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Record contract basics, terms and explanations

By
Scott
 – September 9, 2010Posted in: Music Business
Record contract basics, terms and explanations
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Record contracts exist for two reasons:

  • To make sure that your band will deliver what it promises and…
  • To make sure that the record company is going to make money.

The record contract has been a driving force that has motivated bands since the beginning of the recorded music industry. Since getting a record deal can be the most pivotal point in your band’s career, you need to make sure that you know what you are getting into.

Regardless of what label you sign with, here are a few basic terms that will most likely be in your contract:

  • Term Length – This means that you will be held under the terms of the agreement for a specific period of time.
  • Required Recordings – You will have to deliver a set number of recordings. This could be a number of songs or a number of albums.
  • Advance – This dollar amount will be in the contract. An advance is paid prior to the recordings, but is paid back to the record company out of your royalties until they break even.
  • Royalties – The amount you will get paid for each record sale.

Other aspects that are fairly common in record contracts are:

  • Merchandising and Video Rights – This part of a possible contract identifies who holds the rights to merchandise or videos produced. The practice of the record company getting a piece of your merchandise sales is a growing issue in the industry due to the new 360 deals.
  • Production Recoupment – There could be deductions taken out for producer costs or other related costs. Be careful with this one, because it could mean anything from the producer costs to food and drink provided to you during recording sessions. This is money that will come directly out of your income.
  • Going Concern – You might see a clause about what happens if the band breaks up during the contract term period.
  • Co-Publishing – You may have to sign a co-publishing deal with the record company. This means that they will be part owners of your songs. Again, this is becoming part of the 360 deals.
  • Options – Allow the record company (or you) to get out of the contract (usually after the first album) if they or you see fit.

Keep in mind the record company wants to get the most out of your band and retain you for the longest period they can. You want to get the most out of the record company while keeping your options open for better deals.
As with any contract, there is going to be some give and take. Prepare yourself properly, and better yet… hire a lawyer.

Unsigned musicians not appearing on Apple iTunes 10 Ping network

By
Brett
 – September 3, 2010Posted in: Music Business
Unsigned musicians not appearing on Apple iTunes 10 Ping network
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Thursday morning Apple introduced iTunes 10 with Ping. Apple is marketing Ping as a social network for music. Early reactions across the web are mixed at best.

So far, detone8.com has been unable to create a band profile, but we hope to get access soon. According to the blog Hypebot, Apple said that artist Ping accounts are by invitation only at this time. We quickly upgraded to iTunes 10 on our Mac, and after a few hours we also upgraded iTunes on Windows Vista. It was easy to create an account, but Ping was sluggish on the Vista computer.

We were only able to add a few artist profiles, and they were only major artists. We looked up Detone8 favorites like Ludo and I Fight Dragons, but they were not listed. Even Saves The Day, a band that has been signed for over a decade, is not among the artist you can follow.

If your band is on iTunes, let us know what you think about Ping. If your band is not on iTunes, check this iTunes guide out.

The top musician resource on the web, MusicMoz

By
Brett
 – August 27, 2010Posted in: Links, Rookie bands
The top musician resource on the web, MusicMoz
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As a musician resources geek, I’m always a little giddy when I find an incredibly useful site for musicians. My favorites are Hypebot, Music Think Tank and The Savvy Musician’s blog, among others. So I was really excited to stumble upon MusicMoz. This volunteer-supported website is a directory of thousands of music websites.

MusicMoz creates pages of links on specific music categories. MusicMoz’s format is similar to Wikipedia and the Open Directory Project in that the pages are managed by volunteer editors. Much of MusicMoz is for fans of music, with categories on specific bands, genres and lyrics. But the real meat is in its resources for aspiring musicians.

Unsigned Band Resources was the first category I was drawn to. This category, alone, has 195 links to websites. And the directory is always growing. I noticed detone8.com is not listed yet, so I know of at least one more site I hope will be added.

MusicMoz’s site structure divides topics into smaller, more specific categories, until you can find a manageable list. For instance, there is a list of agents and managers that cater to folk musicians.

Not knowing about this resource-heavy site sooner has me calling my music geek cred into question.

The only real drawback I see is the directory could use more volunteers. Some categories, like Clubs and Venues in the United States, have very few links and no editor. But because it is a volunteer maintained site, anyone can pitch in and help add links. MusicMoz is doing its part to educate on the music industry and simultaneously giving you the ability to help improve it.


The Open Music Project

The 4-Ps of music marketing for your band

By
Scott
 – August 26, 2010Posted in: Marketing
The 4-Ps of music marketing for your band
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Marketing, in general, is often used synonymously with advertising. However, marketing is actually so much more than that. For your band, marketing will mean a whole host of ideas and planning that you will be executing through your entire career. There are 4 basic concepts in marketing that you will want to know and focus on at every turn. These terms are referred to as the 4-Ps and are:

  • Product
  • Price
  • Place
  • Promotion

Each term is pretty self-explanatory on the surface, but there are many nuances to them you should be aware of.

Product can refer to many things for your band. A product is the thing or idea you are looking to produce and sell. Your band, as a business, is a product. There are a whole host of other products that you will be selling over your music career:

  • Your music – both live and recorded, you are selling the emotion and talent you portray through your tunes
  • Merchandise – T-shirts, hoodies, stickers, buttons, and whatever else you put the band name on
  • Your tour – selling tickets and the excitement you bring to the crowd
  • Your selves – you are going to have to market your selves to the crowd and possibly record companies

For every product you market, you will need to come up with a price. There are two basic ways you should look at how to price your products. One way is to come up with a price based on the products cost to you, plus what you want to get out of the product. One thing to remember is that a lot of your merchandise doubles as advertising for your band, since fans wear or use the merchandise around town.

The other price strategy you are probably going to use will be competitive pricing. Using this strategy is a bit easier as you will basically set your prices similar to other bands in your genre. When dealing with companies like iTunes or record labels, the price for your music is more than likely fixed, but if you’re selling independently or at shows you should find out what price similar bands are selling their music or merch for.

The third P of marketing is place. The places to sell your products in the music industry is expanding in some areas and contracting in others. As more digital delivery systems present themselves on the internet and over your phone, your music can find sales growth through these avenues. It is hard to get into the big box retailers like Best Buy and independent record stores are closing around the country. Getting into the independents is a good way to sell CDs, but you are going to have to be vigilant in both advertising that your CDs are there as well as keeping track of where you have CDs, how many are there, and how many are selling. Of course, one of the biggest opportunities for you to sell your music is going to be at shows and on tour. So, plan your “place” strategy well.

The final and probably most familiar aspect of marketing is promotion. This, of course, is the advertising aspect of marketing. More than likely this is going to be the biggest part of your marketing efforts and take most of your time. If you have planned out the product, price, and place properly your band should feel pretty confident in selling and promoting your music. Advertising can be done through many media outlets these days:

  • Internet – your band website, MySpace, Facebook, Pandora, in-dio.fm, etc.
  • Radio – getting radio play in your hometown or the towns you are touring in before the show
  • Street – having a street team put up posters and flyers throughout the city
  • Stores – drawing attention to the fact that your band has a CD in the store
  • TV – might be hard to get into, but with licensing opportunities for an ever-expanding array of TV shows, it is something to possibly pursue
  • Print – Magazines and newspapers are good ways to get free publicity, so try and set these up; invite writers and journalists to your shows and make sure they are on the guest list or you get them a couple free tickets

With everything else you do when it comes to marketing, plan your promotion very carefully. Make sure you are setting money aside to pay for posters, flyers, your website, and tickets. You also may need to hire a web designer or graphic artist to make your posters.

Sit down with the whole band to talk about the 4-Ps of marketing before you get in over your heads. It will really help to make sure you are not wasting money on products your fans don’t want or advertising that won’t work. Build your network with other bands or even venues and promoters and find out what other people are doing in the industry that is working. Marketing your band correctly and taking time out to think about the 4-Ps will hopefully put you on the right path during the early stages of your career.

Image by Flickr.com user Plutor / Logan Ingalls.

Basic accounting terms every band should know

By
Scott
 – August 21, 2010Posted in: Music Business
Basic accounting terms every band should know
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Accounting may seem like a strange and foreign language to most, but it doesn’t have to be. There are some simple terms that every band should know that will help them whether you are keeping track of your own finances or hiring someone to do it for you. The five major terms in accounting are:

  • Assets
  • Liabilities
  • Owner’s Equity
  • Revenue
  • Expenses

The two most important terms to know right away are revenues and expenses. Simply speaking, these two terms are what you make and what you spend.

Revenues are any money that your band earns as a band. This may include ticket sales from shows, selling CDs or songs on the internet, royalties from licensing opportunities, and merchandise sales. Revenues do not include what your band makes as individuals working part-time jobs. You want to keep the band money separate from each of your personal finances.

Expenses are what you purchase using the band’s money. There may be a whole host of expenses that may crop up in the course of your career, but some of the main ones you will see frequently are:

  • Advertising expense (posters, flyers, etc.)
  • Transportation expense (gas, vehicle rentals, etc.)
  • Rent expense (if you are renting practice space)
  • Tax expense (if your band is set up as a corporation)

Keeping track of the money that comes in and out of the band’s coffers is very important. It is also a basic starting point for your band’s economic success. Use a notebook or Excel program to keep track of your revenues and expenses and make sure you keep it current. Start by keeping track of the cash your band has, whether it is money that you each have put in or that you have earned in revenue.

The other three terms you should know in accounting get a bit more complicated, but you should be familiar with them. Even if you make enough to hire an accountant, it is good to know these things.

  • Assets are any resource that the band has which holds value (i.e. cash, equipment, your bands record deal or licensing agreements)
  • Liabilities are debts the band owes to others (e.g. a band credit card or loan)
  • Owner’s equity is the band’s claim to its assets or basically what your band is worth

Keeping these few terms in mind should help you get started with a more sound financial understanding. To start, though, it is very important for your band to keep money separated from your personal accounts. Keep track of your band’s cash flow each time someone puts money in to the band, takes some out, you gain some revenue, or when any money is spent and you will be on your way to helping your band stay financially afloat.

Image by Flickr.com user GenBug.

2010 Midwest Arts Conference Preview

By
Kevin
 – August 14, 2010Posted in: Music Business
2010 Midwest Arts Conference Preview
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The Detone8.com crew is getting ready for Play:stl 2010. The music showcase and music business seminar will be held in St. Louis Mo. Sept. 16-18. We are excited we will be talking with musicians about their music business experiences.

Yet, this is not the only awesome music event going on in the Midwest that week. The 2010 Midwest Arts Conference will be in Indianapolis Sept. 13-16. The conference is a workshop and showcase for professional musicians. The conference brings unique venue buyers, like libraries, who use the event to find and book talent.

How to legally record and make money from a cover song

By
Brett
 – August 12, 2010Posted in: Distribution, Legal aspects of the music business, Music Business
How to legally record and make money from a cover song
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Playing a cover song live is one tool in a new band’s arsenal to get people’s attention. Having that song available to iTunes and Pandora audience increases that exposure exponentially. There is more than one way to get the rights to record a cover song, but the easiest is to get the mechanical rights through a company called The Harry Fox Agency (HFA).

HFA represents more than 46,000 music publishers, and has the right to grant licenses on behalf of its publishers to record songs to be distributed for money. Depending on the license, you can put your cover song on CDs, cassettes, records and even sell the music digitally in the form of Permanent Digital Downloads (PDDs), ringtones, limited downloads and interactive streams.

To record a cover song you will need to get the proper license, which is called a mechanical license. A mechanical license grants the right to copy and distribute copyrighted material. If you are a new band, and you don’t expect to sell a lot of copies of a song, you can use the super cheap and easy to use Songfile®. Songfile is HFA’s online licensing tool, you can use it if you plan to make 2,500 copies or less of your recording. It enables you to license for both physical (i.e. CDs, cassettes, etc.) and digital, including PDDs, ringtones, and interactive streaming.

Bands that are going to sell more than 2,500 copies can sign up with HFA as a commercial licensee, similar to record labels and online services. HFA issues licenses that cover most audio-only medium, but they do not issue licenses for audio/visual recordings like music videos.

The nice thing about using HFA is that not only do they issue the licenses for musicians to cover songs, but they also collect and distribute the royalties. There is no need to deal with more than one company.

Yet before you can get a mechanical license from HFA, you need to make sure your cover qualifies for a compulsory license. To qualify for a compulsory license the new version of the song has to follow a few rules:

It can’t be a derivative work. This means you can’t make major changes like rewriting the lyrics, taking out sections of the song, sampling a song or creating a new arrangement.

If you think your cover is going to be considered a derivative work, you need to go directly to the publisher of the work and ask them if they think it is a derivative work. If they do not, you can still get a compulsory license. If they do, you will need to get their permission before coming to HFA for a mechanical license.

According to Maurice Russell, Senior Vice President of Licensing, Collections and Business Affairs for HFA, you can tweak a song a little bit. And moving a song from one genre to another is not usually an issue. It becomes an issue when you start to change the melody or lyrics of the song or you add to the song and make it into a sample.

Since compulsory licenses only cover non-dramatic works, they may not apply to covers of complete works such as musical plays or operas.

As long as the work has been commercially released on a record and your cover song qualifies for a compulsory license (i.e. not a derivative work), you can get the mechanical license to the song and pay a statutory rate. Statutory rates are royalty rates, set by the government, which you must pay for each time you distribute a song physically or digitally. It does not matter how much you charge for the song, the rates are always the same.

Now as this seems like a hassle, bands might be tempted to record a cover song and not get the mechanical rights to distribute the songs. This is a bad idea. According to HFA, even giving this music away for free does not make it exempt from copyright laws. If a musician gets caught distributing copyright protected work, even for free, they can incur a legal claim that amounts to much more than what it would have cost to get a mechanical license.

It may not seem to matter when your band is small and unknown, but if you make it in the music industry people are going to check out what you have done in the past. If your goal is to be successful in the music industry, you better play by the rules.

Book Review: The Musician’s Guide to Licensing Music written by Darren Wilsey

By
Scott
 – August 11, 2010Posted in: Legal aspects of the music business
Book Review: The Musician’s Guide to Licensing Music written by Darren Wilsey
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book The Musician's Guide to Licensing MusicLicensing your music is a great way to start an income stream and generate revenue for your band. Darren Wilsey’s “The Musician’s Guide to Licensing Music” is an in depth look at all of the facets of music licensing.

Not only does he explain all of the licensing terms and opportunities that exist for your music, he gives very good advice as to how to go about getting licensed as well.

With chapters about the players in the industry, agreements, and protecting yourself, Mr. Wilsey’s advice will give you the knowledge to be ready when you have that first meeting with an industry player or contract to sign. The book also gives some really good advice as to how and why to make contacts in the industry if you want to be successful.

Chapters on how to get your music into each of the different media markets are the gravy in this book. With opportunities in advertising, television, radio, internet, films, digital media, and a host of other outlets, the book covers them all and covers them well.

By providing his own knowledge with a mix of advice from players in the industry (quoted throughout the book), Mr. Wilsey’s book is a great place for all musicians to start once they decide it is in their best interest to license their tunes… which it is.

Image by Flickr.com user notsogoodphotography / Ibrahim Iujaz

The basics of trademarks, service marks, and what they mean for your band

By
Scott
 – August 8, 2010Posted in: Music Business
The basics of trademarks, service marks, and what they mean for your band
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Though trademarks may seem like a cool thing to have, they aren’t very important for your band in the early stages and can be costly. Trademarks can be obtained for any word, name, symbol, device, or combination of these things that are used to identify a product – or in the case of a service mark, a service. To properly secure a trademark, you must register it through the United Sates Patent and Trademark Office . Though the basic definition for trademarks is pretty straight forward, not just anything can be registered.

In order to qualify for registry, a mark must be:
• Coined – you made it up
• Completely fanciful – it doesn’t mean anything
Or
• Arbitrary – it has no other meaning in the English language.

For your band, this would mean that for instance a band like Red Hot Chili Peppers would probably not be able to qualify for registry because red hot chili peppers are a food, not a coined name, neither fanciful nor arbitrary. However, perhaps U2 would qualify as it has no real other meaning. Most band names, in general, probably would not qualify, but you may have a logo or symbol that identifies the band that would – think Prince.

Registration for a trademark can take quite awhile to get approved. You may recall seeing the ® symbol which shows that the mark has been registered. The ™ symbol is used to signify a trademark that has not been registered, but the company wishes to retain the mark. Registration for a mark can be quite costly. As of this writing, basic registration runs around $350. The duration of a trademark is pretty much indefinite, but it has to be in continuous use. If you break up for a five or ten years and want to come back, you may have to check to see if you lost the mark.

Overall, it probably doesn’t make too much sense for a band to waste money on a trademark. Most band names probably wouldn’t qualify anyway. It might be possible that you have come up with a symbol that identifies your band and may want to look further into registering that, however. Furthermore, if you have come up with a unique service that you or your band provides, you may have grounds to register for a service mark.

Image by Flickr.com user Lauri Rantala.

Marketing your band to get signed by marketing to fans not record labels

By
Brett
 – July 29, 2010Posted in: Interviews, Marketing, Music Business
Marketing your band to get signed by marketing to fans not record labels
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About one year after playing their first show, the band I Fight Dragons (IFD) was signed by a label. It was not luck. It was not about paying their dues. Their strategy, from day one, was not to get signed, but to connect with their fans and take the Chicago scene as quickly as possible.

“I used to read a lot of books about the music business…and the biggest thing everyone always said was that it was not about looking for [labels and managers]. When it was time they will come looking for you…I thought it was not really accurate,” Brian Mazzaferri, the lead vocals and guitar player from IFD, said. “But in our case it really turned out to be true.”

Mazzaferri started IFD with his friends as a concept band. He began writing music that both integrated the sounds from various video games and was composed with video game hardware. Soon he found out that there was an entire genre of music in this style called chiptunes.

As the band was developing and writing music, they also took a serious approach to the business side of the band.

“I really did treat this as a business from day one,” Mazzaferri said.

According to Mazzaferri, one of the first things the band did was hire a social media coach. He wanted to avoid the pitfalls a lot of bands fall into, like wasting time and energy when trying to promote themselves on the web.

“It’s not about paying someone to do something for you,” Mazzaferri said. It was about learning how to become a part of the community, and not just spam everyone out there, he added.

One of the most unique marketing techniques IFD uses is giving free music to fans who sign up for their mailing list. It seems counterintuitive, because they are giving their content away for free. But not completely. By letting IFD send them e-mails, fans are paying for the music. They have created an audience who listens to new IFD material often and knows about IFD promotions and events.

Detone8.com writers have been on the mailing list for several months. We have noticed IFD sends few e-mails, but the ones they sent had great content.

Two of the most interesting promotions IFD have had were the 1,000 first fans certificates and the lifetime subscriptions for music and shows.

When the mailing list reached 1,000 subscriptions Mazzaferri wanted to create a special experience for their oldest fans. He said that everyone who is fan of a band likes to show that they were a fan before the band was big, so IDF gave their fans this opportunity. Any fan who was one of the first 1,000 people on the mailing list can receive a laminated card verifying their “original fan of the band status.” Several hundred people signed up.

IFD got creative again in order to fund the band’s first tour when they opened up for MC Chris. IFD has six members , with a lot of gear, so Mazzaferri knew touring would be very expensive. Their solution? Sell 100 lifetime memberships to shows and free music. Members are given a wallet-size USB drives with the IFD logo on it. The membership includeds a lifetime free pass to any IFD show ever, and access to a free digital copy of anything the band ever releases.The $100 memberships sold out within 48 hours. In two days the band made $10,000.

One of the more amazing aspects is not did locals fans signed up, but worldwide fans purchased memberships. Fans as a far away as Australia and Singapore became members.

The difficulty the band faces now is finding the time to share with an expanding fan base. The e-mail list has more than 10,000 members, and it’s harder to give time to every fan.

It is not luck that the band is successful. They learned early to take the same serious approach to connecting with their fans as they did with writing and performing their music.

People who struggle to advance in the music scene can get caught up in the concept of “paying your dues.” Yet, today IFD is working on their first label-produced album a little over a year after forming the band. Perhaps paying your dues means writing great music and having a serious marketing plan.

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