SellaBand Business ABC: Second edition, April 2008

Dear Artists and Believers, it is our pleasure to present to you the 'Second Business ABC'. What started as a spontaneous decision to inform our community of our plans and current whereabouts back in October 2007, is now becoming a regular, twice a year fixture. An official business update. And it comes in the shape of an ABC once again. What has happened, what have we done and, more importantly, what are we going to do? It is by no means a definitive plan and certain issues are ongoing. What we do hope is that is gives you an insight about the current state of affairs of SellaBand and the direction we will be taking in months to come. Enjoy...


pologies
We begin this new alphabet with our sincere apologies. Because in spite of the serious progress we have made in growing the community and expanding the company, there is one aspect where none of our expectations and predictions have been met: the website. And everything that is related with it. When we launched the Business ABC back in September '07 we were counting on having the right resources to revamp the site and add important new features in a timely fashion. We counted wrong. We had some major setbacks in re-developing the site (including an absolutely necessary re-design of our back office and financial system, something that we have implemented, but only we get to see the result) and lack of resources. As announced in Tribune 77, we now have the means to make it all happen, will try to speed things up like crazy, but a brand new SellaBand site is still quite a few months away. Our new target date is August 15, 2008, and most of you know what special date this is for SellaBand. Until then small changes will be made (like adding some useful tools to the Forum) but nothing major. That's the way it is and we simply don't have any better news as far as the site is concerned.


eliever increase
Still our number one priority. We are now at 30,000 registered Believers which means that since the release of the first ABC the number of contributing participants has almost doubled. Not bad in six months time, but still not good enough. Therefore, growing the number of Believers will remain our number 1 priority. Branding the name SellaBand is our marketing strategy. It should seriously increase the number of Believers. More Believers = more Parts = more Artists at 50K = more CDs = more Revenues = more Faith in the concept = more Believers. See, it's no rocket science. And while we are on the subject of numbers and projections: in the last six months (again, since ABC 1), we have grown $800,000 in Parts (now totalling almost $2,000,000, including Parts that are still on Believers' balance) and welcomed a little over 2,500 new artists. What might also interest you is that the number of refunds is less than 5% of the total investments and that includes people asking their money back after the departure of the likes of Trail and Jonatan Cerrada Moreno. Finally, since October 2007 we have welcomed no less than 11 new SellaBand Recording Artists. This is an aspect of the business plan where we are way ahead of schedule;-)


oncept changes
Yes, there will be a few changes to the concept of SellaBand. Let's start with stating that we have identified four cornerstones that form the essence of our concept: SellaBand is a community based website (1) where unsigned artists try to raise $50,000 (2) which enables them to record a professional CD (3). SellaBand will then provide the right infrastructure to sell and market the product (4). The 'work in progress' tag has been used before and we'll use it again. We always said we would write the book as we go along and that is what we have been doing since going live in August '06. Now, with almost two years of experience under our belt we know what the weaknesses are and will act accordingly. The concept has to be tweaked in order to optimise the interests of all parties involved. Adjustments include: the weak dollar versus the budget, the status of the Limited Edition and the role of SellaBand as 'the Record Label of the Future', as we have been dubbed by international media. Now that we have the necessary resources we can start implementing these changes. What we find of utmost importance is that changes -as small as they may seem- are announced properly and in a timely fashion so that they can be executed without complications and people have the opportunity to respond before they are in effect. Projected timeline: Announcements on August 15, 2008. Adjustments in effect on October 1, 2008.


rowning in numbers
A lot has been said about availability of statistics and sales figures, or rather, the lack of these numbers. As stated before, for several reasons, the system was not designed to share these numbers in public. We acknowledge that this is a flaw and needs to be corrected in the re-design of the website.  Recording artists will also get access to a wealth of information and the Believers  will be able to check what's going on. Mind you, a lot of figures -especially third party sales- take a while before they become available. That should not prevent us to publish weekly, monthly and real time results in a Sales Charts, a Download Top 20 and what have you. It will add to the general excitement on the platform and give all parties involved a clear insight of what's happening. Just like it should.


arnings
Making money is top of mind, of course. Not only the lifeblood for the company, but also living proof that the concept works. Moving forward, generating a healthy return on investment for the people who took the risk to invest their money in unsigned artists is another crucial element. Lest we forget: From July 2007 until (and including) March 2008 SellaBand has allocated a total of $55.000 to Artists and Believers -enough to fund another recording in itself. And please be aware that these revenues (including Limited Edition Sales) were generated primarily with the first three SellaBand albums: Second Person, Cubworld and -biggest earners- Nemesea. As an example, Believer Thom Theunisse allowed us to share this with you: "I spent $100 on Nemesea, kept 1 album and put 9 up for sale, also through third parties. All 9 superfluous copies have been sold, from my initial investment I have received $81,68 back. That's not too far from break even and I still enjoy listening to a great album."


ifty K Artists
They are the crown jewels of our platform, but as far as visibility is concerned, haven't been treated as such (see under A). While they are recording their album(s), their Believers should be kept informed of the progression made, the artists should be more visible on the sight, and newbies should be able to either pre-order the album or, for lack of a better word, become a fan. And once the album is out the release and artist should be more visible on SellaBand itself. We have 19 Recording Artists, something we are very proud of. But where does this show on the website? Exactly...


etting the name out
Somebody suggested we invest the recent $5,000,000 injection in a TV campaign to advertise SellaBand around the world. Sorry, this won't happen. In growing a business and building a company, 5M is a healthy sum of money, in buying advertising to establish a brand it is peanuts. What we will do is targeted marketing campaigns in key markets (see under K), get our viral team up and running (see under V), continue our PR-assault around the world and enter into strong new partnerships (see under P). We want to get our name out and now is the time to do it, but we need to keep it real and only do things that make sense. Lastly, our soon to be appointed community manager and our web-team will supply you with the necessary tool to promote SellaBand and its Artists, so you too can contribute to our growth.


uman resources
This week we move into a new office. When we started SellaBand two years ago, we were four people in a small basement. Next month we will have a permanent staff of 11 people. And still we're adding new staff. A CTO, a third Music Manager, an Office Manager and expanding own web development team, including a Community Manager. Also, we are opening a London Office in June (see right column) and the same will happen in New York, later this year. We need hands to grow this company, we now have the means  so keep those resumes coming.  Take  Roy for example. Started out as a  Believer on SellaBand and now is a full time  member of the team, currently redesigning the Forum;-)

ncubator

ump the gun
Speaking of jumping... You should know by now that we're an enthusiastic bunch. And because we sometimes get carried away it has happened in the past that we have announced things too soon. Be it a new online feature or an album release, we are aware that we shouldn't announce anything before it is written in stone. As far as album releases are concerned: no dates will be set or announced until we have received all the necessary elements (final master, artwork, CD Extra content, etc.) in order to start the manufacturing process. Have everything ready, that's when we will set a release date. After we have premiered the music online, Believers should not have to wait weeks (or even months) for their LE copies.

 

ey markets
SellaBand wants to be a Global Player. This will take time. In our Business Plan moving forward, we have indicated a number of key markets for SellaBand. These include our 'home territory', the Netherlands, where we have made a lot of natural progress already. But, if by this time next year NL is still our biggest market, something definitely has gone wrong. For the immediate future our focus will be on the USA and, closer to home, the UK, Germany and France, as well as other major European markets. Opening a UK office is the first concrete step, followed by a New York office later this year. In short, this Summer we will be active and plan to be visible all over the EU, and in the mean time will ready ourselves for launching an on the ground operation in the USA.

icensing
Not focusing in particular on other markets doesn't mean that nothing can happen. SellaBand can currently provide sales and distribution of your SellaBand album in a number of key markets. Distribution of our product is an important marketing tool in itself. Today we add another exciting partnership to the list (see right column). The list of Distribution channels will grow even more, but is not limitless. Therefore, it will be part of our policy to take any license offer into consideration that makes sense for one (or more) of our artists in particular markets. Examples: if there is a demand for Julia Marcell in Poland, or if Lily wants to establish her career in Columbia, it can make sense to enter into partnerships with local labels who want to license an album. With a license agreement, a label acquires the right to release, sell and market an album in a given market. In return, a royalty fee will be paid to SellaBand. One third of that fee will than go back to the artist in question and one third to his/her/their Believers. Encouraging fact: the first requests for licensing our product have already come in.

illion Dollar Artist (copyright Mandocello)
Whether it happens today or tomorrow, fact is that Recording Artist #20 is on his way (with #21 not far behind!). And that also means that thanks to the generosity of this community, in the first two years of SellaBand a total of at least One Million US Dollars will be spent on producing, manufacturing and distributing newly recorded music. By all means, that is a very healthy injection for this industry in creating new music. In our previous Business Plan, we aimed to have 18 Recording Artists by July 1 2008 and 30 by the end of the year. This has now been adjusted to 36, which means from now on two Final Countdowns every month...

o preference
For us all artists are equal. There is no selection at the door (unless you are Coldplay, please give us a call) and no selection after 50K  either. There is exactly $50,000 available to record, manufacture and distribute your product. We wish to remain impartial and leave the selection process totally up to our community (i.e. deciding who reaches 50K). To us this implies that we can also not be expected to make any distinctions between artists after releasing the record. If an exciting opportunity comes along for an individual artist we would be stupid not to take it, but what we offer is very much a one size fits all for Recording Artists. We offer (upon request): advice and guidance, sales and distribution, marketing and promotion. All Recording Artists are entitled to receive the same advance money (to be used for Marketing and Promotion) from our Publishing Fund. 

ne Stop Shop
We aim to make our platform a so called one-stop-shop for artists on SellaBand. Meaning that you will not only be supplied with the right tools to promote yourself outside SellaBand, but also have enough reason to attract people to your SellaBand page without having to invest $10,00 to make it worth wile. Sell your previously recorded CD(s), offer your demos as downloads, debut your new video, etc. All this will be part of the site makeover but we wanted to re-iterate this aspect in the new ABC to confirm that we acknowledge that the Road to 50K can be tough and long and is perhaps even not the only reason why you are here as an artist.

artnerships
Since ABC 1 we have entered into and renewed a number of partnerships, including Amazon.co.uk, The Orchard, Rough Trade Distribution and Hyves. There are many more to come. This may sound arrogant, but SellaBand is a 'wanted' partner. Our concept is perceived as very sexy and we have what a lot of community websites lack: tangible content. This puts us in a great position to work with great companies in the online world. Our focus is on finding and selecting the right partners who will increase our online visibility. Negotiations with a number of exciting partners are currently under way. (Look under J; we would not be saying this if it wasn't true...)


uality product
We have spotted a number of competitors. Let's be nice and say that most of them seem to be very inspired by SellaBand. One thing should always set us apart from any competitor: we aim to release quality product only. The guidance and experience that the team of experts who will work with you on your SellaBand album can offer are a very valuable asset to working with SellaBand. People put faith and trust in SellaBand by spending their money without any guarantee that what eventually will come out meets their expectations. We acknowledge that trust and although we have no influence on artistic output, we will strife to release product with a high quality standard.

ecording process
It has been unrespectfully called 'the SellaBand Graveyard'. Artist reaches 50K and then disappears off the radar. Recording your SellaBand  album should be something that you will remember for the rest of your life. But it should also be something that your Believers should be able to experience. It's the part of the process that they are not (or hardly) involved in but with regular updates, studio reports etcetera, Believers can at least witness what is going on. SellaBand will create the tools, artists should have the discipline to give their Believers access to the process.


ellaBration '08
There will only be one official SellaBand gig this year and that is SellaBration '08. The date is Friday August 15 2008 and it promises to be a very special event. Details of location, line-up and why we think this is one event that is not to be missed will be announced in due time. In time for sure for people to make the necessary travel arrangements.


rouble in Paradise
The Forum -its user friendliness will be improved- remains a great platform for frank discussions. Some hefty debates have been going on lately, and not always in a very respectful manner. Other music sites, like GarageBand.com for example have shut down their Forum mainly for this reason. We have no intention to do the same, since a/ we' will always defend freedom of speech and b/ it offers us a wealth of ideas and information. An official Administrator has now been installed. The role of the Administrator is to ban foul language and personal attacks. Questions for SellaBand Management should be addressed to: info@sellaband.com


sing the budget
Time and time again the question pops up in all kinds of variations: Can I use the 50k to finance my tour? Can I use the money to build my own studio? The answer is a plain and simple: no you can't. On average there is between 30 and 35K available for Recording, i.e. studio, producer, mix, musicians (if needed), mastering, etc. The exact amount depends on what you want to spend on artwork, packaging and how many copies need to be sent to your Believers. The SellaBand budget is meant to record a professional album, that is what the Believers are investing in. Not to fund a TV campaign or world tour. If all goes smoothly (and yes, this does happen), there may be some money left to make a video, do some PR or whatever. But 30K for Recording  is the directive. An A&R representative and a SellaBand Music Manager will work with you on the budget. There is a fine line between creative freedom and defending the interest of those who have invested and we intend to not cross that line.

iral marketing
The spearhead of our marketing approach is viral. In conjunction with our marketing experts, the web team will develop and execute the strategy to get our name out online. API's, widgets etcetera will all be brought into action. Many members of our community have an IT background themselves, so keep your suggestions coming. Again: info@sellaband.com is the right address if you want to make sure we take note of your potential contributions.

isdom of crowds

L and other spin offs...

in and Yang

est for Life