2. Financing
Label/Publisher Advances
Advances, mean that the future earning of the artists are kept by the label/publisher to pay
back the costs that may have incurred along the way (e.g. recording time, music videos etc.)
Labels mean that there are fewer advances and less offers.This is because publishers are even
more reluctant to provide advances.
Private Advance Services
These companies promise easy cash. However, it included compounding interest rates and
restrictive terms that make paying them off and gaining control of your copyrights against
almost impossible.Also, with both label/publisher and private advances, the money the artist
arms from any new music they create after the advance deal goes towards paying it off, rather
then them gaining profit.
3. Financing
Crowdfunding
This allows fans to fund projects they believe in.These fans in return receive the album
once it’s created, usually with extra benefits such as gaining recognition.Crowdfunding
has no loans to pay off however, there is less profit available for the artist. Platforms such
Kickstarter, Patreon, PledgeMusic use crowdfunding. Kickstarter states that 54% of the
music campaigns on its platform succeed.
Bank Loans
Artists are able to but their assets up as collateral so in return banks can lend them money.
There are however, only a handful of banks who will provide loans to artists with royalties
as collateral, and it takes a long time to process such loans
4. Financing
Other options for music business finances can include:
Self-financing your music
Grants and subsidies for music
Private investment for music
Music Sponsorships and endorsement deals
5. Distribution and Exchange
Music distribution is how music gets delivered to the listener
Traditionally, distributors got records into stores and labels got people to go and buy their
music products through promotion
However, over the years this has changed because of the development in the internet
which has bought a new way for people to consume music
People spend more time online, and less money on physical music. Also, resources and
energy of physical distributors are often focused on top-selling records only
Smaller bands who sign to labels tend to get trapped in exclusive agreements that end up
hindering their success
Digital distribution has allowed artists to distribute music directly to online stores while
keeping 100% of their royalties
6. Distribution and Exchange
■ These days, audiences can stream, download and buy the artists music
■ In exchange, they receive royalties depending on how and where the music was listen
to
■ Digital distribution companies now deliver digital music to major music stores such as
Spotify,YouTube Music, iTunes, Deezer etc…
■ Examples of distribution companies: LANDR, CD Baby,TuneCore, Ditto Music, Loudr,
Record Union, MondoTunes, Reverbnation, Symphomic, iMusicans,The Orchard (they
work with labels only) andAWAL (they only work with selected applicants)
7. How do audiences access them?
■ Internet
Audiences can access music products through online platforms such asYouTube orVimeo.
Through progresses in social media apps fans can come together to create a community
as they share similar interests. Products can also be modified and exchanged as well as
promoted with little to no costs.As well as this, fans can access information about their
favourite artists and music through websites such asWikipedia. Not only that, celebrities
are able to communicate with their fans through social media apps by sending direct
messages to them. However, before the internet, promotional factors were much more
expensive as the artist’s music would have been needed to be promoted in other
countries; because of this companies would have to consider any rules and regulations
that differed in any country which would increase the costs, therefore, the artists would of
needed to sell more products to ensure they achieve maximum profit.
8. How do audiences access them?
■ Streaming Platforms
Throughout the years, audiences are now able to stream and download music videos on
any portable device they own.This can be done through apps such as Spotify and iTunes.
In order for Spotify to gain profit they have created two version, one being the free
version which includes ads that allow them to gain capital, and the other being Spotify
Premium. Spotify Premium allows their audience to download music to listen offline as
well as taking away adverts but for an affordable price of £9.99 a month.These streaming
platforms have become more popular overtime because it allows audiences to access their
favourite music and music videos whenever they would like.
9. How do audiences access them?
■ TV Channels
Music videos first appeared onTV. MTV made its first appearance in the 1980s and
broadcasted MusicVideos. Other music channels also included 4Music which play all
different types of genres but mainly rap and pop due to it being the most popular genres
of music for the younger generation. However, MTV are able to target any audiences with
any taste of music due to them creating different channels for the different genres of
music.
10. How do audiences access them?
■ Physical Music Products
Before the development of the internet, audiences would access music through physical
copies such as CDs,Vinyls, Cassettes etc..They would be sent to shops that would support
the label and the artist. Even though the majority of audiences now stream music through
the internet, there are still remaining groups of consumers who buy physical products
especially now since vinyls for example have become a recent trend within the younger
generation.As well as this, you can argue that some fans would prefer to buy physical
music products to show their support towards the artists, and there may be limited
additions that could include the signature of the artist to help increase sales of the
product.
