Monday, October 18, 2010

A Guest Blog

Artist Revenue Opportunities Without Playing Live

This guest post is by Bobby Owsinski. Triangle Exception, a winner of the Hypebot Hit Song Contest got to pose two questions to him as their prize.*

In most cases, recorded music has always been somewhat of a promotion for the live show. It’s a little known fact that most musical artists have always made as much as 95% of their income from playing live, if we take publishing out of the equation. Even artists that were selling millions of albums during recorded music’s heyday from the 70’s through the 90’s weren’t making as much on record or CD sales as you might think.

It’s still true today that most income for an artist comes from touring, so what’s an artist to do if touring isn’t an option? That’s the main question that two of the artist’s who submitted songs to Hypebot’s Hit Song Contest had.

In their own words:

“Given that we are purely a studio act – are there any good models or strategies for turning the exposure generated from freely distributed music into profit that do not involve playing live?”

“Given the geographical separation between Steve and I, we don’t get to play in the same room much, let alone tour. What are the most effective strategies for bands who are strictly studio acts?”

The answer is the same for both of these questions. Assuming that you already have developed your own “tribe,” or core group of fans, you need some products to sell. Let’s take a look at a few additional income streams that an artist can cultivate:

1) Increase online sales. Let’s look at your music first. Because online music is mostly a commodity these days, it’s best to think of it as primarily a promotional tool, but not exclusively.

You give it away for free on your website, and you make it available for sale on all of the popular distribution platforms like iTunes and Amazon. Although it may seem counterintuitive, there’s a lot of empirical evidence that the more your music can be found for free, the more it sells. In reality, this is the same way that the music industry has always done business, since before the age of Music 3.0 came to pass in 2002 with the introduction of iTunes, you’d give away your music with radio airplay to order to generate sales of physical product. The more it was available free on the radio, the more it sold (usually).

It’s the same thing today, only you’re giving it away on the same medium that you’re actually selling it. That being said, even though you may get an increase in sales, don’t expect it to be a huge amount without a huge audience, and don’t expect it to happen overnight. For most artists, this takes some time to ramp up.

2) Physical Product. Although it may be against the popular wisdom of the day, it’s important to have some physical product like CDs available. People still buy them, especially if you’re active in certain musical genres like country, christian and even metal where CDs are still preferred to digital downloads. You can have them made and even drop-shipped at for $1.75 each (1 to 100,000 copies have the same unit cost) so you won’t have any upfront costs or inventory to worry about. It’s worth having CD’s from another standpoint in that it’s easier to get reviewed when you have a physical product, even by bloggers. Reviewers still feel that you’re more legit if they receive a product that they can hold in their hands. Bottom line, you may not sell a lot of physical product, but it is another possible income stream.

3) Alternative packages . Once again coming back to the world of physical products, vinyl releases and even cassettes ( read more about this retro trend here) can become another income stream even when your fans aren’t interested in purchasing a CD. That being said, even a CD can be an alternative package. Sometimes calling it a “special edition” and numbering them (for example, “#35 of 500”) will entice a fan to buy a product in the hopes of having something scarce and collectible. Likewise, having a “limited edition” CD in a Digipack with lyrics, extra pictures, and lots of information can sometimes be attractive to the fan as well. The downside for any of these packages are that they’ll be a custom item so you’ll have to shell out money up front and carry inventory.

4) Merch . Another thing I’d look into would be branded merchandise like T-shirts, hats, hoodies, mugs and other popular merch items. This only works if you have a strong brand with a great logo, which is easier said than done. Sometimes a cool looking logo on a t-shirt will make people buy an item even they don’t like the music. Once again, thanks companies to Cafe Press and Zazzle, you no longer have to worry about inventory or fulfillment. Just upload your logo, select your product, and they do the rest.

5) Bundles . If neither physical product or merch is selling, then a bundle of both together might prove more attractive. You offer a package of a CD and merch item, or two different merch items, two different physical medium items (vinyl and a CD), or any other combination you can think of. Tip: Don’t use the “Buy this and get that free” technique because it sometimes feels less like a deal than a package of items.

6) Unique items. Once again, this only works if you already have a fan base, but unique items like CDs, DVDs or downloads of alternative mixes, rehearsals, demos, outtakes and in-studio videos can be cherished by superfans and can command premium prices.

7) Publishing and Music Licensing . The real money in recorded music has always been in publishing. For decades songwriters have made more money than most performers (unless they were the songwriters as well) because they were paid for a song’s performances on radio, television and the movies as well as the mechanical royalty on sales of physical product (where they didn’t have to worry about the record label recouping recording costs and advances). There are two areas of publishing that directly apply to an artist that wants to expand his revenue streams - have your songs covered by other artists, or have your existing recorded music licensed.

If you think that you write songs that others might want to cover, then start pitching your songs to publishers, managers, producers and the artists who might find your songs appropriate. For a list of publishers, start with the Music Publishers Registry. For managers, producers and artists, try one of the pitch sheets like Row Fax or The Pitch List to find out who’s looking for songs and how to get one to them.

If you think your music might work for commercials, television or movies, then send your stuff to a specialty publisher like ArtistsFirst Music. There are more cable channels than ever before, and while you may not make much up front, the royalty checks that appear quarterly in your mailbox from your favorite performance rights organization (BMI or ASCAP) can be really nice if you get a song that’s used a lot somewhere in the broadcast universe.

Bottom line, if you don’t already have a core of manic fans for your music, you’re better off spending your time developing publishing contacts and licensing deals until your audience increases. If you have a fan base already, you’re going to need as many of the above income streams as you can get since all may be small in themselves, but can add up to something significant in total. Keep in mind that any of the above opportunities takes additional time and effort that goes way beyond simply making the music in the first place. Being in the music “business” these days is not a passive activity and requires considerable elbow grease, especially if your situation eliminates a possible income source or two.

Saturday, October 16, 2010

Deals Successful Artists May Be Offered


The most important thing an artist can do to get the attention of the recording industry is to start your own label, and build a reputation for your music by showing the industry how popular your music is, i.e. how many people bought your record both online and through traditional methods, attended your shows, network with you online, and follow your activities.

Now I want to give you some information about what can happen IF you do get the industry’s attention. Starting an indie label is really quite similar to starting your career as a musician. Your label needs to impress the music industry with its stories of success, just like you as a musician need to do the same with your creative talents. The reward for building a successful label is the possibility of doing business with a major label someday…on your terms. Major labels need to work with successful indie labels to maintain their viability in a ever-changing popular music environment, so they keep their eyes open for indie labels and artist who have had success with a certain musical genre or musical styles

Needless to say most of these deals, when appropriate wiill involve digital/Internet activities these days.

There are several deals that may come your way as you get more successful. The following short summaries of the most common kinds of indie/major deals are given to you as an introduction to them. They are discussed in far more detail in my book 'Music Is Your Business'. I would like to thank Bart Day, the co-author of this book, for dealing with this topic and his cooperation and help in preparing this information.

· Pressing and Distribution ("P&D") Deals: The name of this deal describes its basic premise. The indie label finances the recording process and delivers the final master recording to a major label distribution company, which then presses (i.e., manufactures) the records and distributes those records to sub-distributors, retailers, etc. In the case of P&D deals, as in the case of the next three distribution-oriented deals discussed below, the independent label will retain all ownership rights in the master recordings.

· "Distribution Only" Deals: Basically the same as the "P&D" deal described above, except that here it is the indie label, not the major label that presses the records. The major label's role is "distribution only."

· Fulfillment Deals: Again, basically the same as the "P&D" deal described above, except that here the records are not distributed through the major label's traditional distribution system, but instead through an ostensibly "independent distributor" that is owned by the major label. This "independent distributor," acting on behalf of the indie label, then ships such records as are ordered by indie sub-distributors and indie record stores, and it also handles all billing responsibilities. In short, the "independent distributor's" role here is to fulfill orders from third parties for the independent label's records.

· "Piggyback" Deals: Used when an indie label doesn't have the clout to get its own distribution deal. Instead, in order to find distribution, the indie label must instead "piggyback" onto another indie label's already-existing distribution deal with a record distributor.

· Production Deals: The "independent label" here is really just a production company financed by the major label, and is created solely for the purpose of producing records. The production company uses the major label's financing to sign artists and produce records, and then delivers the masters to the major label. The major label will manufacture and distribute the records and handle the marketing and promotion activities. The major label will own the masters.

· Joint Venture Deals: The word ‘joint’ implies a joining of forces by a major label and an indie label, whereby they agree to share responsibility for the making of records and for the marketing and promotion of those records. These responsibilities are divided in whatever way the two labels agree upon in their formal joint venture agreement. The major label finances the joint venture. Then, from records sales income, the major label will reimburse itself for the expenses that it has occurred, and the net profits are then divided between the two labels.

· Equity Deals: Think of ‘equity’ as having an investment in something. With this type of deal, the major label invests money in the independent label, and in exchange the major label acquires a part ownership or total ownership of the independent label and the independent label's assets and its contracts with artists.

· Licensing by Major Labels: Here the major label owns the masters, but "licenses" (i.e., leases) the masters to the independent label for a limited amount of time (usually a few years), during which time the independent label will have the rights to sell records made from those masters. In return, the independent label will pay a royalty to the major label for each record sold. All manufacturing, marketing and promotion costs are paid by the independent label. The major label continues to own the masters at all times.

· Licensing To Major Labels: The exact reverse of the above deal. Here it is the independent label which owns the masters, and which is licensing (leasing) the masters to the major label for a limited period of time. In exchange, the major label will pay royalties to the independent label.

· "Rights Buyouts": In a "rights buyout" situation, the independent label will have previously signed a recording contract with an artist. Then at some later time, a major label buys all of the rights of the independent label in the artist—in other words, all rights that the independent label has in the artist under the terms of its recording contract with the artist. In short, the major label steps into the shoes of the independent label. In return, the major label normally agrees to pay a cash advance to the independent label and a royalty on future sales by the major label of records featuring that artist.

Wednesday, October 13, 2010

Clueless Messages Once Again


I get a lot of email messages every day. Most of them are very polite ‘thank-you’ messages letting me know how much they appreciate all the free articles and columns I have written, and how much they have learned from my advice. All those messages are quite gratifying to say the least, but I have a problem with some of the messages I get, and the problem is getting worse every day.

More and more often people don’t have a clue as to how to write a polite and courteous message that doesn’t include major grammar, spelling, and/or punctuation errors. Many other people have no clue how to approach a complete stranger in the music business and introduce themselves properly. Others are blind to the imposition they are making by diving into very complicated issues, without so much as a “Hi, my name is_______” followed by a simple statement like; “If it isn’t too much to ask, I would like to ask you a question.”

It is so rare these days to get a polite message that doesn’t presume that I am sitting at my computer just waiting to write back and answer dozens of questions.

What’s up with all these rude and clueless people??!!

In an effort to educate you about a business etiquette that exists in this world, I have decided to print out a few recent messages that really drive me crazy. As you read these messages please note that I have deleted any reference to whom these clueless people are.

Please read these messages as if you received them, and ask yourself how you feel about dealing with these creatures from some lost lagoon. Ask yourself some of these questions:

Are you offended by their abrupt and presumptuous messages?
Can you decipher their cryptic writing?
Do the numerous spelling errors, grammar glitches, and punctuation catastrophes bother you?
Would you respond to these messages?, or would you just delete them and try to forget them?

Here’s a clue: If you do indeed want to reach someone you don’t know in the music industry, please approach carefully. Ask if you can ask a question or two before going into an epistle on your situation, and for god’s sake introduce yourself and ask them if they have the time for your questions). Just because you are using email doesn’t give you permission to barge into people’s lives and demand their attention.

A small amount of common courtesy will take you quite far in this business.

Here now are some amazing -but true-messages I have received. I simply ‘cut and pasted’ these messages from my email into this piece for you to decipher at your leisure.

I comment before each message below:

(Was I just sitting here waiting for your message, or what?)

“hey whats up im filthy clean 23 year old black male from louisville ky i
never thought about rapping until about two months ago one day i was
around a group of guys who where rapping so i gave it a try and the loved it
and told me to give it a try and i went against guys who been doing it for
about two or three years i've always been camera shy but i think i could
maybe do something i believe i can becomig an artist if i give it a
serious try. so if you can give me some tips on how to get started because i've
tried to find major labels over the internet but they just show the artist on
there label but im trying to get a labels e-mail address”

(Sounds like he is gagging in the middle of his first, so called “sentence’)

“ew are from philly we have 15 songs we are ready to tour we have a bio pack and
we are ready to travel we are like the draft pickz”

(Count the questions he asks me in this next message)

“Crazy questions..I am looking to produce and market a song I wrote
and am looking for help...first I need a singer..I plan on using the music from
the Beverly Hillbilly's theme I need their permission? How do I get
it? The singer I need is someone that has a very low voice...maybe a little
countryish...exactly like the guy that sings the Beverly Hillbilly's theme
song..where do I find someone? What would they charge to cut four or
five versions of the song? Please help...Also..if I was to approach radio
stations with the song how does that work? What do I charge them? Do
I get a flat up front fee or do I get paid for each time it is played? Or both?
Who is the person at the radio station that I would talk to? How do I market
the single to the public? Do I need a Record Studio? It's a Funny song
kinda like a Weird Al thing...who would help? Please help”

(At least this next guy gave me his name, (which I have xx’d out)

“My name is XXXXXXX, I am currently C.E.O of XXXXX. I produce music that seems to be well liked in the Midwest or North, I am from Milwaukee, WI. Just giving some background. The problem that having is that over 50 artist that want to buy my music for there albums, but the goal for me is to achieve a good distribution and at that time I will be able to produce the artist to create residuales. I have songs that are mastered and ready for radio play. I have not done anything major as of yet, wan't to
make sure I do it right the first time. If you know any one who has the means majorly Please Pass it On. 4XX XXX XXXX
P.S. I gaurantee You will Like what you here! 50 Beats 10 complete songs”

(up next: Has he been having a conversation with me? Check out how the message starts)

“It doesn't mean that im doing right. We have been doing tons of shows and or first
effort sold 5,000 copies locally be we haven't broke out of the Chicago
area yet we also haven't generated enough buzz to get the radio play we need.
So I take it as we are doing something wrong.”

Had enough? Me too.

Chris Knab

Tuesday, October 5, 2010

7th Tip Never To Be Forgotten

Have Your Own ‘Entertainment Law Attorney’ To Represent You.

The business of getting signed to any deal in the music business has always had, has now, and will always have, the involvement of entertainment law attorneys. No jokes will be inserted here, because any relationship between a musician, a record label, a publisher, a merchandiser etc. will come down to two attorneys hashing out the contract for the musician and the respective companies.

When all is said in done with the ‘courting’ process, the musician is never present during the actual negotiations. The musicians attorney and the music company’s attorney meet, talk over the phone, and fax their offers and counter-offers amongst themselves. This fact serves to remind you that choosing a reputable, ethical, well respected attorney with lots of deal-making experience within the music industry is an absolute necessity for any serious musician who wishes to fight the good fight in the legal arena. You may not need an attorney right now, but you should find out what lawyers are available to you in your area. The Yellow Pages of Rock, or the Recording Industry Sourcebook are a good place to start your research.

Saturday, October 2, 2010

My 6th Tip Never To Be Forgotten

6. Get acquainted with any labels or publishing companies you may be interested in..

If you were applying for a job with a certain company of corporation, wouldn’t you take some time to ask questions about their stability as a business, their reputation in the industry, and their background and experience? The same is true when shopping for a record deal.

(If you insist on this approach, and if my emails, tweets, etc. are a good source of information, thousands of you still insist on shopping for deals instead of building your career to attract the businesses you want to work with)

Some musicians get so excited when a certain label approaches them with a recording contract, or a publishing company offers to sign them. Well, what can I say…go ahead and sign some damn deal…you will be writing me back after you experiences with that approach and asking me for help, but it will be too late bpublic.

At least take the time to learn a few things about contracts before you go looking for one. Research the companies who may contact you. How have they done with your particular genre of music? What specific ‘points’ are they offering you? Who runs the label or publishing company? What is their reputation in the music business? How do you like them as people?

These and other questions can be crucial in making an unemotional decision about an arrangement that could make or break your career.