Brands & Merch Business News Digital

CMU@CMW: Direct to fan comes of age

By Andy Malt | Published on Friday 13 May 2016

Artists are now beginning to see the potential of operating a good direct-to-fan business, says Music Glue’s Mark Meharry. But there is still much more to be done in changing perceptions.

“Over a five year period, having direct access to a fan – an email address – is worth on average $75”, Meharry told CMU Business Editor Chris Cooke in an interview during CMU Insights @ Canadian Music Week last week. “You start multiplying that up, it becomes very lucrative”.

Fans want to buy things from artists they like, he added, but by fragmenting how they offer direct sales – by linking to one service for merch, another for records, and another for tickets – artists are often missing out. “If you are selling tickets, the products you sell alongside them can be worth $30 per person”, he said. “If you sell tickets through your website, you could be making an additional £60,000 from secondary products”.

“We’re not trying to disrupt the industry”, he added. “We’re providing another route. The best person to sell is the artist – nothing else compares. We have bands who are so successful in D2C that they have their own fulfilment centres in the UK. Enter Shikari are a prime example. They built a warehouse, and it’s now so successful that it sends out merch globally for Metallica, Rage Against The Machine and Red Hot Chili Peppers”.

The growth of the direct-to-fan industry has moved slower than many expected, given the obvious opportunities for D2C sales provided by the web and now mobile. This is largely a technological issue, says Meharry.

“To create a service where fans come to you as an artist, to buy tickets to your shows, to buy merchandise, digital content or even just experiences; to create a platform where managers can do this without any help, and to do this globally in any language, that is difficult”, he explained. “We all thought ten years ago that this was going to be such an obvious thing and easy to implement. Five years in we [realised that wasn’t going to be the case]. But ten years on, we’ve more or less got there [in terms of the technology challenges], and now we’re seeing a shift”.

That shift being a cultural thing, ie changing a mindset in the industry. “There’s a cultural shift that needs to happen now”, Meharry continued. “The technology had to come first, now it’s mindset. I’m sure I’ll still be doing conferences for the next ten years advocating that cultural shift. We just need to educate people. It’s going to be tough, but it’s going to happen”.

Look out for further reports from CMU Insights @ Canadian Music Week next week.