"1000 True Fans"

I just came across an interesting analysis in a post that is now over 2 years old.

The point is that in such an era of niche-driven music, a band can survive without a record label and prosper making enough money to pay the bills and then some, as long as they have around "1000 true fans" who each spend roughly $100 per year on this band and their products. Finding 1000 people in a country so large doesn't seem so difficult, especially now that the Internet and pro tools and the like has democratized the barriers of entry into the music business. You no longer need the record label to pay you an advance and cover your 3 months of recording fees and then pile another significant amount into marketing and advertising.

And once you already build a following of 1000 true fans and several thousand more who are interested enough to buy most of your catalog and attend most of your shows in their area, there is really nothing more that a label could do for most bands...other than get in the middle, take a cut of the profits, and ultimately probably not sell many more albums for them. I guess what keeps some new artists signing with major labels is that they believe they will be that 1 out of 100 bands who signs with a big label and goes onto super-stardom, rather than just making a nice living doing it your way. And waving a big advance in front of them probably helps - the bird in hand and all that.

At this point, I should describe what the phrase "1000 true fans" means. It refers to 1000 people who are die hard fans - they get email news alerts, are probably on mailing lists or fan clubs, buy every new album the day it is released (either in CD or from iTunes, etc), drive several hundred miles if necessary to see a live show, buy t-shirts or other merch, etc, on an annual basis. They will buy the new reissued, remastered, including bonus tracks and early demos version of the same album over and over again.

Some artists like Pearl Jam, for instance, probably have hundreds of thousands of fans like this. That affords them the opportunity to do whatever they want when it comes to style and live set lists, with still enough demand to sell out arenas and make enough money to pay their bills and still live very comfortably. Pearl Jam has not signed on with a major label since their Sony contract expired earlier last decade. Instead they are releasing albums on their own label and then signing on with other outlets for distribution. For their most recent album, it was exclusively through Target.

On a smaller scale, a band like Wilco is sort of like Pearl Jam but with tens of thousands of "true fans" instead of hundreds of thousands, with enough demand to sell out large theatres. And as you work your way down the scale, you will find probably hundreds if not thousands of artists who have over 1000 true fans.

Record labels have become as irrelevant as video stores now and most everyone should cut out the middle man.