Only time for a quick update folks. Now that the Health Care proposal is out of the House and on its way to the Senate, the tax folks have more time (although not that much more time) to focus on tax incentives and credits that are set to expire at the end of this year. For our purposes Sections 181 and 199 are really the only one matter.
According to a staff tax attorney at the Ways and Means Committee, the focus has been shifted and if Section 181 has a chance of renewal or extension, it will occur in the next two weeks. Please note that even if the renewal of Section 181 is proposed in the next week, there is no guaranty that the bill which carries the renewal proposal will pass. To that point, you will not see a renewal of Section 181 in a proposal by itself. Any renewal of the film incentive statute will be included on a larger and broader “Extender” package introduced to Congress before the end of the year.
So, I suppose this is good news. However, if you can get started on your films, do it now or forever hold your peace!
I’m finally fully recovered from my week in NYC. While many of the topics discussed by panels at CMJ this year were slightly on the negative side (not too surprising when your industry is in constant flux), there was an air of renewed hope and positivity that musicians and those who are dependent on music to make a living may be turning the corner.
Huge issues, such as how to compensate musicians who have content ripped off or used without permission on Goliath’s like You Tube, do not seem to be any closer to being resolved. One lawyer from a large internet file sharing site expressed her frustration that it took her client 8 years to work out a comprehensive license deal with the labels. The labels countered that with a complaint that the country’s Anti-Trust laws prohibit the labels from meeting in the same room let alone coming up with a unilateral price for licensing music and come up with a fair price for licensing; music. The result will be years of musicians losing out on mechanicals and licensing revenue.
But, like I said, the weekend was not without some optimism. Focus groups discussed new ways for musicians to make money and reach their fan groups. Several of the methods they discussed were ideas that this site previously discussed (Click Here and Here). Using new and creative ways to get your music to your fan base (USB drives, t-shirts, treasure hunts) and utilizing social media were stressed by those in the know. Creating an interactive experience with the buyer should be the ultimate goal of musicians. With all of the utilities currently available, the one on one fan/artist experience is easier to achieve.
The byproduct of the new methods of reaching and interacting with fans is the steady decline of the traditional album (Something I mentioned in last week’s post: See White Chocolate and the Soul Berries). Rolling Stone is picking up on this trend as it is reaching beyond the indies and making headway with some major artists. In Issue 1090, October 29, 2009, David Browne cited to the death of the traditional album in his article entitled “Artists Break Free of the Album”. In the article, several artists, including Billy Corgan, Modest Mouse, Sppon, Blitzen Trapper and Radiohead, are testifying to the need and the appeal of a new model for getting music to the masses. Finally catching up to the public trend (or disease, depending on how you feel) of severe Attention Deficit Disorder, the music industry is coming to the realization that if you are going to get new music out and grab the public’s attention, you better do it quickly and in a new and interesting way. EP’s are becoming the new LP’s and on-line releases, once deemed leaks, are becoming a cheaper and easier way to reach the entire world and not just the big box store customer.
The industry insiders and taste makers at CMJ were not necessarily revealing any new or earth shattering information that the informed musician did not already know. Yet, it is important to realize the significance of the simple fact that these industry and label types are finally catching on to the truth. If you really needed proof that the industry is not what it once used to be and the old model of releasing a cd, touring, sitting back and living off of royalties is dead, then hearing it from a label owner, label lawyer and label A&R executive is all you hopefully ever need.
I’m on the way to CMJ music marathon in NYC. CMJ and other similar music events are good barometers for the industry as whole. Who will be the next band? What are the labels going to do know? How has piracy effected music sales? Etc. Etc.
In the past this indie music conference and pseudo music festival has proven to be a great place to find new music talent and network with creative industry types. This year, the line up is more representative of the changing music scene: a lot of bands that are great, but that you probably haven’t heard of yet. The Antlers, Pitbull, Japanroids and Das Rascist are recognizable names to those in the know and will hopefully CMJ will take them and the hundreds of other bands to the next level.
The networking that had gone on in the past was between labels, pr firms, distributors and radio folks. This year, many of those people are looking for jobs. Perhaps CMJ will have a job fair day?
I’m looking forward to seeing if the unprecedented ease of getting music to the masses (i.e. the Internet) has truly watered down the musical talent or if it has afforded those that never would have had the opportunity to perform in the past to have their talent seen and heard. I’m obviously hoping for the latter. I’m also curious to see what pearls of wisdom the overly entrenched New York industry types plan on sharing at the various panels. My prediction this year is that a lot of the label types have new jobs with smaller (both in size and revenue) companies. So, chances are that the theme will be battling piracy and identifying new ways of getting paid for making music.
We shall see and I’ll report back after my trip.
SHAMELESS SELF-PROMOTION OF THE WEEK:
Speaking of new ways of getting music to the masses in a creative way, check out my friend Whatzisface’s newest project (click the link below). In the past hip hop artists have been found via the mixtape. Mixtapes were and still are to a large extent, full length albums without a particular theme or concept. They are given away for free usually on a burned cd or now, via myspace download. The hope is the same: someone with decision making power and a budget will listen and choose to develop the artist. Why not change it up? Why not re-invent the mixtape so that people look forward to it like a new album release? Add a concept to it. Make it funny and release it in a cool way. That’s what ‘face has done. Here is one of his latest installments in the White Chocolate and… series. Enjoy.
As most independent film makers know, Section 181 is set to expire on January 1, 2010. The tax incentive has been an incredible tool for US film makers attempting to lure investors and their money offering deductions against passive (and in some cases active) income. First introduced as part of the American Jobs Creation Act in 2004, the incentive was first set to expire on December 31, 2008. The stimulus bill or the American Recovery and Reinvestment Act breathed new life into Section 181, albeit only for a year.
So what is the plan for the film incentive?
Great question. I’ve done all the research that one man can do and I still do not have an answer. According to a source at the IRS who is an expert on the film incentive sections (181 and 199), he would not be surprised if an extension was slipped into a bill much like it was in 2008. However, he has no real basis for that opinion and urged me to just keep watching the government’s proposed bills for updates.
The committee that is in charge of introducing tax incentives is the Ways and Means Committee. I spoke to one of their tax lawyers to get her perspective. Not surprisingly, she 35, 55, 61 told me that their entire attention was on health care reform. She mentioned that if a health care reform bill was presented in the next month or two, they would probably turn their attention to tax incentive bills that are set to expire. However, she also cautioned me that, due to the economy, proposals for reducing the overall tax collected by the government are not exactly in favor.
Bottom line, there is no answer to report yet. Continue to check here, your local film office and government websites for updates. Call your representative and keep on them.
If you are planning on beginning filming in early 2010, all I can say is try to start in December. If you begin filming in 2009, you may qualify for the incentive even if you do not complete filming until 2010.
Most people don’t want to be that guy. You know the guy that rocks the Iron Maiden t-shirt to the Iron Maiden concert. However, that guy, has helped musicians generate additional revenue for decades.
Today there are many more outlets and many more products that an artist may peddle. While t-shirts and posters still rule the merch tent, new (and cooler) band merchandise is being developed seemingly every day. Recently one of my clients put out an entire mix tape on a bracelet. The LiveStrong looking bracelet ingeniously connects via a USB drive (see below). This allows a band to sell something that looks cool, is unique and includes the band’s name, logo, design AND their music. It’s brilliant. There is even software available that would allow the band to continuously update the USB drive so the fan who purchased it will have updated music and band information and the ability to purchase new music every time the fan plugs the device into her computer. (contact Vadim at www.customusb.com for more info.)
Picture Your Band's Name and Logo on a bracelet/album!
T-Shirts are not what they used to be anymore either. If you remember this post: Mos(definitely A Great Idea, you know that I am a big fan of including music on non-traditional media. Computer codes and affordable USB drives can be included with all sorts of merchandise that fans are more apt to buy. Mos Def included a code on a designer tee which enabled the purchaser to download his entire new album. Magazines have used this idea for years; purchase the an issue of Spin and you can download the new single from Jack White’s new band, The Dead Weather. Even beer purchases include mp3 downloads. Obviously, indie artists do not brew their own beer, publish their own magazine or manufacture their own t-shirts. However, with a little bit of research and some creative marketing, partnerships with content starved companies can be forged.
Not only are there new products, but with band websites, myspace, facebook, sonicbids, amazon and other e-stores, there are countless new ways to sell the products. The back of the tour van will always be the primary way that a true indie rocker sells his burned cd’s, but for a couple bucks more, that indie rocker could sell you an mp3 from his couch. Internet partnerships work just as well, if not better, as partnerships to manufacture and sell physical products. If you align yourself with a like minded or themed website that has an on-line store, than you can offer exclusive gear to that site. You take a chunk of the sales and share the rest (and all of your users that visit the site) with the partner website. Everyone is a winner.
Music is quickly becoming a “value add” to products that people already purchase. In the battle to grab a consumers attention, companies will pay a bit more to make their product stand out. “Free” music is a great way of doing that. And for musicians, the deals that can be struck with these type of forward thinking companies can be fairly lucrative; or at the very least serve as a great way to get music out to a whole new audience.
Creativity has to continue after the music is recorded. In today’s era, where the only type of music sale that is increasing is vinyl, artists have to think creatively in order to make a profit. If the public will only pay for select albums and download the rest of their music for free, new income streams must be forged by bands. Selling your music in a non-traditional way may increase a band’s merchandise sales as well as “album” sales all at the same time.
Welcome back to my multiple part series on how to make money as a musician: Volume 2, Licensing.
No point dwelling on the past, making money selling records has gone the way of the 8 track, the ferbie and the Hummer SUV. The antiquated system of big advances and platinum record sales has died (or is at least on life support) along with the major labels. So while it is harder to make money the old fashion way, there are new and, more importantly, more ways of making money as a musician.
Performing live at concerts is still the best way to make money. It used to be that bands would perform to sell albums, now the musicians give away their music to sell concert tickets. However, not everyone can sell out stadiums, concert halls, or even high school proms. So, what is another great way for musicians to make significant income or supplement their concert income? Licensing!
Think of how many commercials you heard or saw today? Consumer Reports estimates that the average American is exposed to 247 commercial messages a day. The vast majority of the radio and television ads, as well as a growing number of internet and new media ads, are accompanied by music. Whether its Budweiser, which spends approximately $90 million a year on advertisements, playing the newest Dodo’s or Santigold (See Above) song or Apple promoting the newest IPhone with Feist, music is an integral part of advertising all over the world. Musicians can lay their claim to the billions of dollars spent on advertisements each year.
Licensing does not end with advertisements. One of the most common terms of art used in license agreements drafted by folks like me is describing the use of a song in “any medium now know or hereafter discovered”. This industry phrase means that a song can be used or synched to movies, television shows, internet programming, video games, radio programs, or any other programming or format which hasn’t even been discovered yet. Think about, when is the last time you watched a movie that didn’t have a sound track, a television show that didn’t have a theme song, or a video game that didn’t have background music? Watching old silent movies does not count.
As satellite and cable television expands and internet programming continues to grow the opportunities for music licensing grow proportionally. Budgets may vary, but mechanical royalties (the statutory rate that must be paid every time a song is broadcasted) must be paid. Licensing music can be a quick substantial pay day or a long term and consistent money maker.
Music Licensing Avenue
The dollar figures for global music licensing are staggering. According to a 2007 report by eMarketer, the projected budget for music licensing in 2010 will reach $4.4 billion! How many artists would be happy with just a teeny tiny percentage of that huge pot?
Just knowing that the licensing money is out there does not make it a reality for most independent artists (I’m anticipating your questions). For independent artists who are not signed to a publisher, it is still difficult to get your music in front of the licensing decision makers. There are several services out there via the web which offer solutions: Pump Audio, Taxi and my favorite (bias added) Music Dealers. These sites allow artists to upload their music to catalogs with the hope that a music supervisor seeking independent music visits the site and selects their song. Some sites are non-exclusive, meaning you can upload your music to more than one, while other require exclusivity. Always read the contract (even the click through contracts)!
Other options for getting your music licensed is to attend music seminars, panels, events, conventions. Research where the industry people are going to be. Buy a badge to CMJ, SXSW, Midem, etc. Music supervisors and a&r types are always at these types of events networking and trying to find the right sound for their project. If you don’t run into the right folks there you can start networking on your own to find managers, lawyers or other independent licensing reps of music. A lot of times these types have the inside track (which is usually a coveted list of contact info for music supervisors in all types of media like movies, tv, and video games) to the decision makers. For a split on the fee, independent reps will submit your music for your. While there is no guaranty, your chances of having a supervisor actually listen to your music is much higher when it is submitted by someone like this.
Just like everything else in your career as a musician, you will only go as far as you and your talent take you. Having great music alone is not enough. You have to treat it like a business. Licensing opportunities will not just come to you. Go out there and sell it. Network, meet the right people, create a buzz and capitalize on every opportunity (no matter how small) that is presented to you.
Welcome to the first volume of the L4M: How to Make Money as a Musician.
The music industry has fundamentally changed. Because of this shift, the way musicians make a living (and consequently the way all of the people that depend on artists to make money) has changed. The goal of this series of postings is to provide a forum amongst musicians, managers, lawyers, accountants and anyone else associated with music to discuss how to make a living in today’s new music industry.
Building off of my last post (Concerts are the New CD’s), the number one way that a musician can make money is by performing live. Most artists are not selling out Wembley Stadium, the Staples Center or Madison Square Garden. However, even in today’s economy, the clubs, bars, theaters, and parks of every size are still booked solid for most nights with live music. Part of the reason that live music is not as effected as other segments of the industry is that it is usually associated with or tied to alcohol sales. In a bad economy booze is king (think of people drinking away their sorrows). To get people to spend their money on alcohol at their venue, club and bar owners will try to attract patrons with music. So whether it is your local VFW, the town pub, or the neighborhood street fest, as long as their is liquor, there will be live music.
Concerts, specifically summer concerts, are still a huge part of the teen and college age crowd’s social scene. For example, Lollapalooza ‘09 sold out every day. If you were here in Chicago during Lolla, you would have witnessed some of the most horrible weather in recent memory (torrential rain followed by Amazonian heat). Yet the kids and their discretionary income were still there in full force.
Concerts and festivals still draw enormous crowds. They have become a place to be seen and to discover new music. For an artist, booking a gig at a festival or on a tour, such as the Warped Tour, will expose them to new audiences who are now discovering music by going to concerts rather than hearing it on the radio. Musicians have told me that they sell more of their cds after a show then they do for an entire month at store. Which brings us to another reason why playing live is still the number one way for a musician to make money.
While the asking rate for a band may fluctuate depending on their “hottness”, the possibilities of making more money by playing live is always there. The obvious secondary income stream from playing live is to sell merchandise. I haven’t been to a concert in recent memory, whether at a stadium or in a dive bar, where there wasn’t a booth with a pissed off looking girlfriend or boyfriend peddling t-shirts, cds, stickers, etc. Direct merchandise sales at a concert combined with directing new fans to a band’s website, can account for a good amount of cash. Maybe enough to keep touring.
No matter the size of the room, good music will pack it.
The not as obvious income stream that may develop from playing live is that you never know who is in the audience. The dream of being discovered by an A&R guy cannot come true by playing in your mom’s garage. Bands are discovered by playing live and getting a reputation for putting on a good show or having a unique sound. It is true that with the Internet you can get your music out to more people then ever before without ever performing live, but once you are discovered by a label or an investor, the first thing they are going to want to see is you playing live. In addition, you will undoubtedly develop relationships with other bands by playing a lot of concerts. Booking with other bands, that are maybe more popular than you can lead to bigger venues and more money.
The bottom line is that people still love going to concerts. Last time I checked, Ticketmaster and Live Nation were still in business, so that means that people are still willing to pay the ridiculous service and “convenience” fees just to go see their favorite band play. Festivals are still selling out and clubs are still packed with thirsty fans. Playing live not only can pay the bills, but can lead to even better opportunities.
Let me know what you think. Leave a comment or shoot me an email about how you make money as an artist.
A not so new fact in the music industry is that musicians can make more money touring then they can selling music. Whether it is digital or physical sales, fans just don’t want to spend the money. One thing that I write about a lot is the fact that giving music away for free, if done correctly, might be the best move an artist can make (See these posts Turn Your Music Into A Virus and Free Today, Paid Tomorrow).
As witnessed at the summer’s festivals, bands who do not necessarily top the Billboard Chart are still able to pack the open fields in front of their stage. Bands that have a habit of giving music away or making it available at a discount (NIN, Andrew Bird, the Decemberists, Radiohead) have a large following and make good money from touring off of that music.
As a precurser to my next posting of How to Make Money as a Musician, I thought I’d share these thoughts and a great article that was in the Wall Street Journal yesterday. Check it out here: The Music Festival Grows Up. Read what Jim Fusilli has learned from today’s musicians who rely on touring over selling their music.
Also, keep the thoughts and ideas coming on how you make money as a musician. I need some more info for my next post. Either leave a comment or write me at lawyer4musicians@gmail.com
This weeks shameless self promotion goes to….Me! I am so dedicated to my clients that I braved the torrential, monsoon, like conditions yesterday at Chicago’s Grant Park to support my clients.
Well, maybe that’s a bit over the top. It was pretty nasty, but I certainly was not the only one willing to endure the elements in order to take in some great music.
The Self Promotion Plug really goes to Hey Champ. They are a great example of a success in the new music industry. While they are signed to Lupe’s First and Fifteenth, they continue to create their own opportunities through their connections with CAA and a dedicated management team (Bandit Productions). This is a band that created their own buzz with great music and an awesome self-produced video. The hard work has landed them national tour, spots at All Points West and yesterday the main stage at Lollapalooza. Check it out below (plus the bad weather):
Show Me the Money? How are you making money as a musician?
Music in general is awesome. It is a social utility which allows all types of people to relax, escape, dance, party, sing-along and just have a good time. People identify others and themselves by the type of music that they listen to. For musicians music is a way of life. It is something that musicians are born with; it is truly a part of them.
Those of us who cannot make our own music depend on the artists to give us what we need. Today, there is no shortage of music. In fact, there is a plethora of music, just a dearth of quality. For those musicians who know nothing else in life but to make music, how do you get recognized or more practically how do you make a living doing the one thing that makes you happy?
Obviously the world will always need waiters, baristas, bartenders and temp workers. But in today’s new music industry, is there a way to still make a living for a lifelong musician?
I try to provide some general ideas and thoughts for musicians and the music industry, but for this post, I need your help. I know how the musicians I represent make a living. I am constantly working on license agreements, concert proposals, royalty agreements and the like. So I have a general idea of how you can still make money as a musician today. But the original idea behind this blog was to get interactive with musicians and their teams. Tell me how you are surviving as a musician. If that means you have 3 other jobs but are eeking buy playing at a Potbellys during the week, let me know.
My next post will hopefully be part my thoughts and part yours. I will share the best responses that I got and combine them with my own money making ideas and experiences. If you have an idea or think you know how to survive without royalties and big label advances, write to me: lawyer4musicians@gmail.com. Thanks, L4M.
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