We’re going to talk about the Music Business Money Tree and then, more specifically, how you can start earning a living… soon.
I like the idea of having an income source. I don’t know about those of you who are independently wealthy. You might not need that and are doing this for fun, but most of us need a little bit of money coming in. So that we can continue to put our heart and effort into our love of the muse.
First of all, when the door of opportunity opens, you have to have your shoes on and your laces tied. So that, when you run through the door, you don’t stumble on the other side. You have to be prepared when the door of opportunity opens..
Opportunities present themselves all the time. Opportunities are projects and the music industry is all about projects. Everything is a project. I call these projects “hats”. Music Business Hats.
Music Business Hats
You’re either a fan, or you’re a musician, or a performer, or a songwriter, or producer or whatever, everywhere there are hats. There are multitudes of entertainment business hats. Let’s call the first one “The Fan”.
The Fan Hat
The Fan Hat is one we are all familiar with. This is us… the one who goes to festivals and shows and buys records and downloads and concert tickets and that kind of thing.
And because everything is project based in the music business, we have to think about which Hats that we want to concentrate on. For example, you could be working on a song or you might be writing a song. That might be your project. You might be recording a song. That’s another project. You might be preparing for a gig. That’s another project, or a tour. That’s a project. Everything is a project.
Sometimes, I find my plate of projects is overflowing, and I have way too many to do. Problem with that? All of them will suffer. And sometimes my plate of projects has only one or two, and then I suffer, because there is not enough income coming in. The real key is how to balance those projects. You’ve got to make it so there ia an income stream coming in all the time. Remember to treat your projects and clients with quality. Everything is about quality in this industry.
The Musician Hat
So, Hat number two would be the musician or the entertainer. This could be a street musician or a band or a singer. And not all musicians are performers… that’s another Hat. And, yes, you can be a fan and a musician. You can do both.
The Content Hat
And also, you may be a content provider. That’s the third type of Hat… The Content Provider Hat. Perhaps you are a songwriter or arranger or composer or producer. You could be the fan, the musician and the content provider.
So, let’s think about that. You’re at home and you’re playing the piano or you’re playing the guitar, or you’re coming up with a beat. It really doesn’t make any difference. If you’re playing or writing content for anybody else, other than you, you are now thinking commercially. It might a lover. It might be a family member. It might be a friend.
Whoever you are writing for, you are trying to get their attention or to touch some sort of sensual nerve within them with your art. As soon as you cross that boundary, you are entering the music business. This is where art and business come together. This is where music and money make sense.
Now, what’s the difference of selling out at this point? We all are going for the art, but there is a time when we might feel like we are “selling out”, where you are creating the art, specifically for money. Is there something wrong with that? Hmmm, I don’t know. It depends on your way of thinking.
The Entrepreneur Hat
What you have to think about, at this point, where you change from art to business, is putting on the fourth Hat, The Entrepreneur. The Entrepreneur is the one who works the business with the art. The nice thing about the music industry is that almost all of us are entrepreneurs is some way or another.
Now, if you want to go and “work” for Disney, you’re not really an entrepreneur. You’ll get you paycheck and everything, but that’s not really the money tree because you’re working for somebody else. The Money Tree is really about owning and controlling your own destiny.
We can do that in this industry. That’s what kind of makes it fun. We have to take the risks, but on the other hand, we have to think business. Those income sources, which the entrepreneur thinks about, involve cash.
How can we be a music business professional and make money and not do something we don’t like, or doing a job that is not music-related.
There is income in publishing. There is income in performances, or recordings, merchandising or endorsements. And also, there’s teaching or coaching income. There are a couple different income sources that we are going to look in to and see how that works.
When I say recording, that could be lots of different jobs in the recording industry. When we talk about performances, there are lots of different jobs in the performance industry. So, if we are looking specifically, there are lots of different ways to do this.
The Management Hat
Now, Hat number five is Management. To be good at management in this industry, you have to have some sort of Project Management skills and then use those techniques. How are you going to take that song, that recording, that gig, that tour or whatever project that you’re working on?
You’re going to need to think about Project Management. I highly recommend that you take a course in Project Management. It will break it down for you and help you with sequences to get the job done in the best professional way. You will use Project Management with all the “hats” that you’re going to be working.
If you are a songwriter, hopefully you are project managing your song. You get back to it. You work some more on your song. And maybe the next day, you work on some lyrics. And then maybe set it aside for a few days, and you manage your time so that when you come back to it, you increase your lyrics, or you think about tweaking it, or a re-write, or another re-write or another re-write, so that you can put out the best possible project. And there are lots of different projects.
Music Publishing = The Real Money Tree
Publishing is another income source. We’re going to talk more about this but I think this is where the real money tree is in the music business. This is the real income source.
If you are a songwriter and you don’t own your own publishing company, you are a fool. So, start thinking about owning and controlling your own publishing company.
Question: What is a publishing company? What does it do?
Answer: OK. Good question.
For example, if you are a songwriter, and you’re writing your songs. Maybe scratch out a couple notes or scratch out a couple chord progressions and maybe a couple of lyrics. Then take the paper and add it to the pile of some other of your other songs. And that’s it as a songwriter.
If I was in a band, I take that song sheet off the pile of songs and then ask the rest of the band to rehearse it for performance or recording, wow I am not just the songwriter, I am the publisher as well. I’m pitching the song that I wrote. So I took off the songwriting “Hat” and put on the “publishing” Hat. I’m pitching the song for use of that song.
Now, it does’t have to be my band. It can be any band. It could be pitched to a producer or a record company. If you are pitching that song then you are doing the process of what a publisher does. They then collect the royalties and then disburse them to the songwriter or songwriters. That’s the difference between the two.
Question: What is the price range to start up a publishing company?
Answer: You can start a publishing company in the State of Ohio with $125. Then put $5 into a bank and open an account. Then you are in business.
It’s that simple and only $130. Now if you want to do business cards or letterhead, it can be more expensive but you can actually start it up right away. It’s not tough and really easy through the Secretary of State office.
The publisher is going to make money from various income sources. Originally publishing was all about sheet music. Printing the sheet music and distributing the sheet music. Now with so many new things being invented there are new opportunities for making money with songwriters.
The royalties really come down to the C-Circle copyright. This is the copyright for the words and music. C-Circle copyrights can be used for mechanical licenses, performance licenses, synchronization licenses, grand licenses, foreign licenses and more.
Merchandising is another income source in the music industry. That can be done with the sale of T-shirts, sweatshirts, and compact discs. You’ve probably seen them at gigs. The merch table.
The Agent Hat
The seventh Hat, The Agent. Agents handle calendars and bookings for performing artists, cover bands, wedding bands, DJs, into nightclubs, schools, TV appearances, festivals, etc. Agents book tours, national acts, mid-range acts, and up-and-coming attractions. Yes, the Bat Mobile has an agent.
For agents, it’s just about contacts by getting on the phone and making the deal happen. And that’s what an agent does. Basically making those deals happen.
The Promoter/Talent Buyer Hat
Hat number eight, The Promoter or the Talent Buyer. Many times the talent buyer is hired by the promoter so I put them in the same category/hat. Basically they promote concerts and tours or maybe festivals or nightclubs or special events. Those kinds of things.
The Producer Hat
Hat Number 9, The Producer. This is the guy who makes the P-Circle copyright. The P-Circle copyright is very important for Master Use licensing… another income source. This is what you’re thinking when you are doing recordings or doing the actual processing of that phono-record.
So, you have the song and you have a recording of a song. There is a difference. You sit at the piano and you write your song and you put the paper down and you move on to the next song. After you put the song down, a producer may see that song and say, “I want to make a recording of that song”. So remember, you have a song and you have a recording of the song.
Just because you have a song written down on a piece of paper, doesn’t mean that you have a recording of the song. Songwriting money can still be made. Distribute the sheet music or fake sheet to a band so that they can then perform the song live. Now the performing artist is making money (from the gig) and the songwriter is also making money for the use of the song in a public performance. The songwriter can make money from their song with or without a recording of the song.
So the C-copyright pertains to the actual composition and the P-copyright pertains to the specific recording. If three different people record a cover of the same song, there are three separate P-Circle copyrights and only one C-Circle copyright.
The example I use a lot of times is with the song entitled “Yesterday.” I use that song because it has been recorded by more artists than any other song. The song “Yesterday” was written by two songwriters: John Lennon and Paul McCartney. It was performed by a band call The Beatles. They recorded it in a studio and the studio was owned by EMI Records (which owns Capitol Records). EMI / Capitol owns the P-circle copyright.
If somebody else wants to record the same song, they go to Lennon or McCartney or their publisher. They don’t go to EMI / Capitol because they don’t own or control the song… just the recording of the song. So if another record label or producer comes along and wants to record a different version of “Yesterday,” they get a license from the publisher for permission and then they record their own version… their own P-Circle copyright. There are over 10,000 versions of “Yesterday.” All of them with a different P-Circle copyright but all getting permission from the Controlling Copyright: The C-Circle.
The Publicist Hat
There’s another Hat used in the music industry and that’s of the publicist. A publicist lines up interviews and tries to get press and promotion for an artist or a song or a tour, etc.
So it’s really about putting together the team. It’s all about putting together the different Hats. And yes, you can wear them all. You went from songwriter to band to performer and maybe to producer or engineer and you can do them all.
I wouldn’t recommend it though. It would take you way too long to learn all the different aspects of putting out quality product. It’s better to work with people who know what they are doing with the specific part of the industry. It’s all about your team. It’s all about relationships and networks.