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Click to email ChrisPlanning You Music Career,
Part Two

by Christopher Knab - Fourfront Media & Music - January, 2008


Back to Music Business 101


Click Here for Part 1, Part 3

This is the 2nd of 3 articles devoted to what is called a 'Career Plan' for a new band or musician intent on establishing their career in a professional manner. Since most newcomers to the business of music have very little experience dealing with the business side of their music, a Career Plan is a useful tool and discipline for serious musicians to consider. It lays out tasks and strategies for putting a band together by prioritizing those things that are most important in the early stages of a career.

In each installment of this column you will find several issues discussed. It is important to note that this plan is a prototype based on a hypothetical situation surrounding a typical band that had undergone an extensive interview and 'inventory' of their accomplishments and goals. I hope you are inspired by these ideas, and realize that to adapt them to your needs, you would also have to take time to answer questions about your music, your goals, your dreams, your finances, and your commitment to your music as a business.

That being said, I hope you find this information beneficial in building your career as a professional musician.

Christopher Knab

* * *

Organizing Your Band
A Prototype Of A Career Plan, Part 2 

By Christopher Knab (with the cooperation of Dianne Caron)
(copyright 2008 Christopher Knab)

Click Here for
Part 1, Part 3
 

Goal #4: MAKE YOUR OWN CD

At the same time as you start booking the first shows you should consider recording a CD not only for it to be sold during your shows but to be distributed on consignment to local and regional record stores, and for marketing via mail orders and through your fan mailing list, and over the internet through such places as the Amazon.com/advantage program, CDBaby, etc. A self-released CD featuring about 10 to 12 of your songs would do the job just fine.

Here are some tips for recording your own CD project.

These days you can buy recording software for your laptop , but be careful...depending what you want to do with your CD, professional studio recordings are really the way to go.

Budget
Before you even go and check out studios, be aware of your budget. Know how much money you can spend. Also, know which songs you want to record and have them tightly rehearsed so that when you get to the studio you can lay down the tracks quickly and efficiently. This can and will save you lots of time in the studio (remember, time = money).

Studio Walk
Check out the studio in person before you book some time. Make sure you feel comfortable in the environment and - provided you engineer and produce the CD yourselves - you are familiar with the equipment.

Negotiate
There is always room for (rate) negotiations; especially when you won't need the services of an in-house engineer. Also, consider lockouts (rent the studio for fill days) which in the end might save you money.

For local and regional recording studios and/or manufacturing houses, please consult the appropriate sections in The Recording Industry Sourcebook, The Musicians Atlas, or use the internet to locate recording studios in your area. The good old Yellow Pages of Rock is also a place to start, as are the many free music publications that exist in every good city around the country.

For the initial phase of getting your product into stores, consider 'consignment' of your release at local and regional stores. All you have to do is bring a receipt book with you to the stores, and fill out a receipt in the amount of CD's left and sell them to the store for about a 40% discount off the retail list price. (List prices of a 12 song CD should be around $12.98 for a new act..

Also, you MUST get your music up on MySpace, your own website, and other social networking sites like Facebook, and learn how to sell or give-a-way a few of your songs.

 

GOAL #5: BOOKING AGENT

As illustrated earlier, you won't need an agent to book your local/regional shows. You will use an agent's services, however, if you decide to go on a national tour. He or she will (help you) decide which markets to hit on which route, select and book clubs, take offers and negotiate deals, etc. The agent is the person who is responsible for you having venues to play at on your tour.

But let's be realistic. No artist will be of interest to an agency until the artist has spent their own time developing their career by selling a significant number of CD's and other successes.like getting at least some regional radio or Internet airplay, been reviewed and written about in the press and online, and performed around a particular region for some time. Once you have accumulated a solid list of accomplishments it is possible agents will be interested in you. However, by this time they will probably have found you, but it is possible that you will also be approaching booking agents.

Term
The agent often times asks for three or more years, and you will want to keep it to one year. Shorter is better for you, because you can split if things don't work out, or squeeze the commission down if things do. If you give more than a year, make sure you have the right to get out after each year if you don't earn minimum levels. Note that there is a very good chance you will actually never even sign any papers at all. This varies with the policy of the agent.

Territory
Since you are a "new" band, it may be difficult to give an agent less than worldwide rights. However, as you move up the ladder you can sometimes exclude territories outside the United States. This is often beneficial, because you can use agents in Europe or elsewhere who are skilled in those markets. In fact, many U.S. agents often employ a local subagent for foreign territories, and you can thus eliminate the middle-man. On the other hand, the U.S. agent doesn't just sit idly by while a subagent does the work. The agent oversees the foreign agent and makes sure the shows are properly promoted, that you get paid on time, etc. (Please note that - at any time and level - you might want to reserve the right to book local shows yourselves.)

Fee
Agents are only paid for the area where they render services, which is primarily booking concerts. So never give your agent a piece of your income from records, songwriting, or publishing. Usually agents don't even ask for this, but be careful of union forms. Agents are regulated by unions; such as the American Federation of Musicians and the American Federation of Television and Radio Artists. The maximum these unions allow them to charge is usually 10%. The AFM and AFTRA printed forms have a place for you to initial if the agency commissions your earnings from records. Watch out for it and never do this.

Termination
Each of these agreements has a clause saying you can terminate if the agent doesn't get you work for ninety days.

Roster
1) You want to make sure that the bands on the agent's roster play the same type of music as you do. This way you ensure that the agent is familiar with the clubs he or she is booking which, in time, will save you from embarrassing experiences.

2) Also, make sure that the agent does not have too many bands on his roster. If there are more than six to eight bands on your agent's roster, he or she will probably not be able to spare enough time for your band.

Personality
An agent is ideally genuinely enthusiastic about you and your music. He or she should be a persistent person who fights for his or her clients. Remember, you don't necessarily have to like your agent's personality!

Check out the "Pollstar Agencies Directory" or the "Recording Industry Source Book" to research more agents.
 

GOAL #6: PUBLISHING COMPANY
GOAL #7: AFFILIATION WITH A
PERFORMANCE RIGHTS ORGANIZATION
GOAL #8: BUSINESS LICENSES

Since these are goals that closely interrelate with each other we will discuss them in one section.


IN GENERAL:

To start out, let's list and briefly describe the three (out of five) basic incomes of an artist (the two types of incomes not listed below are "concerts" and "merchandise" which are self-explanatory). It is very important that you understand the concept of royalties; not only because - if you seriously pursue a career as a professional band - this will be you major source of income, but it will help you understand the concept of publishing and affiliating with a performance rights organization.

Mechanical Royalties
Generated by: Record sales
Formula: (9.1Cents x Amount of Songs on the Record) x 75%) x Units Sold
Paid by: Label
Paid to: Songwriter and Publisher
Note: The current 9.1 Cents are an Industry Standard as of the year 2007

Performance Royalties
Generated by: Public "performance" of your song (theoretically, whenever your song gets play on air, in a club, restaurant, etc. you'll get paid)
Collected by: Performance Rights Organizations (ASCAP, BW or SESAC)
Paid by: Performance Rights Organizations (ASCAP, BMI, or SESAC)
Paid to: Songwriter and Publisher

Record Royalties
Formula: 90% of ((Suggested Retail List Price - Packaging) x 11%) x Units Sold
Paid by: Record Label
Paid to: Artist (the Band/Performers)
Note: Most everything is negotiable. The 11% (or 11 "points"), for instance, are a prime example for a negotiable part of a contract.

 

Publishing Company

What does a publishing company or a publisher do for you? Well, a publisher has many jobs. Here's a list of his or her major roles:

- selling songs
- issuing and negotiating contracts
- submitting copyright forms
- arranging for manufacturing and distribution of sheet music
- soliciting songs for TV and movie usage as well as TV and radio advertising
- collecting and administrating funds
- registering songs with a performance rights organization
- suing infringers
- maintaining industry contacts
- generating interest in songs and writers
- keeping track of projects
- sometimes helping record and promote a CD
- arranging for shopping demos
- arranging for internet usage rights
- etc., etc.

If you decide to use the services of a publishing company, you will be offered one of the following three deals (please keep in mind that these are generalizations; each deal is different):

1. Developmental/"Songwriter"
A developmental or songwriter deal is common for somebody who is exclusively a songwriter or for a very young band who needs help with recording, duplicating and promoting a product, etc. Advance: $ 5,000ish The money generated from royalties is split between the songwriter and the publisher 50/50. You surrender all copyright.

2. Co-Publishing
The co-publishing deal is great to help bands support themselves. Advance: $ 20,000 - $ 200,000 The publisher gets 25% of the money generated from royalties. The copyright is shared 50/50

3. Administrative
Advance: Usually none The publisher gets 5 % - 15 % of your income generated from royalties. You (normally) maintain 100% of the copyright.

Why would you want to sell to a publisher instead of having your own publishing company as discussed in Part 1?

Well,

- you get some money up-front
- some publishers help you record and promote your product
- they help collect money for you (mechanical royalties, performance royalties, etc.) not only in the U.S. but also overseas.

But, in turn
- you lose if not all, then a big part of your copyright and you definitely get less money in the long run.


Is the loss of all or part of your copyright worth the "goodies" you get from a publisher? Before you answer this question to yourselves, please consider that these days, (major) publishers are often not much more than banking operations. They will compute how much they expect to earn from a given deal, and pay a portion of it to obtain the rights involved. Well ok., some publishers are "creative" publishers, in the sense that they put their writers together with other writers, help them fine-tune their writing, match writers with artists, etc. However, is this worth giving up all or part of your copyright? If you ask me, "I don't think so."
These days a lot of major songwriters keep their own publishing; they are their own publisher, retaining ownership of their copyrights and perhaps hiring 'Administration companies' to do the clerical function of the publishing work.
 

Performance Rights Organization Affiliation

What does a performance rights organization do for you? Publishers and writers sip up with ASCAP, BMI or SESAC who then issue licenses to the users, collect the monies, and pay the publishers and writers. Performance Rights Organizations collect and distribute your income generated from mechanical and performance royalties.

Why would you want (or have) to "join" a Performance Rights Organization? Well, there are two main reasons why you as songwriters, a band, and/or a publishing company want to affiliate with a Performance Rights Organization:

1. Once you have a product out that sells in stores or gets played on the air, the Performance Rights Organization is the institution who collects the money and pays it to you.

2. You will have to affiliate when you set up a publishing company.

The major performing rights societies in the United States are ASCAP (American Society of Composers, Authors, and Publishers), BMI (Broadcast Music Incorporated), and SESAC. Of the three, ASCAP and BMI are by far the largest, as SESAC has only about 1% of all performing rights. BMI and ASCAP are nonprofit organizations, as opposed to SESAC, which is privately owned. Virtually every foreign country has the equivalent for its own territory, most of which are government owned. The contract term for a writer is one year with BMI and two years with ASCAP. The publisher will. sign up for one year with BMI and for five years with ASCAP. BMI charges a $I0 annual membership for writers, and $50 annually for publishers. There is a one-time processing fee for members of ASCAP.
 

Business Licenses

Once you generate income you will have to get business licenses. I'd recommend you to get business licenses for you as a band or individuals (depending on how you decide in the matter of "partnership vs. sole proprietorship and corporation) and the publishing company at the same time

State License - The State Department of Licensing issues the state license

Federal EIN - You will be able to get a federal tax id.number (or EIN) from the IRS. The federal EIN is for free. Phone: 1-800-829-3676
 

Some Suggestions

Now let's get down to business.

The Absolute First Thing To Do
Before you do anything, you positively must take the first step. Affiliate your company with ASCAP or BMI. The reason you have to do this first is that these societies will not let you use a name that is the same (or similar to) the name of an existing company. They don't want to accidentally pay the wrong party, and so they're tough about the name you can use. And you don't want to have a label copy, printed music, copyright registrations, and everything else in the name of a company that can't collect performance royalties.

You can affiliate and secure your name by completing an application and giving the society three name choices, ranked in order. That way, at least one of the names should clear. If you're also a songwriter and haven't yet affiliated, you should affiliate as a writer with one of the two societies at the same time (they won't let you affiliate with both). You'll have to affiliate as a publisher with the same society in which you affiliate as a songwriter. This is because the societies insist on having a song's publisher affiliated with the same society as the song's writer. And for this same reason, if you're going to be a "real" publisher (meaning you're going to publish other people's songs, as opposed to only your own), you'll need to have two companies, one for ASCAP and one for BMI.

The publishers and writers affiliation forms are pretty straightforward. You can get affiliation applications by contacting ASCAP.com or BMI .com


Setting Up A Business
Every state, county, and city has different requirements for setting up a business. Be sure to research what is required in the area you are planning to do business.

Copyright Registration
Next, register the songs with the Copyright Office in the name of your publishing entity. If they have been previously copyrighted in your name, you need to file an assignment transferring them to the publisher's name.

Society Registration

To the extent you didn't do so when you originally affiliated, you must register all your songs with the performing rights society. The societies will send you the forms, which are self-explanatory. You only have to register the songs as either the writer or the publisher, not both.

After that, you're in business. you can begin to issue licenses to record companies and other users, as well as make foreign sub-publishing agreements, print deals, and so forth. However, there's no particular need to rush into these deals, nor will anybody be interested in making them, until you have a record released. In fact, unless you've got a product (coming) out, the societies won't even let you affiliate, and frankly there's not much point in doing any of this. You'll just be all dressed up with no place to go.


That's it for this month. Stay tuned for the final installment of a Career Plan next month.

Click Here for
Part 1, Part 3

-----

Christopher Knab is an independent music business consultant based in Seattle, Washington. He is available for private consultations on promoting and marketing independent music, and can be reached by email at: chris@chrisknab.net

Visit the
FourFront Media and Music website for more information on the business of music from Christopher Knab.


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