The Fix

Kevin Kelly, the founding executive editor of Wired magazine, consistently adds insight on how to cope with our rapidly evolving digital culture. Since survival in the “long tail” environment is a major concern of indie artists, it is not surprising that Kelly’s web-article on “1000 True Fans“, first posted on March 4, 2008, has gone viral in the blogosphere. If you are not part of the group that caused this phenomenon, you should certainly read the article now because it is relevant to you as a passionate stakeholder in the future of music.

I view with wonder both the adulation and controversy created by Kelly’s article. Its title, “1000 True Fans”, is only a metaphorical benchmark, yet it is precisely because it is a powerful and easy to grasp symbol that many fail to get Kelly’s basic premise, which is reflected in his simple and true statement, “Direct fans are best.” The key word to tag here is direct.

Kelly frames his 1000 True Fans formulation as follows: if your True Fans (and 1000 is a feasible number) spend one day’s wages per year of, say, $100 in support of what you do as an artist, that sums up to $100,000 per year–which is a living for most after deducting modest expenses. Kelly stresses that the key challenge for an artist is to maintain direct contact with their True Fans who can provide them with a living through multiple revenue streams if they “cultivate” the “direct support using new technology”. These “diehard fans” will be surrounded by “concentric circles of Lesser Fans.”

While Kelly’s perspective certainly resonates in broad terms, $100,000 per year would be a dream come true for most struggling artists with day jobs and who are on the verge of giving up on their dreams of making any money at all. The contra-Kelly view that $100,000 per annum is not an easy task to achieve (in acquisition or maintenance) is well presented in Scalzi’s article on “The Problem of 1000 True Fans“, which artists and music fans should also read. However, most critics overlook the important point that Kelly uses the “formalized” term “1000 True Fans” to represent a process or path rather than a specific result. As Kelly states, the “actual number is not critical”, it’s the “mid-way haven” where you “make a living instead of a fortune” that is “a much saner destination [for artists-in-the-making] to hope for”.

So let’s take Kelly’s notion of using technology to obtain the direct support of True Fans to find a good “home for creatives in between poverty and stardom” and break it down into some workable baby-steps first. That is, before artists give up their day jobs, let’s look at the process to make, say, $1000 per year, to see if we can find the “sweet spot” of focus as artists try to create aesthetic values that should, somehow, generate a return commensurate with the value created.

First, consider the following range of possibilities on how to make a thousand bucks. All of these formulations are based on some simple mathematics and immutable economics that markets clear according to supply and demand for value created:

1.) 10 fans x $100 = $1000 [this reflects on a smaller scale the “one-to-one business model” of “direct contact” that Kelly favors to acquire True Fans, defined as “someone who will purchase anything and everything you produce”.]

2.) 100 fans x $10 = $1000 [this reflects the “one-to-few business model”, being the inner-circle of Lesser Fans in Kelly’s formulation of “concentric circles” on their way to becoming True Fans willing to part with more money as more value-added direct connections are made. NB: this was the “album-centric model of the major labels (multiplied by millions of fans rather than 100) in the good ol’ days (or bad ol’ days depending on your perspective).]

3.) 1000 fans x $1 = $1000 [this reflects the “one-to-many business model”, being Kelly’s concurrent process of nurturing “many more Lesser Fans” as you acquire True Fans. NB: this is the core of the “one-price fits all” iTunes model currently pushed by Apple (multiplied by millions rather than 1000) but morphing as Apple makes its real margins on iPod sales.]

4.) 10,000 fans x 10 cents = $1000 [this reflects the “many-to-many business model”, that Kelly suggests may be higher up “the narrow and unlikely peaks” of the long tail. NB: this “marginal pricing to zero” is essentially the environment of “music for free” that is currently forcing artists to search for other business models that generate, somehow, returns commensurate with value extended.]

If you have earned your Master of Business Reality, you will note in the foregoing formulations the countervailing trade-offs between generating “high margins” ($100) and “high velocity” ($1) as the primary revenue driver. But, let’s face it, margins vs. velocity is only a theoretical framing exercise for most artists. It is exceedingly difficult to get anyone to part with a hundred bucks, except maybe family and close friends. Equally, when artists are just starting out, it is difficult to get a thousand folks to part with a buck. And we know that even when downloads are free, an artist will likely not get 10,000 people to take them. Where then, indeed, do you find the “sweet spot” of your focus if any and all of the foregoing business models seem to be difficult to achieve for artists just getting started or artists who have always struggled to make a financial breakthrough? I believe that even on a smaller scale of revenue possibilities, Kelly has the right answer.

For indie artists, the key take-aways from Kelly’s article (or what he calls the “gist of 1000 True Fans”) are his observations [emphasis added], “To raise your sales out of the flatline of the long tail you need to connect with your True Fans directly. Another way to state this is, you need to convert a thousand Lesser Fans into a thousand True Fans…the technologies of connection and small-time manufacturing make this circle [of direct contact, feedback, and love] possible.”

What Kelly is saying in his prescient and now famous article is that even within the long tail environment fostered by new technologies, there are practical opportunities for artists to make a living by focusing on “the heads within the tails” rather than the stardom of the “heads within the heads.” This is accomplished by using the power of “the very technology that creates the long tail” to establish direct rather than indirect connections. The reason this sounds familiar is that it is the very same reason we are all here.