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Professor Pooch's
State of the Music Business Address - 2016

© 2016 David J. Spangenberg

Pooch@ProfessorPooch.com

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Music Business
Address 2016

To succeed in the Music Industry, I have always believed that it's good to: honor and learn from the past, respect & participate in the present, while preparing for and creating the future... But right now is right now, so I'm going to focus on the present day Music Industry for you. We should probably just title this era as: "Anything Goes!" You can be any age, any style, or at any stage of your career - and still earn a living in the Music Industry.

This includes becoming even more and more common for Artists to record and produce their own recordings, and even form their own Publishing Company for their songs and their own Indie Record Label for their recordings. And, even co-publish with a Major Publisher and/or become a subsidiary of a Major Label/Distributor.

So how can you make this all happen? What's the best way to succeed?

Well, please hang in there, and let me paint the picture in general, then in specific, including the players and the parts and what's really going on in the Music Industry, so it all makes easy-to-understand common sense...

I know you're probably tired of hearing all the complaints from the Major Record Labels and their subsidiaries, especially from the RIAA (Recording Industry Association of America) that represents them, saying that since the Internet and all the illegal free downloads associated with it, plus piracy, etc., that "... sales have gone way down." But in reality, do those numbers actually reflect the actual state of the Music Business?

What you aren't hearing, is that Music Sales have actually been increasing - just not always using the traditional paths, means, people and sources.

Question: How many Indie Musicians/Bands/Groups/Songwriters do you know who sell their Recordings, either by Digital Downloads or CD sales at gigs, etc? And how many of these Musicians you know, actually get their Recordings "scanned" to become part of this number sold that they use to measure sales?!

Right to the point, in the last ten years, the Major Labels have had serious competition from a once unlikely source - the masses. And the direction the masses are taking is known by "the New Model", "The Long Tail", and countless other names.

But, the simple translation? Well, if you are under 30, this isn't your older brother or sister's, let alone your parent's, Music Industry!

Due to the advances in technology, especially relating to recording, plus all the Social Networking available through the Internet, there are now many, many more people showing an interest in being in the Music Business than ever before.

But these same advances are affecting how people are getting paid - or not paid. There are constant fights trying to keep up with all the new forms and formats of Music and distribution that are affecting everyone in some manner shape or form.

It doesn't matter whether you are a Major Label or a Major label Artist or an Indie Artist or Label, or a Songwriter, there's been constant arguing over how much you and your work are worth, whether through sales, streaming, licensing, whatever, and much of this is now being debated and fought in Congress, in the courts, and with other agencies, even including the copyright office.

And, with these same advances in technology, some other things have popped up:

"The Good" - In regards to promoting your product, the way we look at things, whether we use mobile phones, laptops or tablets, etc., anyone can be almost anywhere and be "wired in", and therefore there's more ways to reach your fans.

However, "The Bad" - this same new technology is stealing the attention of many of your potential fans, basically leaving you competing with all new forms of entertainment that is readily available to the masses. And with all of this entertainment at their beck and call, why should they leave their comfortable home, and come out and see you?

(Note: I cover this dilemma and present a successful way to solve it more extensively in my essay: Indie Acts and Drawing Fans in the "Free Library" section at www.professorpooch.com).

What is super important that everyone must realize is that it's not just about "the Music" anymore. It's all about Entertainment! This is the age of "Multimedia", and if you don't embrace that, you're going to have a long road ahead of you if you wish to be successful in this Industry. Let's face a fact: when somebody wants to look for a particular piece of Music, where do they look? 90% of people go to multimedia sites like YouTube. Case closed...

One major thing that I see happening is a separation that splits the future serious Artists into 2 sides: those wanting to go with a Major Label, and those wanting to have a successful Music Business career, but for some reason are not able to, or don't want to deal with a Major. The serious Indie people, in effect, would be (should be) starting a "Small Business." (More on how, and why, later on)

Let's take a closer look at both sides, with the understanding that one can lead to the other - in either direction. And for good reasons...

Yes, it is fine if you, as an Artist, are still interested in going through a Major Label, but realize there is rarely such a thing in this century as them spending time, money and effort on "Artist Development" anymore. The reason is that the Major Labels have become so paranoid about their "bottom line", that most of them will expect you to be able to jump right into a large amount of sales in a matter of months after they release your product - or they'll probably drop you with a thud! Or even worse, just hold on to you, and do nothing!

And they rarely sign an Artist anymore who hasn't racked up at least 25-50,000 sales going the self-label or Indie route, and/or created a giant buzz on social media along with drawing crowds to their events. Then, when the Record Labels see that you are already semi-successful on your own, they will come to you directly.

But, this leaves you with an interesting decision to make - should you, or shouldn't you even want to go with a Major Label? Yes, there definitely can be major advantages going with a large label, such as possible financial advances, maybe quicker large-scale fame through wider Distribution, Licensing, Radio and Promotion, etc.

But why are more and more Major Artists purposely not re-signing with a Major Label when their deal ends?

Itís simply because they've realized that they will probably make way more money selling 50,000 records on their own than selling 500,000 through a Major. And with way less restrictions. And they don't have to wait for the label to first recoup (get back) what they spent to help them record and sell those records, adding to that the much smaller percentage they'd eventually receive than if they would pay themselves.

And on their own, the Artist's are retaining "Creative Control", plus ownership of their songs (Publishing), and ownership of their recordings (their own Label).

Yes, I realize these Major Artists are already known, but if you still need those 50,000 sales, buzz, etc., for the Majors to even blink at you, anyway, then...

So how can you get a great start without going to a Major Label? Well, there is an answer, sort of...

Simply, what the Major Labels "used to do", just selling recordings, doesn't work anymore - it's being proven by them, and to them, every day. So now, to make money again, it's become all about 360 Deals, where the Label takes a piece of Every part of your Music Income, such as Live Performances, Publishing, Merchandise/Branding, etc.

And, as the Major Record Company business is failing, they've had to lay off a lot of people - people that used to do the stuff that the Artists needed to have done. Realizing someone had to do this kind of stuff, the labels have been leaning towards signing Artists that are managed by very knowledgeable Management Teams, or "Super-Managers". Or insisting on it as part of the deal.

(Note: I cover this situation more extensively, including if you want to keep your personal Personal Manager, in my essay: Artists, Their Managers, and Getting a Major Label Deal - in the "Free Library" section at www.professorpooch.com.)

These Major Managers, in the Label's mind, should take over and handle many of the operations that the Labels want to get paid for, since these Managers have the facilities, staff, knowledge of the Industry, and the contacts to be able to take over many of these Label functions. So, to sum it up, nowadays, more and more, the Major Labels have become pretty much "Banks", while the Manager is often relied on to help make that Record Company a lot of money, through the 360 deal.

(Note: Yes, if they really believe in you, the Label will put money into promoting you. But the only money You'll probably ever see directly from a Major Label, is possible front money.)

And because of this new situation, a new trend is already in progress. As Bands are finding out: "Why do you need a Major Label for the money needed to launch your career, if you can either find a knowledgeable Management Team who has, or has access to, enough money and contacts to at least get things started and on a roll?"

Well, one thing you're going to find out is that it's just as hard getting picked up by a well-known manager as signing with a well-known label, and to attract them you're going to have to produce on your own just as if you were going for a label deal.

And, even if you can attract a well-known, knowledgeable Manager, or a worthwhile substitute, you must keep in mind that, when you sign with a Manager, you are still signing a 360 deal with them. He/she/they will get, on average, 20% of the Gross of everything you do in any part of the Entertainment Business...

Except there's a major difference that makes the situation much more bearable:

A Record Company normally owns your Recordings and most often, indirectly, your Songs. A Manager doesn't have to...

So, in this scenario, the Artist can remain the owner of their life and properties. That is, in effect, the Artist is the Record Company, Publisher, etc., and the Manager is the person who simply runs the operation for you.

(Note: I highly recommend that before you sign with anyone, or put out any of your Music, check out and follow my "how to... " for starting a small Music Business situation, or at least protecting yourself in my article: Professor Pooch's 3-Step, Music Business Career Plan of Action which covers everything You Need To Do To Be Prepared for Anything You Want To Do In the Music Business!. You'll find it in the "Free Library" section at www.professorpooch.com.)

Now that I've drawn the big picture for you, I'm going to give you the logical direction to aim no matter which direction you want to head. As I said in the beginning, you could title the 2016 version of the Music Business as "Anything Goes". But, if you seriously want to make a full time career out of Music, you must be ready to spend several years building up a substantial fan base with the attitude of making "One Fan at a Time" your new mantra.

1st, I'm going to let you in on some interesting math: if you can build up just 20,000 real fans in 5 years, that are each willing to spend $100 a year buying your recordings and merchandise, that equals $2,000,000 a year!

To accomplish this, that doesn't mean the Artist is not doing anything but their Music! Yes, they still must produce excellent materials and products, and just as importantly, they must communicate, as personally as possible, with all their budding fans, especially building up that all important "Email List", made up of your "Real Fans".

And don't forget having your own website, sending out periodic newsletters, staying in the public eye in every way possible via text, audio and video.

And this means, spending time promoting themselves not just on social media, but just as importantly, in person.

One of the major facts in Music relating to Fans nowadays: the fans expect to be treated as "part of the family" and want to be an integral part in your growing as an Artist, sharing your ups and downs and all arounds on your way to stardom. It Is Necessary to take this Seriously and It Does take Time and Effort to comply!

One of my major laws regarding making it in the Music Industry is: you have to be just as creative on the business side, as you are or your Artist is on the artistic side. You must be willing to think "outside the box" while still remaining within your image.

But you can live out your dream. You Do have to want to make it in Music more than anything else in the world. You must be ready to show that you are really serious about your Music, and not treating it as a hobby in your or anyone else's perception. You need to be, and the people that matter need to see that you are in it for the long haul.

This is the only way to make it that is possible nowadays because there are really no shortcuts. Even if you wish to go with the Majors, they will still want you to sell at least 25,000 downloads, have a ton of "views" and "likes", as well as hear a ton of "Buzz" about you, for them to be interested in wanting to hook up with you.

Many people don't know that it took the Beatles over 7 years before anyone would sign them. The same with the group "Muse". They were fairly unknown for over 10 years, had to 1st make it on their own, and now still are one of the hottest live acts as well as selling millions of recordings 21 years later. And that's just two examples.

One thing on the Indie side that levels the playing field is that everyone has access to the Internet just like the Majors, where you can put your Music up with the idea of having fans bring in other fans through word of mouth and hearing your recordings and seeing your videos, and buying your recordings and merchandise, and telling others where you'll be performing next.

And there are a large amount and variety of Companies/Sites (with more constantly popping up), to make it even easier for you, by offering services dedicated to helping you with your sales and placements on all the important sites.

One important benefit of dealing with these type companies is that many are now willing to help you while using a completely different type of business deal, even non-exclusive deals, meaning you can sell or license your products through more than one company. And you can retain ownership of your songs and just License them to others! And there may be no "recoupment" to worry about - meaning you get paid from sales starting at record #1!

There are also many social media/"community sites" where people can read all about the Artist and listen to their Music as well as see where they are playing next, as well as watch their Videos and can "spread the word".

To me it's quite clear: Since most people now have the capability to accomplish quite a lot without a Major Label or Major Manager, and since neither will want you until you create a large buzz anyway, and since you can have and keep a large amount of creative, business and legal control, and be in a much better bargaining position if and when you want them - or they come to you - you might as well get started on your own, following the 3-Step, Music Business Career Plan of Action.

However, how do you get started on your own, if you don't have the time or expertise to learn them, let alone do them - while still making amazing outstanding Music and products? Or even more simply, how can you be out there in the Public's eye AND inside on social media AND handling everything that must be done to become a success?

The answer? Well, you can't take the term "Do It Yourself", literally... "Do It Yourself" does not mean not having Help! You DO need a Team!

Simply put: if an Artist wants to have a reasonably successful career, they are going to find out that they will still need to put in the time and have the necessary resources, including some competent, hard-working help, so they can stay on top of their career, and so they can still have enough time for writing, playing, and recording their Music.

But you'll find you may want and/or need a different type of team, nowadays, than what's been the Music Business Norm. Your Team should fit You and what You want to do, and might be comprised of some "Super Fans", a manager/investor, a social media person, etc., for example.

By associating yourself with the right people who can handle the constant responsibilities and things you can't for whatever reason, you have as good a chance as anyone in the Music Industry...

Personally, I have spent 50 years full-time in the Music Industry. And, if I can do it, so can you...

---

Finally, I highly recommend that whether you want to be on the creative side, such as a Musical Artist, Songwriter, or Producer etc., or on the business side, such as a Manager, Publisher, Production Company, or Indie Record Label, etc., I am sorry, but there is no way around it - you need to learn at least the basics of how the Music Business operates if you wish to "Get in, Survive, and Succeed in the Music Business - without Getting Ripped Off":

Please check out: Music Business Complete™ comprised of 2 books and 4 courses covering the entire creative, business, and legal end of the Music Industry. Both Text and Audio versions are included. You'll find it at my site: www.professorpooch.com.

Also, please remember, if you ever need my personalized guidance in any way regarding the maze that makes up the Music Industry, I am here for you. I can always be reached at Pooch@ProfessorPooch.com.


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David J. Spangenberg
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