I’m a musician.
I make my living touring and writing. But these days,
an artist must have one hand on a guitar case and the other on a brief
case. So, I decided to write about the one business principle I knew
very well:
The American economy wasn’t built on money ... it was built on logical barter.

The music business, believe it or not, is a billion dollar global
industry based on smart, logical barter. The internet has created a
worldwide economy generating several billions of dollars based on one
simple word: Free. That word will cause the panties of most traditional,
brick-and-mortar, business minded Ayn Rand-followers to bunch into a
major economic wedgie. Here’s the truth: Barter is not free. When merged
with capitalism, barter is the most effective form of economics.
‘Free’ causes financial transactions to happen.
Need examples?
Let’s look at Yahoo, AOL, Explorer, Google and Facebook. They allow,
no, they spend millions, trying to get the public to use them for free.
FREE. Why give their creation away for free?
Because … drum roll, please …
loss makes money.
The business model is simple: the more people they can attract to their
domain, the higher the odds are people will buy something. Whether it’s
clicking on an ad link or responding to a pop-up ad, advertisers pay
them dearly because of their audience. That's why I like Folk-Book, it's
at least honest about what is happening. Free is the new business model
of the global economy. Free works. But then it always has.
Consider your grocery store: Krogers buys milk at nearly $3 per gallon
but sells it at a huge loss for $1.89. Why? If the board of directors
looked simply at the profit-and-loss of the milk shelf they would have
people fired. But they don’t because they are looking at the entire
financial picture. Everyone needs milk and low priced milk draws
customers into the store. Sure, they are losing money on milk ... but
they put the milk in the far back corner of the store forcing customers
to walk through a myriad of isles to get there. And what do they do as
they journey through the store? Fill their carts with high profit items
they didn’t realize they needed. The loss causes people to buy stuff.
That’s how loss makes money.
Pepsi and Coke have done the same thing for decades. Anytime they have a
new product, they set up a table at Krogers and what do they do? They
give cups of it away for FREE. They call it “sampling.” Television
networks have made billions by spending millions to get you to watch
their channel … for free.
And, thus, the long standing
business model of the music industry. An artist goes to a radio station
for an interview, for FREE. The radio station is handed their new CD,
for FREE. The radio station plays the song, for FREE. You tune in and
hear the song, for FREE. Why? Because, eventually, if you hear a song
for free long enough you’ll become a fan. If you’re a fan you’ll buy a
ticket to the concert and buy the ding-dang album.
And that’s how FREE makes money. FREE is
logical barter, and it works. FREE is the most powerful business model
used to attract an audience. And where the audience goes, wallets
follow.
WoodSongs was conceived, created and is broadcast as a
global, free barter with the sole purpose of attracting the biggest
audience possible. The crew works for free. I work for free. The
engineers and stage crew work for free. Local hotels put up the artists
for free. Local restaurants donate meals the day of the show. Highbridge
Spring Water sends water for free. American Recordable Media burns and
prints the CDs we send to radio for free. We give the show to WEKU and
WUKY for free. The other 500+ radio stations get the show for free.
American Forces Radio Network gets the show for free. Insight
Communications gives us use of the TV cameras for free. We send the show
to KET for free. Public television stations from coast to coast get the
TV series for free. Heck, even most of the audience comes to the show
for free.
The artists, whether Big Bad Voodoo Daddy, Exile,
Peter Yarrow, Judy Collins, Norah Jones, Blind Boys of Alabama, or
Emmylou Harris come for free. FREE.
Any why?
Because WoodSongs has nearly two million listeners, that’s why.
Two million wallets a week listen to the show, and a lot of them buy
the CDs of the artists on our stage. Most travel and we invite two
million people a week to come visit Lexington, Kentucky. We tell two
million people a week how beautiful the Lyric Theatre is.
“Free” has huge financial value. “Free” turned Facebook into a billion
dollar company. “Free,” saves Lexington tens of thousands of dollars a
year in marketing costs and generates hundreds of thousands of dollars
in income. I’ve turned over emails and letters to the Lexington
Convention and Visitors Bureau from fans all over the world who visit
Lexington because of WoodSongs. I recently read a letter from a family
who used to watch us on PBS-TV in Oklahoma and moved to Lexington
because of it. One of our crew members, Mim King, moved to Lexington
from San Francisco because of WoodSongs.
Sent: Sat, Oct 27, 2012 8:57 pm
Subject: My life on woodsongs
Hi Michael,
I'm
at home listening to Woodsongs and I can’t believe how closely tonights
show is woven into my life: I am a native of Grand Rapids, MI. About 2
years ago I began listening to Woodsongs on Bluelake Public Radio and
just over a year ago I decided to undertake a life adventure and moved
to the beautiful city of Lexington, KY, home of Woodsongs and the heart of the bluegrass. Thank you so much for such terrific music to me wherever I live.
Joe Wynia>>>
This business model has tremendous value to our new home, the Lyric
Theatre. That’s why they wanted WoodSongs there, that’s why they
partnered with the show … and the packed theatre on Monday nights show
it was a smart decision. This was accomplished even though the Lyric had
been struggling, unfairly, with a less than positive public perception
problem. The general public perception of the Lyric was:
• it’s a “black” theatre
• it’s in a bad neighborhood
• it has no parking
• it’s not part of downtown.
The truth is the historic Lyric Theatre is a state-of-the-art,
multi-cultural community facility. The truth is the neighborhood is
wonderful, friendly, well lit and anxious to serve as a positive part of
Lexington. The truth is there is plenty of parking for our fans at the
Lyric, over 250 parking spots within a couple blocks. The truth is
downtown has grown and so, yes, the Lyric is now “downtown.”
Another truth is that the Lyric wasn’t thriving as hoped. It
opened a few years ago with great promise … and has struggled since.
They had little on their schedule. It accelerated the perception that no
one was using the Lyric, no one wanted to go there, no one cared. Well,
our all-volunteer run project cares. Our audience cares.
During the first few weeks of WoodSongs, we attracted over 2,500 fans
into the main hall of the Lyric Theatre. Ninety-nine percent of them
have never set foot in this beautiful hall. To a person, all have been
amazed that their perception of the Lyric was nothing like the very
positive reality it proved to be. The public loves the Lyric. This happy
and impressed audience will change the negative perceptions plaguing
this beautiful venue and help nurse it back to health. “People in the
seats” will protect the $7.5 million dollar investment the City
entrusted to rebuild this hall. Whereas: a dark stage is a surefire
recipe for disaster.
Our partnership with the Lyric leans
heavily in the Lyric’s favor because, unlike WoodSongs, the theatre can
turn this relationship into cash. WoodSongs is helping make the Lyric
attractive to national and regional presenters, who will, in turn, rent
the theatre. WoodSongs is helping readjust the public perception of the
theatre so the presenters have a fair shot of attracting ticket buyers
to the shows they book.
And like I said, barter is not free. It
cost our show thousands of dollars we didn’t have to move into the
Lyric, and at great risk. We had to somehow overcome the negetive public
perception of the Lyric and still get the audience to show up. We had
no guarentee this would happen. Even so, WoodSongs delivers an
advertising package to the Lyric Theatre worth well over $750,000 a
year. The Lyric gets this marketing package and our audience for free at
a time when it needs it badly. WoodSongs brings a marketing and public
relations bonanza to the Lyric they don’t have to pay for. I’m certainly
not getting paid. Neither does anyone on our amazing crew.
WoodSongs is taking a dark, unused theatre on the night they are
normally closed and turning it into a goldmine for Lexington by
attracting tens of thousands of fans each year through the doors of this
beautiful concert hall.
Free is good for the Lyric because
where there is an audience, there are wallets. And where there are
wallets, there are concert producers and event organizers that will fill
the Lyric’s schedule all year long. Soon, the Lyric will be the most
popular theatre in central Kentucky. I would even expect some smart
entrepreneurs to open up stores, coffee shops and cafes near the Lyric
side of downtown, taking advantage of this audience and helping downtown
grow in that direction.
This is a good thing. And only by establishing an audience around the Lyric Theatre will that happen.
Oh, sure, there’s some grumbling. Often it is from traditional business folks who see the packed theatre just convinced WoodSongs is rolling in money.
They are unaware that the majority of the audience comes FREE. They are
called WoodSongs Partners and it is the smartest plan we have ever put
in place to fill our theatre on a Monday night.
To them I offer this:
WoodSongs’ partnership with the Lyric and our WoodSongs Partners is the
ultimate “value-for-value” barter. WoodSongs is the “Rearden metal” of
downtown. Heck, even Ayn Rand would be proud. Our partnership is based
on the same model that made Facebook and Google successful. It works for
the City, the audience, the Lyric, the neighborhood, the show, the
artists, the Commonwealth and our volunteer crew. WoodSongs is uniquely
positioned to offer a partnership like this, and the Lyric is uniquely
engineered to make this partnership practical for WoodSongs.
The real winner, ultimately, ends up being the City of Lexington.
To be clear, if the Lyric and the City follow through on the
opportunities our audience offers, this audience will help protect the
$7.5 million dollar investment the City spent to reopen this historic,
legacy theatre. Our audience is helping make the Lyric viable and
exciting again. Our audience is proving the Lyric needs to be, deserves
to be, preserved, seen and used by the community.
This is why I believe in the value of volunteers, of musicians donating a concert to a school now and then, for artists to step up and meet their audience, even if it's free. Because it works. Every artist should be willing to "sample" their songs and performances, yes even for free. These are often called "benefits" or promotional appearances. If any artist gets lost in the tiny world of "no pay, no play" they will soon lose their audience, in turn their market, in turn their living. Artists should be consumed with reaching their audience, not getting paid. Ultimately, that is the most financially rewarding market plan because, once you find your audience, you are, in fact, set for life.
And stay
tuned: If WoodSongs successfully converts to high-definition television
while still at the Lyric Theatre, this formula will more than double in
value. Imagine Lexington hosting a worldwide broadcast seen in over 125
million USA TV homes across North America from the stage of the
beautiful Lyric Theatre in historic Lexington, Kentucky.
And THAT would be something to sing about.
Michael Johnathon
folk singer – log cabin dweller
michael@Folk-Book.com