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Take a hint from
music millionaires

THE music industry's traditional model is falling apart. Revenues have been sliding downward for years now and many bands (along with the industry powerhouses) have chosen to fight the trend to "on demand" or "music by track" choice rather than embrace it.

So with most bands crying the blues (no pun intended) -- how did a jazzy improv/ Grateful Dead-sounding band from Colorado pull in $14.5 million last year?

What you learn from their success can help you blend online and offline channels in your small business for incredible growth.

They did it through a solid click-and-mortar approach, driving offline consumers online to make purchases, and allowing online consumers to become fans of the band without ever seeing them in person.

The band has been touring nonstop for 11 years. The devoted following that they've developed has contributed to this outstanding annual cash flow. But the money only really started rolling in during the past four years when they implemented their click-and-mortar growth strategy.

From 1999 to 2004, when the rest of the music industry suffered steep declines in revenues, String Cheese Incident watched its annual revenue rise from just about $2 million a year to $14.5 million! Not bad for five guys who love what they do and play relatively small venues.

String Cheese Incident recently battled Ticketmaster in a lawsuit and gained the right to sell tickets to their own shows on their Web site. This gained them more fan loyalty by offering tickets for their shows at 10 percent below Ticketmaster rates. With 50 percent of their revenue coming from their tour dates, this has had a huge impact on their bottom-line.

Anyone who has ever been to a concert knows the big bucks lie in the merchandise and CDs for sale at the venue. But how many concertgoers don't have the cash in-hand, or desire to fight the crowd to wait in line? By driving their off-line fans to their Web site they've racked up some pretty impressive numbers.

CD sales rack up $2.9 million a year. Merchandising and ticket sales another $2.9 million a year. That's another $5.8 million that most smaller bands never see.

And String Cheese Incident is not content with the traditional profit centers of bands either. Recently it saw an unmet need in the marketplace and set up a travel agency that helps fans plan trips for SCI and 20 other bands on the road. That little "side business" is good for another $1.45 million per year.

If a Grateful Dead style band whose fans thrive on live experiential concerts can use the click-and-mortar approach to create a 725 percent increase in gross revenues, what could you do with your small business?

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