Tom Hagan Design | How This 19th Century Economist Can Help Your Music Career
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How This 19th Century Economist Can Help Your Music Career

How This 19th Century Economist Can Help Your Music Career

Now with labels investing less and less to grow and develop their artists, musicians are under considerably more pressure to take the reigns of their entire music career than ever before. As a musician, today you have to be doing everything from advertising, marketing and promotion to understanding your brand, social media and managing your online presence, all while simultaneously writing songs and delivering them to your audience.

 

It’s hard. If you want to be signed to a major label, then you need to prove you have the following first without their help, and if your goal is to make it independently off of a label, then you will need to understand the business side of your music career regardless. So, where is it best to focus on, and what will give you the best results the fastest? It’s here I introduce musicians to Vilfredo Pareto and his very special vegetable patch.

 

If you want to be signed to a major label, then you need to prove you have the following first without their help, and if your goal is to make it independently off of a label, then you will need to understand the business side of your music career regardless. So, where is it best to focus on, and what will give you the best results the fastest? It’s here I introduce musicians to Vilfredo Pareto and his very special vegetable patch.

 

Pareto was an Italian economist and sociologist. His seminal work ‘Cours d’Économic politique’ included a principle which we would later call many names, the 80/20 Principle, Pareto’s Law, Pareto’s Principle or the 80/20 Rule.

 

Pareto used this law to demonstrate how 80% of the land in Italy was owned by 20% of the population, and how 80% of the wealth and income was produced by 20% of the people. Though, perhaps more interestingly he applied this on more direct terms, and more specifically to his vegetable patch.

 

Pareto saw that 80% of the peas in his garden were produced by 20% of the pea pods planted. Pareto soon found that the 80/20 principle didn’t just apply to economics, but was apparent everywhere. 20% of tools in the toolbox are used for 80% of tasks, 80% of accidents on the road are caused by 20% of drivers, we typically wear 20% of all our clothes 80% of the time and etcetera.

 

Scannable Document on 10 May 2016, 21_55_57 (1)

Pareto thinking about dem peas

 

Pareto’s Law can be succinctly put as 80% of the outputs result from 20% of the inputs, but can also be stated as 80% of your consequences come from 20% of sources or 80% of your desired outcomes will derive from 20% of factors.

 

The ratio 80:20 is merely a guide, in reality, it will be sliced many different ways: 99:1, 90:10, 70:30, and does not always have to total 100, it could be that 15% of your event advertising attributes to 95% of gig tickets sold. But the gist is: The majority of an outcome is generated from something far smaller. Using 80:20 as the guide is helpful as it’s the minimum we are looking for and poses the best question to ask when applying it to our music careers.

 

So, how can we use this?

 

Using Pareto’s Principle and 80/20 analysing specific areas of you music career can give you tremendous clarity on where you need to focus your attention. For example, one area that proves useful to analyse is: Who is contributing to the majority of your income?

In a previous post [here], I talked about two types of fan distinctions, soft fans and hard fans. The latter generates your income from sales of merch, live events, hard media sales and such, whereas soft fans will stream your music just for their late night workout sessions and that is all. Today, this type of fan no longer has to pay. But as I explained, if you stop whining about how you wish you were born in the 60’s and focus on the type of fan that will generate you an income, you’ll accomplish a lot more with your time and resources.

WWPD? (What Would Pareto Do?) Pareto’s Law would say that 80% of your income will be generated by 20% of your audience. This 20% will obviously be your hard fans. The rest will be soft fans. The soft fans (80%) will generate 20% of your income, and there will be no point focusing on them, you need to make the most of your time. It’s far more worthwhile to be focusing your efforts on those 20% of fans who are generating the majority of your income (80%), as increasing them will increase your income (obvs).

It’s also plain to see how these hard fans are contributing to your income. Hard fans are distinguished by how they contribute, so creating more of this type of fan would be a matter of giving them more opportunities to obtain your creations. Then, to maximise further, you could analyse what 20% of these creations are giving you the 80% of your sales and strengthen those areas.

 


A short case study…

 

American Hip-Hop collective, Odd Future, took most of us by surprise. Their music was totally DIY and unashamedly had the same aesthetic, their content was unrestrained, unhinged and above all, authentic. It created a world that connected with kids on an emotional level everywhere. Odd Future understood their audience because they were their audience. They understood how kids today were listening to music, which was on their own terms and not the artists.

 

Odd Future released all their music on their website for free download. Their audience didn’t have to jump through hoops to get their music, Odd Future simply gave it to them, appearing to their audience on their level and creating trust.

 

What wasn’t free however was their merchandise. And this is what they focused and maximised on entirely. They created limited edition clothing sometimes upward of $100 a shirt and tied this to their concert tours with pop-up shops on the day of performances; personally selling the merchandise, blending meet and greets with their clothing line; resulting in queues down streets and through city centres all for limited edition socks that cost $20 each.

 

OddFuture

 

Were they exploiting their fans? No. They didn’t force them to buy anything. Their fans have all the freedom to download their music for free and love it in their own time and contribute nothing to Odd Future. But they didn’t focus on this part of their audience. They focused on the 20% of their fans which brought in money, then focused on the products which were bringing in the majority of their income, which was their clothing.


 

Another example of what you could 80/20 analyse is: What 20% of music publications in your genre do 80% of informed people read? These will be the most trafficked websites and consequently what will be the tastemaking/influencer sites. These will be the blogs you should be aiming to get coverage in to extend your reach and turn your fans.

 

Another would be, what 20% of my songs do 80% of my audience react to most? This should be obviously known to you but you’ll be surprised what songs musicians will push as their single; ignoring what their fans clearly like most and focusing all their efforts on a 20 minute, 7/8 ‘masterpiece’ in Locrian.

 

Pareto’s Law can be used in a multitude of ways, but remember it’s a guide. The real purpose of Pareto’s Law is to realise the time that can be saved through eliminating the sources that don’t contribute to your desired outcomes; allowing you to focus on the 20% of sources which do. By doing less of the unimportant, you can do more of what is important, whether it’s enhancing or eliminating, or simply growing more peas, Pareto’s Law will help you see what is important, rather than what you think is important.

 

For more on Pareto’s Principle you can read:

Richard Koch’s Five Secrets to Living an 80/20 Lifestyle (Nightingale)

Business Balls’ Pareto Principle (Business Balls)

Richard Koch’s 80/20 Principle: How To Achieve More with Less (Book)

How to Finally Play the Guitar: 80/20 Guitar and Minimalist Music (Tim Ferriss Blog)

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