PMBC Making Money Making Music

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This is an overview from the Pacific Music Business Camp kickoff class that introduced students to some of the fundamental players, concepts and conventions within the music business.

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PMBC Making Money Making Music

  1. 1. Who’s Who?  Dana Myers – entertainment lawyer and criminal attorney, music manager, Pacific alumni  Keith Hatschek – program director, author, producer, engineer, musician
  2. 2. What’s Wrong with This Graphic? Source: Nielsen/ Soundscan
  3. 3. Out with the Old, In with the New  Traditional record sales are only a small part of overall MUSIC industry today  Some artists, songwriters, managers, concert promoters are all still making money – how?  Success no longer requires major corporate backing  But it can be a useful add-on if done strategically (Examples: Macklemore & Death Cab)
  4. 4. Why Clout Matters  What is clout?  Who has it?  Who doesn’t  How to get it  What it will allow you to do
  5. 5. New Models/Metrics  Amanda Palmer – Kickstarter  Jay-Z + Samsung – Instant Platinum  Justin Bieber – Beliebers “fanatic fans”
  6. 6. Sources of Income  Live shows  Have a Billboard – BoxScore data  Recorded music  Merch  Other
  7. 7. Where Does the $$ Go?  Solo artist, house concert, no band, use your parent’s car – you keep 100%  That is not the norm!  Expense areas  Manager  Venue share  Agent  Attorney  Sound & Lights  Roadies  Food, instruments, insurance, marketing, promotion, videos, et c.  What else can you think of?
  8. 8. Gross vs. Net  Total revenue from a gig, album, tour, or other event is called the “gross” earnings  What the artist puts in her/his pocket after all expenses have been paid is the “net”  Many artists have earned millions and been forced into bankruptcy due to poor management, under what conditions artists are eventually paid  Never be afraid to ask, “What do you expect I will net from this opportunity?”
  9. 9. Live Revenue Splits  Bruno Mars - $65 ticket  Venue/Promoter = 38% ($24.70)  Artist = 34% ($22.10)  Ticketmaster = 10% ($6.50)  Facility fee = 8% ($5.20)  Opening act = 7% ($4.55)  Taxes = 3% ($1.95)
  10. 10. CD Sales Split – Traditional retail  J. Cole Born Sinner - #1 on Billboard 200 this week  SRLP $16.98 (consumer pays)  Published Price to Dealers $12.05 (Target pays)  Price paid by Distributor $8.45 (UMGD pays)  Label pays out  $1.25 to artist  $1.00 to songwriters  Rest goes to pay off album’s cost to produce and market (aka “recoupment”)
  11. 11. Merch Madness  Survey of class – how much does stuff cost?  $__ is a great price on a concert tee!  Revenue split  Sales tax withheld  Venue share (for allowing you to sell it)  Merch share (for bankrolling your inventory)  Artist share – what you get to keep (minus your merch table staff payroll)
  12. 12. Forbes 2012 Top Earners  Dr. Dre $110MM  Roger Waters $88MM  Elton John $80MM  U2 $78MM  Take That $61MM  Bon Jovi $60MM  Britney Spears $58MM  Paul McCartney $57MM  Taylor Swift $57MM  Justin Bieber $55MM  Toby Keith $55MM  What does this mean to You?
  13. 13. DIY Artist Model  Do-It-Yourself (DIY) Artists take control of their own careers  This means:  Creative control  Learning the business aspects  Building relationships  Learning by doing! (Make that CD, book a show, hand paint your t-shirts, make your EPK, etc.)
  14. 14. DIY Benefits  You’re the boss!  You learn what works and why  What doesn’t work and how to improve  You keep any earnings (but need to reinvest)  Fun, rewarding, empowering
  15. 15. Music Biz Camp Goals  This week you will study and learn:  Production techniques  Concert production and marketing  Social Media for artists  PR and Marketing  Copyrights and “Wrongs” – protect your music  Live Sound  Careers in the Music Industry . . . And make new friends while having fun!

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