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Get Ready for the 2020's Version of the Music Business!

Professor Pooch's State of the Music Business Address

© David J. Spangenberg

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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, looking forward to, and creating the future..." But right now, is right now, and we are here in this era, so I'm going to lay out the Music Industry for you, for the beginning of the 2020's ...

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.

It's 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, or do a Joint Venture with, a Major Label/Distributor.

So how can you make this all happen? What's the best – and safest - 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…

After complaining they weren't making any money due to piracy and the lack of CD sales, with the help of "360 deals" (more on this later) & with streaming really growing, etc., the Majors have found new ways of making lots of money (though not much of it is trickling down to their Artists.)

What you weren't hearing, was that Music Sales have actually been increasing since 2005 - 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 the Majors used 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 has been called by "the New Model", "The Long Tail", and countless other names.

Simply put, if you are under 25, 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 or Publisher, 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 the USA and around the World, in the courts, and with many other agencies and Commissions.

Nobody's happy. Even after the MMA (Music Modernization Act), that was supposed to solve many of the rate issues, etc., everyone's still fighting everyone. A lot of "Overpaying vs. Underpaying" royalties, etc., between the Companies & the Creators.

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

"The Good" - In regard to promoting your product, 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 forms of entertainment on all kinds of devices, including Podcasts and Video Games that are readily available to the masses and seems to be taking over a lot of the eyes and ears of potential fans. 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 great way to solve it more extensively in my essay: "Indie Acts and Drawing Fans"

What is super important that everyone must realize is, that it's not just about "the Music" anymore. It's all about Entertainment! Therefore, you must be Great Entertainers, as well as Musicians. And You need to Stand Out from the Competition on both angles.

And where once great "Music" was the most important asset, it changed with the advent of MTV, where "Image" became Just as Important, and over the last several years, "The Story" has also become a dominating factor. Whether it's "overcoming diversity" or having some kind of back-story on how the Artists got where they are. (Hint: Everyone has one!)

And, unless you've been in hiding somewhere with no devices, I'm sure you've seen that 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 the Music 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.

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 things like "Artist Development" anymore. The reason is that the Major Labels have become so paranoid about their "bottom line" (money they're actually making), 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!

Therefore, the Majors rarely sign an Artist anymore who hasn't racked up at least 25-50,000 sales, 100's of thousands of Streams, etc., going the self-label or Indie route, and/or created a giant buzz on social media along with drawing large crowds to their events. Then, when the Record Labels hear/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 still can be major advantages going with a large label, such as possible financial advances, and 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?

It's simply because they've realized that, unless they're offered an insane amount of up-front money, they will probably make way more money selling/streaming 50,000 recordings on their own than with 500,000 through a Major. And with way less restrictions, such as being able to release their Music when they want to. 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 simply pay themselves.

And on their own, the Artists are retaining "Creative Control", plus ownership of their songs (with their own Publishing Company), and ownership of their recordings (with their own Record Company).

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 is there another way about going to a Major Label, directly? Well, there is an answer, but it has a catch…

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, when the Major Record Company business was failing, they had to lay off a lot of people - people that used to do the stuff that the Artists needed to have done, including "Artist Development." Realizing someone had to do this kind of stuff, the labels started 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"

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 pretty much become "Banks", while the Manager is often relied on to help make that Record Company a lot of money, through the 360 type of deal.

Note: Yes, if they really believe in you, the Label will put money into recording and promoting you. But the only money You'll probably ever see directly from a Major Label, is possible front money. The money a Major receives, rarely trickles down to the Artist.

And because of this new situation, Bands might think: "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 become at least fairly well-known 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 also signing a 360 deal with them. He/she/they will get, on average, 20% of the Gross (money taken off the top, before expenses are paid) of everything you do in any part of the Entertainment Business…

Except there's one 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 the Artist.

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." "3-Step, Music Business Career Plan of Action"

Besides going to a Major, directly, or going through a powerful Manager, there is another way of speeding up the process to the Majors - but it also has some catches. It will entail going through a Major Producer, who probably owns a Production Company of his/her own.

In this scenario, someone may believe in you enough to put out the money for recording, (or owns their own studio), but, would expect to be your Producer, and also would expect, not only half of your future monies when (if!) they sign you to a Major, but also expect 50% of the Royalties Artist would receive from the Major, plus 50% of your Publishing monies, plus even a piece of your writing, especially if they are making the "tracks" for your songs.

Now that I've drawn the big picture for you, I'm sure you're seeing that, in the beginning, there is only one logical direction to start with, no matter which direction you want to eventually head. Unless you simply want to sit around waiting... And waiting... And waiting to be, "Discovered."

Yes, as I said, you could title the 2020's version of the Music Business as "Anything Goes". But, as you'll see, no matter what, you'll need to start out thinking "Indie," and should seriously think about starting a "Small Business," if you wish to be taken seriously.

And, if you seriously want to make a full-time career out of Music, you must be ready, if necessary, to spend several years building up a substantial fan base with the attitude of making "One Fan at a Time" your new mantra.

However, 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, etc., 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, but 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 seriously 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 show you're an up-and-running business with amazing numbers for them to be interested in wanting to hook up with you, anyway.

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 25 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 telling others where you'll be performing next, etc.

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, including streaming and sales venues.

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!

There are also many social media "group/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 a Major Label or Manager – or they come to you – you might as well get started on your own, following the "3-Step, Music Business Career Plan of Action".

Note: Click here for a Personalized, Just for You, 3-Step Plan of Action

However, how do you get started on your own, if you don't have the time or expertise to learn how to do everything that is necessary to succeed, let alone do it all yourself – 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, with the understanding that, since you don't have Major Label Money, you'll have to put in Major Effort, you'll quickly see 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 used to be 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.

And Band/Group members should be doing Their part!

Note: You notice I used the word "Team" – Not "Posse." You want/need people to Help You, not simply Use You!

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 3 books and 4 courses covering the entire creative, business, and legal end of the Music Industry. Both Text and Audio versions are included together.

If you prefer individual "Kindle or "Print" Versions, you can check out my Amazon's Author's Page

You may also want to check out my "Home Page" for a list of my most popular educational-type programs. This includes my new, one-of-a-kind "Complete Music Business College Education" – Designed and Personalized, just for You!

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. And every email is personally answered by me...

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"Our aim is to help guide you, protect you, and to answer any and all of your questions regarding the Creative, Business and Legal sides of the Music Business, in plain, easy-to-understand "People-Talk". No matter what style of Music, no matter what you do, no matter what stage of your career - we're here for you! Let us help you save wasted time and money..."

David J. Spangenberg
["Professor Pooch"]

Music Business Career Guidance,
Entertainment Contract Specialist

E-mail David at: Pooch@professorpooch.com

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