While 2007 CD sales were down 14% from 2006, digital downloads were up 50%. Record labels continue to struggle to develop new distribution models that take advantage of the digital revolution.

Over the last year, fans have shown they are willing to sink money into digital intellectual property. The success of digital audio in 2007 is paving the way for the comoditization of online digital video in 2008-2010.

Digital Audio is to 2007 as Digital Video is to 2008

As everybody knows, video delivered via the Internet is quickly becoming the future of mass communication. With the success of digital audio downloads in 2007, and with more people than ever knowing how to use online video thanks to YouTube, video is set to be the next major commoditization in 2008 in the same way digital audio took hold in the last 3 years.

Bands can now generate buzz with video on their MySpace pages, YouTube channels and official websites. Promoting a live concert video on these sites can greatly cut down on the cost of marketing across traditional mediums because they are footing the bandwidth bill. All the while you are hitting your target audience and giving them media in a way they feel comfortable receiving it.

Using online video sites to show off a one song clip from the concert is a great way to promote the sale of the full-length show, or the band’s upcoming album release or tour. After viewers watch the video, they will inherently want to see the rest of the show.

Having a professionally-produced concert video on YouTube quickly exceeds the mixed bag of low-quality footage from other amateur videos, immediately making your footage stand out and look even better in relation to what viewers are accustomed to seeing.

The Numbers on Digital Downloads in 2007

While Radiohead stole most of the limelight in terms of independent digital downloads of their newest album, hip-hop artist Saul Williams went the same route, offering his album for download and giving listeners the option to pay or listen for free. Lucky for Williams, his album was produced by tech-savvy Trent Reznor (Nine Inch Nails), who fully embraces the digital revolution in the music industry.

Reznor, unlike Radiohead, recently detailed the results with hard numbers:

[taken from nin.com]
As of 1/2/08,
154,449 downloaded Saul’s new record
28,322 of those people chose to pay $5 for it, meaning:
18.3% chose to pay.
[/taken]

You can take the 18% however you like, but Reznor claims the roughly $140,000 brought it did not cover all costs. Regardless, this was for a relatively unknown artist in the grand scheme of things, and little to no promotional push was made to sell more records via this method.

Possible Cost Breakdown of Producing a Concert Film

How many records did your band push of their last release? How many more do you think downloaded that album online without paying for it, resulting in your real total fan-base? Does your band appeal to people who know how to use online video? Let’s do some math…

20,000 potential sales (a modest first-week sales run for a new album for an indie label band)
@ $7.50 profit per sale ($2.50 to ship it = $10 total sale price)
=
$150,000 total budget

So we have a modest potential budget of $150,000 to work with to produce the show. We have the to take into account expenses to derive a profit.

$150,000 budget
- $20,000 for 25,000 DVD replication w/ standard packaging/artwork/shipping
- $15,000 for Titus Films to record and produce the show (a rough estimate for a bigger show)
=
$115,000 profit assuming all discs sold.

Could you offer downloads of the show as well? You bet. Bandwidth costs would be about 5 cents per download at high-quality, and 1 cent per download at lower quality. Maybe even give people a discount at $5 for the download since there is no manufacturing overhead and they can instantly pay and watch it.

You are then sitting with $115,000 profit. Of course some parties have a stake in that profit, but it’s more than you had before producing the show.

Compared to producing an album, producing a recorded concert is relatively inexpensive, with just as much potential sales revenue. While you won’t make any additional profit from licensing fees of the show, you will be pushing more product into the market for the band and giving fans a more immersing media experience.

Producing the Show

Ready to get filming? If you have a crew ready to go, check out our guide on How to Film a Live Concert, or simply give us a shout about how we can help.

Categories: Concert Films, New Media, Titus Films