The Future of The Music Industry...

Over the past several years the music industry has taken a sudden downfall in sales. Piracy of illegal downloading has caused record labels to pull back on signing new artist. The music industry has taken a complete spin from back to the early 1900’s with sheet music was the only way to listen to music. To nearly a century later, with mp3 files and digital media being the new way to listen to music.

Almost ten years ago no one had even heard of iTunes, MySpace, or even FaceBook. But now, the music industry has changed in ways no one could have predicted, in what is now called digital downloading. The music industry has been torn apart by new technology and social media. The future of music from the creative aspect to the business has all changed due to the illegal file sharing. So now that the record industry is no longer making money in the future because, artist are now self-producing, distribution, and marketing their music through the Internet.

Record labels have begun to change their strategies on artist, album sales, and marketing for their clients. Even contracts have been changed to fit the new trend of digital downloading and social media, offering what is known as the 360 deals. Which is different from artist to artist, but in general will include earning revenue from live performances, merchandise, and other income the artist receives. These deals are put in place to make up for the drop of the albums sales. But due to the new digital downloading and iTunes, album sales are surely but slowing climbing back up the charts.

So as the music industry continues to work out a few minor details in the new technology department. This may allow students who are going to school and receiving degrees in the entertainment business industry, to look forward to the future of the music. We may not be able to predict the future but we are sure getting our selves prepared for it.

http://www.futureofmusicbook.com/2011/06/how-will-musicians-earn-money-in-the-future/

Finding Alternative Funds to Start Your Company...

For the pass two months of my program we have really been focusing on our business plans and how to find ways to raise capital for the start-up cost of our business or company. When starting a company, money is the hardest thing to get. And with the economy the way it is, it just seems to be getting a little bit harder to start a company. Investors have begun to invest in other companies that have been around for quite some time, where as the new business have to find alternative routes to find funding sources. So for the past several weeks I have been researching companies that help fund new business, and decided to share a few with you. With the help of others and my instructors I have found several companies that do offer investments to help company like mine and maybe yours rise from up off the ground.

One of the first companies I looked at was Opportunity Finance Networks. OFN is a private membership only financial institution located in all 50 states. They are a community development company that helps finance urban, rural and native communities. Funds are received in loans or investment ranging thousands to millions of dollars. New business owners as myself could really benefit from using OFN to help raise funding for the start up cost.

I thought this next funding source was an excellent choice being that I am part Native American. First Nation Development Institute is a grant program that provides financial resources to other Native Americans to help fund their nonprofit organizations. First Nation Development receives grant from the government to help fund new businesses within the American Indian communities. And even though this institution is not for everyone, there maybe others out there like this one that you can research and find more information on.

Remember that when you do look for funding sources for your company, that you pay attention to the type of funds your are borrowing from a financier. Loans are money that is borrowed that you payback over a period of time with interest. Investments are usually a person that writes you a check for the funds needed, but in return of the payment may want part ownership within your business. With the companies listed above there are advantages for these types of communities and the people that are looking for funding to start their business. But there are also disadvantages as the types of financial institutions are not available for everyone, and maybe a harder to find funding. So when looking for funding research all your options that way you have all your cards in your hand to win the game.

http://www.opportunityfinance.net
http://www.firstnations.org

What to do with Business Plan Advice?

For the last month I have been working on building my business plan for my entertainment company. One thing that is important when developing a business is the information that goes into it such as the marketing and financial data. Investors want to know if there is a market to sale your product in and if they will get a return on their investment.

When researching business plan experts I came across Theo Afkoudias, a Project Prospectus who has written numerous of articles on investor documents. He has a strong commercial awareness and broad business on financial writing. What he looks for when writing business plans is the resource allocation and preempts of return on the resources. When looking at new business plans he focus on the management section, “ In the management section you need someone who is experience in that industry in order to determine if I would move forward with the business deal”. He also mentioned to put focus on the industry analysis and marketing research; if you don’t know your market then you don’t have anyone to sales too.

While researching business plan experts I went to take a second look at what Timothy J. Cartwright the Chairman of Gulf Coast Venture Form stated, about what he looks for when investing. The first thing he looks at is the proforma financial statement; it should include detailed information on revenue building and exit strategy, along with how the company will return the invested funds. In order for him to invest his money into your business he has to make certain that he will get a return on his investment.

So after the long research of finding out what I should put into my business plan I went back to adjust my marketing strategy, make sure I hit head on with the customers in my target market and how I would pull them in as clients. And I readjusted my financial statements, making as real assumptions as possible while giving the investors the opportunity to invest knowing they will get a full return on their investment with the shortest time possible.

Business Plan Experts...

When developing a business plan you want it to be perfect and self-explanatory. A business plan contains all the information you will need in order to receive funds from a bank or investors to start your business. Well for the last ten months or so I have been working on my business plan preparing for the day that I have to place it in some one hands. I was researching some banks, venture capitalist, and angel investors when I came across this company named Gulf Coast Venture Forum. The company is located in Naples, FL it is a group of angel investors that looks for investment prospective in pre-revenue or early revenue companies involved in targeted industries.

Ran by Timothy J. Cartwright Chairman of Gulf Coast Venture Forum. He is also Managing Director of Compass Advisory Group, LLC, a firm he founded in 2003. He began his career working with marketing companies that specialized in software. He received his MBA at J.L. Kellogg School of Management at Northwestern University and his undergrad from University of Wisconsin in Economics. He has also served as a Board position with FGCU Foundation and served as a Director for the Florida Economic Development Council.

The company looks for passionate and committed management team who also has invested their own capital in the company. There should be documentation of customer demand within the industry and business, a competitor analysis, a complete description on how the company will make money. Proforma financial statements should be included as well with detailed information on revenue build-up, and an exit strategy along with how the company will return the angel investors fund. If selected GCVF provides presenters with a 20-minute delivery followed by 10 minutes of Q&A. They look for market opportunities, potential growth, among other factors, to make sure that you are meeting the investment criteria.

So make sure that when the time comes for you to complete your business plan and hand it to investor that you do your homework and research companies like the one above, because not all investors are good investors.

www.gcvf.com
http://www.pr.com/press-release/70338
http://angelsoft.net/angel-group/gulf-coast-venture-forum

Social Media has taken over...

Social media has taken over the world of entertainment. From your favorite artist to information on the next blockbuster hit, is all marketed through social media. Facebook, Twitter, Blogs, RSS feeders, etc. all have one thing in common followers. With the millions of people that follow these social networking sites, companies have the opportunity to put information at the palm of your hands. With the ability to follow your favorite artist, company, movie updates, etc., social networking has become the new way to receive information in the entertainment industry.

Advertising on social media sites has been one of the top effect ways to market product, services or even to promote upcoming entertainment events. So if the music industry is getting serious about social networking then why don’t they just create their own social networking site? Well Warner Music Group has, they have implemented a site call Eso on to their main site. Eos is created by Cisco as a platform that is intended for media and entertainment companies. Eso represents certain social networking tools that can bring various music sites more social interaction with the fans. Warner Music Group is hoping by add this platform to their site that sales will rise and more fans will come to the site for information on artist that are signed to the label.

Research has shown that 36 percent of fans go to the official sites for updated information on their favorite bands. With Warner Music Group their goal was to get the same reaction as MySpace when it first was created. Bands actually used MySpace to interact with their fans talking directly to them and giving out updated information on upcoming albums, tours, and special appearances. Eso has been design to do the same things as all social networking sites. Warner Music Group wants to keep fans on their site instead of visiting other sites for the same content. So adding Eso to the site, with this goal in mind has add more revenue to Warner Music and a bigger fan base following the site.

Warner Music has integrated the new media marketing strategy and by jumping on board with the social media train we can all see what changes this has made to the industry. So in my opinion, if I had the same opportunity I would do it the same way Warner Music has.


http://profy.com/2009/01/10/music-industry-getting-serious-about-social-networking/

Digital Marketing in the Music Industry

  Digital marketing has played a very high role in the entertainment industry for quite some time now. With the up rising of social media, digital marketing with Twitter, FaceBook, RSS feeds, emails blast, podcasting, video streams, instant and text messaging, and other Internet communication vehicles. This has lead to a change in the way we promote and market our music in the entertainment industry.

  The Internet has been the center of digital marketing. Its main focus has been towards search engine optimization (SEO) and pay-per-click (PPC) advertising. SEO such as Google, Yahoo! And MSN has been designed to improve web site in order to attract search engine crawlers. A crawler, crawls from one site to another, following the links that is within each web page. And PPC is keyword advertising programs that when a specific word is typed in, companies web sites pop-up or is listed in the search. The web site owners are charged each time a person clicks on their ad. This type of advertising brings visitors to the site based on what the consumer is looking for or needs.

  So what has digital marketing come to now? Well one, advertising has and will continue to change with video ads, Internet banners ads, and other creative digital communication outlets to bring awareness to a brands. YouTube has been one of the top online video advertisers. It has allowed viewers to promote, video share to other online sources, and advertise all without spending a dime. Twitter and FaceBook have been added to just about every media outlet you can think of gaming console, mobile devices, and PC along with cable on-demand service. The ability to access these social media sites from just about anywhere you go can add a great about of traffic to your site or advertising for your product.

  Social media along with technology has rewritten the terms for marketing in the music industry. Artist to record labels executives have incorporated social media into their marketing campaigns. With these communication outlets it allows the fans or general audience to receive current information on a their favorite artist, upcoming albums, shows, or appearances. And giving the artist an opportunity to receive feedback from their fans, so the artist can build a stronger relationship with them as well.


http://adage.com/article/digitalnext/digital-marketing-watch-2010/141219

Something's You Might Want To Know About Music Publishing...

Now that we have established what music publishing is, we can discuss what the performances rights organization does for you, the difference between mechanical royalties and performance royalties, how music gets distribute and how effect is self-publishing you music.

There are three major performing rights organizations ASCAP, BMI, and SESAC. The purpose of these organizations are to collect royalties from all performed music, whether a song that is played in concert or a song on the radio. All published music is placed in a catalog with either one of these organizations, they then act on the behalf of the songwriter or producer to collect licensing fee for their work. In order for a song to be played on the radio or performed live it has to be published and you have to be a member of one of these organizations.

The royalties most songwriters and producer will collect are mechanical and performance. Mechanical license royalties are money collected from the sales of CD’s, DVD’s, films, videos, commercial, etc., that your song is featured on with an audio-visual media. Performance royalties are for live performances, radio, TV, satellite radio, jukebox, syndicated radio, broadcast radio, etc. The difference between the two royalties are one is performed and the other is a physical copy of the songs reproduction. But you want to learn more about the royalties in the music business visit www.bmi.com.

In the new day and era music is now digital distributed to the Internet, through iTunes, Rhapsody, CDbaby just to name a few. The songs are format into MP3 files for customers to purchase and download. So how effective is self-distributing music now? Well with the new trend of digital media, it has made it easier and effective. Artist can now create a song and digitally distribute the song himself or herself, by either uploading it to iTunes or Amazon for their fans to purchase. You can also self-publish your song by developing a publishing company and market the song yourself by distributing the song to your fans, local radio stations and record label executive. Always research information before jumping out there and make sure you have the material that others are looking for to get you that number one hit.

www.ascap.com

www.bmi.com

http://entertainment.howstuffworks.com/music-royalties7.htm

http://www.stonebridgemastering.com/blog/?p=35

The Deals of Music Publishing....

           Well we are coming close to the end. This month I will focus on publishing and distribution, from the regular old school to the new media digital era. We will discuss what music publishing is, and who are the key players in the contract deal.          

           Music publishing is when a songwriter creates (writes) a song and in order for that song to make money the songwriter has to have a publisher. The publisher signs a contract with the songwriter on the cost of how much the song will make, usually publishers and songwriter split 50/50 on royalties from the songs earnings. The publishing company use it contacts in the music industry and shops the song like it is a product trying to make as much money as possible for the song.

            When finding a publishing company you should make sure you do your homework before signing a contract with the company. Now with that being said, there is several music publishing deals out there: the “standard” publishing deal, co-publishing deals, and administrative deals to name a few. A “standard” publishing deal is the normal 50% for the songwriter and 50% for the publisher. You may be wondering if the songwriter wrote the song then way does the publisher get 50% too? Well with the publisher’s connections, marketing and promoting this song to sell to other artist or musician, the publisher is working the same if not twice as hard to get the song in purchased whether if it is by a film, commercial, or musician. The copyrights of the song is divided 50/50, so that the publisher has the right to distribute, reproduce, or allow others to perform the song. The publisher’s goal is to get as much money for the song as possible.  A co-publishing deal is when a songwriter already has their own publishing company and they sign a contract/deal with a second publisher. The income is split 50% for the songwriter, 25% for their publishing company, 25% for the secondary publishing company and the copyrights are split between the two. And an administration deal is a songwriter signs a deal with a big publishing company just to collect money on their songs. In this deal the administrator may get 10-20% of the income and the songwriter will collect the rest, and the songwriter will own all of their copyrights.

            

http://www.musicpowers.com/publishingdeals.html

Get familiar with your Intellectual Properties

This month we have touched on a few topics in Intellectual Property such as trademarks, copyrights, fair uses, etc., I have picked three podcast to share, that will talk about cases in Intellectual Property. The podcast are from entertainment lawyer Gordon Firemark. The first podcast touches on a few topics such as, sound recording royalties, a copyright case dealing with rapper Jay-Z, and a local Houston’s producer on being sued for copyright infringement. As of now artist are only being paid for record sales and/or satellite radio. They have never received royalties for radio clear channel broadcast. The legislatives are trying to pass a bill in favor of the musical artist to begin receiving royalties for songs played on the radio. Well in order for this to happen radio stations will have to pay fee to RIAA to play your favorite song on the radio. But as of now no ruling has been made.

 Jay-Z had a case of copyright infringement for the song “Big Pimpin”. The plaintiff Nafal claimed that the Egyptian tune in the song belongs to writer Baligh Hamdi. Nafal claimed the rights to the Egyptian song through an assignment agreement with a third party who allegedly acquired the rights through Hamdi’ heirs. The federal court came back and granted summary judgment to the “Big Pimpin” and stated that Nafal’s agreement did not give him the exclusive rights necessary to bring on the copyright suit.

And producer Jim Jonsin sued over copyright infringement for Houston rapper Slim Thug song “I Run”. The original creator for the track Jason Jaggon was never notified that Jonsin had interest in the track for use, this giving Jaggon the right to sue him for compensation and copyright infringement. The case is still in court and has not been a ruling for this case.

The second podcast address the issues of the Minnesota woman who download 24 songs from a file sharing application. Six Major Record labels brought a suit against her, for statutory damages for illegally distributing songs for the sole purpose of obtaining free music. The damages equal out to $1.92 million, the court reduced the award to $54,000 ($2,250 per song), three times the minimum statutory amount. Least to say I don’t think she will be downloading any more songs illegally from the Internet every again. Another topic was Pink Floyd v EMI, the group has in a expressed in a contract to prohibit selling tracks as a single song sale. The court holds that Record labels cannot sell the band track individually without permission. Pink Floyd stated it was a moral rights issue to keep the albums “whole”, which was included in the contracts. The band’s music was placed on iTunes for album purchase and single song purchases. The contracted was applied before iTunes or any other MP3 websites came a long.

On the final podcast discusses the court case with Eminem on whether digital distribution of a third party should obtain a license and that the copyright owner should receive a percentage of the income made from the song under contract.  A contract was made between UMG and Apple to digitally distributed Eminem’s master recordings through iTunes for permanent downloads. Artist and labels are entitled to receive payment of royalties from record sales or license where a duplication of the song is use to make another record. In the same case a former label Eminem was signed to F.B.T. Productions are suing for royalties due over older songs. In 1995, F.B.T gained exclusive rights to Eminem’s recordings. In 1998 F.B.T. signed an agreement to transfer the rights to Aftermath Eminem’s label as “Records Sold” and would receive 12 to 20% of retail price. In 2003, F.B.T. and Aftermath created a new agreement that terminated the 1998 agreement. The agreement increase royalty rates and changed the wording of Record Sold to Masters Licensed. F.B.T. brought the suit after an audit showed that Aftermath had been applying the Records Sold to calculate royalties due to F.B.T. and not Masters Licensed. Aftermath stated that it did include the royalties from permanent downloads. So the court ruled that F.B.T. would not receive additional royalty payment and Eminem would get royalties from the iTunes downloads.

Podcast 1:http://firemark.com/2010/08/25/entertainment-law-update-podcast-episode/
Podcast 2. http://firemark.com/2010/03/25/entertainment-law-update-podcast-episode-olympic-trademarks-  album-integrity-more/
Podcast 3. http://firemark.com/2010/09/29/entertainment-law-update-podcast-episode/

When things go wrong in Entertainment Law...

Music Recording Contract Fraud

How important is it to do your research before signing contracts, especially in the music business? I was reading this article I found earlier, about how a well-know R&B singer got screwed over in a music record contract because, his attorney or his self did not research the company they were dealing with. He signed a contract for $1.75 million to record one album under this entertainment record label. Well, according to the article the record label never existed. So what does that do for this artist, because he signed the contract the owner of the “label” has the right to sue him in court for breach of contract if he does not follow through and it can potentially stops him from recording any other music for another label or independently. When dealing with contracts, even though it seems like a great deal, maybe sometimes it is too good to be true. In my opinion his attorney should have done his research before allowing his client to sign a fraudulent documentation. So who is to blame I say both because, the artist is just as much of control over his career has his attorney. When dealing with the music business some people are just looking for the money and some do it for their passion of the music. In cases like these you have to make sure you are doing business with the right person that fits your standards.

Copyright Infringement 

 When it comes to copyrights you are responsible for checking infringements on your accounts of services. But what happens when it is all around you? Who do you go after first? Well some companies go after the most popular because they feel they have a better chance of getting the company to payback losses from the infringement. In this article it talks about copyright infringement with music and film. And with the technology in this century it is easy to upload and download files over the Internet. But a lot of music is downloaded illegal because it is leaked out of the artist’s computer and the same goes for motion pictures. So how do you protect yourself from this happening to you? Be the eyes and the ears of your product or service, you are responsible for copyright infringements not the performance rights organizations.

Music Distribution Deals

With my production company I was looking into music distribution, if I want to distribute the music myself or outsource it to another company. With distributing music myself I run into a few problems such as the networking. You have to know the right person in order to get your music heard in other states. So I would have to travel to network in other states to get my music heard on radios and Internet. Where as the other established distribution companies already have this reputation and does not have to work so hard to distribute music. But I was thinking they had to start off somewhere, so I think I will try my luck and start networking to get my music out to the world. Distribution deals are very important in the music industry it gives that artist or producer the ability to get their music worldwide.

Next stop Artist Management...

So in this month my class was on Artist Management and Product Development. I was very interested in the Artist Management, I have prior experience with managing artist and I wanted to make sure everything I had done was right.  Well turns out I was doing exactly what I was suppose to do and more. I was shocked on how much I knew with out educational experience.

The book we have been reading is This Business of Artist Management by Xavier M. Frascogna, Jr. and H. Lee Hetherington.  This book has given insight on what an artist management job should include. It breaks down what an Artist Management does and how it is important to have management representation. The music business is changing constantly and rapidly.  Someone needs to help navigate new opportunities, revenue streams, technology, and help to create a structure around their art so that the artist can stay focus on the music.

A management company should understand technology, and who is willing to take experiments, risks, and try new things in addition to working non-stop for their artist. Mangers who want to be successful should take a few pointers from this book, like for example, managers must live and die by their artist, their success is your success, there should be teamwork with a equal hand in how the artist is going to be marketed to the industry

In reading this book and learning in class I began to grab the concept of the Artist Management and developing artists careers. I plan on using the knowledge that I already had and putting it together with the things I have learn this month, and creating a Artist Management firm for signed and unsigned artist. I want to make sure that I am the best at representing the best.

Do you have what it takes to become an Artist Manager?

Being an Artist Manager is something that I really want to pursue. I have had a little bit of experience with managing my own artist, but I decided to put that on hold to come to Full Sail University, so I could get a better understanding on how everything operates in the entertainment business. Living in one of the biggest cities that produces a lot of music has its benefits; I have had the opportunity to meet different people in the music industry. I got a chance to work on a small project that involved an artist development deal with a local artist manager Ron Black.

Ron has been responsible for a few major producers careers and some local artist. I had a conversation with him asking a few questions about how he got started managing artist to where he sees his self in the future.

Q: So how did you get started in the music industry?

A: I got started back in 2000, when I came across Fatboi (a local hip hop producer). A friend of mine introduced us and at the time I was running a small club in Atlanta, and we had like an open mic night. I made a deal with Fatboi that if the local talent could use his tracks to rap to, I could help him get to a better place to sell his music.

Q: What do you look for in the artist you sign?

A: I look for where their heart is. If a person has it in their heart that they want to make, that they are going to make, then there is no doubt that they would not give more than 100%. If music is their focus, their motivation, their drive and you can see it. Then that is the artist I am looking for, that I want to sign, because that one just might make it to the top.

Q: How do you feel about the industry change on how promoting new artist have changed?

A: Living in Atlanta and having new artist come out every week unsigned, make it easy and difficult at the same time. When you have the right people behind an artist that artist can go far. With the music industry changing you can get really far based on whom you know versus what you know. Like for example: if you know the radio personalities at a radio station and you slide them a demo and it gets played on the air regardless if the song is a hit or not, you just promoted your self and now have an advantage to further that possibility. 

Q: How do you measure the quality of a singer or producer? How can you tell if they will be a star or make it in the industry?

A: I measure the quality of the artist their music, their voice. Often times you can’t tell a diamond is a diamond until you scrap the dirt of, wash it, and sand it to the shape of a diamond. That is how I measure if that artist will be a star.

Q: What are the top 3 skills an artist should obtain before you even decide to take a listen?

A: One is talent, if you don’t have talent well there is no need for me to have a conversation with you. Two, I would say motivation, you have to stay motivated in this business, it is very easy to get distracted or let the fame and the fortune get to your head. If you stay focused and motivated on your goal there is a chance you can make it. And third, social skill is one of the important ones. If you want to be an artist you have to first self promote yourself. If you can’t sell yourself what makes you think I can, when the talent is all you.

Q: So what do you offer your artist that signs with you?

A: Each artist is different and every contract is different. But for the most part I offer the artist the ability to be creative with their music, have input on how they think their image should come across and I treat them as business partners so they can learn the ropes of the business.

Q: How do you approach the creativity with the artist?

A: There has to be trust between the artist and the manager. My job as a manager is to protect their image, so when developing the music and image. The artist has to be able to trust the decisions that I make for their career, image, and music.

Q: And where do you see your career going in the future?

A: I look forward to managing more artists and building my roster. And continue doing what I love to do the most and that is music.

As my time came to an end with Ron I began to realize some of the qualities he had and compare them to mine. If I continue on the road I am currently on then there is not doubt in my mind at I could not reach the same level Ron is on or higher. Like he said, if you stay motivated and focus you can reach any level you set your mind to.

Deal Making in the works...

So this month we have been talking a lot about negotiation involving deals for record contracts, artist management, and reality TV shows. Going through the different types of negotiation criteria’s I thought it would be interesting if I talked to someone I knew that does this in their everyday job. So I called up my friend Mr. Thomas, he is a lawyer that does a lot of work in the entertainment industry. He has work on a couple of projects for some of my friends, so I decided to ask him a few questions for myself to get a better understanding of this whole negotiations and deal making class.

           

            The first question I ask was what negotiation techniques do you use when you negotiate contracts for you clients? “I am a fairly sensible man, so I usually stick to the traditional side of negotiating. I find it easier to go with treating each other as equal, that way no one is above the other. When I negotiate contracts for my clients, I make sure I know exactly what they want and what they are looking for out of the deal, that way everyone goes home happy.” Well it seems everyone has there own way of negotiating deals. Whether it is playing hardball to wait for the other person to crack first, or going in saying your piece and hopefully walking out with what you were expecting to get. Another question I ask was how do you work a negotiation with a company when you have other offers on the table? “When I have other offers on the table, what I do is meet up with each company to see what they are offering my clients. Once I know which direction my client want to go in, I pick the top two my client want and I begin negotiating what is needed from the deal. Only when I am not getting the response I want from the deal will I throw up the other companies offers. I want them to know we want to work with them, but there are other options as well. That way it allows the company to see that they could miss out on a great opportunity.”

            Speaking with Mr. Thomas help me see that when it comes to negotiating it is only hard when you make it hard. Everyone has different strategy and you have to figure out what yours is. I think I have figure out how good negotiator gets the deals. Now it is time that I get out there and put what I learn to use.