Dead by April is an up-and-coming metalcore band based in Gothenburg, Sweden. Formed in 2007, the four-member ensemble has grown in popularity significantly with the release of several albums and hit singles.
Their Facebook audience reaches over 425, 000 fans, and many of their videos on YouTube have view counts in the millions. The band has opened for big names such as Linkin Park and has toured to nearly every continent on the planet (they're still waiting for their Antarctic tour dates to be confirmed).
Read on to learn how they grew their margins quickly and easily using a Shopify store and our Marketplace app in a creative way!
The online presence for the group is built on Shopify; while a platform designed for eCommerce doesn’t jump out as one of the most obvious web hosts for music-makers, the service’s blogging and “Pages” features have allowed the band to build out a full service website to their fans.
The website provides plenty of content such as background info, upcoming tour schedules, and blog posts from the road. Merchandise, as well as albums and individual tracks, can be purchased directly from the store by supporters.
Music is a very competitive business to break into; as one of our oldest forms of creativity, it can be very difficult for the millions trying to launch careers to set themselves apart from the competition. Performers will often need to front their own cash for equipment, venue rentals, and promoter fees. Any reduction is these costs (within reason) is a huge benefit to these groups that can have very limited budgets in the early stages.
Artists also face a constant struggle with regards to distributing their works, both on CDs and digitally. Recording labels and online platforms such as iTunes, Google Play, and Amazon can take significant portions from the revenue on a given track or album. An average royalty for a $0.99 purchase is (net of fees) around 7 cents to the content creator; with huge start-up and recording costs for new artists, it can be very difficult to break-even and launch a sustainable career.
This is a major challenge for Dead by April as they make the transition to full-time music-making.
Any potential solution would need to be cost-effective and (perhaps most importantly) easy for customers to use. One major advantage of iTunes and other distribution services is that customers can purchase and check out with a song in a manner of seconds; as soon as the “Buy” button is clicked, the file begins downloading and the user can listen to it immediately.
The importance of reducing friction for customers can't be overstated; if the band's supporters don’t understand how they’ll actually be able to listen to the music and sync it to all of their devices, they'll be less likely to make repeat purchases.
Regardless of the solution chosen, the band's recording label will need to be paid a royalty for their services. This ranges within the industry, but is typically within 40-60% of the music's retail price.
Bold's Marketplace app for Shopify was built for businesses that wanted to allow vendors to take control of selling through their platform. The app allows users to sign up as “merchants” and upload their products to be sold on a communal Shopify store. This allows those merchants to focus solely on their own products, leaving the marketing and customer acquisition to the Marketplace operator.
The owner of this selling platform generally takes a commission on each sale in return for hosting these goods, with the products being fulfilled by the merchants themselves when an order is placed. Customers view products in the same way they do normally on Shopify; through a storefront personalized by each store owner to match their brand.
One of Marketplace’s more recent feature updates included the ability for merchants to offer Digital Download products. These special products are listed in the same way as any other on Shopify, but there are no physical items to be shipped to the customer after checkout.
After the purchase, the customer is e-mailed a link to download their file securely and easily. These post-purchase e-mails are also a great way to drive traffic back to your store to encourage repeat purchases.
The band and Graeme, one of Bold’s Account Managers for Marketplace, saw an opportunity to revolutionize how the group distributed their music.
Using Bold’s Marketplace app, the band would be able to sell their music digitally through their Shopify store, with tracks being instantly available to customers when a purchase was made. The royalties owed to the recording label are tracked automatically by the commissions feature.
Dead by April’s profit margin before selling music through Marketplace was 9%; this has since increased to 45% since their songs were uploaded through Shopify.
This means that on each sale, they collected 500% in additional gross profit, which they were able to re-invest in their music to help expand and grow their fan base.
How to use Marketplace to sell music
Marketplace was originally designed to give sellers the ability to upload their own products for sale through a central Shopify store. When one of these products is sold, the app calculates a commission based on the store owner’s configured rates and presents the order for payout. Once the order has been fulfilled (which happens automatically for digital products), the store owner has the option to pay the merchant directly for the sale of that item. The “Payments” screen in the app allows the store owner to display all payments owed to a particular merchant.
In Dead by April’s case, their record label is the only merchant set up in the Marketplace system. Every time a song is sold for which royalties are owed to the publisher, Marketplace records a payment required for the label. This means that monthly payouts are automatically calculated so the band can spend more time creating and less time accounting.
After setting up Marketplace, the band then uploaded their songs as this newly-created "merchant". Using Marketplace's Digital Downloads feature, the band added their song files to the product listing along with album art, a description, and variant pricing for "high-resolution" downloads.
Marketplace calculates commissions based on a store-determined rate. When a merchant-uploaded product is sold, the app deducts the commission from the selling price and totals the amount owed to the merchant. In this case, the "commission" being calculated is actually the fee owed to the record label for their services.
Every month, the band's team can easily total the payments owed to the label for music sales and remit that to them through a cheque.
Try it free
Using Shopify and Marketplace together saved Dead by April a ton of time, and they're making additional profit every time they sell music directly to fans. Our amazing support team is always going above and beyond to help merchants solve unique eCommerce challenges.
free for 30 days by checking it out on the Shopify App Store.
ANALYZING MANAGERIAL DECISIONS: iTunes Music Pricing 2 1. By offering consumers with a more variable pricing model, Apple’s Music Store can increase their revenue tremendously. According to a published article by Greg Keizer on Computer World, Apple controls 70% of the United States music downloading business (Keizer, 2010). With this large of a market share, Apple can be considered a frim with substantial market power, meaning that a raise in pricing will not cause a loss of consumers. In this case, Apple will not only raise the pricing on newer/more popular songs but they will also decrease the pricing of older less popular songs. This will allow Apple to continue to witness sales in popular songs because of their market power but begin to see an increase in the less attractive songs as the lower price will entice consumers to purchase those songs. In conclusion, Apple will see an increase of purchases in those songs that are deemed less desirable as consumers will begin to purchase them at lower costs, which in turn will increase Apple’s overall revenue.