is at 3k and has recently ceased to exist as they didn't make it through.

• 5k-10k:"They’re a touring band or have had some licensing or YouTube success". Right now, no bands in that scale comes into mind

• 10k-50k:"Either they have been beating the road touring for YEARS or are starting to kill it somewhere on the interwebs." For example, the french band, Deportivo with 12.5k comes here but they are still far from making it a real success.

• 50k-100k:"This band can headline national tours and bring a few hundred to every city they visit." For example, the french band, Plastiscines has had several successes and press coverage. I am still not sure they can be considered successful.

• 100k-500k:"They’ve had a big hit. Either radio or YouTube, but their numbers are strong. They have YouTube views in the millions. They are touring internationally. They can pack theaters wherever they go. They are on the brink of mainstream. Their fans are hard core." Most of the indie bands I like seem to be in that range (The Dandy Warhols with 120k, The Vines with 250k and the Libertines with 505k). The "brink of mainstream" seems to be the reason why I like them ;)

• 500k-1M:"Multiple hits. Die hard fans. Life is good. Touring internationally and they have it figured out."The french band Air with 700k falls into that category, yes they seem successful.

• 1-5M:"The superstars of the industry. Label support. They’ve either had their day or on the up and up fast. They’re on the brink of mainstream or were hot last decade." I can think of Jack White with 1.5M and the Strokes with 4.5M. 

• More than 5M:"Mainstream. Your mom’s heard of them." Close to 5M you have the Arctic Monkeys and far ahead Guns N'Roses with 30.5M

From what I know of these different bands, it appears that to start making a decent living out of your "product", you need to go over the 100k fans milestone.

Before that, you are just one in a million and this is a struggle.

What would be interesting is to see whether the same ranges apply for other types of product.

Market Study on Live Streaming services in the Music Industry

The HEC MBA is soon coming to an end :( Before that, I still have to finish one of the major assignments for my class "Business Plan Workshop" in the Entrepreneurship track.

As a subject, I have chosen to study the potential of Live Streaming service applied to Music.

The reason why, I have chosen that topic is that I am passionated about music and technology and after the MBA, I really would like to work in a startup (or create one :D) dealing with that subjects.

Working on that study has been a great way to learn more on the Music industry where I have no past experience. Thanks to the HEC's network, I have been able to meet Universal Music and EMI executives and great discussions have followed. It's really cool being able to meet anyone in an industry for an academic project :D

Right now, there are several services offering live music streaming such as Grandcrew.com, Justin.tv, BigLive.com... What is still not clear is how these companies make money out of it if they make any. Indeed, even though many companies have launched such service, music fans do not really seem ready to pay for watching a live concert on the internet.

Therefore, many studies and bloggers argue that it can be an indirect sales channel to help music bands develop their marketing strategies (Direct-to-Fan and give Reason-to-Buy). By the way, I have come across a great study by Virginie Berger (a french blogger specialized in the music industry) called "What is a good digital music strategy?" and it provides great tips on our bands should build their marketing offer to reach and maintain their fan base.

Coming back to my market study, the general trend seems now to be to have a better knowledge on your fan base and propose them customized offers depending on their willingness-to-pay. Several music startups are working on that: Topspin in the US, Noomiz in France.

But this is for recorded music as it has been a decreasing market for the last few years. On the live music market, the picture is a bit brighter in the sense that this is a growing one and that the industry is restructuring around that. Indeed, music labels are now buying music venues and tour management companies in order to find new revenues. And vice-versa when LiveNation (tour management company) offers 360-deal with artists managing their whole career from the recordings, tours, merchandising,...

So what is to be done in the live music market? Are there still market imperfections where a startup could work on and make a profit out of it?

These questions are still open for me and I will work on that for the remaining months of my MBA. If you have opinion on the subject, please do not hesitate to contact me.