Contract

First Lecture After the Release

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We had an interesting lecture on the strategic use of social media and the artist’s story at HEO on 23th of April. The first public lecture after the book release – yes it feels good again. The summer will be in the construction of a new book’s promotion. The Essence of the Music Business – Philosophy is scheduled for release in August. Lectures have been booked for the autumn season and more is coming. Some of these lectures are open to the public and will be further informed later.

There have been some inquiries whether I am doing any legal assignments. The answer is yes. The contacts are more than desirable – in other matters as well. I wish a joyful spring for everyone.

Exciting first lecture for a long time

-Mika

Footwork

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Footwork in this context does not mean the true meaning of the word – it is more of an association. Footwork is the easiest aspect to present as one of the most important phase of a career in the early stages. Footwork is synonymous with the responsibility of everyone their own career. In the music profession, the business of an artist is typically first a presentation, especially by the professional groups supporting the artist. There is nothing wrong with this technique, however such a presentation is likely to mislead people in terms of footwork, which is the artist’s own responsibility. Footwork entails things done by the artist themselves, either being onsite or otherwise ensuring that the project under construction is moving forwards. One important starting point to consider in the music business is that your dreams are yours – not anyone else’s. Generally, outsourcing is usually needed to achieve them – but not as a matter of course.

Professional thinking assumes that self-titular authorship manages its plot with the same intensity that the necessity of a task requires. It would be an ideal situation if that were the case. Everyone would simply choose their goals and concentrate their full energy and passion on it. Everyone would be well prepared and practiced in their skills so that they can respond to each request of help coming out of the box. With such an equation comes structural problems. It would require each participant to experience the operation as their own, with financial benefits. Only a real professional can concentrate and engage with the necessary care when dreams and work-related compensation are not met, which is perfectly understandable.

Hence, a professional thinking only dictates what should be done and whose responsibility it is. Because we all have our own dreams and goals, and we cannot always implement them ourselves, we must compromise and rely on the help of others. In this context, agreements will be entered into in exchange for these mutually important elements. As an example, an individual may be a social media master that with correctly timed operations and feeds that support the artist’s career, the artist and their existence may become quickly known to the general public. This requires continuous monitoring and analysis of input power. It is not enough for the first feeds to be done impressively, and then deteriorate, which is the most common mistake in this case. Another big mistake is to assume that an expert would willingly continue working without any incentives. It is quite possible that, without a reply, the aid provider sees no other possibility than to continue in other contexts than with the story of the artist. Commitment is sometimes difficult to achieve when it comes to other peoples’ dreams. Each dream must be somehow included in each pattern of effort so that the goal of success is maintained throughout.

Most often this motivation is acquired with money. The obvious problem being that there is rarely enough capital at the beginning of a career. That support therefore needs to be acquired in some other way and when nothing large is on offer – you are not able ask a lot. The artist should also note that even a couple of unfinished projects can attract remarkable interest. Bringing the artist and their production to a point where it really begins to produce takes time and resources. Even though such cynicism is fortunately not always true, it should always be taken into account. At the time when there is nothing to offer to the public, projects cannot be left to someone else, at least not entirely.

At this stage it is good to return to the idea of your own responsibility. It is not realistic to expect anyone to do the lion’s share of the project if they are not entitled to a share of the resulting income. The previously mentioned master of social media showing their flavor through the production of an artist, combining their own personal motives – bringing the knowledge into a favorable environment and raising awareness to the public in a professional manner. Nothing prevents these ‘free employees’ from using their contribution as a springboard for their own personal dreams.

A social media master needs something that reflects his or her skills. This is also the case with other professional groups supporting the artist. In the music business, it is difficult to be a relevant factor without music and artists.

In principle, there is nothing wrong with this. The music industry’s livelihood is based on independence and free will. On the tactical side however, problems arise if the artist’s success counts on such cooperation. Thus if such an attempt to move forward fails, the artist will be in trouble.

The artist easily relies on those who provide feedback and encouragement. It is not uncommon at all for someone to comment on the first demos on a regular basis. Because industry circles are a difficult equation, or at least the belief is such, the artist can become locked in a challenging trap, both in fact and mentally. This should also be understood by professional groups that support the artist.

The person who evaluates the demos may actually be at a point in their career/situation where nothing available at that moment is interesting. From the artist’s point of view, one should consider whether such a person is the right person to give feedback in all matters. It is a completely different matter to give feedback from a general point of view compared to putting one’s own assets into a project. Such a situation, and especially the longer it continues, is bad for the artist – particularly in light of footwork. The artist likely goes astray wasting energy to assure the ‘feedback agent’ with a new demo. This kind of motivation may in turn make it harder to continue the work. It also excludes a lot of other options and closes other doors to the artist. The time that an artist should harness their social skills in other forums, is now wasted on this single judge’s opinion. Worst of all, it is perfectly possible that the recipient of your demos may one day find the artist/project he or she has been looking for and thereafter have little or no time and energy to provide even the slightest feedback.

These two situations are educational examples of what happens when footwork and self-responsibility fall short. It is completely polite to answer questions and give feedback, even though a commitment might not follow.

A man I did not always like told me to always trust your stomach. I cannot confirm the accuracy of that assertion but quite often in my own career it has held true. Not all people are meant for each other in such a delicate branch as the music business. The sooner this fact is accepted, the easier it is to move forward. The pursuit of a meaningful career can sometimes be in the midst of work and pain, and there are no shortcuts to it. You also have to remember that only a few compositions will last forever – people change. It is quite possible that some unexpected event might even bring you together with your worst enemy.

Artists must understand that some things must be done themselves, even if they have external help. The most effective artist organizations are when participants are aware of the special skills and available resources of each member. If a manager handles 70 percent – you should consider whether they can also handle the remaining 30. It just slows down the operation. The organization can find another operator who performs the task easier with less effort. For reasons of professionalism, it is not worth increasing the workload over resources – no matter what professional titles say. An artist’s affiliates tend to admire the artist’s organization as a whole – not always whom it belongs to. Such a thing may be left uninterrupted because other things are so well taken care of. An operator who is working hard to do something is not the person you want to blame.

Solidarity is good. Such implementation requires an open discussion. A group is may be unknowingly ignorant of the motivation and resources of the participants. Due to copyright, the artist and other copyright holders are ultimately held responsible for everything – whether these tasks are delegated or not. Many things are related to career advancement elsewhere and are often a prerequisite for success. Since the artist does not yet enjoy public awareness, it is difficult for an artist to make a break unless the matter is first presented to the public. The question is when you should seriously consider outsourcing activities and become lazy. The answer is certainly never – but the idea is clear. In an ideal situation, the artist’s organization would work in a differentiated manner, with each department performing in accordance with the artist’s wishes and instructions, so that the story of the artist remains consistent.

Let us consider a social media master getting hype in Australia with some ingenious post of his or hers. If the artist does not have anything more important on, the artist’s management should take advantage and already begin to make inquiries about a possible Australian visit, for example TV-shows and gigs. It is extremely important to take a stand whether the performances will promote the success the artist has achieved or something else, for example related to the initial hype created by the social media master. The answer to this lies in whether the artist takes part in the cost itself, or are they already aiming for an income stream when visiting. In general both occur, but in the first phase of promotion this decision is of great importance. Sometimes it is worth taking part in the costs yourself if the expectations are realistic or the visit otherwise fits the artist’s story. Quite often such a project is left unattended or is not even seriously considered, because the artist or management feels they don’t have the resources to make the vision possible. This is a big mistake. Simply emailing rarely leads to any desired outcome, but is preferable than doing nothing. A trip can be made at your own cost if it is expected to be favorable. The promotion of the artist is about reacting.

The main rule is that hype should be utilized, or at least the artist needs to become mobilized in some way. That moment will never return in the same way, and it only lasts a short time. A new artist needs a story and the audience’s interest is the best way to get people to listen it.

A horror scenario of this situation would leave the Australian hype situation totally ignored or not used to its full advantage. The resulting hype is mainly enjoyed by the band’s inner social circle and bragging to friends and domestic media. Perhaps the artist’s management comes to the conclusion that no visit should be made, which can be a sensible decision due to analyses showing resources and interest were in fact not sufficient to make the visit profitable. But let’s think about it from another point of view.

What if the artist had taken advantage of the Australian hype opportunity?

Let’s think about this matter from a passive situation. An artist’s actions should be internally aligned so that outsiders can also detect it, making it easier for people to contact the artist. Even if the artist has outsourced management, the artist’s website should also have the artist’s contact information, especially at the beginning of their career. This is not a no-confidence motion for management – it is just that contact may concern a variety of things and the artist should be aware of all possible contact opportunities. Hence, if the artist has reassigned operational responsibility too early, or is simply lazy and/or careless and ignores potential advantageous situations, many easy-to-follow or act-on things may be completely missed and not implemented.

In the situation where the artist is directly contactable, the Australian trip can be accomplished at a later date and the situation still be taken advantage of, even after the initial hype may have died down.

These situations tend to occur when the artist’s activities associate with economic value, or at least some kind of expectation value that the industry acknowledges. Before this, the artist does not want to make any far-reaching plans with anyone without justified grounds. It is also unwise to grant any rights at any level until it is clear that the music will be released and the organization is set up enabling passive income entry. Up to that moment the artist should be self-sufficient, even if supported by other people. Someone’s commitment cannot be defined if there is no guarantee of desired outcome, thus this is the period in which the participants are living in more or less uncertain circumstances.

The main rule here is that if you question whether something is being dealt with on time or proposals or initiatives are reaching the recipient, you should take care of primary contact yourself. During the time when no one has economic motives acting for the project, many things can be easily left untouched.

In the promotion of an artist, the most important thing is to connect the music with the artist, so people know who they are when they hear a song. The wider this knowledge spreads, the more successful the promotion. Footwork should not be stopped or neglected before this position is achieved. It is up to the artist, how they ensure this is happening, which also requires monitoring of the situation. Here we come to the area where the limits of responsibility for requesting and providing support are met. What is reasonable? When very strong commitment from others is awkward to expect, the artist should be mainly responsible for the progress of projects. It should also be noted that although the operation works together, the horizons are the combined personal goals of everyone involved. These are not always consistent even if cooperation has already begun, which is the reason why it is important to study the basics of the industry carefully. Then it becomes easier to evaluate what to expect from others and what to pay attention to when mapping the need of external assistance.

Footwork explained better in this book

Transferred Rights And Contract Types

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Here is the article on the transferred rights and contract types that I promised. During this holiday, I had just enough time to finish the text. This article continues in the next section with passive income and how the different contract types and transfer of rights are economically linked to it.

The artist has often no choice but to transfer some of the rights that are originally belonged to them in the pursuit of their business goals. In the implementation and organization of their business, the artist management (whether or not outsourced) is a responsible player in relation to granting the rights, or licensing of them. If the artist is not thinking to handle everything themselves, is the artist most likely to deal at least with the record companies, music publishers and booking agencies.

For the sake of clarity, the artists also work effectively in other relevant business areas, such as new media (ringtones etc.), sponsorship, and merchandising. However, in these business areas, there is no such solid linkage or great influence on the core business of the artist that it would require a great attention in this article.

This article is about assigning, granting or transferring the rights which term it then wants to use. The essential aspect of this action is its impact on the artist’s private life, decision-making power and economic conditions. Each transfer of rights restricts the artist’s position to some extent. The artist, though, should receive a financial compensation from certain admission. The transfer of rights is an important trading instrument for implementing the artist’s business and career plans. What they are searching for these interest groups is often capital, infrastructure and strategic know-how.

The artist management’s mission is to create and develop the artist’s business so that it serves the needs and the goals of the artist. The artist’s merchandise for all this is the attraction of one’s own pre-essence, the performances both live and a recording, and of course the music behind the performances. All of these activities are associated with the copyright dimension. This means that the factors of production require the artist’s consent to allow the manufacture of products. It is a completely an articulate matter, in which all the music business areas the artist has activities and aspirations.

Because the success of the artist cannot be predicted very well, it must be careful when it comes to assignment of rights. The content, strength, or the scope of these granted rights is of great importance in assessing the motives and commitment of each interest group or a partner that the artist would like to have. To counterbalance the transfer of rights, it would be good to have a margin, something in return. The transfer of rights, thus, must never be free of charge. The artist’s business plan and current popularity is the source that tells you what rights are relevant and which should be excluded. The main rule could be that no rights should be granted for any kind of void action, just as an option without the implementers.

The rights to be transferred are either fixed term, indefinite or permanent. The most intense right relates to music publishing, whose value as merchandise is superfluous to cover up. The right of the publisher is identical to that of the author (song-writer) – the copyright will continue to protect the compositions at least for seventy years beyond the life of the author. The publisher’s right is not an original as the author’s, but a derivative. It is generated by the correctly signed music publishing contract. This agreement transfers to the music publisher significant rights – originally belonged to the authors themselves. The contract does not restrict the artist, therefore, only for the duration, but also in fact. In order to be justified, the artist has to in some way make sure that the publisher makes its own contribution to the fact that the value of the relevant catalog increases as substantively as in the case of income streams. Otherwise the music publishing agreement is difficult to justify. The music publishing agreement entitles the publisher to as much as 50 percent of the copyright-related revenue of the songs. It should also be noted that the termination of the music publishing contract does not end the rights of the publisher to those songs that have been included as a part of the contract during the term of the agreement. Even if the active part of the parties’ agreement is terminated, the relevant rights of the publisher will remain in force.

A similar permanent right is also associated with the recording agreements. In these contexts, however, the right is far more limited and does not restrict the artist’s freedom of action to the same extent. In these contexts, the permanent rights relate to the phonograms and other recorded material that the artist has recorded to the company during the term of the contract. The record company obtains, under the terms of the agreement, and effectively by acting as a financial producer of the phonogram, the status of the producer which entitles the producer`s right to the legitimate period of protection. The record company usually receives the decision-making power over the phonogram as well as the music publisher gets with the music publishing contract.

This, however, affects the artist’s circumstances mainly through the possible non-competition clause of the agreement. In general, the artist is required not to record any songs that the artist has recorded for the company during the validity of the recording contract. The protection period is, according to established practice, five years. So nothing prevents the artist from recording the same tracks as in new versions, as long as five years have elapsed since the end of the contract. Such a ban aims at enabling the company to obtain a motivational exploitation right of the financial investment they have made. In this case, the artist does not have the same financial impact as in the case of the music publishing agreement. The company is required to pay royalty after the term of the contract as defined in the contract. The artist will not be left without compensation during the validity of this restriction. In the music publishing contract, the publisher does not perform anything for the artist, but becomes a part of the copyright revenue generated by the songs of the artist.

In two of the above examples, we are dealing with two fundamental concepts, a song and its performance. These two concepts must never be confused with each other. This is also the point where we get to the topic of this article. The term of the music publishing contract is not a synonymous for the terminology of the recording contract. Yet these two things are closely related.  In case where the music publishing agreement concerns songs, the recording contract is in connection with the performance. The object of protection is therefore different aspects of the same thing. For those artists, who also perform the music they have made, this division is extremely important.

In addition to permanent rights, the artist transfers also fixed-term rights in order to implement their business plan. For example, the booking agreement gives the agency a right to convey performances to the extent specified in the contract. As has already been mentioned, the transfer of rights is often long-term, geographically broad and exclusive. As we can see, the artist has to deal with the contracts in several interconnected business areas at the same time. This uncertain situation will cause a headache while networking of contracts. The artist’s business areas are closely tied together. If some of the sub-areas do not function properly, it has effects on other the areas as well. It is therefore reasonable to have different exits in view of this opportunity. The artist is certainly not happy with the situation where the performances would be and records will sell, but the performances will not be on the calendar for some reason or another. If the situation is that the artist cannot match the current demand or demand is not even attempted to create, the artist will not want to adhere to a contract that, through exclusivity, prevents them from acquiring performances elsewhere. The same applies to other business areas’ contracts. Each agreement should have a future exit, if the parties intensify so that co-operation is no longer possible, or cooperation simply does not work. This is an expression of why each transfer of rights should be conditional, if only possible.

When designing the artist’s business plan, the risk management is extremely important. Where the business plan focuses on the maintenance and improvement of economic activity or earnings, the agreements are more concerned with the possibility that things will not go as planned. Therefore, mixed-type contracts should be avoided. It is not uncommon for the contracts to be negotiated enthusiastic about designing co-operation over the traditional business bargains. Where the artist’s interest groups (record companies, music publishers, booking agencies, external financiers, merchandising holders etc.) have a willingness to participate in the artist’s business in other areas than which is their heartland of competence, the artist may have a need to engage in motivated partners in all relevant areas. In an ideal situation, everything would remain in the hands of a competent, committed and trusted group, and there would be no disagreement between people over time. But this is rarely the case. It requires no more than one key player to change the organization, industry, or retirement and the whole operation gets a whole new direction.

Everything in the midst of the hurry easily forgets what this is all about. Due to the copyright dimension, it is about the transferring the rights of the artist and the consideration paid to the artist for these assignments. Each business area needs to be organized separately, even if the same operators take care of them. Every business area must also considerate as a separate unit. They must not be dependent on each other because the artist does not always grant equal rights to all their business areas or the reciprocal obligations are not at the same level.

Respect for the contract-type boundaries will come out well in the following example. The parties can make a very detailed contribution to the content of their cooperation. In such a situation, the parties will almost certainly have to resort to the basis and structure of a type of the contract that the industry is familiar with. If the agreement with the terms of the agreement resembles a recording contract, it will automatically become an impression of the exclusive right that is usually dealt with in that kind of contract. This makes it easy to imagine that the agreement will in other respects also be exclusive and constitutional. There is nothing wrong with this, if that really is the case. But if the parties have meant something else, it is not worth considering such an agreement. If the agreement refers to music publishing-related activities, it is already in dangerous waters. Even if the copyright is not in principle possible to transfer with the tacit approval, but with the express consent, it is still a risk. Terms of the music publishing agreement in a recording contract are incorrectly used in full code red. Any suggestion of the music publishing should not be conveyed to the impression that the artist, while entering into some agreement, also includes the music publishing rights. This is one more reason why each business are should have a separate agreement and a separate exit, says the business plan between the parties then whatever.

When you grant the rights originally belonging to you, do not grant them more broadly than the relevant business plan requires. Never give up rights unconditionally. If the promised performance of the counter party falls short, you must have a chance to react. With the utmost care you should be with the music publishing contracts, as they are final. Each song that is considered to be a part of the agreement under the music publishing agreement will give the publisher the status of the publisher and generally entitles them to administrate the songs and to receive 50 percent of the copyrighted turnover.

No matter how enthusiastic you are from a new partner, do not mix plans and agreements with each other. The terminology that goes beyond each business areas is to be critically addressed. This avoids imaginations that could infer that the rights would be extended more broadly than the original purpose. The same applies to the options. To be justified, the benefit of the option to the artist should be in some way realistic. If the artist agrees on an option that goes beyond the resources and willingness of the partner, the artist’s career in this regard may be stuck. Indeed, without the consent of the existing option-holder, the artist is unable to progress in these areas with potential other partners if the option is exclusive.

Mixed-type contracts can also pose problems in very good relationships. The management agreement between the parties may work flawlessly, but the prospective cooperation in production precipitates. If the agreement is principally in the exclusive domain, the productive parts of it may also be considered as exclusive. In such an imbalance, the management party hardly hesitates to withdraw from the production side of the plot, but if the disputes for some reason will arise, the contract and its contents will certainly have to interpret. Although some of the examples in this article are far-fetched, it is sensitive to keep contracts apart – even for the own peace of mind. When the unadjusted parts of any cooperation are easily removed, and no such confusion prevents going, it is easier to plan future.

The purpose of this article is not to comment on how the artist should organize their background organization and business. The purpose of this article is to clarify the significance and motives of granting rights. It is also important to understand that they not identical in all areas of activity. The artist’s business plan lives with a changing popularity. A joint business plan and the drawn up agreements should safeguard the position of all the involved so that it is able to focus on the essentials. If the parties have chosen a cooperating model in which, for example, the other party to the contract carries out both the artist management and the actual booking, each task has to be the subject of a different contract. If the management decides at some point to abandon the booking, or booking the management, this part is will be easier to unload and continue on what the remaining cooperation is going to be. If the artist’s record company and the music publisher are the same, then these issues should not be agreed upon in one agreement only. If such a crazy situation has happened, a special attention must be paid to the assignment and the determination of publishing rights. Particular attention must be paid to the ability of artist to change the record company or terminate the agreement. If the publishing rights are tied to the recording agreement between the parties, the publishing part of the agreement should also be terminated to that extent. Consequently, only those artist’s songs that are recorded by the artist during the validity of the contract could then include the publishing right. All new songs from the artist are no longer included in the same catalog. If the artist has entered into a house-writing agreement in connection with the recording contract, extends such a right to any material that the artist has created during the term of the recording contract. Where the publishing right of the previous example is tied to the albums actually recorded by the artist and their content, such a house-writing element makes it a vaguely challenging combination. At the end of the contract, it is difficult to decide which of the songs are covered by the publishing right or whether they are all included at all.

The main rule is that if the rights are to be transferred, they should be granted as narrowly as possible. These rights can always be expanded in the future, if there is a reason to do so. However, the artist is the party who needs proof that there is economic justification for each transfer of rights. The other half of the artist’s freedom is the exits. Although the music industry contracts are often long-lasting and include options, there must always be exits against them. The artist has to get rid of the contracts if the business plans behind them do not correspond to the reality.

transferred rights explained in more detail in this book

The Idea Behind the Music Business

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When we are approaching the music industry as a business, we are dealing with quite an ingenious revenue generation model and logic. The strong role of the copyright and meaning of a ’footwork’ reach a whole different level than in many other branches. This fact easily fades out the true essence of it all what comes to an unacquainted viewer. The idea behind the music business is found beneath the surface. Instead of monitoring by eye, the focus should put more into tactics and strategies behind them – and even more into the core intentions that each operator truly is aiming for. The idea of everything is to get produced material along with immaterial elements into a profitable form for consumers to listen and watch.

People consume products of music for many purposes and reasons. More there is possibilities to enjoy the music – more roaring each prospective action may turn to. Music industry is known of its ability and willingness to drive new technology in to its own systems. Every new invention enables a new way to listen music.

The production of the master tape on the technical side is a one-time expense. This makes it possible for a licensee to produce music into different formats or products for sale. Booking studio, hire of personnel during the session and pre-production is a ’courier service’ with an intention to record a specific amount of performances for the album to be released in future. However, the production cannot be exploited without the relevant copyright assignments.

So the twist comes along with the copyrights and other immaterial property rights. At that point it is good to make a distinction between one-time expenses (cost-items of physical recordings) and recurring expenses (authorization of exploitation) while building a business around it. Compensation for these rights-transferring agreements is the cost-item which entitles the exploitation in a granted territory to the extent that is specified in the agreement. All commercial use of music requires a notification of copyrights in order to be exploited and used.  This claim is usually regarded in royalties and other copyright compensations to the relevant rights-holders against which the right-holders grant all the respective rights and licenses. It is all natural that the existence of copyrights indirectly reduces the income of every manufacturer and operator who wants to exploit the music in itself or the music as in part of their own commercial operations. For the industry that share is an important cash-flow-channel, a reason to produce music.

Footwork, in turn, that non-profitable activity, is something that should not be neglected. Footwork is something that starts all. It is a way to get in. Everyone has heard about connecting and its meaning for career. This is one of the most misunderstood issues in the whole branch. It is – as usually associated – not ’connecting’ at all. Connections are the consequence. They happen as a result while working together for the joint destination. It all starts from the little circle and bubble grows bigger at the same time the operative environment gets larger. There are no short cuts on building your network. Meeting people at the parties and in other similar events is not so meaningful as people often tend to think. Initial meaning for networking is to get know each other via actual work, activity or common business, not only in Person. The ultimate goal for beginners is to be able to demonstrate their abilities in places where decisions are made and where the potential of one’s own talent can be more widely noticed. While working in that stage, it is easier to develop and learn. This is what the word footwork basically means – making itself, the matter and production public. Same applies to business. True connections are always earned in a way that everyone can see that. Usually the release is the moment that fulfills said requirement. Impartial feedback and approval of the audience and industry is what this is all about.

If every accomplished session is taken as an acquired connection, each release is then accounted as an existing resource. Discography or back-catalog is often comparable to money. Same happens with every accomplished and notified business. It is all about the release and results. From that moment it is not possible take that achievement away. After the release also the vital copyrights will be activated and all the potential input can be channeled to its makers in a way how the rights are originally granted, transferred or assigned. It is difficult to engage in sales without the production to the public.

The idea of the music business is to get the immaterial substance into a physical, profitable form. It is important to make a distinction between direct sales and indirect intention. Direct sales occur while money transfers from hand to hand and sales online with the physical downloadable package or streaming. Indirect intentions are the other source of income. It is more of a result of the public play and presentation for commercial purposes. It doesn’t matter if the sales or use happen directly or indirectly. This distinction is made to make it easier to understand the matter. It is the copyrights and its related rights which have an elementary role in pricing. The physical production of the record with the relevant prints is not necessarily a very expensive operation. As the technology is already at the high level, making music available to the public is also cheaper and easier than ever before.

Artist’s total income or turnover is a combination that is collected from the different sources. Availability, the other side of the coin, is dependent on how largely an artist and its production has been distributed all over and made available for the public. The artist receive incomes in royalties from the album and online sales, payments from their live performances and merchandising in their every available forms but also strict money from the advertisers and sponsors who wants to use their name, picture, music, physical presence, likelihood and success identified to the products and brands they represent. The artist can also generate revenue from the new media such as ringtones or synchronizing their music with the movies

Some artists, as we already know, also write the songs they perform as in whole or partly. Because of this they are entitled to receive payments while that material is played public. They are also entitled to obtain copyrighted mechanical fees – if someone wants to record the performances from those songs.

At its most authentic form music industry introduces itself when artist is having a show in front of the audience. Decreasing selling rates are not an indicator of a dying industry. Actually development and reality is heading to a whole other direction, the result is made from a growing number of sources with a less effort than before. Music as a phenomenon breaks customary barriers where ever it is possible. Origin of the song and its performer have no longer same role it used to have. Nowadays there are no requirements to born or move to the United States to become a world-known artist, manager or producer. At the same time when then technology reduces the margins, distribution becomes more easy and cheaper. That progress is a double-edged sword. Some of the artists benefit of this progress and others don’t. The fact is, however, that none of this changes the essence of the music business. Supply and demand goes the same way it has done for last 50 years. There has just become new ways and technologies to consume music. It is all about how the fans and listeners want to hear it. This is the request for which industry have to answer.

Singular songwriters are the production units of this branch. These operators by themselves or jointly bring forth the substance for the performers to record or to present it live. Technically production is provided by the composers, lyricists, arrangers, producers and the engineers. They create the facilities for the performing artists. Their asset gives the form to the substance in which it is possible to enjoy. At its most reduced form that outcome is provided by the performing artist while they are giving live sessions in front of the audience.

When the artists have made themselves known with the footwork in the contexts they have sought and organized their music to the world so that the most of the distribution channels make their music available to the public, we are dealing with the most significant level of artistry – the enjoyment of passive income. Turnover and its magnitude are not relevant here. It is important for the new material to be constantly released without any major effort. What it ultimately generates, depends on the reception of the audience.

to be continued..

idea behind essence of music business
2nd Edition – Cover