Photo: Recording Academy
4 Must-Know Ways For Music Makers To Succeed In "Finding the Money"
Making a living in the music industry has always been tough. In fact, leveraging creativity for profit has challenged artists for centuries. But today's music professional faces not only the need to create work that has value, but perhaps more the daunting task of identifying where and how income can be generated for their work.
To that end, the Recording Academy New York Chapter and their Professional Development Committee held an event titled "Finding the Money" at the Bryant Park Hotel in Manhattan on Mar. 28. New York Chapter Executive Director Nick Cucci welcomed music industry leaders in attendance for a panel discussion on how independent creatives can maximize their revenue and avoid costly pitfalls and miscommunications.
Moderated by Chris Carroll a lobbyist for Yoswein New York, the panel discussion included Binta Brown, Founder of Fermata Entertainment and Big Mouth Records; Alex Heiche, Founder and CEO of Sound Royalties; Richard Barone, singer/songwriter and front man for The Bongos; and Neeta Ragoowansi, SVP and Co-Founder of NPREX.
With music in their hearts and money on their minds, here are four key takeaways from the panelists and their dynamic and informative discussion.
1. Have the money conversation first
Artists and songwriters can sometimes be hesitant to talk business. As we all find out sooner or later, this can cause huge problems down the road. The “money conversation” doesn’t have to kill the creative vibe. Get it out of the way first. Don’t wait to sort it out later when no one remembers as clearly. For instance, before a writing or recording session, creators should agree—in writing!—who is part of this composition, what they each plan on contributing (music, lyrics, instrumentation, etc...), and what they are there to accomplish.
Barone offered advice on this occasionally touchy subject. He advocates for splitting credit down the middle whenever possible or when in doubt. “As a solo artist, I had other co-writers come to my apartment in the village for writing sessions. One well-known artist came with a briefcase with an agreement ready to sign. The contract said that everything we write is going to be split 50/50. First, I was offended because I thought we were just playing music in a room, but then I realized later that it was actually a smart thing to do.”
2. Figure out your income revenue streams
Gone are the days when a creator can merely wait for fat checks to come in the mail from their record label and or publisher (of course, this always only applied to a lucky few). Streaming and new digital sources of revenue (SoundExchange, for example) can be valuable sources of ancillary income; however, it’s important to understand the basics first: royalty calculations, copyright, and the monies owed to you from your Performance Rights Organization (PRO, such as BMI, ASCAP or SESAC). Dedicate time to understanding how the business works and educate yourself on how your music makes you money. Ask questions, ask your PRO contact, ask your manager, ask your fellow music creators and take notes.
Heiche is an expert in this area and offered up advice that all new artists should follow: “One of the common mistakes we see are songwriters that are collecting from a PRO but never signed up with a publishing entity or created their own pub designee. Creating your own LLC and registering it with the PRO will allow you to collect the other half of the writer’s performance share on the publishing side. It will also open the door for sync licensing opportunities.”
"The numbers in other countries are huge and are growing, and that’s where the money is going to be.” –Neeta Raggowansi
Meanwhile, Ragoowansi focused on income generated by international performance royalties, also known as “neighboring rights,” and the tangible benefits to a more proactive approach of signing up directly in other countries. A publishing administrator (Kobalt, TuneCore or CD Baby, for example) should be able to take care of this. Neeta says, “Don’t sign up with your PRO and then sit back and hope you get paid as a songwriter. Be aggressive and think about your other markets. Often, we are U.S.-centric and miss out on the bigger picture. The numbers in other countries are huge and are growing, and that’s where the money is going to be.”
3. Get a designated business manager
As the saying goes, artists who don’t manage their business will soon find that they have no business left to manage. Artists who reach a certain income threshold will need a full-time business manager, who typically works on commission. Until then, most artists will find a CPA when tax season comes around, which isn’t enough in many cases.
Make sure someone from your team understands all aspects of the music business, including royalties, licensing, publishing and copyrights. Even if your manager is a wizard at understanding contracts, you will still need a lawyer (if not on retainer, then a phone call away).
If you need reminders (and let’s be honest, we all do), set alerts to check your balances and run cash flow reports monthly, quarterly and annually. Above all, you need to know where your money is coming from and how it is being spent.
"If you don’t feel comfortable advocating for yourself to be paid, find someone who can do it for you.” –Binta Brown
Brown, who currently works with Chance the Rapper, shared her invaluable wisdom and offered a touching piece of advice: “When other people are using your music, remember how much love, effort, energy, and money you put into creating what you created. When they ask for permission so they can use your creation to amplify the value of what they’re doing—whether it’s in a podcast or a retail store or whatever it is—they’re generating value from that. You have contributed to their value, and they owe you! You have absolutely every right to insist on having an agreement that ensures you are going to be paid, and if you don’t feel comfortable advocating for yourself to be paid, find someone who can do it for you.”
4. Protect yourself
One relatively easy way to protect yourself is to pay attention to your metadata. Make sure it is correct on the label copy and liner notes. Metadata is the information embedded in an audio file that is used to identify content it includes the following information: Artist name, album title, song titles, year of release, genre, ISRC, and UPC. Double check your spelling and syntax and always ask for a final copy. Mistakes with metadata may seem trivial but can be costly.
When in doubt, ask questions. The more you know, the less likely you will make mistakes, and the less likely you will be taken advantage of. As always, make sure your team has your best interests at heart and has the knowledge and passion and hustle to make your dreams a reality.
If you need help but can’t afford a lawyer contact Volunteer Lawyers for the Arts here.
Check out this handy ‘Finding the Money’ list of helpful links here.