By George Howard
(Follow George on Twitter)

The concept of A&R has undergone several changes over the years. Originally it was a term signifying the effort of individuals who, prior to the era when most performers also wrote (or co-wrote) their own material, would try to match songs with performers; hence its now-anachronistic meaning of “artist and repertoire.” After the singer-songwriter revolution of the 70s, the role of A&R morphed to be more about finding new “talent” and signing them to the labels.  In the era of consolidation from the 90s onward, A&R has expanded from “just” finding talent to also being active in the conception and execution of the marketing strategy for the artist the A&R person signs.

I propose that we’re now at a place and time where A&R must evolve once again. This time, however, I propose a radical shift.

Whereas before, A&R (artist and repertoire) was largely related to finding artists and then working in some capacity to raise their profile, the new A&R looks the other way.  As artists no longer need labels (not to say that labels can’t add value; just that they are not the requirement they once were), there is no reason for A&R people to try to match an artist with a label.  Now that artists can (if they so choose) act as their own label, and/or work with a small team (manager, etc.) to raise their profile, it’s the artists themselves who must focus on A&R.  However, the A&R that they should be focused on has nothing to do with finding and signing artists.  The new A&R is about Attraction and Retention.

Rather than looking to find artists and create relationships with them, the artist who is taking charge of his career must find and keep (attract and retain) fans/evangelists for their work.

All businesses succeed for the same reason: they attract and retain.  While—via sales pricing or gimmicks—companies can attract customers, it’s the retention part that—over time—will allow a business to become profitable.  Most people when asked what makes a business successful answer by citing “profit” as the key metric.  It’s crucial to understand, for bands and any business, that profits are a byproduct of attraction and retention over time.

Think about a company like Amazon.  For the first several years of its existence it lost money on virtually every item it sold.  While on the surface, this seems an amazingly insane business model, what Amazon was doing was, via convenience, referrals, and, yes, low prices, attracting customers who—feeling they were receiving value from their experience—kept coming back.  Amazon attracted and retained customers at such a rate that they were able to create economies of scale that took them from losing money on every item shipped, to eventually, breaking even, and then profiting on orders.

Bands must think in these terms as well. What are you doing to not only attract customers, but keep them coming back for more?  These are key metrics.  One of the single-worst things that a business (or band….is there a difference?) can do is attract a customer, and then lose that customer after only one transaction.  If, for instance, a band puts in all the time and money to build a website, make a CD, play a show, etc., and goes through all the marketing effort to make a person aware of the band’s output, and even compels that person to purchase something from the band (or visit their site), and that person only makes one purchase/visit, the band has lost.

In every consumer transaction there is a series of steps that a customer goes through, often called the Customer Journey: Awareness, Consideration, Trial, Purchase, and Re-purchase.  It’s this final step, Re-purchase, that matters most to band/business.  There are costs all along the customer journey (both in terms of time and money) that are not recovered if the customer purchases once, but doesn’t repurchase.

This is why retention is so crucial. It’s through retention (Re-purchase) where profit can finally be realized.  This is because, while the cost (time and money) required to acquire the customer and compel him or her to make an initial purchase, is massive, the cost for the Re-purchase is incremental at most (i.e. there are no costs related to acquisition, marketing, etc.; whatever costs exist are related to the transaction itself (credit card fees, costs of goods sold, etc.)—hence, incremental costs).

Practically speaking, we’re talking about loyalty.  It relates to an internet meme of a few years back that’s compelling in its simplicity, even as it’s frustratingly elusive to achieve: 1000 True Fans.  The theory goes something like this.  You are better off trying to acquire 1000 true fans who will—over the course of a year—spend $100 apiece for some work product you create (could be a t-shirt, download, subscription, ticket, etc.).  If you do this, you will gross $100,000 per year.

The reason this is compelling is because it’s much more approachable to think about acquiring 1000 true fans, each spending $100, to make $100,000 than it is to try to acquire 100,000 fans who net you $1.00 per fan (i.e. the traditional record business model).

The reason this is frustratingly elusive to achieve is that to arrive at 1000 fans willing to part with $100 each over the course of a year, you likely would need to have well over 100,000 fans in your “funnel.”  That is, 100,000 or so fans that you have email addresses for, etc.

In any case, difficult or not (and what isn’t difficult that’s of value), the idea behind the 1000 True Fans meme is instructive as it shows the importance of retention of fans.  Arguably, retention is more important than attraction; however, you, of course, must focus on both.

To summarize, A&R must take on a new meaning for you in today’s artist-centric music business.  No longer do we need gatekeepers of talent, scouring the clubs and college radio playlists, looking for the next “big thing.”  This old-school A&R is largely over.  Instead, artists (and those who work with them) must re-conceive of A&R to focus on the attraction and retention of fans.  Doing so creates real, genuine, durable connections between the artist and their fans.  It will be these connections that provide artists with the means to continue making their art on their own terms even while the industry continues to arrive at sustainable business models.

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George Howard is the former president of Rykodisc. He currently advises numerous entertainment and non-entertainment firms and individuals. Additionally, he is the Executive Editor of Artists House Music and is an Associate Professor of Music Business/Management at Berklee.  He is most easily found on Twitter at: twitter.com/gah650

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