Introduction To The Music Business The Hidden Network


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This is the first installment of a suite of training presentations for people interested in the music industry.

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  • Caught the bug in 1992 started as a roadie for Percy Hill. Began managing in November 1993. Was the only guy accept promos until 1996 when I hired an agent. In 1996 began promoting shows in Portsmouth and Durham In 1997 began talent buying Over all I have managed 21 or so artists Been a booking agent and booked national tours I’ve agreed to or signed something like $2M in contracts Never had a platinum or even silver album selling band or a band that has sold out arenas but I have been doing this for 12 years and 9 of which were full time and my only source of income. Got into it and stayed in it because not only my love for music but for how music affects other people…made me feel like I was making a difference in peoples lives ….if only for awhile… CREATED THIS WORKSHOP BECAUSE The books out there don’t provide real word information – put together band and sign record deal…too easy… I wish there had been someone to give me the info in this workshop. I hope to help them avoid some of the mistakes that I have made.
  • If the artist is serious and can read then they have read a book and paid attention to the business …or if they can’t read then they have attended this workshop! No one will care as much about you as you! Are you rock? Rap? Country? Folk? There are niches and genres and you have to have some idea about where you fit in. You must be able to tell someone….How many artists say, “Its hard to define!” CRAP!!! If you can’t define it how do you expect others to…and if you don’t then someone will and you may not like what they say. NOT – I’m going to play my ass off at the Tin Palace and then someday play the Fleet Center! Must have a plan for who you are….are you the Backstreet Boys or are you pearl jam? Meaning does you plan include a choreographed dance number? Are you gong to build a following on the road or on the air…. I believe that an artist who doesn’t have a vision for themselves is: 1. Setting themselves up for someone else to create the vision for them which they may not like. 2. Total Failure Some people disagree with me on this – they believe that it is the managers role to create this vision for the act….I can tell you from experience that if the manager is the only one with vision then the artist’s days are NUMBERED! There are too many outside influences – Parents – girlfriends – friends etc... We need to first go over the artist and the artist’s responsibilities since everything starts and ends with the artist. Yes the artist has other responsibilities than just getting on stage. We define an artist as a musician or group of musicians creating music together and we believe there are a few things an artist must be able to do in order to succeed. The first thing is that the artist must understand the industry. What are the industry trends? What kind of music is hot? What kind is not? Ask yourself who is popular and why? Are there websites that are used throughout the majority of the industry and what are they? Who is signing who and why? Get a book and read about the history of the industry. You don’t need to become an expert but familiarize yourself with pioneers like Irving Azoff, David Geffen, and Bill Graham, and milestones like Dylan at the Newport Folk Festival in 1965 and Woodstock. The second thing is that the artist needs to understand where their music fits into the industry. The easier questions are: Are you rock? Rap? Country? Folk? Or some combination? But you also must be able to tell someone where your music fits. How many artists say, “Our music is hard to define!” This is CRAP! If you can’t define your music how do you expect others to define it and you need others to define it so they can tell their friends to come see you. If you don’t then someone will define it and you may not like what they have to say. Once you can define your music in terms of genre you can use your knowledge of the industry to understand how the genre came about and get an idea of the what challenges and successes the genre has had. This will help you when formulating your own game plan. The artist then has to have some understanding of the business. If the artist is serious and can read then they need to read a book about the music business or they need to watch this presentation or take a class. They need to pay attention to the business so they know as much as they can about the logistics of being a band. This is key because in the beginning you’ll be handling most of the business yourself and once you’re not then you at least have an understanding of what the people working for you are doing, or should be doing. It will help in making decisions with your manager and agent. But in reality no one will care as much about you as you so the more you know about your business the better. If you have an understanding of how you make money and how much money you can expect to make, and you have an understanding of your expenses and how much you can expect to spend you can make better decisions. For example, if you get paid $500 for a show what is your net? Understanding the expenses of your business is crucial! If you are a manager we advise that you make your artists read a book, take a class or watch this presentation before proceeding. If they don’t understand what you are doing then they’ll blame you for everything that goes wrong and take credit for everything that goes right. Well, they’ll do that anyway. Understanding the industry and where your music fits in and having some idea of the business will help prepare you to answer the most important question of all which is, “what is my vision for success?” Your vision is your game plan. You can’t be successful with a game plan of, “we’re going to play [insert local bar here] this Saturday and one day we’re going to be HUGE and be doing MSG! You absolutely must have a vision for who you are. Are you the Backstreet Boys or are you Pearl Jam? Does your plan include a choreographed dance number? You absolutely must have a vision for how you’re going to succeed. Are you gong to build a following on the road or though radio and the internet? Are you going to quit your jobs? Do you have enough contacts to perform full-time? Does your business make enough money for you to perform full-time? Are you weekend warriors until you are getting paid $1000 a show? How much do you have to be making before you hire crew? When do you want to set time aside for recording? How are you going to pay for the studio time? Are you going to take per diems? Are you going to borrow money? What are you going to spend that on? How do you plan to pay it back? There are a million questions you need to ask and your vision may develop over time but you have to start with something. We believe that an artist who doesn’t have a vision for themselves is: 1. Setting themselves up for someone else to create the vision for them which they may not like. 2. Going to fail. Some people may disagree with us on this. Some believe that it is solely the managers job to create this vision for the act but we can tell you from experience that if the manager is the only one with vision then the artist’s days are numbered! There are too many outside influences like parents, girlfriends, friends, etc. that get in the way if there is no clear vision created and agreed upon by all parties involved. This brings us to the last thing we think the artist needs to be responsible for before getting going and that is that the artist must understand and agree on what it takes to put the vision into motion and keep in moving . This is the hardest thing and the most often skipped thing. At the beginning everything is wonderful and everyone loves one another but eventually conflict arises. If you are a solo act then this is much easier but the more people in a band the more personal agendas there are; the more influences there are; the more issues there are; the more egos there are, etc, etc, etc. The relationships within the band are the hardest business relationships to maintain. There are many reasons for this but the leading cause of bands breaking up is the breakdown of communication between band members because its difficult to discuss business with people you are creative with. With bands where there is a clear leader things are easier. What the leader says goes and if you don’t like it then you can quit. With bands where the members are equal things are more difficult because not everyone agrees all the time. For example three band members might believe that everyone should practice their instruments three hours a day while one member might not think its necessary to do that. Everyone must agree on the vision and everyone must understand and agree on what it takes to put the vision into motion and keep it moving. [click]
  • What the hell does that mean? The managers role is so ridiculously vague other than to say that if something goes right then it was because the artist is so talented and if something goes wrong then it is the managers fault! Not being a cry baby…if you want to be a manager then you must accept this. Can also be a marriage counselor, a doctor, a psychologist, a mother, a drug dealer, etc…
  • Explain per diems… Explain retainers…. Sometimes has other responsibilities on the road…. Talk about Andre vs Peskie Tell story of getting no dinner a million times…. Tell story of Cleveland…..
  • Tell the story of Tina….
  • If manager they can spend half their time doing this… Take back $100
  • Talent Buyer – not necessarily true at the smaller venues… Talent buyers and promoters are a bit synonymous – you would hope that the talent buyer also has some stake in whether the show does well or not and works to promote….but that doesn’t happen…
  • Go over all the other costs!
  • Its now time to touch on the record companies and get into the specifics of record deals and recording contracts. We’ll discuss traditional deals but we also want to point out that some labels are coming out now which are more “partnership” friendly and artist friendly. There are some independent labels now offering artists non-traditional royalty payments with as much as a 50/50 split in return after the cost of the album and its marketing budget is recouped. This is just one example of a non-traditional royalty payment structure but the point is that over the last few years some independent labels have become creative in their recording contract proposals. However, the majors still do their deals in the same way as they always have. Why didn’t we include the record label with the other members of your team? The answer is that it’s hard to consider most labels as part of your team when they demand so much control, take a lion share of the profit, and for the most part aren’t interested in career development and are as likely to sever their relationship with you as there are to wine and dine you. But you can’t talk about the music business without discussing record labels and record deals. If you land a record contract the label will certainly be a part of your team. They’ll demand it. One difference between a label and lets say your booking agency, is that you can’t fire your label because of contracts they’ll make you sign and because you probably owe them a ton of money. They’ll see to it that your indebted to them. What happens most of the time is that in order to get away from under the labels control the band has to break up! Record labels have introduced most of the greatest artists and music to the world They’ve got all the connections and can make you a star! They’ll take you to dinner and give you $250,000 so that you can create your music. So why do they get such a bad rap? Lets talk about the big boys and go oever a typical deal with them and let you make your own decision. The traditional record companies have been consolidating for years. You now have four major record companies creatively called “The Big Four.” These are Sony BMG Music Entertainment with world wide revenues exceeding 9$ billion and 28% of the US Market. Universal Music Group with revenues of 6.8$ billion and having 34% of the US Market. EMI Group with revenues at 3.8$ billion and 7% of the US Market. And last but not least Warner Music Group with revenues at 2.6$ billion and dominating 16% of the US Market. Next up and barely discernable from the majors are the Mini-majors. Mini-majors like Arista, Mowtown, Elektra, and Columbia are distributed through the majors. Third, you have the Independents or Indie labels like Rounder and Flying Fish. These labels are totally self-sufficient with their own distribution deals. There are hundreds of indies ready to offer deals from $15,000-$50,000! Some are now offering non-traditional deals that give the artist a higher percentage of the profits. These labels are truly trying to form real partnerships with the artist. There aren’t many but their out there. And last and not on the list is self-released albums. A self-released album is when a band scrounges up enough to record and manufacture an album and then distributes it through any means necessary. With the invention of the internet you can now distribute your music worldwide and there are literally dozens of online resources to help you do it. [click]
  • Introduction To The Music Business The Hidden Network

    1. 1. Music Biz 101
    3. 3. Definition: A musician or group of musicians creating music together. ARTIST 1. The artist must understand the industry. 2. The artist must understand where their must fits into the industry 3. The artist must understand the business. 4. The artist must have a vision for success. 5. The artist must understand and agree on what it takes to put the vision into motion and keep it moving.
    4. 4. Definition: Helps the artist create a vision and executes the vision. * The single most important person of the artist’s team.* MANAGER Responsibilities can include: <ul><li>Booking shows </li></ul><ul><li>Tour Managing </li></ul><ul><li>Producing Albums </li></ul><ul><li>Releasing Albums </li></ul><ul><li>Promotion </li></ul><ul><li>Legal Advice </li></ul><ul><li>Managing Monies </li></ul><ul><li>and much more! </li></ul>Compensation: 15% - 20% of what the artist receives A new manager must have strong interpersonal skills.
    5. 5. The golden relationship which must be a true partnership. They work together and for each other.
    6. 6. BOOKING AGENT Definition: The person who secures live performance deals for the artist. Compensation: 10% of gross net Gross net – amount artist receives after production costs (sound and lights if artist provides). <ul><li>Works very close with the manager. </li></ul><ul><li>Has strong relationships with talent buyers in his territory. </li></ul><ul><li>First line of negotiating contract and rider points . </li></ul>A new agent must have strong phone sales skills!
    7. 7. How Do Booking Agencies Work? Agencies have their agents work in one of two ways: <ul><li>By territory – books all artists on roster or department in his/her exclusive area (usually done this way with larger agencies). </li></ul><ul><li>By artist – books artist in all territories (usually done this way with smaller agencies). </li></ul>
    8. 8. TOUR MANAGER/ ROAD MANAGER Definition: The artist’s representative on the road in charge. Compensation: Salary + per diems (depends on act). Sometimes receives retainer while off tour. Who makes a good tour manager? <ul><li>Extremely organized. </li></ul><ul><li>Easy going and “cool” but assertive and gets results. </li></ul><ul><li>Willing to “suck it up” to make the artist’s life on the road better. </li></ul><ul><li>A problem solver and decision maker. </li></ul>A new tour manager must have fearless problem solving skills and strong interpersonal skills.
    9. 9. PROMOTIONS DIRECTOR Definition: Person responsible for promoting artist tour, album, and likeness worldwide. Compensation : Salary (depends on act) What does a promotion director do? Simple answer: He/she promotes the artist and the artist’s art worldwide . <ul><li>Organized </li></ul><ul><ul><li>Must be able to write well. </li></ul></ul><ul><li>Must be personable on the phone. </li></ul>
    10. 10. BUSINESS MANAGER Definition: The person on your team who handles all your money. <ul><li>Collects the money </li></ul><ul><li>Keeps track of the money </li></ul><ul><li>Pays the bills </li></ul><ul><li>Invests it </li></ul><ul><li>Makes sure you pay your taxes </li></ul><ul><li>Handles business matters like state filings, trademarks, copyrights etc. </li></ul>Compensation : Either hourly or percentage (industry standard is 5% of gross) Cover your butt and keep you legit .
    11. 11. TALENT BUYER/ PROMOTER Definition: Person or company who either owns a venue or rents a venue, hires an artist, and is responsible for the live performance. Compensation: Varies but typically is paid promoter profit + % over split point. Talent Buyer vs Promoter <ul><li>Talent buyer typically works for a venue and is paid by the venue for the sole purpose of buying talent. </li></ul><ul><li>Promoters are typically considered independent from a venue. </li></ul>
    12. 12. Summary of Team <ul><li>Manager - who runs the show and represents the artist – 15% </li></ul><ul><li>Booking agent - who books shows – 10% </li></ul><ul><li>Business manager - who handles finances – 5% </li></ul><ul><li>Attorney – who shops albums and protects the artist legally – 5% </li></ul><ul><li>Then with the remaining 65%: </li></ul><ul><li>Promotion Director – who promotes you – salary </li></ul><ul><li>Tour Manager – who runs the show and represents the artist on the road - salary </li></ul>
    13. 13. RECORD LABELS Three types of labels: <ul><li>Major Record Companies – The BIG FOUR - Major Distribution </li></ul><ul><ul><li>Sony BMG Music Entertainment - revenues ** $9 billion (2000) - 28% of US Market </li></ul></ul><ul><ul><li>Universal Music Group (France/USA) - revenues $6.8 billion (2004) - 34% of US Market </li></ul></ul><ul><ul><li>EMI Group (UK) - revenues $3.8 billion (2004) - 7% of US Market </li></ul></ul><ul><ul><li>Warner Music Group (USA) - revenues $2.6 billion (2005) - 16% of US Market </li></ul></ul><ul><li>Mini – majors – Distributed through the majors </li></ul>Arista, Motown, Elektra, <ul><li>Independents or Indie labels – Independent distribution not affiliated with a major. </li></ul>Rounder, Columbia Flying Fish
    14. 14. Where to Get More Information <ul><li>General information – </li></ul><ul><ul><li>All You Need To Know About The Music Business – Donald S. Passman </li></ul></ul><ul><ul><li>Musician’s Business & Legal Guide – Mark Halloran </li></ul></ul><ul><li>The History of Rock and how the major players developed </li></ul><ul><ul><li>The Mansion on the Hill – Fred Goodman </li></ul></ul><ul><li>Touring and Promotion </li></ul><ul><ul><li>Musician’s Guide to Touring and Promotion - Billboard </li></ul></ul><ul><li>Booking agents, Managers, Venues, Talent Buyers, Record Companies, Artists </li></ul><ul><ul><li>Pollstar and </li></ul></ul>