Thursday, February 7, 2008

Getting Paid From Labels

Allen L. Johnston – The Music Specialist

While sitting in a music conference panel recently it dawned on me that the Independent labels had created a whole new series of individual and small group owned independent SUPPORT businesses . These businesses are flourishing while the independent labels that use them are not.

As a Hip-Hop / R&B / Neo Soul / Rock / Country or Gospel artist you feel that your material should be the hottest in the country. You just don’t know what to do to get started, so based on what you’re seeing and hearing today the first thing you desire is a

Manager – Most individuals imagine that a manager will be the one person that can take an artists career to great heights. Unfortunately the entry level manager knows just about nothing concerning the intricacies of the entertainment industry. At this level it’s ALL about ego and a false sense of power. Many mid-level managers only know how to spend money on delusional marketing schemes and are not creative enough to really enhance an artist’s revenue streams or career.

Consultant – This person is normally hired by the artist or label based on either who they know or the company they used to work for. I recently had a label consultant tell me that he knew how to sell music because he had worked for G-Unit as a STREET TEAM LEADER. The best consultants know how to develop team strategy, work within specified budgets and develop meaningful marketing plans.

Since the majority of today’s artists don’t know how to make music they now need someone who can place music around their lyrics and make people want to listen to them.

Beat Makers – is a name that was created because rappers wanted people to believe that they were solely making the music popular with just their lyrics. It doesn’t matter that the people inventing the music, which ultimately gives the artist their muse, are relegated to an inferior position. They only make the BEAT and sell it for a few hundred or thousand of dollars. This new business is becoming so popular that I have recently seen directories of Beat Makers for sale.

Producer – is the correct name given to the person who not only creates the music, but assembles and mixes the musical project. Sometimes considered Beat Makers, today’s producers are becoming stars in their own right and their fees are becoming astronomical also. It is normal to expect to pay $20,000 - $75,000 per track for the expertise of a Gold or Platinum selling producer, plus own NONE of the publishing royalties. These are the real “ballers” in the entertainment industry for they retain more money, more often.

Since there is a growing cadre of Beat Makers and Producers, then there has to be a business in making the tools these people will need to work with.

Computer recording software – Fruity Loops, Pro Tools, Sonic Foundry and thousands more have been purchased and downloaded on multiple machines around the world. These new recording software businesses have become so wealthy that they are having their own closed vendor shows to network and give rise to newer business models.

Recording has become so removed from the art of making music that people now say “Out of the lab” making recording a Frankenstein phrase. Musical products should instead be a work of genius, emotional yet precise and be originated from creative thought. Once “out of the lab” most labels and artists start immediately promoting the “upcoming” music.

Flyer & Business Card Printers – Computers have made this business easy and home grown. Just in the streets of Charlotte NC alone I saw thousands of flyers, post cards, mini-posters and business cards ALL promoting a new artist, a new band, mix tape or song. This phenomenon is happening in every major, secondary and tertiary city in this country, and it is happening in every major city around the world. Who is reading ALL OF THIS PAPER?

CD Inserts, posters, merchandise – This is normally a 2 or 3 person operation, with one person doing artwork, while another person does the physical machine runs. This business physically makes most large orders obtained from Flyer & Business Card Printers who become the middle man. This company is also working with the…..

CD Duplication – Not to be confused with replication, the duplication process is just copying onto a pre made blank cd. Having to buy the cd duplicating machines is the first qualification for the owners of this type business. Computers have made this business easy to operate as long as you have supplies and your machines are clean and maintained.

Now you’ve got your product and you need to expose it to the world so you can become rich and famous. Of course your ego has told you that your song is HOT and you are the greatest performer of all time. Therefore you need to perform it in front of as many people as you can even though you have never had any training in how to perform. This brainstorm has generated many different varieties of the following business concept.

Night Club showcases – In every town and hamlet weekly showcases have opened, giving the artist a chance to perform in front of an audience. Very few showcases promise any reward and the few that do still use the performers’ audience to make additional money every week. I have yet to find a showcase that actually gave an artist a major label deal as the grand prize, or any artist that received one.

Talent shows – Not to be confused with Fashion show (That’s another article)

Talent Auditions – Normally this is a weeding out process to see who will really pay money to be told that they have NO talent.

Music Conferences – If I read or hear about one more conference being compared to JACK THE RAPPER’S FAMILY AFFAIR I will start a fight. Today’s music conferences leave much to be desired for the new artist. Panels have people talking down to the audience or just promoting the panelists individual agendas. The dress code is loose and so are the attendees who arrive with pre-conceived ideas of grandeur, . What made Jack’s conference the best is that it WAS a family affair, with proper rules of etiquette and a complete cross section of the industry, announcers, store owners, labels, artists and support groups. It was NOT a
DJ’s Summit
Producer’s Summit
How Can I Be Down
Get Seen & Signed

Street Teams – someone has to place this monstrous pile of paper and plastic goods in the street. Teams have become specific as the All Woman Country Music Street Team I met in Nashville recently.

Another avenue of promoting your song or performance is now the impressive…..

Publicists – Dedicated to getting you as much publicity as possible the majority of the new business publicists only have a limited amount of physical contacts and a myriad amount of email addresses. How many times have you seen 80,000 emails sent for $100 or something just as ludicrous. A real effective publicist has writing contacts, print contacts, radio contacts, television contacts and venue contacts.

Periodicals - Have you been able to count the number of genre specific magazines in your city? Not only the Hip-Hop magazines, R&B magazines, Gospel magazines, but now urban lifestyles, hair, business contacts, and networking magazines ALL in print form. Add to that the ever increasing….

Ezines/ E Blasts – Interactive emails that I am receiving about 20 a week publicizing concerts, shows, new songs, new artists, and other entertainment events. This seems to be the wave of the future reaching the consumer directly.

Internet Radio shows – There is now a radio show or pod cast for every type of music and genre available. You can hear it over the Internet at any time day or night.

When you are ready you are told that retail distribution is the only way you will ever see any substantial financial reward from your product. The reality is that if you were organized you could make more money selling your own product.

Distribution Services – This is really the new business model for making money off labels that never sell records. You offer the label or artist distribution then you charge them for everything you do.

Major Independent Distribution - First to get your product into a major indie distributor you must pay another company that already has a distribution deal with the major indie, thousands of dollars to be able to be a subsidiary company. Next you must hire a liaison that has a relationship with the major indie distributor to make sure that your product has preferential treatment. Finally you must hire a radio promotion person to TRY and get you airplay in several different cities over different radio stations all during a specified time period that should coincide with the product release and video showing.

Mid-Level Independent Distribution – This new business model is popping up at a surprising rate. Companies are now charging labels AND artists to distribute their product. Additional charges include storage fees, shipping fees, marketing fees, distribution fees, advertising fees and the new digital distribution fee. These distributors seldom have direct access to the larger chain stores (Best But, Wal-Mart, Target, etc) and must use another company to help them sell.

Digital Distribution – More and more companies are popping up claiming to be able to place your music on digital download sites and ringtones. These companies have a reputation for telling the artist that they are going to get a lot of money, while the reality is that the creator and owner of the music makes about15% of all the money from online purchases. Phone companies get the money, take a percentage then send money to the phone carrier who takes money then sends it to the mobile aggregator who takes money then sends it to the company that represents your music. You are seldom told that you must pay for ALL marketing & promotional services online & offline.

Online Stores – The new online store model is for either digital delivery or physical delivery. Once again most online stores are either individually owned by the artist and label, or leased operations where the store owner does not control the product or the money from the purchase. One of the best examples of this type of operation is BurnLounge, by the way whatever happened to all of those people claiming that this was the wave of the future?

There are many adaptations on the above named new businesses, but one thing remains constant. The independent labels are disorganized, unfocused and not realizing the multiple revenue streams available today. Instead of making money labels and artists are supporting many new businesses.

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