Interview with LEE PARSONS, co-founder of innovative digital distribution company Ditto Music - Dec 7, 2009
“The clever guys that use Twitter and have a band probably post up to ten things a day. One thing is about the band and the other nine things are interesting things about the music industry”
Online music distributor and promoter Ditto Music originally attracted world notice in 2007 when it released the first single by an unsigned artist to break into the official British Top 40 chart. Rather than a happy blip, a further seven Top 40 hits by unsigned acts soon followed.
Co-founder Lee Parsons talks to HitQuarters about how Ditto managed this feat, how it can help you release your music, and also offers advice on promoting yourself online, and his thoughts on the direction in which digital music is heading.
You set up Ditto Music with your brother Matthew in 2006, what was the original motivation behind it?
We were in bands and found it tricky to release your own music, because without a record label you cannot get your music into online music stores. It took us so long to set up a record label, to get the barcodes and to send material out, that once we had done it, we thought, “There must be a lot of people with the same problem.” So we started offering the service to friends and released their music through our label. If ‘A’ is the artist and ‘C’ is the online store, we are ‘B’.
In 2007 we released a band called Koopa that we helped become the first artist to get into the Top 40 from only digital sales. We planned the campaign to release the single in the quietest week of January, where the total sales are the lowest, from being a couple of guys releasing bands from our bedrooms we were suddenly gaining worldwide acclaim from people like The Guardian, The Sunday Times, BBC1, Sky News.
Koopa signed a record deal a couple of months later, recorded an album with Blink 182 and got a deal in China. People might hate or love the music, but they sat down and thought up ways that had never been done before.
Now with digital music there are hundreds of different ways of doing things. You just have to be clever about it. That’s the interesting thing for me, to find out what the next thing is.
What did you learn from being in a band previously in terms of making the right first career steps?
When my brother and I were in a band we got it totally wrong, to be honest. We did a showcase for Sony in front of all these industry people after having only played one gig beforehand.
The first thing you have to do when you go out there as a band is to get your sound right before even thinking of recording or releasing anything. Then you should start building a fan base, especially if you are going for the charts. You’re better off having 200 people that you’ve built up as a solid core following than having 50,000 friends on MySpace.
It's about having genuine people that want to invest in your music. You can only do that with time and effort, playing for the sake of playing and not just trying to get signed right away. If you then do release music set up different street teams in different areas and try to think out-of-the-box.
What do I have to bring to the table if I want to release with Ditto Music?
Everything is online now. You upload the music and your artwork. If you have a record label you can send over the codes. If you don’t have a record label, we generate the codes and everything that you need. Then you set a release date and tell us on how many stores you want to have it on.
So how does it work, I pay you a flat fee, and I keep all the revenues?
Yes, pretty much. Our fee starts from £2 a month. That gets you on Spotify and iTunes. Then there is a package for £25, which handles around 400 stores.
But there are so many different options you can have right now. We do iTunes pre-releases if you want your music available on iTunes to pre-order before the actual release date. We do another 13 stores with pre-releases and do specific dance distribution.
Obviously you keep all the rights to the music and we don't take any percentage. There are no takedown fees if you want to remove the music from us. We just want to make it as easy as possible for the artist.
We’ve had a lot of big artists release through us like Prince or unreleased 2PAC music that needed a tailored deal for them so they are not tied to anything. We also had a lot of artists that released through us and signed a record deal after. So it needs to be structured in their favour.
How does the pre-order thing work?
Basically, the artist will pick their release date. Say they choose something in eight weeks time. We will put them on pre-release right away and the sales count in the first week after release date for the charts.
How do you order the song?
You can do it through SMS, which means people can pre-order it through the phone and on the release date they get sent a text where they can download it.
When we got the artist in the charts that was one of the key tools they used. Obviously, it's easier with a large fanbase and the under-18s market. Otherwise, You go on the website of whichever store you use that does pre-releases (there are about 14 stores) and at the release date you get an emails saying, "Now you can download the song." You won't get the song until it is officially released.
How many online stores do you deliver to?
We do 700 stores in total, and we’re always looking for new stores. iTunes is a large percentage of the market, but you shouldn't underestimate the others.
Things like Spotify that are hot in the moment or we7.com that have about 2.5 million users a month. Amazon, Rhapsody, Emusic, we also do specific dance distribution because there are sites that are more specific to a certain kind of music.
It all comes down to tailoring a release and finding out where it is going to sell, and not just throwing it out there and seeing what happens.
What makes your company special and stand out from other distribution sites like State51 and Emubands do you think?
All I can say is that our track record speaks for itself. We’ve had seven Top 40 hits, and we work with everyone from small to big artists.
As well as distributing artists, it's about joining up with good companies. We were the first people who got in contact with Spotify. We have hooked up deals with new sites like we7, Pandora and already have Sky Songs lined up.
We even distribute to torrent sites if people want that. We found a market with torrent sites.
We had a band that was selling music and offered to download music on MySpace, but they were literally getting about two hits a day. So we got it out through the torrent stools like Pirate Bay and we got thousands of downloads in a few hours.
The thought behind that was if we put it out through a torrent site it has more value than just giving it away for free. For some artists it's a big thing if 2000 people download their track even if they don't get any money for it.
We’ve also done a lot of work with labels that just wanted to leak their stuff and not have people sharing it themselves. If people do it themselves you lose out on quality, you don't know where it is being sold and a lot of other things. So you have more control if you leak it than if someone else does.
Do you offer your artists any form of promotion?
Yeah, we are just launching a service called Cuetracks. We have a mailing list of thousands of industry people, mainly through our own personal contacts that we have made through the years. They review the music and send feedback back to the artist.
You can spend thousands of pounds on a plugger and get a list back with comments like, "No, didn't like it." With our reviewers you get a specific feedback on if they are going to play it or why they wouldn't play it. At the end of the day it gets them to actually listen to the music.
How does Cuetracks work exactly?
The artist pays us around £100 and the song gets sent out to hundreds of industry people. We have people from Xfm, Sony or Kiss FM. They get the track sent from us as an mp3 and they get a form to fill out. Once they fill out the form and get it back to us, they get a small fee. If you are a reviewer, you can earn between 25 and 50p per review.
The questions on the form are things such as, “Would you play this song? Would you like to be sent a physical copy of the song? What marks would you give out of 5?” And just general comments on the song.
We want to make sure that people actually listen to it. The problem we had was when bands were sending stuff out the e-mail wasn't addressed properly or they didn't know how to write an email to someone. If a reviewer gets hundred demos of artists per day, ours goes straight up to the top of the pile. We’ve had several artists sign record deals from it and we had someone that had a production deal signed from it.
You’ve also recently been using TV as a promotional medium – how did that work out?
We did a show [Ditto Music Live] on Sky with Emma [Scott] from Kerrang! Radio where we had bands playing, and we were interviewing them. We did that for 12 months, but in the end it became too expensive to do unfortunately. Then we got more into video blogging. We are going to do interviews with industry people, artists and DJs that got successful.
Can you describe the process of how artists have got signed through your site?
We have a featured artist on our site every day that you can vote for. The most popular one goes through to we7.com. Every four weeks Ditto Music, the Guardian and the NME supplies we7.com with a featured artist - they put them on the front of their page, and the artist gets a campaign worth £15,000. A German label signed the first band we put on there for £25,000.
How can you find out how many sales you need for entering a certain chart position?
There are different seasonal trends. Around December around X Factor times, the sales go up. The second week of January is the quietest time. We get the top 200 every week. It's confidential information so we are not allowed to publish the information. You have to join the charts company and pay them a subscription fee then you get the sales figures per week of the Top 40.
Are videos counting into the charts system?
What we heard from the charts company is that at the moment they're not looking into having videos counting in the charts. What we do is if you bundle the video with the lead track then you can sell the video and the main track and it will be chart eligible.
As someone clearly focused on the digital market, how important is do you think are physical sales are still?
With album sales it's still about 80% of the market. People still buy them. With single sales it's about 95% digital.
Would you advise artists to make physical copies at all?
Yes, once people see you live and if they like it they want to invest in you. There's not a lot of people wandering through the internet stumbling upon a band and buying their CD. I know a lot of bands that will get a thousand CDs done to go on tour with and sell them there.
We do a service called ‘Amazon on-demand’. Basically, you can sell your CD through Amazon. If someone buys it for say £8, Amazon will take £4. It's a great tool to have something through Amazon, but you are losing 50% of your income straight away.
Do you do physical distribution at all?
Yes, the main thing with physical is you have to have a lot of press and radio. If you are a new artist, shops are not going to take it because there is no proof that you are actually going to sell anything.
Where would you say are good places to market your music on the internet?
There are lots of good places. You need a Twitter account, but there are right and wrong ways of using it.
What a lot of bands seem to do is set up a Twitter account, and then just give updates about their band, such we are on tour, this and that. That’s fine but if you don't have anything that has any value to other people - information, different things that people might be interested in and might pass along - you are not going to get any followers.
The clever guys that use Twitter and have a band probably post up to ten things a day. One thing is about the band and the other nine things are interesting things about the music industry for example. That's how you build followers. But don't be too much in people's faces, because there are so many people in bands just trying to sell stuff. You have to be very clever about how you are selling it.
Mog.com is a good website, too. It’s a kind of music blog where people from the industry go and check out and review different peoples music. I would suggest starting to chat to different people on there and over a period of time introduce your music.
It’s the same with forums and even on MySpace. Talk to people about what they are interested in. Don’t just tell people about your band, take an interest in the person. People are very aware if you are just trying to sell your music.
What do you think about the benefits of giving music away from free?
If you are a massive band like Radiohead and if you, as a fan, really love that band then in the end you pay for it.
I think if you are a new band starting out then the best way is to just give certain pieces of music away for free and tell people, “If you sign up to our mailing list, we’ll send you a couple of tracks - we are not going to spam you.” That's much more effective than just giving an album away for free. You can use the email then for marketing purposes. If you record a full album on the back of the three free tracks they hopefully want to buy the rest of the album.
MySpace seems to be on the decline, where do you see music on the internet heading in the future?
When MySpace came along, people thought, “Oh, I have 2 million friends on MySpace, that means I'm a big band now.” But when they were actually selling music none of those MySpace friends actually knew who they were.
If you look at Prince, for example, he has been selling music on a subscription basis for years. People pay him per month to receive music. He hasn't been waiting for record labels to do something. Trends like that, which don’t go through a social networking site or a record company, will become more important.
With things like Twitter or blogging it’s not just through your music - if people are good at that you can get a lot of fans and followers. Work at getting good publicity rather than sitting at home adding friends on MySpace. It all comes down to value. What is the value for the people to buy your music?
So set up gigs, and even set up gigs for other people. If I started a music project now, I could call on about a hundred people for help, because I value them, because I have a company and we have a relationship with them. I have done them favours and they have done me favours. Network with other bands, invite them over to play in your city, and just trade gigs with them. Think about what you can offer.
Take an interest in the music industry as a whole and not only in your band.
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