Time to load up on finance

For the last several months, I have been working on a business plan to start my own company, Zaga Entertainment Group. Zaga Entertainment Group will house four current projects, including a music production studio and an independent record label. Up until now, I was under the impression everything was going well, then it happened, BUSINESS FINANCE. Having taken finance in undergrad, I thought this was going to be a no brainer, some simple formulas, and a little investing… NO BIG DEAL, RIGHT? If you only knew, how wrong I was!

I must admit, I have learned a lot of valuable information; some new, some old and unfortunately a lot I have forgotten.  Figuring out numbers for the start-up cost of my business wasn’t to bad, when you can research competitive companies online. This information has been used as a guideline for Zaga Entertainment Group. These guidelines have prevented me from making the same mistakes similar companies have made. Even though business finance wasn’t what I thought it would be, it has proven to be very resourceful. As you see, I’m making it out of class alive everyday with more knowledge then I came in with. I’m beginning realize how much work it takes to open a business and the knowledge need for the company to be successful.

In conclusion, I’ve learned that during economic downfalls it is hard to find funding from other sources. I have been creating a list of how to invest my money in order to successfully operate my business with out having to use the bank lenders or investors. I want to finance my company myself giving me 100% ownership over my corporation only bring in others for opportunities of advancing my company. I have not figured out if I want it to be public or private but I am sure when I get there you will be the first to know.

Economic Hard Times in the Music Industry....

Has the economy really gotten that bad to where musical artist are now giving away free CD downloads? Well I guess it has the music industry has changed again artist have gotten to the point where they just want to make music for their fans. And with the economic hardship the true music lovers cannot afford to purchase CD’s anymore.  So artists have created a way to still get their music heard by the fans. By offering FREE downloads on new albums by the artist allows the fans to stay in touch with their favorite group or singer.

Well FREE huh? If the artist is allowing the fans to download the album for free. Than how much is the artist losing on actual sales? If a CD cost between $10 to $13 dollars, I would guess and say $6 dollars of that price actually goes to the manufacturing of the CD including the CD cover booklet. Well that leaves $4 to $7 to make a profit, and say 56,345 people purchase the album at $10 a CD, well that would have given them sales of $563,450 which would have given them a Gold Status in Records sales according to RIAA. But out of that same 56,345 people they would have made a profit of $225,380. 

           
            So does money not matter to artist when it comes to their fans? Artist Sonja Kahn express in an article that “ it is important to offer a free download to your fans.”  “My fans are from all over the world. They all have different music tastes and backgrounds… My goal is to reach and touch more people with my music, spread the message through my songs and entertain at the same time." Well for this artist it shows that money does not matter when it comes to the love of music and her fan…






Article on Sonja Kahn at http://newsblaze.com/story/20090202165701zzzz.nb/topstory.html

Inside the RIAA of the Music Industry...

In the music industry there are several professional association that you become familiar with such as ASCAP, BMI, and RIAA. RIAA is short for Recording Industry Association of America; they support and promote the creative and financial vitality of major music companies. So basically they keep track of artists royalties that are paid to them. BMI and ASCAP monitor the publishing side of the artist music and report their information to RIAA.

            RIAA also certifies if albums are Gold, Platinum, Mutli-Platinum and Diamond sales. So with the digital music piracy how does this affect the music industry and RIAA? Well according to a recent report from Policy Innovation the recording industry has loss over $15 billion from street piracy all the way down to employment losses over the last five or six years.

            So how are they planning to recoup some of this money back? Well RIAA is trying to pass a bill that wants public radio to pay a flat annual fee to the Copyright Royalty allowing them to recoup from their losses. Station that makes under $100K would pay $500 each year; stations with revenue of $100K to $500K would pay $2,500 a year and so forth and so on. As the revenue amount gets higher the higher the fees are.

            With pass history of the same situation in a previous incident where the record industry tried to demand additional royalty payments from Radio Broadcasters. Stating that every time the radio played a song they would have to pay the record label extra royalties. Well now it seems the same situation is happening all over again. And from reading the last incident it did not end so well for the labels. The Radio Stations boycotted and played all independent music letting the record labels know they don't need there artist to play music on the radio. Radio Stations already provides between $1.5 to $2.4 billion dollars annually to music sales for artist and labels. So by pushing this new tax reform law on local radio will the labels and RIAA face the same outcome of radio stations boycotting until the bill is thrown out or will radio stations pay the additional tax fees annually? Well I guess we will both be waiting for the outcome when the house of congress votes on the bill.

www.ipi.org

http://www.zeropaid.com/news/86235/riaa-vs-public-radio-performance-rights-act-moves-ahead/

www.riaa.com

A Story behind A Story...

Everyone always has a story, a story on how it all started. How one story idea created a movement, their Fortune 500 Company, or how that idea made them a millionaire. So as some might do take the advice from that story and replicate exactly what this person did to see if they could come out with the same success. Well unfortunately it does not work that way, we all have different stories for a reason the paths that we take lead to different adventures.  That is why we create mentors someone that we admire for their success and achievements they have accomplished and use that as our guide to build our own stories.

Russell Simmons was born in Queens, New York studied sociology at the City College of New York. Simmons began promoting and managing local talent. After one year he quit school to purse his passion for music. Russell often referred to as the “ Godfather of Hip-Hop”, he is responsible for bring a once unknown culture to the forefront of the music industry. Russell Simmons has represented the Hip-Hop culture with dignity and integrity. Def-Jam Records was one of the first Hip-Hop record labels in the 80’s opening the doors for future labels.

        
         But over the last decade he has added several other names to the list. Not only is he an Entrepreneur, he is also a Philanthropist, Entertainment CEO, Fashion Icon, and Media Mogul. Through his organizations he has brought awareness to communities on financial education empowerment, encouraging young adults to register to vote, and several charities such as David Lynch Foundation for Consciousness-Based Education and World Peace. He has inspired others to encourage their community to become educated on political agenda that support drug law reform, education cuts, and developing projects. Simmons has a vision and through his organizations he will continue to educate, influence and create positive changes for the youth of America.

      
       From the time Russell Simmons has step on the scene with his record label he has done nothing but greatness. He has allowed people like myself to be an entrepreneur and operate an R&B/Pop/Rock/Hip-Hop label. Russell Simmons has crossed barriers that no one could imagine collaborating Rock and Hip-Hop. He opened the door for the future, for me to write and tell my story to the world through my company. He has given us a voice to speak and now the world shall hear my songs. 

http://online.wsj.com/video/talking-with-hip-hop-godfather-russell-simmons/7F2A93B9-2744-44CA-83A9-C877B34F8B7A.html

Swails, Christopher A.L. (2009, October 9). Hip Hop leadership and Russell Simmons.

http://statusmediaglobal.wordpress.com/2009/10/01/status-profile-russell-simmons/

Projects and what goes in them....

Over the pass several weeks I have been taking classes in Project and Team Management.  We have discussed what a project is, what are project managers role in the project and what are the step when breaking down a project to complete.  This course has given me the starting information I need to develop my event company and the work breakdown structures that goes along with the project.

A project is a temporary nonrecurring easy to manage, activities that are related to specific goals and deadlines. Projects are broken down into life cycles such as initiate, plan, execute, and close.  Through these phases the project is identify by the needs, development of a project solution, executed through team objectives and deliverables, and closed out to focus on customer satisfaction.  

            Project managers are the ultimate person that is responsible for the success or failure of a project. They manage all aspects of the project, including budget, timeline scope quality and customer expectation. They develop the project charter, cost benefit analysis, and monitor update project plans. 

            When trying to get your project off the ground like I am, there are several questions and steps you have to ask and take. Like what are my potential clients? What objectives am I expected to meet? And who is this project for? When you are a project management for event management industry you have to plan, prepare, organize, design, and arrange every aspect of an event.  By breaking down the objectives into various categories it allows the project to be broken down into planning and production, that way you can develop a timeline of when to expect your project to be completed. I found an article that talks about project managers in the event management industry and in this article it breakdown the different categories of the events down to design and marketing areas. I hope this article can help you understand projects and give you a little in sight of what I have learn and how to complete one if you are ever appointed a project manager.

http://www.chennaitamil.com/articles_directory/2010/08/project-management-for-event-management-industry/

My Team....

A lot goes in when you’re trying to create and develop an Entertainment Company.  With the different departments and artist, it is safe for me to say that I will not be able to do this on my own. So how will I find the right team to bring on board? Well I tell you it will not be easy.

            So far I have started off with an attorney, he has been taking the legal standpoints of getting the company name copyrighted and trademarked and paper work that follows all of that.

Once this is completed I will find an investor/business partner whose traits will fit in with my company and help me steer this project in the right way. The person will have to have a background in music, artist development, finance, and business management. They will also have to create ideas and implement plans for the company to continue to grow further. Have problem solving skills, research for up coming events, artist, and business opportunities. 

            With the artist, producers, marketing and promotion team I want to bring to the company. I also elaborate on their skills they will have to possess. Not only will they have to have great people, communication, professional, leadership, and business skills.  But they will have to have a strong background in music and their field they want to apply themselves too. You have to be passionate, educated, creative, and original in the project you are presenting to the company and mature enough to handle the road that will be laid for you to travel.

Knowledge is power use it, use it to push your music, to update your technology in your craft, and show your work to the world.  I want the people I bring to my team to be motivated, a drive to be successful and goal oriented.  A dynamic personality that inspires people to work with you and future artist to become like you. 

Positive influences, Bad decisions...

Why is it so hard for artist in the music industry to stay out of trouble and keep their hands clean? Atlantic Records recording artist T.I. real name Clifford Harris Jr., fits right into this category.

T.I. has never been a changer to the judicial system, from the time he was 14 years old he has been in and out of courtroom time after time. But it wasn't until recently that he found trouble following him once again. In 2007, he was arrested for trying to purchase arsenal guns from an undercover police officer. T.I. was convicted on seven previous counts of felony charges. And with the federal weapons charges pending T.I. is looking to facing up to 20 years in a federal prison.

While waiting for his trial date he was placed on strict house arrest orders from the courts and had to have clearance on any non-medical reasons for him to leave or have visitors. During the trial he was convicted on two charges: possessions of three unregistered machine guns and two silencers, and possession of firearms by a convicted felon. He was sentenced to a year in a day at a federal prison in Arkansas and 1500 hours of community service.

For good behavior T.I. was released in early December 2009, and spent three months in a halfway house to complete his sentence, and placed on three years of probation. He was on a roll to keeping his hands clean, with the opening of his movie Takers premiering at number one in the box office first week of opening. And preparing for his seventh studio album King Uncaged, T.I. was finally on the ride of his life, or so that is what we thought until early September 2010 T.I. and his newly wed wife was arrested in Los Angeles for suspicions of possessing meth amphetamines. And recently failed a court appointed drug test.

So at the end of the day is it all worth it? Well I think I can answer that and say NO!!! Nothing is worth losing your family, career, and assets. Sometimes the mistakes we make tend to have prices to pay, being in the spotlight forces people to be a role model even if you ask not to be one. T.I. has been a positive influence by changing his life around. So has this bad decision to be careless and violate probation cause him to lose everything and return back to jail? We will find the answer out soon.....

New Record Deals...

What has the music industry come to? From the 80’s to 2010 music has went through changes. There are new artist, labels and genre; Pop has collaborated with Hip-Hop and Rock with R&B. But is that enough to keep people happy, to keep them wanting more?

Labels have started and end, artist have come and are now gone. But it wasn’t until the early 2000’s that the music industry began to turn for the bad with the illegal downloading of music; record sales started to decline and soon after record labels felt the financial downfall.

Record companies have started to cut back on album sales and push only singles. Taking advantage of mp3’s, iTunes, and ringtones sales. But we all know that artist that are out there now like the Jay-Z’s and the T.I.’s are going to sell there millions of album sales but what about the new artist what do they get? Are they going to sign a single deal meaning a record label signs you for that one popular single you have out to get royalties from ringtones, mp3’s and iTunes sales as well as radio play and if your lucky you get to push a second single and if that one is successful as well then you get the “360 Deal”.

Now what is a “360 Deal”?

The music industry executives came together to figure out how they were going to recoup the money back that were lost to the illegal downloading. The “360 Deal” is a record contract that the artist and the record company sign in agreement that the artist will split a percentage sales of all touring, merchandise, endorsements, songwriting, publishing, etc. Now the labels are promising that they are going to add more marketing and promotions to the new artist and that they are the one’s that is taking the financial risk by signing the new artist to these types of deals. So at the end of the day who are these deals made for the record companies or the artist? 

http://musicrowlawyer.typepad.com/music_row_lawyer/2007/12/the-360-record.html