Hello, this is Todd at A Different Drum. I am using this Saturday morning to have a little, frank discussion with you– my good friends and music supporters who receive this regular update.
As you’ve heard me suggest before, the music market has been struggling increasingly over the last few years. Particularly the smaller bands, labels, and stores have suffered. In fact, I can’t think of even one independent music store (physical store) within a hundred miles or more of my residence. Indie stores are a dying bread. That has also spread to the mail-order and online stores who now struggle to survive in a world where music is unavoidably free and easy to obtain without lending the financial support of a physical purchase. Even legal MP3 purchases have changed the market to such an extent that profits are very hard to come by when selling music.
But I don’t want to dwell on that as much as on my own situation here at A Different Drum. After all, A Different Drum is one of those independent stores that has seen a huge drop in sales and support over the last few years. Just as a quick example…our monthly sales of label CD’s through Amazon.com has dropped to less than 1/10th of what it was even 4 years ago. Our one homepage and a couple of other cool mail-order stores are the only remaining places where any real sales are generated. And those sales are down too. It has been about two years now that I have been unable to take any real payment for my full-time job. Understandably, that can be a big stress on a family man, as I have not been able to take on a roll as a provider for my family. It is harder and harder to justify the hours and hours I spend as a “hobby” or as a “service” while debts go unpaid and my family struggles.
As an additional note, you may have noticed that the label has released a lot less music lately. Some people might make the argument that the fewer releases is the reason for the lower sales. Well, the truth is reverse– the lower sales made it impossible to keep putting out new music because every new release added to a very large manufacturing debt that is still not completely paid. We were putting out so much music a few years ago that the situation became dire once people stopped buying CD’s and started downloading. The result…no money for new releases, and too much risk to release new bands.
Needless to say, I have thought and thought and thought about what I could do differently. I’ve attempted a few things to “improve” A Different Drum’s store, but those changes have often had no meaningful results for one reason or another (one example is our MP3 store, which was rarely used because interested customers already have regular, well established sources for buying MP3’s…not to mention the inquiries I was getting from our server about the number of files stored on the site).
I suggested on Facebook a few days ago that it would be best for my current personal situation if I could sell A Different Drum to somebody who is motivated, interested, and in a position where they could make a living running a small store (maybe somebody with less family obligations, etc.). Of course, the replies I received about that idea were mostly, “NOOO! You can’t do that!” Only a couple of people asked me about terms. I explained privately that I would only sell the business for a price that would allow me to pay off all debts, royalties, etc. associated with the business so I could leave without a continued financial burden, and the buyer would only have their own purchase price to consider in terms of measuring profitability.
The fact is, the few supports still around don’t seem to want A Different Drum to leave or drastically change. I don’t want A Different Drum to leave either. I’ve dedicated nearly two decades of my life to this business. But reality is what it is. So…what to do now?
I’m still open to selling the business to somebody who is able and excited to take it on. But I’m also open to any other ideas which could help make the business profitable once again, without ruining the integrity of A Different Drum.
I’ve also considered putting together one more big party or convention for supporters and fans to gather and maybe pull together enough business and support to actually make some money to pay some of the bills. But you know, I’ve hosted festivals before and can honestly say, I have NEVER made a profit on a concert or festival. I did get quite a lot of merchandise sales during a couple of those events, but the event itself always lost money. Other festivals have seen similar results– it is VERY hard to put together an event with many bands playing and get enough support to pay for the expenses.
But maybe a non-concert-oriented event? I know that a lot of us enjoy the idea of simply “getting together”. The social interaction, networking, discussion, and even shopping is more the reason to assemble? If I were able to pull together a convention-style event that did not have the expenses associated with putting on a concert, would anybody come? Or would it just be another “party” where I walk away a thousand dollars more in debt? I’d love to do something like this in a place like Minneapolis, if there were enough people to support it. But my past experience has me doubtful.
So, I’m open to your suggestions! I’m open to your ideas! I’m open to your offers! I value your opinion, and I admit, at this point I’m pretty desperate. I have to turn this around in a couple months or walk away, downsize to nearly nothing, and find a new career (something difficult and awkward to do for a middle-aged guy like me who has run a music business since graduating from college).
I look forward to your feedback and suggestions. I’ll answer as quickly as I can. Don’t think I’m ignoring you if it takes a few days to reply. I want to take every opinion seriously.
I’m also going to send out a poll from Yahoogroups about the convention idea, just to see what kind of response I get (if any). Watch for that and share your opinion. Here is a link to the poll, in case you don’t get an email:
http://launch.groups.yahoo.com/group/a_different_drum_update/surveys?id=13024144
Thanks for your valuable support! And of course, I appreciate your CD orders! Believe it or not, every single one is something of a life saver and seems to give A Different Drum “one more day of breath,” so to speak.
-Todd
One thing that I don’t know if you’ve looked in to. Rather than selling it to an individual, have you approached a major (or even minor) label?
Comment by Gandalfe — July 17, 2010 @ 12:19 pm
I’ve bought a lot of music through Fixt, which seems to be growing and it basically only does mp3s with a few albums getting CDs pressed. They’ve signed deals with several other labels to distribute their music through Fixt’s site. You might see if they would be interested in selling albums from your label.
- Mike
Comment by Mike Driscoll — July 17, 2010 @ 1:43 pm
I think you should put all of your “free” time into practicing the skits on Win it in a Minute. Then you and I could go on the game show and win a lot of money! Bingo, no more problems!
Comment by Myra — July 17, 2010 @ 4:04 pm
I love Todd Durrant and still see a future for ADD but I do feel that sir Durrant\’s \"personal\" feelings towards digital music is one huge reason why the \"synthpop\" world is lost in a very active 80\’s influenced Electronic Dance Pop movement.
There was an MP3 store on ADD but Todd refused to upload any of the limited edition remixes, extended cuts and B-sides that were released through ADD over the years either as bonus disc or singles that were now out of print. He had his reasoning (felt it took away from the \"limited edition\" aspect of the release) but I always disagreed and felt Todd was saying good-bye to an extra potential revenue source when he so desperately needed revenue.
Some might say that ADD is digital since ADD albums are available through I-tunes and Amazon but there is still so much more that can be done to create a better online presence. Not just for ADD but for the entire synthpop community [This is a \"full time\" gig for you but I would never guess it by visiting your site, this blog or the youtube channel]
ADD use to be the source for 80\’s influenced electronic Pop [synthpop], What happened? Why did it stop? The music is still out there, seems now more than ever. Why isn\’t ADD letting synthpop fans know about the latest free download from Cause and Effect. The latest single from Daybehaviour [new music in 6 or 7 yrs!].
Why isn\’t ADD telling fans about amazing new talent like The Aeons, The Twelves, The Aikiu, Anoorak, Cassette Kids, Chew Lips, Human Life etc….
Why isn\’t ADD talking about the latest albums from Scissor Sisters, Goldfrapp, Crystal Castles, Two Door Cinema Club etc…
Why isn\’t ADD our news source pertaining to the new Iris, B!Machine, Cosmicity and Echoing Green albums?
Instead of investing on a get together, use that money to revamp your site [get ready for hosting tons of music]
Use your connections and feed the hungry fan base [its okay to ask for help to update the blog, revamp the site]
Take Advantage of your back catalog [find new artist/producers to retouch, redo, and remix your history] as you save up to pay off debt.
Send these new tracks/reworks to active blogs in high quality audio formats. Get people talking [outside of your current community]
Bring back the MP3 store to ADD.com, but don\’t sell whats already on Amazon and I-tunes. Sell the exclusive material you never allowed yourself to sell for personal reasons. You can repackage, re-release and revive the artist that made ADD the synthpop source so many years ago.
If there really is only a couple of months left; if this really is your full time job, make it worth it.
A former \"addict\" signing out.
Comment by overbyte — July 18, 2010 @ 10:01 pm
Please don’t take this the wrong way, but it’s very possible that your business model may no longer be viable. The business has changed so dramatically that unless you’re willing and able to change with it, it’s not going to be a good thing.
These changes are not limited to the music business. Nearly every business is this way. I work in the IT field and have seen big shifts as jobs are moved offshore as companies try to save money and improve their margins.
You can’t fight technology. If you do, you will eventually lose.
One of the nice things for you is that in this new stage for music, content is king. As you’re not just a reseller, but also involved in getting content created, you have an advantage over the regular music shops that have been quickly disappearing over the last several years.
The question is whether is still value to the content that you own and whether there is a way to sell it in this current business environment.
Don’t get me wrong. I love what you have done with the business that you’ve built over the years. But while it was cutting edge when you started, it isn’t anymore. The idea of selling CDs is just outdated now. Not for me personally, but for most of the public you’re trying to reach. My suggestions:
1) Embrace technology: Sell your products in the ways your customer want to buy it.
2) Focus on your content: That’s where your value as a company resides. You may not be able to move CDs as you did in the past, but that doesn’t mean there aren’t people out there that want to hear the music. The more you scale back release of new material, the more you diminish the value of your company. Maybe you can’t afford to continue doing business as usual, but that music needs to be released by someone. If not you, your bands will find another way to do it.
3) Think about value add: People don’t buy CDs in the volume they did in that past. Many prefer downloads now. Your advantage as a content creator is that you can create unique products that cannot be easily replicated by a bunch of MP3 files. So what exactly does this product have to be to bring back those that may only buy downloads? Well, that’s the big question. Not sure I can give you that answer. But as a creator, you are in the position to come up with those ideas. As a reseller only, costs will just continue to go up and margins will go down.
Best of luck.
–David
Comment by David — July 19, 2010 @ 4:04 am
I did figure I’d hear comments about digital media and the change in the market. I have talked quite a bit about this before. As mentioned in the blog, I did make an MP3 store on ADD, in a simple, beta-style approach. However, the sales generated there were rather small. Most digital shoppers have their preferred sources, most of which carry all ADD label releases. Major stores like iTunes, Amazon, Rhapsody, Napster, etc. all do what they do so well that there isn’t much point in trying to duplicate their efforts. It is like trying to compete with Amazon.com by selling Lady Gaga or other larger pop stars– it costs me more to buy their CD’s wholesale than Amazon sales them retail, so there isn’t much point.
When it comes to digital downloads, I don’t think that ADD has failed to embrace the technology. As I’ve said, our releases are distributed digitally through most major sources worldwide, including in Europe, Japan, Korea, or anywhere else you want them. The digital download market has undeniably changed the profitability factor. Instead of buying an album when somebody hears a song they like, they buy only the song. So, instead of making a few dollars, the sale generates a few cents in revenue. Do that over a few thousand times, you you start to see the big difference in cash flow. Plus, 90% of the world’s digital music fans get their music for no cost at all. That is fact none of us can change. People prefer a product at the cheapest price, and the cheapest price for an MP3 is free. I don’t argue that there shouldn’t be a digital market. I simply surrender to the fact that a small label and small bands can’t make much money selling that way. I know for a fact (because I happen to work directly with a lot of bands) that releasing a new single digitally may result in a net income of $100 over the course of a few months. Cha-ching! Nice to think somebody is buying it, but hardly a “living” if you know what I mean
Concerning other comments about web design, etc. I did spend thousands and thousands of dollars building ADD’s website from scratch. Is it out of date? Yes. I couldn’t afford to keep paying to update it. Again, money has to come from somewhere. Once a company is far enough in debt, something has to go. You can keep spending more to try to pull out, but that also can be the death sentence if the investment doesn’t generate more income. I admit, there are probably other business-savvy folks out there who do have the investment capital and ability to give it new life. That’s why I’m happy to pass it along to somebody who has those bid ideas, available money, and time to do it.
-Todd
Comment by Todd — July 19, 2010 @ 7:45 am
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Comment by EulaDavid — July 20, 2010 @ 4:56 pm