Six Things That Should Be Included In Every Band Agreement Contract

handshake

There are numerous clauses and nuances to any contract in the music business but there are six specific things that should be included in every band agreement contract.

A band is usually a group of friends who share a common musical interest. As friends, they want to remain friends. With that in mind, musicians should not fret about coming up with an agreement amongst themselves.

With a win-win attitude, each member of the band will understand what is expected from them as well as what they should expect from their collaborators. A band member agreement provides clarity of responsibility as well as the possibility for members to remain friends, if and when, they move on with their own musical projects.

The entertainment business is fraught with stories of contracts gone bad. Obviously, this means that there was no win/win attitude going into the negotiation, or the person signing the agreement did not understand what they were signing. With any agreement, communication is a key to success. Discuss these issues with fellow band members before any problems arise.

  1. Who is in the band? The contract should identify the parties who are agreeing to the contract. If there is a leader of the band, this would be a good place to identify the leader’s name. If there is a tie in any decisions, decide ahead of time how to resolve a tie-breaker.
  2. What is the term of the agreement? How long is this agreement to last? If there is no presumed end-date, there should be a section describing how the agreement might end. Sometimes, it is better to think backward when deciding the agreement. Start at the presumed end and determine the outcome before deciding how to start.
  3. What is the responsibility of each party to the agreement? This might include a clause about individual musicianship or the care of their instruments. If you want each member of the band to deliver their best performance, you might want to include a clause about onstage behavior such as drinking, smoking or swearing. Remember, a band member’s public behavior is a reflection of you. In addition, this section of responsibility might include language about drug use.
  4. When is each party responsible for doing their job? This clause might include information about performances, rehearsals, or promotional appearances. This would be a good opportunity to address tardiness and preparedness. Perhaps bands members should be expected to practice their parts while at home and then be fully prepared when coming to rehearsal. This makes the time spent together more productive. It also sets an agenda for rehearsal as band members know in advance what is expected of them.
  5. How much compensation (if any) is going to be paid to each member of the band. This section should include information about live performances as well as any ancillary income such as merchandise being sold. If the band is planning on collaborating with outside companies such as a record label, publicist or booking agent, a separate agreement will be necessary.
  6. Lastly, where are the individuals of the band agreeing to be for rehearsals, performances and band meetings. Many times one member of the band may live many miles from the rehearsal space, while other members live nearby. Should the distant member be reimbursed for their travel and fuel?

So, when constructing a band agreement contract, go over these important areas and then consult with a good entertainment attorney to assist with the final draft of your agreement. Just remember, win/win, and remain friends.

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Putting Together A Complete Business Plan For A Record Label

YOUR BUSINESS PLAN

The importance of establishing a business plan for a record label cannot be underestimated.  Just like any other business, you must have a plan.  If you don’t know where you’re going, you will never get there.

A record label business plan is similar to a business plan for any other industry, except that there are noticeable differences, such as licenses, royalties, and online distribution.  However, the similarities are very real.  You will still need a section for the executive summary, operations, product development, manufacturing, distribution, marketing, sales, industry analysis, and financial plan.

The importance of establishing a focus for your business cannot be overlooked.  By developing a business plan, record label executives can easily explore and share ideas and strategies with collaborators and investors.

Remember, a business plan is fluid and constantly changing.  However, it creates a structure for entrepreneurs to work their ideas.  Ideally, the record label business owner can identify their niche, capture content that fits that niche and then promote and sell their recordings for monetary gain.  Remember, this is the music business.

Especially in this digital age, a business plan is essential to the record label’s success.  As a label owner, you will need to identify outlets for your recordings as well as opportunities for media exposure.  And because the costs involved with creating new music have been lowered considerably, there are many more competitors vying for the same consumer dollar.  Other than the artists and material they perform, smart management is the most important ingredient in a record label’s longevity.  A business plan is a great place to start.

Here are the basics of what goes into a business plan for a record label:

Introduction

  • Business Description
  • Business Formation
  • Directors
  • Management Team
  • Business Goals / Mission
  • Business Philosophies / Identity
  • Geographical Markets
  • Vision of the Future

Executive Summary

  • Main objectives
  • Sales summary
  • Strategic positioning
  • Strategic alliances
  • Licenses
  • Key advantages
  • Funds required

Label Operations

  • A&R Artists and Repertoire
  • Marketing and Promotion
  • Content Development
  • Licensing
  • Distribution

Product Development

  • Song Clearances
  • Recording
  • Mastering

 Manufacturing

  • Pressing
  • Packaging

 Distribution

  • Brick and Mortar
  • World Wide Web

 Marketing

  • The Product Mix
  • Sales Estimates
  • Competitive Research
  • Market Analysis
  • Marketing Goals & Strategies
  • Pricing Policy
  • Advertising & Promotion
  • Sales Management
  • SWOT Analysis

Sales

  • Sales Plan
  • Projections

Industry and Historic Analysis

  • General View
  • The Market Position
  • Income Statement Historic
  • Balance Sheet Historic

 The Organizational Structure

  • Management and Personnel
  • Administrative Organization
  • Contingency Planning

 Record Company Operations

  • Record Company Identity
  • Record Company Location
  • Record Company Layout

Financial Plan

  • Investment Budget
  • Statistical Data (ratios)
  • Return on Investment
  • Financial Projections

 Risk Management

  • Risk Reduction
  • Exit Strategy

Investment Opportunity

Appendices

  • Personal Income Statement
  • Other

For more information about a business plan for a record label, there is a complete sample in the book “Forget the Majors… Launch Your Own Record Label” by John Latimer.

 

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How To Register Your Record Label Name

Minolta x700 test - Record store

In today’s age of digital downloads, it’s a perfect time for musicians and songwriters to record their material and release it online.  In the spirit of building your business, you might consider owning your own record label.

If you are a songwriter, you may also want to start your own publishing company.  The steps to register your record label name and your publishing company name will be the same.

First, select a few names to consider for your business.  You’ll need a couple of ideas as you may find the name is already in use.  If you are interested in a full international search, you may want to contact Thompson & Thompson to assist.  The name of the company is not of great importance but you may want to consider a few thoughts before choosing your business name.

For instance, a very long name may be hard to prepare a readable logo.   I recommend a easy name that has one or more words relating to your business, such as So-and-So Records or  My Great Sounds Company.  Another idea to consider for a company name is one that is easy to pronounce as well as easy to type.  It’s not a good idea to establish a name that you have to spell every time you state it.

To be complete as a business owner, you will need to check if the name is used by another individual, partnership or corporation.  The easiest, but not thorough, search is through an online search engine.  Try searching with various filters such as label, music, record label, band, records, publishing, etc..

If you find one, note where they are doing business.  If it looks somewhat legitimate, you may want to move to the next business name that you have considered.  If, however, you suspect that this is not a real business, inquire with the State where the company is listed.  You can locate the Secretary of State online.  Then search the business listings.  If the name you are interested in registering is available, you may want to register it.

Remember to use “Quotation Marks Inc” for better results in your search.

For example, in the State of Ohio, go on to the World Wide Web and follow these instructions:

  • Go to: www.sos.state.oh.us
  • Go to: Business Services
  • Click: Businesses / Corporations
  • Click: Search Filings
  • Scroll: Search Database
  • Click: Search Database
  • Click: Business Name
  • Type: Desired business name
  • Click: Submit
  • IF No rows returned, you may be OK within the State of Ohio
  • IF Business names are listed, review for your specific name
  • If found and active, repeat process with new name

Before you register your selected business name, do some more checking.  The next step is to check the United State Patent and Trademark Office.  This, too, is available online:

  • Go to: www.uspto.gov
  • Click: Trademarks
  • Click: Search TM database (TESS)
  • Click: New User Form Search (Basic)
  • Type: Search Term
  • IF No TESS records were found, you may be OK with the trademark
  • IF Records Found, review your specific name and review Live / Dead status
  • If found, repeat with new name

So, go to it.  Register your record label.

For more info on forming your own record label check out episodes 21-24 of our podcast.  Also, episodes 13-16 discussed many of the legal issues artists and record labels have to deal with on a daily basis.

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Where Are All The Songwriter Jobs?

Songwriting time

I am often asked, “Where are the songwriter jobs?”  Yes, unemployment may be high but that only if you want to work for someone else.  In today’s entertainment industry, the focus should be on entrepreneurialism.  Yes, create your own job.  So, now you ask…”OK, so where do I look for customers for my songs?”  Ah, that’s a much better question.

There are multiple income sources for a songwriter.  One of the best ways for a songwriter to have a consistent flow of money is if the songwriter can also perform live. This accomplishes two or more income streams:  one is the active income of getting paid to be the entertainment as a performer, and another is the income derived from the use of the song by the venue or promoter while you, the songwriter, perform the song.  Yes, two income streams from one performance. In addition, there is a third possibility for more income if you have merchandise for sale such as T-shirts, compact discs or e-cards for music downloads.

Songwriter Income Sources

  1. Perform songs by the songwriter
  2. Royalties for the use of songs when performed live through P.R.O.
  3. Royalties from the use of song when broadcast through P.R.O.
  4. Royalties from the use of song when downloaded or streamed
  5. License income for use of song in video, film or television
  6. License use of song in audio recordings
  7. License use of song in game or toy
  8. License use of song lyrics in book

The third way for a songwriter to generate income from their song is if the song is used on the radio.  This royalty is called Performance Royalty and payments are made in the form of a license from a radio station to a Performing Rights Organization such as ASCAP, BMI or SESAC.  The P.R.O. where the songwriter is a member, acts on behalf of a publisher or songwriter to collect these fees from broadcasters.  They also collect fees from venues and promoters when the song is performed live (see example 2.)

The fourth way to generate income from a song is when the song is used in synchronization with any type of video such as television or film productions.  This includes music videos as well as training films.  There is a one-time fee that the video producer will pay to a songwriter, or assigned publisher, for the use of each song used in their production.  Entrepreneurial songwriters will do best if they negotiate the highest fee possible.  In addition, if the film production company intends to release a soundtrack of the project, there may be mechanical royalties involved.  Which brings us to number 5.

The fifth way for a songwriter to capitalize on their song is when a record label or recording artist uses that song on a recording.  If the song has never been released as a master recording, the songwriter has “First-Right” and may negotiate any price they can get for the use of their content.  However, one the song has been recorded and released for sale, any other record label or recording artist may use the song for their project.  When this happens, the songwriter is paid a statutory rate determined by the US Copyright Tribunal Board as mechanical royalty.

Songwriters may wish to have their song included in a video game or a toy.  When this happens, the game-toy company will negotiate a one time fee for the use of the song.

Lastly, if the lyrics to the song are used in a print publication such as a novel or music book, the songwriter will be compensated for its use.

So, when a songwriter is looking for songwriter jobs, it is recommended that the songwriter think outside the box and look for all possible uses for the song.

For more info check out:

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The Musician’s Mini-Guide To Twitter

Guitar-Playing Twitter Bird - The Musician's Guide To TwitterI just love it when someone goes out of their way to make my music career easier.  The nice folks at Twitter have done just that with their brand new mini-guide, “Twitter for Musicians and Artists“:

For music fans, Twitter is the next best thing to being backstage. And for performers, connecting with your fans in an authentic way is one key to your success. A Twitter connection tells fans how much you appreciate them, and it also enables you to tailor your messages. The fact is, Twitter provides more authenticity and creative control than any other online medium. Tweets come straight from you, and go right to your followers all over the world, in real-time.

One of my favorite things about this guide is that they use real tweets from stars like Katy Perry, Selena Gomez and Bruno Mars as examples for showing how musicians should be using Twitter to interact with their fans.

For Twitter newbies, concepts like re-tweeting and the use of hashtags are very clearly explained.

I’m calling this a mini-guide because the entire thing can be read in about 5 minutes.  Of course all the info in the world is essentially useless if you don’t act on it.  So let me leave you with today’s challenge:

  1. Spend five minutes reading, “Twitter for Musicians and Artists“.
  2. Choose your favorite tip and use it to connect/interact with your fans today.
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#27: Answering Listener Questions – The Music Biz Workshop Podcast

The Music Biz Workshop PodcastListen Here  
Subscribe via iTunes here
: The Music Biz Workshop Podcast

Welcome to episode #27 of The Music Biz Workshop Podcast!

In this episode, John and Bill answer more listener questions.

You can leave us a comment or question on our voicemail at 440-782-1Biz (1249), or email us at info@themusicbizworkshop.com!

As always, please take a look at some of our other websites:
Undercurrents
SoundSavant
Tri-C Recording Arts & Technology

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#26: Answering Listener Questions – The Music Biz Workshop Podcast

The Music Biz Workshop PodcastListen Here  
Subscribe via iTunes here
: The Music Biz Workshop Podcast

Welcome to episode #26 of The Music Biz Workshop Podcast!

In this episode, John and Bill answer listener questions.

You can leave us a comment or question on our voicemail at 440-782-1Biz (1249), or email us at info@themusicbizworkshop.com!

As always, please take a look at some of our other websites:
Undercurrents
SoundSavant
Tri-C Recording Arts & Technology

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#25: Case Study – Harvey Lewis – The Music Biz Workshop Podcast

The Music Biz Workshop PodcastListen Here  
Subscribe via iTunes here
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Welcome to episode #25 of The Music Biz Workshop Podcast!

In this episode, John and Bill have their second Case Study.  They welcome Harvey Lewis and offer their thoughts on what types of agreements he needs to have in place before he appears on the Judge Joe Brown show.

You can leave us a comment or question on our voicemail at 440-782-1Biz (1249), or email us at info@themusicbizworkshop.com!

As always, please take a look at some of our other websites:
Undercurrents
SoundSavant
Tri-C Recording Arts & Technology

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#24: Record Label, Pt. 4 – The Music Biz Workshop Podcast

The Music Biz Workshop PodcastListen Here  
Subscribe via iTunes here
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Welcome to episode #24 of The Music Biz Workshop Podcast!

In this episode, John and Bill talk about some tips for anyone running or thinking about running their own record label.

Next, they answer a question about what software to use for making and recording music.

In the Tech Tip, Bill discusses 3 business podcasts you should be listening to.

You can leave us a comment or question on our voicemail at 440-782-1Biz (1249), or email us at info@themusicbizworkshop.com!

 

As always, please take a look at some of our other websites:
Undercurrents
SoundSavant
Tri-C Recording Arts & Technology

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#23: Record Label, Pt. 3 – The Music Biz Workshop Podcast

The Music Biz Workshop PodcastListen Here  
Subscribe via iTunes here
: The Music Biz Workshop Podcast

Welcome to episode #23 of The Music Biz Workshop Podcast!

In this episode, John and Bill talk about the various agreements that a record label may venture into.

Next, they answer a listener question about artist business plans.

In the Tech Tip, Bill discusses how to make some music money with the YouTube Partners program.

You can leave us a comment or question on our voicemail at 440-782-1Biz (1249), or email us at info@themusicbizworkshop.com!

 

As always, please take a look at some of our other websites:
Undercurrents
SoundSavant
Tri-C Recording Arts & Technology

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