Chapter ONE

Getting Started

Warning! The Downside

If you like music or think you have a great song or band, let me tell you now, right up front - QUIT NOW while you still enjoy music.

If you cannot imagine doing anything else with your life but being an artist and if you have friends or parents to feed you and help keep you warm and dry at night, even when it gets to the point of asking anybody and everybody you can “lean” on for something and if you are willing to drive hours to play gigs for ten people with no pay several times weekly, well, I can still probably suggest to you - QUIT NOW before you no longer enjoy music.

There will be no success as determined by profitability in this path. Most (99.98% pure) artists leave the music business at or before this point.

If your friends all think you’re crazy, but now you are willing to get in a van with nine guys for months at a time, share three hotel rooms and bathrooms, eat only “catered” pizza and burgers and like it, then you have the one in a million CHANCE of becoming financially steady enough to be able to buy a home, a car and pay taxes. Music is now a business to you, and now you are feeding everyone in the entire music business, and they all get paid before you. There will be limited success as determined by profitability in this path. A couple of hundred “new artists” make the jump to financial stability each year.

If you become one of these few financially steady artists, you stand a one in a million CHANCE of being a “big rock star.” Few make it to this point, but those who do, often don’t stay around long because it is hard work to stay in the limelight. True success is measured by profitability. It requires financial management of income over a period of years.

What do I mean by CHANCE? It’s almost a matter of luck. Do you feel lucky? Like the band whose bus broke down right in front of an open garage, and they made the gig on time. Timing and luck have as much to do with success in terms of financial profitability as talent and hard work do. Are you the beginning of a fad, or a one hit wonder, or a true career artist or band? Did you meet the right guy at the right time in your career, and did you meet that right guy at the right point in his career? Is someone else playing a gig in the same market around the same time? Many talented bands are not successful due to bad timing or bad luck.

If you don’t feel lucky – QUIT NOW! If you have bad timing or are always late – QUIT NOW! If you are unwilling to work hard and do things that you might not like to do – QUIT NOW!

Good News! The Upside

Music is a BUSINESS. It is not easy, and it takes more work than most any other type of job I know of. This “how to” book is my opinion of what techniques an individual artist or band can use to make it in today’s Internet-driven marketplace. Making it defines success as profitability. This do-it-yourself method is hard work, but the pay off can be great.

I used “breaking” in the title of this book because it has many meanings. It can have a downside meaning: the breaking up of a band. It is the doom that is felt if the band cannot continue on. It might be due to personal issues, but as in many marriages, the issues are often over money. If everyone in the band has the same BUSINESS expectations, it is easier to keep the wheels on the tracks when the money gets tight. Otherwise, the band may break.

This book will show you how to “break” in the good sense. To a record company, an artist/band breaks when they sign a recording contract, and in the world of radio, an artist/band breaks into a radio market or into the Top 40. To me, a band breaks when they achieve success in terms of long-term profitability.

Today’s technology, especially the Internet, is radically changing the music industry and allowing unbelievable reach for both artists and audiences. First, it is enabling the artist, or content creator, to maintain ownership of the music, instead of the record company controlling the intellectual property (IP) represented by the music. Now records (IP) can be created in basement studios for a fraction of what a record company used to pay a recording studio. Also, the Internet is changing how records are sold, the methods of distribution. Now distribution can be done over the Internet for a fraction of the cost of what the record companies used to pay to press and ship record inventory to many geographic locations. Finally, the Internet also allows the artist to communicate directly with the fans without the use of conventional radio airplay and interviews in small geographic areas within range of a station. Now, for very little investment of time and money, a band can share information on tours, recording, and merchandise with all of their fans in all geographic areas, national and international.

As more digital downloading policies and laws are being established, artists are able to retain more rights and more of the cash flow, but there is a price. Artists and bands must learn to be more self-sufficient as a business. You must understand the system of who wants to buy what, at what price, and when in order to be profitable. This is not easy; in fact, it is a full time job, and it takes time away from the music. You can do it, but “Will you?” is more the question. The “how to” is answered here in this book, but it all gets back to you. Will you do it, and if you don’t do it, who will you PAY to do it for you? I can promise that if these tasks are not done, you will not be successful as defined by profitability.

If your definition of success does not include profitability, then consider this to be an encyclopedia of how the music industry is currently structured and how the cash flows: when, to whom, and for what. Then read on and set a definition of success that allows you to still enjoy music, BUT KEEP YOUR DAY JOB.

If you have not heeded my warnings and still want to be a “big rock star,” I must warn you one more time. This is not for the faint of heart. I am a fan of humor, some of my friends call me a clown, and I am cynical, but I am totally serious (at least until the end of this sentence) - to be financially successful as an artist or band requires years of serious work. If you are an artist or band ready to fight, and it’s an uphill fight all the way since every other band wants to be the king of the hill, and if you believe in yourself and your ability to do everything it takes, like missing family events and holidays, working endless hours, talking to every industry person who will listen in every little town, all while trying to learn the business enough to be successful as defined by profitability, READ ON!

If you are a crazy, stubborn, fighter, who so strongly believes in yourself and the team around you and who writes and performs great music without “all the props,” you are already successful in my eyes and we will probably become friends and allies if we meet. THIS BOOK IS FOR YOU - it will open your eyes to all the folks who need to be on your team, their jobs, and how they affect your cash flow. My goal is to help you enough by educating you about the system you are working in to make you financially successful as defined by profitability. I will suggest some things to watch out for and some things to do to increase your chances (there is that luck and timing thing again) of becoming profitable more quickly. The new path this book recommends uses artist or band selfpromotion and marketing programs and customer direct methods of “getting the word out,” all promoted via a “fan club” across the Internet.

I am also an artist; however, my art is building software and my life has been applying my academic training as an accountant and my addiction for computers to my love for music. I have been a fan of music since I was young, and while in college, I organized musical events for the campus and was exposed to the music industry. My "art" started in 1981 as a college intern project that over time turned into a business and became the Fox companies. In my intern project, I "painted" my first accounting programs around a two-dimensional calendar, something revolutionary in that teletype era. Since then, we have built calendar-driven accounting applications for managers, promoters, agents, tours, record companies, radio, publishing, ticketing and fan clubs. We have worked with small artists and the largest, including U2, Prince, the Who, and Whitney Houston. Our ticketing systems have been used for systems with many venue locations and outlets across a state, used for artists like Pearl Jam for national tours with a centralized telephone call center, and used by ISC, the owner of many of the NASCAR races tracks, to integrate their phone room and internet for both tickets and merchandising. Over the years, we have worked with Ticketmaster on two different projects, and designed national systems for both the Promoter and Agency Divisions of SFX, which later became Clear Channel. (See Appendix A: FoxMan Group Executive Summary.)

I can’t imagine doing my art for anyone but people in our music industry. My art has helped musicians become successful as a business, making a profit and connecting with their real fans, especially at live gigs. I have always been artist-centric but have also known that the fans are the real boss in the industry. They cast the final vote – so don’t forget who’s the boss during your career: it’s the fans, who pay you and determine your success as defined by profitability.

Ok, so far I have scared you with the dark side, but how about the balance or equal time. The upside of the life of an artist in a band is more amazing than you can describe in words. There are the little hairs that stand up on the back of your neck and the buzz the first time you hear your music played on the public airwaves. There is the euphoria you and the crowd feels as the lights go up at the same time as the first chords of the concert erupt to the rafters of a sold-out arena. There’s the pop of the cork from a bottle of Champagne to mark the end of the recording of your new songs. Or, from my accounting point of view, your first check from the record company AFTER you have recouped, meaning you can start to pay off everybody (oops, sorry I went back to the dark side for a moment).

Seriously there is hardly anything more fun than getting paid to tour, or record, or do interviews on the radio. The parts between the traveling and bad hotels are the stuff other books have written about. I have worked hard enough, and been LUCKY enough, to have experienced these thrills first hand for many years. I have seen all the states in the union (my butt still hurts from all the miles in a bus or plane seats), and many countries on several continents. I have seen a show at almost every place that holds a group of people, and it has been great. I am still telling the stories (now if I can just get paid for it….).

I have made friends and learned to deal with others. I have grown to respect the folks like me who live in the “support” roles because we can’t write songs or sing and dance, but can’t live without the music. In fact, I have found just as much passion in these folks as you find in musicians. I understand why artists can succeed. So much of an artist’s or band’s “luck” comes from relationships with these people. Your manager and your lawyer and your accountant are your guardians; they are truly trying to protect you. They might even become your friends, or your enemies. It’s a love-hate relationship: you love to hate them and hate to love them, but they’re yours. They’re your extended family in the music business.

The relations these folks have with others in the industry also plays into what I have called “luck.” Your new manager did your new record company guy a major favor with his last big band and he calls it in for you. What luck! What if he decided not to cash in his favor for you, or worse what if he had screwed the guy and payback was coming. What bad luck! So one of my recommendations is find good folks to be on your team. You need them as much as they need you; it should be a two-way street. Find someone who is passionate, who gets what you are doing, and who can add something you don’t know how to do or don’t have time to do yourself. Find guys who have done it before but are not “over” from doing it too long. Shop around and find someone you trust, and that may not be easy. Find someone who will tell you the truth, not sell you some bullshit. I cannot stress how important this team building is to your financial success, and more importantly, to your happiness. (Check out the chapters on music industry resources and the folks who did the interviews because they are the best of the best.)

Financial success does bring into focus one of the other Catch 22’s of life. You always have too much time when you can’t open the doors or don’t have any money, and later when success bites you, you can’t go into all the doors that are now open and don’t have the time off to spend any of the money you’ve worked hard enough to earn. So enjoy it while you have it; it has to last your entire life. No “would haves” or “could haves” - do it, and do it fast in case you like it and want to do it again!

This book stresses the financial and contractual side of the business, and the people and forces that affect the cash flow. I have researched the “how to” books in the music industry, and almost all deal with forming a band, working with other band members, song writing, touring and recording, but most do NOT even discuss contract pitfalls and getting your money. This book will shed some light on the legal structures your band should form, what kind of contracts you will need and what you will be paid for giving up what rights and obligations. It will describe where the money comes from, who touches it along the way, and how you can be more profitable by taking on more responsibilities yourself. My goal is to help you create a business structure that will protect your rights and property so that a slip and fall accident at a live event can not lead to a lawsuit liability that takes your royalties after it takes all your tour profits, or even more critically, jeopardizes your family’s home or assets.

Throughout the book I have used masculine pronouns instead of “he/she” or “she/he” or “s/he” or “his/her” – you get the idea, right? But you should understand that any and all of the players can be and have been women. It is also assumed that artists might pursue relations with members of any sex, not just “…oops, the girls.” I mean no disrespect to anyone when I say “he” or imply that scoring relationships is the only thing done on tour.

My friends think I am crazy, driven, and always on the go. I prefer persistent, maybe pushy, and for sure passionate. I work too much, but I have LOTS of fun and get paid to do it. I have seen many great shows all around the world. This is the moral of the story: the harder you work, the more fun you can have, and the trick is to make a living at the same time.

Like you, I too have had people who have fed me and helped keep me warm and dry at night and who I have leaned on. My thanks to my gorgeous wife Lorraine, and Caesar & Cleopatra, my partner Bull, my parents, my aunt the English teacher, my two brothers and sister – Family Rules!

And to all my other brothers and sisters from the music industry who have helped me, taught me, fed me, and given me shelter so I could learn enough about how this industry works, so I can share it with everyone else – Thank You All.

And to my working teammates, those “in the business” who have helped me build and launch or use many of our systems that have brought music and smiles to lots of people over lots of years. Thanks for the long hours, unreal time lines and impossible situations you all helped solve – THANK YOU!

The most thanks from me, and from all of you who learn from this book, go to those who did the interviews and shared their expertise, experience and secrets. Send them business!

So I wish all you artists the best along your path to success and may timing and Lady Luck be with you, and let me know if I can help. I am your fan.

David B Cooper
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