The Music Business System Chapter Three

What is your particular area of interest/talent in the music industry? Start Thinking . . . What areas of expertise and kinds of resources are required to get a song to market? What is your particular area of interest/talent in the music industry? Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

Chapter Goals Understand that the music business is a system composed of subsystems, each of which submits to rational analysis. Learn how a song gets through “the maze”—how it travels through the system to the bank. Grasp the significance of the “information age” and how to deal with it today. Appreciate that the music business has been based on the star system—that only individuals with strong talent and motivation could expect to persuade others to invest in their potential for commercial success. Discover that performers often can’t gain or sustain success without a fully staffed support system. Learn the four factors contributing to the success of those who “win” in the music business. Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

Help Wanted! Transforming technology shaped the music business: 100 Years Ago: Music publisher shipped paper to retail stores countrywide. Today: Publisher may also be part-time songwriter with all assets on a hard drive. 50 Years Ago: Record company exploited only one path to the consumer. Today: Artist can produce and distribute music, CDs, and downloads at home. 30 Years Ago: Performance of large ensemble required many musicians. Today: One or two musicians and an MIDI controller can provide similar performance. Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

Help Wanted! To economists, trend = increased productivity To old guard, trend = loss of jobs + traumatized investors But change also = opportunity Human talent is still the key behind the music industry Aspirants need opportunity plus talent understanding of how music business system works Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

Getting Through the Maze The music industry = musician + audience There are two convenient ways to view the music industry: Understand the music business system and its subsystems Understand how a song gets to market Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

Getting Through the Maze [Insert Figure 3.1] Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

Getting Through the Maze How a song gets to market: The composer—who sometimes is also the performing artist—writes a song and signs with a publisher. The publisher persuades an artist (or that artist’s producer) to record the song. Lawyers (at several stages) negotiate contracts between parties and specify terms for varying forms of usage and exploitation, such as mechanical rights and synchronization licenses. The record company produces a recording and, possibly, a video version of the song. Promoters persuade programmers to broadcast the audio recording and the video. Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

Getting Through the Maze The record company uploads the song for online sale and ships the merchandise to distributors, who sell it to retailers. In cases where artists retain distribution rights, artists sell music from their websites and negotiate deals directly with download and/or streaming digital platforms. If the song becomes popular, a second wave of exploitation can occur—licensing of ringtones and merchandise connected to the song and/or artist. A talent agency contacts promoters and books a concert tour. Concert promoters enlist cosponsors and sell the tickets. The road manager moves the people and the equipment. Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

Getting Through the Maze The concert production manager dresses the stage, lights it, reinforces the sound. The artists perform. The performing rights organizations collect performance royalties. The accountants count the money; the participants pay their bills. The government collects the taxes. Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

Music is not simply about an artist performing a catchy tune. Show Me the Money Music is not simply about an artist performing a catchy tune. The music industry has mushroomed into an interconnected series of segmented multibillion-dollar businesses, including live concerts sale of musical instruments and equipment streams, downloads, physical recordings Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

Show Me the Money [Insert Figure 3.2] Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

In times of rapid change, you need to stay informed: Tools of the Trade In times of rapid change, you need to stay informed: Read the trades Attend professional meetings Read online music blogs Learn from the professionals Study at accredited institutions Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

Music Business Studies in Higher Education Rapid growth of the music industry after World War II Most people learned on the job Growing music industry required leaders in music business administration accounting law Pressure for curricula in music business from students gigging faculty Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

Music Business Studies in Higher Education Music business studies in higher education was born offering the following: Music Business administration Accounting Marketing Business law Copyright Recording technology Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

And the Winners Are . . . Four factors of “winners” in music business: They are strongly motivated; they really want to win. They are talented—and they surround themselves with talented associates. They persevere; they hang in there until they succeed. They study the business for insights on the creative process, career trajectory, and industry economics. #1 to #3 depend on you. #4 is offered in this course. Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners

For Further Thought . . . What would you consider to be the essential factor(s) for “winning” in the music business? Music Business Handbook and Career Guide, 11th Ed. © 2016 Sherwood Publishing Partners