Business Basics for Musicians: The Complete Handbook from Start to Success - 2nd Edn

Today, when artists are empowered to take greater control of their careers and earnings, the need for musicians to understand the business of music has never been greater. In a digital age overflowing with confusing and ever-changing information, musicians need trusted business advice from a veteran artist who can break down the basics in language they understand. Written by a professional musician for other musicians, Business Basics for Musicians is the laypersons guide to the music industry. In this must-have manual, music industry veteran Bobby Borg presents vital info in a conversational tone and an easy-to-scan format regarding five vital areas that musicians need to succeed: Career Execution, Business Relationships, Pro Teams, Deals and Dollars, and Future Predictions. Everything from copyrights to record deals, to managers, to merchandising, to doing it yourself is covered. With pro interviews, anecdotes, and review quizzes, Business Basics for Musicians is the complete handbook from start to success. Updates for this edition: Changes in copyright laws Summary of the Music Modernization Act Updates on record, merch, publishing, and live performance deals New trends in sponsorships and partnerships with product brands New interviews with industry professionals, including managers, producers, and agents New stories paralleling current events and industry happenings Updated business resources, industry contacts, and URLs Business Basics for Musicians Contents Foreword by Don Gorder Welcome and Welcome Back! Here's What's New! Preface Acknowledgments PART 1: CAREER EXECUTION 1. PURSUING A CAREER IN THE NEW MUSIC INDUSTRY: 15 Tips for Career Success Tip #1: Realize Your Dreams by Visualizing Them First Tip #2: Analyze Your Career Motivations Tip #3: Develop a Realistic Outlook by Ignoring the Media Hype Tip #4: Be Ready to Pay Your Dues, but Use Your Head Tip #5: Expect the Worst to Happen So That the Worst Won’t Seem So Bad Tip #6: Let Go of Your Fears and Learn How to Go for It Tip #7: Form Solid Connections in the “Clique of the Future” Tip #8: Nurture New Opportunities While You’re Already On the Job Tip #9: Climb Through Back Windows When Front Doors Aren’t Opening Tip #10: Create Your Own Destiny by Being Proactive Tip #11: Adapt to Change by Diversifying Yourself Now Tip #12: Be Practical About Money by Keeping It and Making It Grow Tip #13: Maintain Control in the Face of Drugs and Alcohol Tip #14: Remember That Finding Your Passion Is a Blessing Within Itself Tip #15: Hang On to the Basics Q&A with Success Coach and PR Expert Michael Levine PART 2: BUSINESS RELATIONSHIPS 2. BAND MEMBERSHIP, PART 1: Formation and Self-Management How and Where to Look for Musicians Criteria for Choosing Band Members Discuss the Band’s Vision Use the Personality Questionnaire Set Goals, Break Down the Work, and Estimate the Schedule/Costs The Day-to-Day Operating Rules of the Band Talk About Teamsmanship Hold Band Meetings That Don’t Suck Run Your Rehearsals Effectively 3. BAND MEMBERSHIP, PART 2: Partnerships, Trademarks, and Business Entities Band Membership Agreements Your Band Is a Legal Partnership Elements of Band Agreements: What to Include Q&A with Attorney Jeff Cohen 4. CONTRACT EMPLOYMENT OR SELF-EMPLOYMENT, PART 1: Gigs and Unions Getting the Gig: How to Be a “Working” Musician The Preliminary Necessities Breaking into the Scene Lasting for the Long Haul Seeking Fair Treatment and Guidance via the AFM AFM Major Benefits: Payment Regulation and Enforcement Special AFM Benefits: Funds, New Use Fees, and More AFM Health and Retirement Benefits Other AFM Benefits AFM Membership and Benefit Requirements Is Joining the AFM Right for You? Seeking Fair Treatment and Guidance via SAG-AFTRA General Differences: SAG-AFTRA Versus the AFM 5. CONTRACT EMPLOYMENT OR SELF-EMPLOYMENT, PART 2: Employment Agreements and Negotiations Working for Employers with Limited Budgets Working for Employers with Larger Budgets Wages Retainers Rehearsals Per Diems Buyouts Special Travel and Lodging Accommodations Special Clothing Instruments and Travel Cases Equipment Parts and Repairs Equipment Endorsements Equipment Techs Equipment Insurance Working for Employers Who Offer a Salary and Percentages 6. CONTRACT EMPLOYMENT OR SELF-EMPLOYMENT, PART 3: Taxes and Insurance Understanding Your Taxes: Uncle Sam’s Cut Contract Employment (Why Is My Check So Small?) Self-Employment / Independent Contractor Status Workers’ Compensation Insurance Contract Employees: Covered Self-Employment / Independent Contractor Status: Not Covered If Not Covered, Where Can I Find Insurance? The IRS: Qualifications for Employment 7. SOLO ARTIST AND EMPLOYER: Pros, Cons, and Responsibilities The Advantages of Going Solo Fewer Hassles over Making Decisions Increased Earning Potential Greater Job Security More Freedom to “Sail” Alone The Disadvantages of Going Solo Greater Financial Burdens Increased Workload Greater Leadership and Business Demands Fewer Members to Blame or Hide Behind More Pressure to Succeed Leaving Member Clauses: The Record Company’s Rights to Solo Artists What Is a Leaving Member Clause? How Does a Leaving Member Clause Work? Leaving Member Clauses and Prorating Expenses The Business and Legal Responsibilities of Solo Artists Treat It Like a True “Work Made for Hire” Pay Wages and Commissions Handle Income, Social Security, and Payroll Taxes Provide Workers’ Compensation Insurance Know the Difference: Contract Employee or Independent Contractor Status Q&A with DJ Entrepreneur Justin Paul PART 3: PRO TEAMS 8. ENTERTAINMENT ATTORNEYS: What They Do and What They Cost You The Role of an Attorney in Your Career Hiring Your Attorney Finding an Attorney Qualities to Look For in an Attorney Attorney Fee Structures Hourly Rate Flat Fees Percentage of the Deals (5 Percent) Label Shopping Percentage Deals (10 to 20 Percent) A Flat Retainer A Conflict of Interest Conflicts with Record Companies Conflicts with Band Members Conflicts with Personal Managers Conflicts with Your Own Attorney Changing Your Legal Representation Talk About It First Sever the Relationship 9. PERSONAL MANAGERS: Roles, Options, and Agreements The Role of a Personal Manager in Your Career Artist Development Contracts and Income Streams Project Management Hybrid Services: Merch, Publishing, and More Live Engagements and Touring Physical and Mental Health Issues Management Options Self-Management Start-Up Management Established Professional Management Management Agreements Exclusivity Key Person Clause The Agreement Term The Manager’s Commission (15 to 30 Percent) Business Expenses Limited Power of Attorney Talent Agency Disclaimer Dispute Resolution: Arbitration and Mediation Post-Term Provisions (Sunset Clauses) Q&A With Blasko, Mercenary Management 10. BUSINESS MANAGERS: Bills and Investments The Role of a Business Manager in Your Career Investment Strategies and Financial Planning Bookkeeping and Accounting Tour Services Asset Administration Financial Reporting Tax Planning Insurance: Liability, Auto, Home, and More Royalty Examination Hiring Your Business Manager When to Hire a Business Manager Finding a Reputable Business Manager Qualities to Look For in a Business Manager Important Terms of Your Agreement Payment Structure Audit Rights Power of Attorney (or “Limited” Power of Attorney) The Right to Terminate 11. TALENT AGENTS: Work, Scope, and Contracts The Role of an Agent in Your Career Formulating Your Tour Strategy Packaging the Artist Determining Whether to Open or Headline Routing the Tour Pricing the Artist Determining When to Put Tickets on Sale Negotiating Fees for Live Performance Deals Collecting Deposits Handling Hall Fees Hiring Your Agent When to Hire an Agent Hooking Up with a Talent Agency Qualities to Look For in an Agent and Agency Terms of the Agreement The Agent’s Fee (10 Percent) The Scope of the Agreement Exclusivity The Territory Duration of the Contract Rights to Terminate Are Contracts Even Needed? 12. RECORD PRODUCERS: Creativity, Budgets, and Fee Structures The Role of a Record Producer in Your Career When and How a Producer May First Get Involved A Barter System Arrangement The On-Spec Agreement The Do-It-Yourself / Work Made for Hire Approach The Production Company Deal The Record Label Deal Additional Responsibilities of the Record Producer Creating a Recording Budget Maintaining a Recording Budget Handling Other Administrative Responsibilities Hiring a Record Producer Selecting a Record Producer Negotiating the Producer’s Deal The Record Producer’s Compensation Structure Producer Advances Producer Royalties Master Monies Music Publishing: When Should the Producer Get a Share? PART 4: DEALS AND DOLLARS 13. MAKING AND SELLING RECORDS, PART 1: Types of Record Deals and Companies Do-It-Yourself Recording Companies General Philosophy What Makes the DIY Label Possible? Funding Budgets Profits Distribution DIY Ain’t Easy, But . . . Independent Labels Ownership Philosophy Advantages Disadvantages Advances/Royalties/Splits Distribution Production Companies Types of Production Companies (From Start-up to Pro) How They Operate General Deal Structure They Are a Godsend They Are a Pact with the Devil Advances/Royalties/Splits Distribution Major Labels Ownership/Structure Departments/Staff General Philosophy Advantages Disadvantages Royalty Rates/Advances/Splits/Deal Points Distribution Q&A With Tim Yasui, VP/GM, Cleopatra Records 14. MAKING AND SELLING RECORDS, PART 2: Key Deal Issues in Recording Contracts Issue #1: Who Is the Label? Issue #2: How Much Will I Get to Make My Record? Recording Funds Advance Plus Expenses Issue #3: Can I Make the Record I Want to Make? Mutual Consent of the Record Producer Approval of Artwork and Other Materials Issue #4: How Do I Know They’ll Release My Record? Guaranteed Release Clause Free to Leave or Buy Back Your Masters Issue #5: Will I Get Guaranteed Marketing Support? Deficit Tour Support? Guaranteed Promotional Videos (YouTube, Vimeo)? Independent Radio Promotion? Websites? Independent Publicity Issue #6: Do I Have a Say in How the Masters Will Be Exploited? Issue #7: Artist Royalties: Will I Ever Make Money from the Label? Artist Royalties and CDs, Vinyl, and More Electronic Transmissions (Downloads, Ringtones, Audio and Video Streaming) Issue #8: Controlled Composition Clauses Issue #9: 360 Rights in Deals Active Versus Passive Income The Label’s Cut (What They Take for Merch, Publishing, Tours) On What Are the 360 Percentages Based? Issue #10: How Many Records and for How Long Is the Deal? Firm Records and Option Periods Term of the Agreement Issue #11: Can I Record Other Projects? Rerecording Restrictions Sideman Performances Issue #12: Everything Else Artists Should Be Concerned About Key Person Clause Guaranteed Third-Party Distribution Clause Reversion of Rights Clause Issue #13: What Does the Label of the Future Look Like? 15. MUSIC PUBLISHING, PART 1: Copyright Basics Copyright: Definition, Formation, and Benefit What Is Copyright? How Do You Get a Copyright? What Benefit Does a Copyright Provide? But How Can I Prove I Own a Copyright? Copyright and Work Made for Hire When It Exists What Are the Implications? Copyright and Joint Works Ownership of Joint Works Control of Joint Works Compulsory Licensing for Records What Are the Conditions? Financial Benefits Creative Downsides Does the Compulsory Licensing Provision Apply to You, Too? Duration of Copyright The Copyright Term Reversion of Copyright Thirty-Five-Year Statutory Right of Termination 16. MUSIC PUBLISHING, PART 2: Even More Copyright Basics Copyright Registration The Benefits of Copyright Registration Requirements of Registration Methods of Registration Tips to Save Money The Copyright Notice Do You Really Need the Notice? What Is the Correct Way to Write the Notice? Why Are There So Many Different Notices on Album Covers? Copyright Infringement What Is Infringement? Any Substantial Damage? What Do You Have to Prove? Sampling and Infringement Best Course of Prevention More on Copyright: Sound Recordings Are Copyrights, Too Key Points of Distinction Q&A with Attorney Steve Winogradsky Q&A With Michael Eames, President, PEN Music Group 17. MUSIC PUBLISHING, PART 3: Income Streams—Mechanicals, Performances, and Print Shares of the Publishing Pie Writer’s Share Publisher’s Share How Is the Money Divided? Does This All Seem Crazy? Types of Publishing Income Mechanical Royalties A Brief Backstory The Controlled Composition Clause (CC Clause) Performance Royalties Who Uses Your Music Publicly? Who Issues Licenses to Music Users? Performing Rights Organizations (PROs) to the Rescue PRO Affiliation: Making Sure You’re Paid Which PRO Should You Join? Print Royalties Types of Print Uses Division of Print Incomes: Based on RSP and Wholesale 18. MUSIC PUBLISHING, PART 4: Synch, Electronic Transmissions, and Sub-publishing Synchronization Fees Income for Rights Holders in the Song Income for Rights Holders in the Sound Recording: Aren’t They Paid, Too? Points of Negotiation: Knowing How Much You Should Get Additional Incomes: More Than You Bargained For Electronic Transmissions: Downloads, Streams, and More Permanent Digital Downloads (i.e., iTunes-Type Royalties) Ringtones Noninteractive Audio-Only Streaming (i.e., Webcasting and Satellite Radio) Interactive Streaming-On-Demand Audio Interactive Streaming Video (Audio-Visual Streams) Downloadable Sheet Music Lyric Websites Lyric Cell Phone Apps Planet Uranus Streams and Other Stuff Foreign Sub-publishing Income Foreign Mechanicals Foreign Performance Royalties Black Box Monies Foreign Sub-publishers At-Source Royalty Collections 19. MUSIC PUBLISHING, PART 5: Publishing Companies and Types of Deals What Established Music Publishers Can Do for Your Career Song Plugging (TV, Film, and More) Securing Recording Agreements (Cowriters and Credibility) Paying Advances Distributing Marketing Funds Handling Administrative Duties Types of Publishing Deals Exclusive Songwriter Agreements Co-publishing Agreements Administration Deals Self-Publishing/Self-Administrating (Doing It All Yourself) Q&A with Music Publisher Neil Gillis 20. MUSIC PUBLISHING, PART 6: Starting Your Own Publishing Company Six Steps to Starting Your Own Publishing Company Step 1: Affiliate with ASCAP or BMI Step 2: Register with SoundExchange Step 3: File a DBA (Doing Business As) Step 4: Registering Your Songs with the Copyright Office Step 5: Handling Other Administrative Duties Step 6: Leave It All Up to a DIY-Friendly Administrator (CD Baby, TuneCore) 21. LIVE PERFORMING AND TOURING, PART 1: Purpose and Opportunity When and Why to Perform Live and Tour Level 1: The Development Phase—Testing the Waters Level 2: The Business-Minded Phase—Going In for the Local Kill Level 3: The Traveling Salesperson Phase—Supporting Your Record Level 4: The Making-the-Money Phase—Getting It While the Getting Is Good How and Where to Get Gigs: 9 Tips to Consider Tip #1: Get Local Club Referrals from Similar Local Bands Tip #2: Form Band Alliances and Gig Swap Tip #3: Consider Contacting Colleges Tip #4: Keep Your Eyes on Corporate Sponsors Tip #5: Watch for Unsigned Artist Openings on Festival Tours Tip #6: Play Industry Conventions Tip #7: Play Where Fans Go: Consider All Alternative Venues and Events Tip #8: Hire a Personal Manager Tip #9: Get a Talent Agent Q&A with Tour Manager Chris Arnstein Q&A With John Pantle, Agent, Sound Talent Group 22. LIVE PERFORMING AND TOURING, PART 2: Deals, Negotiations, and Contracts How You’re Paid for Live Performance Deals Nothing (a.k.a. Free) Pay-to-Play Straight Percentage Flat Guarantee Guarantee Versus Percentage How Live Performance Deals Are Negotiated The Gross Potential Per-Show Versus Per-Tour Mega-Promoter Negotiations Co-Headlining Negotiations Multi-Band Festival Tour Negotiations Live Performance Contracts and Riders In the Beginning: Local Gigs to the Early Stages of Touring At the Mid-Level to Big Leagues of Touring 23. MERCHANDISING, PART 1: Rights, Types, and Companies Merchandising Rights Publicity Rights Trademarks Grants of Rights Merchandising Companies Types of Merchandising Deals Tour Merchandising Retail Merchandising 24. MERCHANDISING, PART 2: Contract Terms for Tour Merchandising Key Touring Terms in Merchandising Contracts Royalty Rates Merchandising Advances Performance Guarantees The Agreement Term in Merchandising Deals Creative Issues in Merchandising Contracts Territory (The World, North America, or X-Japan) Exclusive Rights in Merchandising Deals The Sell-Off Period 25. MERCHANDISING, PART 3: Retail Deals and Independent Merchandising Key Retail Terms in Merchandising Contracts Royalty Rates: Retail Merchandising Q&A with Independent Merchandiser Bob Fierro PART 5: FUTURE PREDICTIONS 26. THE MUSIC BUSINESS 2025: Future Forecasts by the Pros Digital Labels With a Focus on DSPs and Digital Advertising Fair Compensation for Creators Success That’s Earned on Your Own: DIY Style Ecommerce Opportunities For Artists Success Will Be Driven by Touring and Merch The Concert Business Will Be Shaped, but Never Replaced Business Skills Are Paramount in a Fast-Paced and High-Tech World Shifting Demographics Mainstreamed More Automated and Sophisticated Marketing Everywhere Extended Product Lines and Stronger Brands “Captured” Musical Performances, Not “Manufactured” A Focus on Exciting Music—Not the Latest Technical Trends The Industry’s Salvation: Memorable Song Melodies Label Deals: Single-structured, No Physical, and BlockChain Career Without a Label Streaming Magnifies the Global Independent Artist The Emergence of Subsciption-based Social Media Chapter Review and Discussion Questions Chapter Activity Assignments Midterm Test (Chapters 1–14) Final Test (Chapters 15–26) Midterm Answers (Chapters 1–14) Final Test Answers (Chapters 15–26) Index Today, When Artists Are Empowered To Take Greater Control Of Their Careers And Earnings, The Need For Musicians To Understand The Business Of Music Has Never Been Greater. In A Digital Age Overflowing With Confusing And Ever-changing Information, Musicians Need Trusted Business Advice From A Veteran Artist Who Can Break Down The Basics In Language They Understand. Written By A Professional Musician For Other Musicians, Business Basics For Musicians Is The Laypersons Guide To The Music Industry. In This Must-have Manual, Music Industry Veteran Bobby Borg Presents Vital Info In A Conversational Tone And An Easy-to-scan Format Regarding Five Vital Areas That Musicians Need To Succeed: Career Execution, Business Relationships, Pro Teams, Deals And Dollars, And Future Predictions. Everything From Copyrights To Record Deals, To Managers, To Merchandising, To Doing It Yourself Is Covered. With Pro Interviews, Anecdotes, And Review Quizzes, Business Basics For Musicians Is The Complete Handbook From Start To Success. Updates For This Edition: Changes In Copyright Laws Summary Of The Music Modernisation Act Updates On Record, Merch, Publishing, And Live Performance Deals New Trends In Sponsorships And Partnerships With Product Brands New Interviews With Industry Professionals, Including Managers, Producers, And Agents New Stories Paralleling Current Events And Industry Happenings Updated Business Resources, Industry Contacts, And Urls