Music Business Essentials




Overview:
The Commercial
Music Industry



                            © 2006 musicbizclasse...
MUSIC INDUSTRY SECTORS
• The Music Industry is not just the Record Label
  Business


• The Music Industry is comprised
  ...
MUSIC INDUSTRY REVENUE




Source: IFPI research report, 2006

                                     © 2006 musicbizclasses...
INDUSTRY SECTORS KEY FUNCTIONS:
A.
A Recorded Music

• Product- New releases; Back catalog;
  Specialty Products/Private-L...
Revenue Sources
Recorded Music-

• %Sales Revenue; wholesale and retail
• % of some artist promotional and sponsorship
   ...
INDUSTRY SECTORS KEY FUNCTIONS:

B. Music Publishing
• Song Exploitation
• Sub
• Sheet music

C. Live P f
C Li Performance...
Revenue Sources

Music Publishing
• Sheet music--%retail sales
        music %retail
• Royalties- Songs, Lyrics
• Licensin...
INDUSTRY SECTORS KEY FUNCTIONS
D. Music in Broadcast

• Film- Soundtracks, Promos

• TV- Music Videos, Soundtracks

• Vide...
Revenue Sources

Music in Broadcast
• Advertising Revenue
• Royalties
• Marketing development fees
• Work for hire fees
• ...
INDUSTRY SECTORS KEY FUNCTIONS

E. Music Instrument & Equipment Sales
•Manufacturing
•Retail/Merchandising
 R t il/M h di ...
Revenue Sources
Music Instrument & Equipment Sales
• Sales Revenue; wholesale a d retail
  Sa es e e ue;    o esa e and e ...
Revenue Sources
Music Merchandise
• Royalties
• % of Manufacturing income

Music Education & Therapy
• Session fees
• Cons...
The Artist Ecosystem



            PRODUCER
 BIZ MNGR


                       Self-Licensing
             Artist
       ...
Key Industry Functions
Key Functions in the artist ecosystem
can be divided into two main categories:
                    ...
Artist-Centered
Main focus=Creativity


Who they are-
   •Musicians
   •Performers
   •Songwriters/Composers
   •Producers...
Product-centered
Main focus=Marketing and Sales
Who they are-
         are
•Record Labels
•Managers- P
 M         Personal...
Key Take-Aways:
The Commercial Music Industry
is much broader than the
Recorded Music Industry (Record Labels)
           ...
Key Take-Aways:
• M i I d t t
  Music Industry top revenue sectors (annually):
                                t    (     ...
For Educational Use Only
 Please do not copy or distribute



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MUC109 LEC 1. Overview of the Commercial Music Industry

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Overview of the Commercial Music Industry

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MUC109 LEC 1. Overview of the Commercial Music Industry

  1. 1. Music Business Essentials Overview: The Commercial Music Industry © 2006 musicbizclasses.com
  2. 2. MUSIC INDUSTRY SECTORS • The Music Industry is not just the Record Label Business • The Music Industry is comprised of many vibrant “sectors”: sectors : Business Sector= economic category or area • These Sectors include: • Radio • Live Performance • P bli hi Publishing • Technology Development • Recorded Music © 2006 musicbizclasses.com
  3. 3. MUSIC INDUSTRY REVENUE Source: IFPI research report, 2006 © 2006 musicbizclasses.com
  4. 4. INDUSTRY SECTORS KEY FUNCTIONS: A. A Recorded Music • Product- New releases; Back catalog; Specialty Products/Private-Label; • Marketing and Promotions Promo Promotions- Events, Press, Sponsorships • Production Creative (Producers); Production- Technical (Engineers) • Distribution- Bricks and Mortar; Internet; Mobile • Licensing & Reproduction- Sound Recording Exploitation © 2006 musicbizclasses.com
  5. 5. Revenue Sources Recorded Music- • %Sales Revenue; wholesale and retail • % of some artist promotional and sponsorship p p p revenue • Creative and product fees • R Royalties and li lti d licensing f i fees (mechanical & performance) • Work for Hire fees © 2006 musicbizclasses.com
  6. 6. INDUSTRY SECTORS KEY FUNCTIONS: B. Music Publishing • Song Exploitation • Sub • Sheet music C. Live P f C Li Performance • Concerts- Tours, Performing Arts • Events- Festivals; Fundraisers; Corporate C © 2006 musicbizclasses.com
  7. 7. Revenue Sources Music Publishing • Sheet music--%retail sales music %retail • Royalties- Songs, Lyrics • Licensing fees & Sales fees for royalty g y y free collections Live P f Li Performance MusicM i • % of Ticket Sales • % of Door • Contract fees; salaries • % of Corporate sponsorships © 2006 musicbizclasses.com
  8. 8. INDUSTRY SECTORS KEY FUNCTIONS D. Music in Broadcast • Film- Soundtracks, Promos • TV- Music Videos, Soundtracks • Video Games- Soundtracks, Ambient • Advertising- Jingles Sonic Branding Advertising Jingles, • Radio- Internet; Digital; Analog • Corporate & Retail- Background Music Services; Videos © 2006 musicbizclasses.com
  9. 9. Revenue Sources Music in Broadcast • Advertising Revenue • Royalties • Marketing development fees • Work for hire fees • Monthly subscription fees © 2006 musicbizclasses.com
  10. 10. INDUSTRY SECTORS KEY FUNCTIONS E. Music Instrument & Equipment Sales •Manufacturing •Retail/Merchandising R t il/M h di i •Rental and Services F. Music Technology Products & Services •Software & Hardware- iPod, iTunes •Online services MySpace YouTube services- MySpace, G. Music Merchandise •Additional Products-t-shirts; posters H. H Music Education & Therapy •Client Services © 2006 musicbizclasses.com
  11. 11. Revenue Sources Music Instrument & Equipment Sales • Sales Revenue; wholesale a d retail Sa es e e ue; o esa e and e a • Rental Revenue Music Technology Products • Retail Sales Revenue • Advertising revenue • Subscription fees • Licensing fees © 2006 musicbizclasses.com
  12. 12. Revenue Sources Music Merchandise • Royalties • % of Manufacturing income Music Education & Therapy • Session fees • Consultation fees • S l i Salaries © 2006 musicbizclasses.com
  13. 13. The Artist Ecosystem PRODUCER BIZ MNGR Self-Licensing Artist Record Label Self-Distribution © 2006 musicbizclasses.com
  14. 14. Key Industry Functions Key Functions in the artist ecosystem can be divided into two main categories: g •Artist/Creative •Product/Marketing P d /M k i © 2006 musicbizclasses.com
  15. 15. Artist-Centered Main focus=Creativity Who they are- •Musicians •Performers •Songwriters/Composers •Producers Producers •Photographers/Videographers © 2006 musicbizclasses.com
  16. 16. Product-centered Main focus=Marketing and Sales Who they are- are •Record Labels •Managers- P M Personal, b i l business •Promoters – event, PR/Publicist •Producers •Distributors/Merchandisers •Publicists •Booking age ts oo g agents © 2006 musicbizclasses.com
  17. 17. Key Take-Aways: The Commercial Music Industry is much broader than the Recorded Music Industry (Record Labels) Labels). The Commercial Music Industry includes: Recorded Music Live Performance Music Publishing & Licensing Music Instrument and Equipment Sales Digital and Electronic Music Services Merchandising g Music Education and Therapy © 2006 musicbizclasses.com
  18. 18. Key Take-Aways: • M i I d t t Music Industry top revenue sectors (annually): t ( ll ) • Recorded Music=$20-25 Billion • Musical Instruments/ Equipment= $19-23 Billion • Live Music= $17-20 Billion Music $17 20 • The traditional record label business may be declining, but the overall industry is very vibrant • There are many, exciting opportunities for f creative, technical, b i ti t h i l business and d legal thinkers in the Music Industry © 2006 musicbizclasses.com
  19. 19. For Educational Use Only Please do not copy or distribute This slide presentation is p p part of the Music Business Essentials series. Contact C t t info@musicbizclasses.com for more information © 2006 musicbizclasses.com

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