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MUSIC BIZ INSIGHT #17 Power Reading for Busy Music Professionals Hope you're hungry! MUSIC BIZ INSIGHT is published for musicians, songwriters, managers, label reps, booking agents, entertainment attorneys, studio owners, music publishers, and all others involved in the music business. Its purpose is to help boost your business, find new markets, make the right connections, develop professionally, work smarter and improve your bottom line. "As a general rule, the most successful people in life are those who have the best information." Benjamin Disraeli Published bi-monthly by Peter Spellman, Director MUSIC BUSINESS SOLUTIONS: Turning Music Business Data into Useful Knowledge. Career and Business-building books, articles, consulting and more. P.O. Box 230266, Astor Station, Boston, MA 02123-0266, USA Phone: 978-887-8041 Email: success@mbsolutions.com Website: www.mbsolutions.com © 1997 - 2003, Peter Spellman, Music Business Solutions IN THIS ISSUE
Watch for the second issue of MUSIC CAREER JUICE, coming June 15 to all MUSIC BIZ INSIGHT subscribers. ))) EDITORIAL ((( MERGER MAYHEM?: THE UPSIDE OF A DOWNSIZE by Peter Spellman (this article also appeared in the June '99 issue of "Berklee Today" magazine, the official magazines for alumni of Berklee College of Music, Boston, Massachusetts). The largest merger in recording industry history occured late last year when the Dutch-owned Polygram Label Group was bought by Seagram's of Canada for a whopping $10.6 billion. Already an owner of Universal Music (Geffen, Dreamworks, Interscope), the acquired Polygram cachet included the labels A & M, Island, Motown, and Mercury among others. As a result, the core record industry now boils down to five major conglomerates (BMG, EMI, SONY, WEA, and Universal Music Group), and that could be reduced to four if rumors of a buyout of EMI by BMG are substantiated. These five supply about 80% of all the music heard on the radio. The shifting of tectonic plates caused by giant mergers inevitably results in upheaval and dislocation. Record companies A&M and Geffen have been folded into Interscope Records, a successful former indie operation in its own right, responsible for the rap stars Dr. Dre and Tupac Shakur, among others. Mercury and Motown (down from over 200 employees to 7) have virtually ceased to exist with any former autonomy gone. Numerous smaller labels are also on the chopping block on both coasts. When all is said and done Seagram will issue pinks slips to over 3,000 employees worldwide (including many middle managers and a number of executives) and let go of 300 artists by the end of this year. What people fear most is that what remaining diversity and originality there is in popular music will be snuffed out for the sake of making easy, unchallenging money-spinners: in other words, more Take That and Spice Girls clones. Serious artists, some say, have already found it difficult over the past decade or so to hold on to their integrity and resist the pressure to over-commercialize. Others feel that in its drive for efficiencies and global markets, the music business is drifting away from its homebase constituency of disaffected, affluent Western youth. Rock, they say, is endangered in corporate hands. But before we start cursing the music-biz execs and their evil bean-counting accountants, consider this: The Universal/Polygram merger could actually turn out to be a good thing for contemporary music. "The good news is that it'll be like 1952 all over again," commented Billboard editor Timothy White in the wake of the merger. "People will take their severance packages and start little labels, just like when Ahmet Ertgun started Atlantic Records with a bunch of artists nobody else wanted." Indeed, the indie sector of the music business is its fastest rising star. Empowered by affordable recording technologies and a hyperabundance of entrepreneurial resources, independent music companies are springing up like mushrooms in a moist field. Many of the most important developments in contemporary music, starting with the launch of rock 'n' roll, were the result of entrepreneurs at independent record companies taking chances on talents that were often thought of as being too far outside of the mainstream for the major labels to sign. The fact that Seagram's Universal Music Group wants to sever ties with so many acts is a condemnation of the industry's tendency to sign talent so indiscriminately. The statistics on record sales are dismal. According to the Recording Industry Association of America, 9 out of 10 new record releases fail to recoup their production costs. Nine out of ten &endash; that's a mortality rate that would easily sink any other business. But because of the music's profit-to-cost ratios it's been allowed to exist. One hit fills the coffers fast. Based on personal observations of Warner Bros. releases over a four month period, I noticed that the label averages 25-30 new releases per month. That's more than one per working day. There's little chance record company marketing departments can give more than scant atttention to most of these records. There is simply not enough time nor people on staff to form a strategic plan and then effectively work that plan. Most new artist releases are given a generic marketing plan and thrown against the wall, while the label crosses its fingers hoping they stick. Faced with this tough reality, the music industry is now downsizing into a more compact, cost-effective version of its former obese self. Big Mac-sized marketing campaigns are out (or, at least, not quite the priority they were) and "we-care-because-you-do" artist development is coming back in as the music industry wakes up to the fact that bands cannot live on hype alone. Perhaps the new Seagram regime will set an example of this new corporate attitude. Most are unaware that Seagram chief Edgar Bronfman is an armchair songwriter who co-authored Celine Dion's , "To Love You More." It's hard to imagine Time Warner chief Gerald Levin or the head of Bertelsmann or Sony writing a song that would be played on the radio. "The music business is now going to be the most important business to us &endash; which it's not to most of the other companies that are running large entertainment businesses," said Bronfman to the Los Angeles Times earlier this year. "Seagram has corporate management that loves music, loves the music business and loves the creativity of the music business. I think that's a good place for a music company to be." We all hope so. ))) GENRE SPOTLIGHT: HIP-HOP ((( White, suburban teenage males buy most hip-hop and rap music in the U.S. Why? There are many theories but the most consistently intelligent has gone something like: There's someting deeply soulful and exotic as well as angry and alienated that appeals to this group which is itself groping for a place in the world. The Hip-Hop success story is in great part the result of the age-old white fascination and emulation of black culture. On the big-time touring front, rap continued to be largely underrepresented, save for Sean "Puffy" Combs's successful Bad Boy tour at the beginning of '98 and the third edition of the "Smokin' Grooves" summer extravaganza. In 1997 and into '98, Combs, who had succeeded Death Row Records head Marion "Suge"Knight as rap's most successful entrepreneur, seemed omnipresent. Here was a combination mogul, producer, rapper (under the name Puff Daddy) and songwriter who seemed to be in every other video on BET and MTV, guest-rapping on records by artists such as Mariah Carey and Mase, taking bows at all the award shows and even teaming up with Led Zeppelin superhero Jimmy page on a song for the "Godzilla" soundtrack. After ups and downs over the years, Def Jam &endash; now part of Seagram's new Universal Music Group &endash; enjoyed a spectacular renaissance in 1998 thanks to a crop of rappers headed by DMX, Jay-Z, the Def Squad, Method Man and Redman. Resources: Rap, This Game of Exposure--For the Hip Hop Entrepreneur: Targeting Rap Fans with your own Record Label! Info at: http://www.nichemarket.com/ A highly recommended, step-by-step guide to starting your own Rap record label and releasing your own records. Includes loads of hard-won wisdom about entrepreneurial development. Hundreds of indie labels around the world have used this valuable information to succeed! Find out for yourself. (Money Back Guarantee). Plus you get: THE EXCLUSIVE HIP HOP ENTREPRENEUR LISTS OF EXPOSURE which includes over 600 contact names,addresses, tel/fax no's of all the key Rap-friendly Radio Stations, Rap Stores, Rap Video Shows, Distributors/Wholesalers, Rap Magazines/Publications, Record Pools & Conferences, Internet Sites and MORE! List Price: $69.00. Limited Sale Offer: $59.00 Next Month's Genre Spotlight: BLUES ))))) ILLUMINATING TRIVIA ((((( Did you know... Latin rocker Richie Valen's most famous hit, "La Bamba," was the first song recorded in Spanish to enter the Top Ten? Interestingly enough, Richie's real name was changed by the record company from Richard Stephen Valenzuela, and he didn't speak a word of Spanish. ))) FEATURE ((( PLAN YOUR WORK, WORK YOUR PLAN: Creating Your Map to Music Career Success by Peter Spellman (NOTE: This was the last article I wrote for MUSICIAN Magazine before it folded. It was also published in the "Musician's Guide to Touring & Promotion"; June '99 issue) Scenario 1: A talented band wants a record deal but their gig schedule is erratic and members' day jobs keep sucking their energies so there's not much left for anything else. Scenario 2: A terrific songwriter keeps churning out tunes weekly but they just sit in her notebook while she dreams of someday recording them. Scenario 3: A singer and producer team up and record two cuts for release but then realize all the cash has gone to recording and manufacturing with none left for promotion and marketing. Scenario 4: A music school graduate with great promise sits in his insurance job cubicle and wonders, " What went wrong?" Sound familiar? After fifteen years of working in artist development I've become painfully aware of a tremendous amount of musically-gifted talent being squandered. Some musicians progress in fits and starts--one step forward, two back; two steps forward, one back...and so on. Others are just spinning their wheels, stalled. Still others are going in circles. A few, perhaps the most tragic, are spinning their wheels and going in circles. What accounts for all this misguided effort? It could be many things: a lack of talent, drug abuse, laziness, etc. But, more often than not, musicians tend to get nowhere because of the absence of a map. A map is a plan that points to your destination and lays out the best routes to get there. Maps give us the "bird's eye view", the lay of the land so to speak, so that our journey toward our destination is discernable and deliberate, rather than haphazard and blind. Singer-songwriter Kelly Pardekooper of Iowa city put it this way: "The bottom line for me is that until I had a plan written down in black and white, I was just swimming in the dark, I had no anchor for my boat, no Felix for my Oscar." Those planning to be doctors and investment bankers have a fairly clear path to their respective destinations: four years of college, followed by several more years of specialized study, and then onto a"job". The requirements are clear; the maps come pre-packaged. Musicians, on the other hand, don't usually have the luxury of a clearly-defined "job" waiting at the end of their preparation. The musician's map will have hundreds of potential paths, and will be as unique as the life and talent it's guiding. A music career plan (map) is never written in stone. It should not be viewed as a "constitution-like document" says Michael Futreal of progressive folk-rock band The Offramps. "That's useful for some but as an independent musician whose main hope is to remain flexible while making enough money to simply sustain my music production activities, anything so set-in-stone is sure to fail." Futreal sees his plan as a provisional guideline serving as "an external memory for me in my scattered attempt to balance a day job, a family and music." If you're seeking to raise money from banks or sponsors, you'll most certainly need a written plan. "A lot of people are surprised to meet a musician who even HAS a plan at all, let alone a written, thought-out, researched document," says Alex Houton, president of New Jersey-based indie Lurch Records. "Just having a written one scores points when you're seeking financing." These more formal business plans follow a general outline that's not too hard to follow. See the Resource Box at the end this article for resources to help you draft your own plan. A plan shows would-be investors that you're dreaming with your feet on the ground. "Writing a business plan forces the would-be entrepreneur to fully address things like costs, risks, competition, market size, etc.", notes Tina Prountzos, an investment banker by day and manager of the New York band Dark Moon at night. "Nobody wants to lend or invest money with an individual or group who hasn't clearly shown exactly how money will be used and what risks and benefits associated with their venture are." So music career plans come in all shapes and sizes. They can be everything from goals scribbled on a napkin to forty pagebusiness plans, but they'll only be effective if there are three ingredients present: long and short-range goals, the right information, and a written form. MAPPING OUT YOUR MUSIC DESTINATIONS "Success" is often defined as the progressive realization of a worthwhile goal. I like that. If you are doing the things that are moving you toward the attainment of your goal today, then you are "successful" even if you are not there yet. It's the goal that starts the whole journey. An illuminating study on goal setting sponsored by the Ford Foundation found that,
What accounts for the dramatic difference between that top 3% and the others? Are you ready?: the top 3% wrote down their goals. Are you laughing yet? It can't be that simple! Or can it? Dreams and wishes are not goals until they are written as specific end results on paper. In some very real sense, writing them down materializes them. Goals have been desribed as "dreams with a deadline". Written, specific goals provide direction and focus to our activities. They become a road map to follow. And the mind tends to follow what's in front of it. So what is your dream-goal? Is it to be the most-in-demand session player on the East coast? To be the next Goo Goo Dolls? To get your song cast with a multiplatinum-selling recording artist? To start a company that creates soundtracks for video games and commercials? Or is it to simply earn extra income playing music while holding down a succesful non-music day job? Each one of these requires a specific map. Are you even aware of your options? Music careers today are being re-written as traditionally separate industries converge and spawn new opportunities for those familiar with audio in its manifold expressions. For example, did you know that book publishers are establishing music divisions as they "re-purpose" their titles onto CD-ROMs and other multimedia formats? Think about where music is used today and an explosion of possible paths will present themselves. Knowing your options and establishing clear goals is your first step. In the entrepreneurship courses I teach, one of the early assignments is for students to write their own obituaries. While on the surface morbid, it forces people to seriously consider what they want to be remembered for at the close of their earthly lives. Try it. All of the achievements and acomplishments revealed in this exercise are translatable into specific goals from which you can work backwards to the present. And speaking of entrepreneurship, unlike the doctor and investment banker previously mentioned, musicians are self-contained business entities with all the responsibilities and obligations which are part of all business activity. Since most musical work falls into a "do-it-yourself" approach, it's important to understand that the "it" you will be doing, for the most part, is business. Whether it's booking a gig, negotiating a contract or organizing a promotion plan for your CD, the fact is you are exercising a variety of skills to grow a business, You Inc. The trick is figuring out what you're good at and then translating those skills into "profit-centers" or revenue streams. Most musicians I know wear a number of different "hats". In any one week they may wear a performer's hat, an educator's hat, an agent's hat, an arranger's hat, and a songwriter's hat. Sometimes all hats are worn in a single day! Each "hat" is a potential "stream" and activity center that can be strategically managed to expand your market audience. And each stream you choose to develop requires it own smaller plan within your larger Plan. Of course the challenges of this loom large. Many reading this article went into music because you didn't necessarily want to do business. Perhaps you watched your parents or relatives chafe under the constraints of business jobs, or maybe you cling to an anti-materialism that scorns and fears the pursuit of the almighty dollar, and that casts art and commerce as hopeless opposites. We can add to this the fact that few of us ever received real-world strategies for developing successful careers from our schools and homes. But whatever the poison, it has had the effect of keeping many musicians ignorant of how to go about creating success for themselves in the world. This is often the reason for all that erratic progress, those fits and starts, in musicians' lives. Even when the goals are clear, the best paths to those goals remain a mystery. In addition, creating your own personal music career map sometimes means clearing out previous experiences that may may be holding you back. I call this clearing process "emotional bushwhacking." All of us carry around excess baggage and psychic trash that burdens our journey. This stuff has the effect of weighing us down and blurring our sight. Someone once said we don't see things as they are, we see things as we are. The world is mediated to us through a lens created over the years of our lives, through our family experience, our schooling, and the choices (both good and bad) we've made. You'll need all the resources and energy you can gather for your career journey. The key is understanding yourself enough to become aware of those things which tend to de-rail your efforts and short-circuit your progress. Perhaps the most honest indicator of our emotional fitness is our relationships. You'd do well to look at these closely. Why? Because the music business is one of the most relationship-driven businesses on the planet. Your ongoing success will be determined, largely, by the quality and quantity of the relationships you build over time. Clearing out the emotional weeds that choke our actions and attitudes is an extremely important ingredient of the journey to your goals. It takes great courage to look these things square in the eye and many of us will need help sorting it all out. Fortunately, there are people who specialize in helping humans become emotionally fit. Seek a referral from friends or from your school for a counselor who specializes in personal development. Many have "sliding scales" and will adjust charges based on your ability to pay. PACKING FOR THE JOURNEY Once you've cleared a path, it's then time to map out your journey. One-time ambassador Benjamin Disraeli said, "As a general rule, the most successful people in life are those who have the best information." When a person sits down to create a map, myriad amounts of data are necessary. Every road, river, city, hill, canal and contour must be accounted for so the map truly serves those who will use it for navigation and travel. Besides providing a "bird's-eye view", a map indicates your destination (goal), shows the most direct path to it, and points out attractions (as well as distractions) along the way. In essence, a map shows you how to optimize your journey, with as little time, money and energy loss as possible. Today, career- and business-planning information is hyperabundant and readily available, if you know where to look. The "small office, home office" (SOHO) trend has hatched an entire industry focused on entrepreneurs and what they need. Books, magazines, software, websites cable tv and radio shows designed for micro-businesses are popping up everywhere. See the Resource Box for a choice selection of these resources. Another great informational resource to help with your planning is the Small Business Administration (SBA), a government-funded service whose main function is to help small businesses start and grow. The SBA has many programs nationwide, one of which is the Small Business Development Center (SBDC). These centers work out of colleges and universities, and offer free small business counseling and training, usually through another program called SCORE (The Service Corps of Retired Executives). Though not experts on the music business, per se, they will provide everything you need to know about being a business in your particular state, including licensure, permits, taxes, insurance, and zoning regulations. Some will even provide training in computer programs and bookkeeping, as well as some much-needed hand-holding through the process of writing a formal business plan. For those serious about growing their business, this'll be the best return on your taxes you'll ever get. And you can now even get counseling via email. Contact info for SBDCs and SCORE can be found in the resource Resource Box. Planning advice may also come from unusual places. Boston band Two Ton Shoe realized early on that they'd move their project along faster with an organized plan. To help the process, they posted announcements at the Harvard Business School saying they were looking for management consulting for launching their own record label. This resulted in them teaming up with a trio of HBS students who succeeded in getting class credit for developing an independent study project with the band as the focus. The students spent their spring semester working with the act to develop a comprehensive business plan, including a section on industry trends and local factors. "Needless to say, this was a big bonus for us, and free!", says Two Ton Shoe guitarist Jake Shapiro. He continues, "Two years down the road we've maintained relationships with the HBS grads and it's quite possible that we will form a management team with one or more of them as our label and band grow." As your plan comes into focus you'll start to get a better idea of the real costs associated with your goals. "A written plan forces you to analyze the cost of production, promotion, and performance," offers Kelly Pardekooper. "Once you use this method for a while you can start to see where your money is really working and where you're throwing it away." Pardekooper has also found the Internet to be a great resource for bouncing ideas off other musicians with similar goals. As an information resource the Internet is unsurpassed but it does have a down side. "You can literally drown in information and possibilities if you use the Internet as a resource," says Michael Futreal. "You're always haunted by the notion that maybe you just haven't found that one special resource that would open doors. As such, it's easy to waste loads of time just attempting to find one more thing rather than following through on leads you already have in hand. The trick is, as always, to balance focus and vision--to see the forest as a bunch of trees, so to speak." Keeping a written record of all your ideas and findings is key. Don't rely solely on your memory because important items are bound to slip away. Futreal uses an integrated software program called The Brain (www.thebrain.com) which acts as an Internet browser, a bookmark file, a printer, a folder, and scrap paper. "I'll write on anything that has spare space...keeping extensive notes leads to the distillation of a more concrete plan along the lines of recurring themes. Eventually, the cream rises to the top, so to speak, and the ides and plans that survive make it into an associative database structure on my computer (a'Brain')." Though a business plan will often be a fixed document, Futreal feels it's worthwhile toying with the idea of a business plan as a "hyper-document", a continually evolving blueprint you mold as you grow. "The added flexibility may add the extra bit of speed and adaptability your music business needs to survive in a complex world." WORKING YOUR PLAN Here are some actionable tips to help with the map-planning process:
Now more than ever musicians must have a plan to achieve the success they crave. The new economy is ripe for micobusinesses to spawn and grow. Set your goals, write them out, obtain the help and information you need, and then give your career or business idea the attention it deserves. Attention means focus. "Staying focused on what you want in the music business is not easy, but, it is a way to grow, not only professionally, but personally," says Trish Thompson of the Atlanta band, Glass Candle Grenade. "When you see your plan in action and the progress you make, it is quite satisfying...and then it's time to kick back and have a beer." Ahh, now that's satisfying. PLAN YOUR WORK, WORK YOUR PLAN / RESOURCE BOX Books
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TO SUBSCRIBE to MUSIC BIZ INSIGHT: send email with the message in the body, "subscribe" to success@mbsolutions.com It's not an autoresponder so feel free to include any other comments, ideas, suggestions, etc. you may have. About the Publisher PETER SPELLMAN is Director of MUSIC BUSINESS SOLUTIONS, a business and marketing consultancy to the music industry, and Director of Career Development at Berklee College of Music, Boston. He is the author of several books for music entrepreneurs and teaches music industry courses at Northeastern University (Boston) and the University of Massachusetts (Lowell). A musician since he was ten, Peter continues to spin riddims in the improvisational collective, Friend Planet and sing Cat Stevens' songs to his kids every night before bed. BLOOM WHERE YOU'RE PLANTED! Quote of the Month-- "Never compete, create." --Earl NightingaleE-mail: success@mbsolutions.com © 1997 - 2003, Peter Spellman, MBS Business Media, www.mbsolutions.com P.O. Box 230266, Boston MA 02123-0266 978-887-8041 Rise up!
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