New Noise Santa Barbara, a digital music conference featuring industry panels and 50 bands in three days, is gearing up for its third year.

New Noise will happen from Nov. 3-5 and is the smaller West Coast analogue to South by Southwest, the massive festival held every year in Austin, Tex. that brings together technology entrepreneurs and musicians.

While the Austin festival is for profit, the organizers of New Noise have converted theirs to nonprofit status with hopes of expanding it to something like the Santa Barbara International Film Festival, which draws thousands of visitors from around the globe and A-list celebrities each year.

“I thought there was room for a small, more boutique idea in Santa Barbara, where fans and CEOs would want to come,” said Jeff Theimer, one the festival’s founders. “We’re an hour and a half flight from San Francisco and 90 minutes from L.A., so I thought it was the perfect place to bring those two together.”

From a business perspective, the highlight of the conference is panels on the breakneck pace of change in the music industry. Even in the brief life so far of the New Noise conference, there’s already been a shift: Three years ago, the panels focused on how musicians could use blogs and MySpace to promote themselves and sell digital downloads on services such as iTunes. This year, there’ll be talk about leveraging Twitter, Facebook and even newer tools to build momentum for licensing music to streaming services such as Pandora or Spotify.

But the one thing that has not changed since digital revolution made copying and distributing music essentially cost-free is that no one’s business model counts on selling recordings as a main revenue stream. The recordings are more like marketing collateral. The most common model is for artists to use recordings and digital tools to build brand awareness and draw a smaller portion of super-fans through the sales funnel to an eventual high-value transactions, such as a special edition vinyl pressing, clothing or concert tickets.

For example, the alternative country band Drive-By Truckers ran a pre-release promotion ahead of their most recent album in which a $75 deluxe package included a CD, a vinyl record, artwork and an exclusive T-shirt. In six weeks the band generated more than $80,000.

“The music industry is evolving toward streaming. Streaming pays less than digital downloads, and digital downloads pay less than CDs,” said Ian Rogers, CEO of Santa Monica-based Topspin Media. “If the game is collecting fractions of pennies, then collecting tens of dollars from your biggest fans is not just a nice-to-have for someone like Pearl Jam – it’s a must.”

Rogers’ firm provides a platform for musicians to run their own digital marketing campaigns. While email blasts, sales conversion rates and trending analytics are the bread and butter of e-commerce businesses, it’s a new frontier for many musicians. Rogers says he tells clients not to even try to sell online until they’ve built a fan base of 2,500 validated email addresses.

“Email is still king by a long shot. In any given campaign, email can easily be 50 percent of your revenue, where Facebook and Twitter are maybe 10 percent each,” Rogers said. “With mobile, you’ll get a higher click-through rate in some demographics, but you have a much higher cost to send.”

The conference will also feature panels on how to make touring profitable for artists and strategies for successfully licensing music for use in film and television. It will also focus on how fans discover new music with streaming services and host the CEO of RootMusic, the fourth most popular app on Facebook.

Theimer, the festival’s founder, said that while today’s music industry produces fewer platinum-selling megastars, new digital tools give artists unprecedented power to take control of their music careers and run them like a small business.

“The new kind of advocate has to be yourself at first. Then the fans can promote you, too,” Theimer said. “If you’re actually good, people will hear you.”