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Learn the Secrets of How to do Business in Today's Music Industry

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 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.

You, the individual artist or band, are the true center of the music business; you are the people who write and/or play the songs, and this music is intellectual property (IP). To become successful in terms of business profitability, you must you sell enough of your music (IP) to cover your expenses and this only happens if you are able to reach your fans. Artist-to-fan direct communications is the FUTURE of the MUSIC BUSINESS, and artist-to-fan direct communications may be the crucial factor that determines whether you are profitable and, hence, successful as a business.

Your music is sellable in four ways; it becomes recordings, which drives publishing, drives live appearances, and creates the possibility for merchandising image/logo-bearing products. Each of these cash flow streams can be charted, including all the players who take a cut before the artist sees anything. There are also other players whose help is required for an artist's success, but they aren't related directly to any particular cash flow stream as measured by profitability. This book assumes that you and your band are already up and running and doesn't cover that because plenty of those books have already been written. What this book WILL do is help you become MORE profitable by identifying the paths the cash follows, the players associated with each path and how to measure and evaluate these cash flows to create profitability. Since music is a business, I'm going to teach you how to do business in the music industry. Here's one of the important bits of information I hope you take away from this book: profitability can be increased in three ways: by increasing income/revenue, by cutting expenses/costs, or by implementing a combo of both. A combo approach is best.

The four major cash flow streams for an artist are:
Royalties - from record sales
Publishing - for song writing and performances of those songs
Tickets - to live personal appearances
Merchandising - selling the products related to the artist's logo

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 book to be an encyclopedia of how the music industry is currently structured and how the cash flows: when, to whom, and for what. 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 (that luck and timing thing) of becoming profitable more quickly. The new path this book recommends uses artist or band self-promotion and marketing programs and customer direct methods of "getting the word out," all promoted via a "fan club" across the Internet.

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 you 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.

David B Cooper
dbcooper@foxman.com
www.foxman.com

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