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Wednesday, December 2, 2009

TechN9ne’s Success leads to 11 million dollars

  101 Distribution - We Are Music Distribution.

Check out the Billboard , July 4, 2009 issue.

The interesting thing is that there's really nothing that groundbreaking at all in Tech N9ne's operation. It's Business 101. Only in the fantasy land that is the entertainment industry could the ideas of "every dollar invested needs to make two dollars" and "everything is driven from the fan's point of view" be considered innovative. In fact, the beauty of TechN9ne's operation is that it's rooted in the basic ethos of hard work and common sense. And most importantly, they actually execute it.

In general, Strange Music, which is the company controlled by Tech N9ne and his business partner Travis O'Guin, is the model of a 360 entertainment venture, which is housed in a 18,000 square foot facility in Kansas City, and includes a label, publishing, merchandising, booking and touring business. All of it is built upon the music and touring that have made Tech N9ne one of the least exposed, but most profitable rappers. The Billboard article revealed that in 2008, Strange Music earned more than $11 million dollars.

How does he do it? Touring is certainly the cornerstone– he does more than 200 dates a year. Just the way the textbook outline says it should, the touring drives the record sales– which are significant, with over 1 million sold on 2008's "Killer". Then there's the merch, the licensing, and the publishing on top of all that. Sure– it's impressive. But not exactly something that's never been done before. By now, most of the independent artists out there are probably asking themselves "What has he got that I don't?" Here are four things that Tech N9ne has learned, that many artist/entrepreneurs have not:

1. Patience

This is not a fast road to success. The journey of a successful independent artist is a very long and winding one. Tech N9ne survived two major label deals, numerous failed independent ventures and abandoned business partners. Not many businesses get their plan right on the first try. You have to be willing to come back again and again, learn from failure, reinvent the model and keep moving forward. Tech N9ne is 37 years old, and just hitting the prime of his career. Pretty unusual for a rapper.

2. The Ability to Get Reactions

As a self-described "weird rock alternative warlock with crazy hair, a painted face, who raps backwards", Tech N9ne makes a strong impression– and that's something you can build a business on. You can not build an independent business on music, performances or artist identities that are passive– to which audiences have no great emotional reaction, either positive or negative. There are thousands of bands that play 200 anonymous dates a year, and have for twenty years. And every night, the audience applauds politely, and immediately forgets about them. The only way the indie model works is when the music and imaging are so dynamic, or at least so perfectly in tune with a very particular audience ("jam bands" being a good example), that they inspire a passionate response. If you're playing 200 dates a year, but your Myspace site has 200 friends and you're selling 1000 records, you're not reactive.

3. A Place To Call Home

Tech N9ne's success is strongly rooted in his core market within the Midwest. Very wisely, he built his following in a place where the competition was less challenging, and where he could get a foothold in the larger marketplace. His strength in one part of the country allowed him to bring a success story to other, more difficult markets. Too many artists think that being outside of a major market means they need to relocate. In fact, that small local market may be the best asset they have, provided that they are able to build a strong core audience there. Likewise, too many major labels spend a fortune in promotion costs trying to take an unknown artist and break him or her nationally, in every territory at once. Find one region that works, and then spread it out slowly.

4. An Ability to Control Costs

The other advantage to basing a business in a place like Kansas City is that the costs are a fraction of what they would be in a major market. Eleven million dollars a year in earnings is very impressive, but it doesn't pay for the Universal Music office in midtown Manhattan. One of the major problems of the music industry is not that lack of earnings, but the fact that the costs are outrageously, and unnecessarily high. There is no inherent need for major labels to be housed in the center of the most expensive cities in the world. But that's where they are, and consequently, they find it almost impossible to make money.

In the same way, many independent artists are seduced by the idea of trying to give the impression of power and success, and wind up wasting allot of money on unnecessary offices, too many employees, or inflated production costs. Tech N9ne's business runs on inexpensive office space, interns, street team promotion, and careful control of the finances. If the music is reactive and you're building on a solid local following, there shouldn't be a need for huge expenditures. All it takes is patience and follow-through.

The growing DYI approach to the music industry is not for everyone. Many artists try it, only to find that it's more work than they ever thought or that they simply don't have any of the skills they need to run their own business. Without a doubt, it is extremely labor intensive, challenging, slow and decidedly lacking in show biz glamor.

But it's not a mystery. There's no secret method that Tech N9ne used to build a successful business. It all comes down to making smart decisions instead of self-indulgent ones, caring for the customer rather than the corporation, and pulling in fans, one by one, show by show, every time you play. "We're Wal-Mart", Tech N9ne has been quoted as saying. "There's no Warner Bros., Def Jam or Sony in the Midwest, so we had to build our own." Good thing he did.

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