 What's up everybody, once again, it's Brand Man Sean and this video is brought to you by brandmannetwork.com because I signed myself and it's Wednesday people, so we're talking about music, entertainment and pop culture from a business perspective. The concept of today's video is something I covered a couple of years ago at this point, but I have to do it in more detail because of some things that I'm going to be talking about pretty soon. Now let's start with this story really quick before I just state the concept. Have you heard the story of touching the void? If you haven't, it's the story of a man who had a near-death experience in the Peruvian and these mountains. And what's so important about that is when that book came out, it actually did pretty well. It did decent and it had some decent critical acclaim. However, it didn't do great, but the important thing to note about this is 10 years later, a decade later, a book called Into Thin Air came out. And when that book came out, with a bigger platform and bigger push, touching the void actually started to do better. And then next thing you know, people noticed it. The sellers noticed it and they started to put touching the void next to Into Thin Air. They start placing the book just like let's say if you were in a checkout aisle and you'll see those magazines that are right there. So let's say wherever that magazine is, they put this other magazine next to it. And then they watched those sales rise, rise and rise until eventually touching the void, the book that had dropped and didn't do all that great. Well, it did decent, right? 10 years later, actually doubled the sales of Into Thin Air and even exceeded doubling those sales. Why is that so important? Because of something called the long tale that every person who is trying to sell a product or just a song, which is still a nature of a product, has to be aware of today in the digital age because there have been a lot of myths that have been created about businesses or some things that actually have been true based on the past limitations. But having the internet has changed the game completely in a lot of times. The thinking that we approach our business toward today is based on past models. So I'm going to say this before I even get into explaining some of the things. Always be aware of the business models that people are speaking from, right? The context when you take advice because they might be taking advice from a business model that doesn't really apply to your particular situation or they might be speaking from that situation and you should analyze it from that particular situation. And then say, hey, okay, I might not fit that model, but can I find a model that works for me? Now, understanding the long tale is simply understanding this. We're in an era where just having a hit song or just having a hit product, right? Doesn't mean that you cannot make money. Why? Because distribution has lowered in so many ways. So whereas you might have had to pay for all this distribution to get your product to people, let's just say, you know, music, obviously, and you might have had to get CDs pressed and all these things back in the day. Now you can just put it online. It's cheaper. So since the price is cheaper to even get it to people, because it might not be a hit song, but it can get some profit, even if you spent $10 and only made $10. What's important about that part is though, are a few things that are completely going to change the way that you not only think about how you can create a business model, but just how you perceive and understand the quality of music as you know it. And of course, this applies all around. So what I mean by quality, let's get into that part before we get into the mathematics of how it breaks down business model wise. Well, one of the things that people have assumed oftentimes is the masses love this horrible superficial type of content, right? The hit movies, they're superficial. They're not deep or the hit songs, they're all about the same subjects. They're not deep, but that is not entirely so. So many of us have our own preference in some category. We might kind of be that highest or lowest common denominator, right? We might be that person who likes the basic stuff. But in a lot of other categories and spaces, we do also like the more particular things and that goes for every individual. So when you actually play that out into the marketplace, what that looks like is there's a lot of content that we think, yo, this should have way more views than this other content. It's way better. It shows better technique, right? It has more substance in it, whatever we're judging in terms of quality. But the fact is, we identify with this particular thing and then start to judge the masses and how that quality looks and why those things are all the same and why we keep hearing that. But it's not necessarily a result based on everybody's taste. A large part of that is actually people's awareness. People actually underestimate the amount of effect that marketing not only has on demand, but people's taste. And what I mean by that is if you're in a hit-based marketplace, which is what things have been prior to the internet because the limitations of physical space, right? To make the most amount of money as a business, you need the hits, right? You don't have the space to have a lot of content that doesn't really perform highly. And of course, as a business, what you're going to do is two things. One, try to find the product that's going to be able to reach the broadest audience and two, try to market as much as possible to this broadest audience. To one, actually let them know this thing exists. And two, sway them that this thing is amazing. So a lot of what you see is based on the fact that businesses are really trying to go through that model. So when we look at a record label, a record label is pushing those things because they're trying to maximize dollars and they believe that that's going to create the most amount of income. A proof and example of this is basically when you hear underserved audiences say that they can't get a movie made because the industry doesn't think a black movie can be profitable, an Asian movie can be profitable, or whatever segment of movie can be profitable. However, once a product is made in that space and it becomes a hit, next thing you know, it starts to open doors and more and more of these industry heads, whether it's a movie, a studio or a record label, they start to fund more of that type of thing because it's working. It's not always because they're being against a certain type of population or segment. A lot of times it's because they don't think ignorantly so that certain things can be profitable. And that's just to use as a anecdote to understand that that is how these people do approach the business. And when you have businesses actually working through this limited way of doing things and then you have consumers that are limited towards that same way of doing things, then people end up thinking that what the businesses are pushing to make the most money off of are actually based on the taste of most of the population. That is not so. So understanding that will actually put a lot of artists in a far better position. Now the more difficult part of that is the fact that, yo, when these companies are investing so heavily and pushing something as a whole, even if people aren't necessarily judging quality off of that initially, it does have some influence that you can't ignore in creating this familiarity with the public and public starting to believe that this is what they like, right? And they're starting to become accustomed to that and they judge other music and other types of products based on that bar. But it doesn't again mean that's the end all, be all for quality, which means your product and your music can have some sort of space. So this is where we go into part two, which is understanding that business model and just looking at straight up economics, right? Because in part two, we have to understand that once again, with the internet, there's unlimited shelf space. When you're in a grocery store, you only could put so many products in that space. When you're in a record store, you can only put so many records in that space, right? You could put so many CDs in Walmart, but we're on the internet, we could just keep throwing, throwing, throwing more product if it's a digital product, like more content, more movies and songs into the internet. And there's a very little low overhead to actually maintain it and to keep it there, where there's a huge price to keeping physical inventory in the real world. So with understanding that though, now you can look at the fact that the long tail has opened up. Those hits that people currently looked at to make the most money actually does not outweigh the long tail. Now from a certain business model, it might make sense to keep focusing on hits, focusing on hits, but there's actually a bigger marketplace when we actually look at the independent marketplace, when we actually look at independent movies and so many of these other types of niche content that might not be the most common denominator when we're trying to meet the masses, but literally by income or the amount of money that it can generate, it's a bigger marketplace and it reaches more people, it's just harder sometimes to figure out because you have to find the niche. But now, once again, because of the internet, you can look at your own music in that model because just like how we talked about the book and how that new book, that second book, Into Thin Air actually was a completely different author but it still generated sales for the prior author of Touching the Void because it brought interest into that whole category. That same thing works of course as many people have started to figure out when it comes to songs, right? They hear a new song that you came out with that finally blew up and then they start to discover the other music and then you might have an even bigger hit in your old music than this new song that finally started to take off. All that stuff people are really becoming aware of but when we think about a business model, right? The actual money being generated once again, you might have a hit that has 10 million views, right? That might be a hit for you. However, that doesn't outweigh somebody else who might have 100,000 streams on 100 songs. That equals 10 million. So once they get 11 songs with 100,000 streams, they have more streams than that one song and then you might have somebody else that has 1,000 songs with 10,000 streams. They don't have a hit song at all but now they still have the same amount of streams and if they keep going, then their volume is still gonna exceed your amount of streams and likely your profit depending on how they build their model out, right? This is something to really keep in mind. Of course, monetizing fan bases is a huge part of building out your business model but the internet has also opened up different ways of monetizing a business model. We've always looked at things like merch and concerts and things of that nature but the internet also allows you to drop ship merch and the internet also allows you to do things like virtual concerts and have other virtual experiences and games and things like that that people hadn't counted for before, right? So there's so many different ways to approach it that you don't have to be restricted to the idea and thesis of a business model that doesn't necessarily even apply to you. So artist issue and their conflict with this business model still though and why so many people haven't really got into it is the fact that, right, artists are focused on being liked while businesses are focused on making revenue and this business model is high volume and let's make money and it makes sense for a record label because back in the day where they would lose a lot of money on artists that they've invested in but don't really still hit now, well, they can make a lot of money on the long tail and the short end, when we're talking about that hit making artists but for an artist, they're thinking I want to be the hit making artist and it's almost this emotional connection or this emotional idea based on the dream that we see of becoming a big artist that actually is the conflict with the business model which is more so, hey, my music is commoditized. I just want people to like these songs and I can keep throwing them out. I don't have to have a lot of hit songs or have a huge fan base that necessarily even loves me as an artist as long as the songs are churning out money, then I'm good. That's a different way of thinking about your business but you don't necessarily have to be that as well because there are companies that have completely commoditized music. We're just gonna put out a lot of different music, we're gonna do sync deals, we're gonna have it do whatever it does and we're not worried about making hits, we're just worried about sheer volume. If something pops off, cool but for an artist, you can combine the two. This is when we talk so much about getting into a niche and when we get into this niche, how do we approach that? Okay, understanding that I can fulfill this niche again and again and again and when I continue to fulfill this niche, I might have a very loyal fan base that listens to 100 of my songs 100,000 times, right? And now what does that money add up to? Or I might have a loyal fan base, right? That listens to 1,000 of my songs 10,000 times. Whatever that looks like, just understand that if you can find your pocket and hit those same people and double down, it'll still amount to some of these bigger companies or these bigger people's revenue. So monetizing doesn't necessarily have to look like blowing the song up. And this is where we start to get in conflict with that model. Again, where people are telling you what? I gotta have a hit song or I gotta blow this song up to have a fan base as opposed to working, working, working to get a slow roll. It's understood, but again, if you understand the business model you wanna go to, then you have to make different decisions because those are completely different paradigms. And there's some people who do a hybrid of both, but understand the business model you're trying to go after because that's going to dictate how you perceive people's advice, how you perceive so many opportunities that come and how you look to monetize the things that you do. Understanding this will actually help you be able to make a lot of money without having a hit product or hit song. Understand that this is the model that companies like Netflix are built on. That's why they buy so many TV shows and series. And if you check it out, you'll notice there's a lot of content that probably isn't that great. There's a lot of bad movies on Netflix, but they're paying money for them. Why? Because they know the turn of profit doesn't have to be huge if I have a high volume. And now all I need is more storage, which is far cheaper than having to pay for a shelf space which is having to create this opportunity cost. If I have this thing that isn't turned a good profit in the shelf space, then I don't have the opportunity for this other product to be there that could turn a far bigger profit. These companies do not work like that. You can work like these companies. You don't have to work on the old record label model. You don't have to worry about first week sales. You don't have to worry about even a lot of certain politics that come with approaching certain models in so many other traditional paths that people paint out because the long tail and the internet has opened up these possibilities for artists. You're able to find this niche. So again, if we're an artist that might be in conflict with certain types of decisions and thinking I understand, but for somebody who isn't an artist, especially, right? The person who's running the record label, that might be a better decision. If you're trying to build up an indie label, this is something to look at. As if you're managing, this is something to look at and considering. It should be easier to flip into some of this mentality in some way. But understand, of course, there's other people who work on a different paradigm. TDE, top dog entertainment, they definitely worry about quality control. Just like, well, actually, quality control music group, they do the exact same thing. When you look at the Migos and Lil Baby and Lil Yachty versus Kendrick Lamar, SZA, Schoolboy Q, it's less about a high volume, curating slower product we build and then we put our product and get a higher margin off of each artist versus let's do numbers. There's both models, they both do exist and they'll both continue to exist however, the opportunity to do the latter, the long tail model is something that so many artists now have and you don't have to be stuck in failure of a model that requires far more capital upfront, far more resources because of the availability of the access that we get to have with artists. We do the same thing with the product, $10, a hundred times over on one product versus $200 on two products. That outweighs it. You have to be able to look at economics at the end of the day if we want to be business people because the numbers, they don't lie when we talk about the money part. People use numbers to lie but the numbers themselves, they do not lie. Keep that in mind. Again, as always, this video is brought to you by brandmannetwork.com because I sign myself, if you like this video, go hit the like button. If you like it, you might as well share it and if you're not subscribed, you know what to do. 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