Finding your edge in the music industry

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(FORTUNE Small Business) -- Dear FSB: My business is into concert promotion and manages a couple of local artists and a future independent record label. I'm located in a little town in Kansas called Emporia. I would like to have some basic tips and advice from the experts.

- Andre Jfirson, Emporia, Kan.

Dear Andre: Technology has opened up marvelous ways to record music and promote bands with a lot less money than even a few years ago.

"There are more small record companies in existence today than in any time in history," says music business consultant Mark Bliesener, who has worked in the industry for more than 30 years, managing, promoting and recording artists from Lyle Lovett to Leftover Salmon. "The technology is incredible. But so is the competition," says Blieisener, who operates Bliesener Consults and Banguru.com from Denver.

"There were 75,000 new CDs released in 2006, according to Billboard, but the killer is that 54,000 of them sold less than 100 copies," says Seattle-based music business consultant Christopher Knab, author of Music is Your Business and president of FourFront Media and Music. "It's not easy. The key is learning the business and building from the bottom up."

Study other successful companies that are doing what you want to do. Nettwerk, a large independent label in Canada, is a great example of a forward-thinking artist management/record label company, says Mike King, the editor of artistshousemusic.org, a free online resource for musicians. "They're consumer friendly - their tracks are DRM-free, and they are taking advantage of current trends and alternative revenue streams and own their own publishing company."

You might have found your groove, but to succeed in the business, you must find your niche. "You can't be all things to all people, otherwise you're competing with Universal and Sony (SNE)," says Bliesener, who believes your locale might help you. "People will say 'hey, that's the guy in Kansas who does the folk-pop-ska-acoustic-a-billy or whatever,' instead of being just another L.A. label," he says. "Sometimes the freshest stuff comes from the hinterland. And today, you can really work from anywhere."

Knab disagrees. "Move," he says. "If you're in the middle of Kansas your music career is as flat as the stage is flat. If you're serious, you have to go where there's a large population and scene of whatever type of music you're into, places to play live, friendly press, stores, clubs, everything."

Regardless of where you're based, touring is key, says King. "It's the lifeblood of any small label and kick starts all the other marketing outlets that are necessary: PR, retail, internet, distribution, merchandising and radio."

Whatever you do, says Bliesener, "Don't let the technology get ahead of the music," he says. "If you don't have an artist that has something to say, really great songs, look for the next one."