The Idea Behind The Music Business

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. 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.

It is often lulled into the idea that everyone 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. Consider a 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 him or her from using this 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. For more and up-dated information around the subject – you should read this book.

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. 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 effort 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 there’s something meaningful in return. And that can be anything.

Oftentimes however, 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 can be 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 is explained in more detail in this book.

Homepage and Communication

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When the first steps of the promotion are to be presented, the website cannot be ignored. In fact, the website provides a fertile ground when we talk about the road map, plan realization or just reacting accordingly. As it is with income types, also promotion can be divided in active and passive sections. Modern promotion has many different tasks, but also meanings. You should read The Art of Music Business Management – For Artists & Managers to get an updated info.

With a new artist, the audience rarely has enough knowledge of them. Therefore all the plug-ins that increase that awareness is extremely important. When people begin to know their name, the two-way role of the website will be established. For the followers who already know the artist and their story, the main focus is on the artist’s up-to-date affiliations and future plans. This part of promotion is the active part. For others, the people who are not yet aware of the artist, or who visit the site for the first time – the attention is paid to other things. They are generally interested in what it’s all about. This side of the story could be considered the passive part of promotion. Unlike with the already existing fans, a new encounter need a background information. They are usually in a need to know more about the artist, and what a better way to do it than search engines. If everything is in order, search engine provides the artist’s own homepage first. The homepage is also a source of information where an artist can best influence the content of stories.

When considering the promotional content, one must take into account the different levels of needs. TV series must have parts that attract new viewers even if they haven’t followed the show from the beginning. In addition, it must also be able to retain older fans interest with new episodes. The artist’s future and the ability to follow their progress is for the existing followers. Giving the opportunity to find out the artist’s history and origin is for the new followers. Thus, it is a good idea to have metadata information such as biographies and discography, as well as photos and videos along the way.  All the new material instead, plays an important role for the fans as it shows the artist being active.

All the artist’s products should be easy to find – also the related information. Information acts like a product description. Unlike the products that can be bought with one click, information works differently. It always requires an effort from the recipient. This in turn requires clarity on the artist’s side, with the content and layout. The artist cannot confide that a new visitor will be patient or want to find information behind a thousand links. This may cause a counter reaction – it can be a good idea to keep your homepage simple, but also thoughtful and spectacular – pleasing to the eye. The career information should be initially guided by the artist’s action plan, not so much a massive awareness of the artist’s existence. On the tactical side, it is important that the artist reacts to the call, if the reception requires. If the artist is unable to answer this call, it is not worth acting the opposite.

What most artists want is to the contacts – for this reason contact info must be very easy to find. The same applies to other things that the artist wants to emphasize. The products should also be accessible and the links should be avoided if the products are difficult to obtain. This of course requires on-call time. If this situation changes in the future, availability placement can be made to match the prevailing situation. This is one example of why homepage matching reality is more important than impressive appearance. If a potential buyer cannot get the product they want, or worse, not even find a link, the visit will surely leave a sour taste.

This will be the next thing – the links and their use. It is perfectly normal and even advisable to use links to the services and improve availability. However, they should not hinder the acquisition of information or mislead people which may happen by accident. Ensure that links actually lead where you want to steer people. It is not uncommon for something to go wrong when setting up links. The artist is therefore not linking their homepages to mere sales aspirations. Links also have other uses. They can lead people to interviews or other relevant forums. It is good to note links may change its content. They may, and often change – as well as their locations. Someone else’s interview may be found behind some particular link. It is good to be aware that not all the content behind these links is not solid.

If you’ve shared that one of your songs or albums is #6 on some chart and half a week later someone clicks that link and you’re in position 28, the positive message you’re trying to convey may have the opposite effect. A 22 position drop does not necessarily support the other positive messages on your homepage. Fast-changing information is better placed elsewhere on the social media environment – not on the homepage unless placed on its News Section.

Restrictions can also be present with copyrights. Some distribution networks have divided their offering so that there are regional distribution points around the world. Many times this is due to local legislation. Even if some umbrella organization has obtained the right to sell your copyrighted products throughout the world, the content of the license does not necessarily apply to all of its distribution outlets. Therefore, it is not necessarily wise to advertise products through German link despite the product would be topical in Germany. This choice may exclude all the other countries if you are not careful. It can be that the umbrella organization’s French unit is responsible for France’s distribution and Italian unit for Italian needs. If there is a globally eligible link available somehow, you should use it. Alternatively, if the artist has a fan site in Germany, then it is completely natural to use German links there.

In many cases – the less information, the better. Browsing pages may become a challenge if the artist’s homepage is a salad, filled with all kinds of information from here and there. Different sections of that site hold a different weight and it is always better if the most delicious points of one’s career are presented first. In doing this, the visitor gets a better idea of what the artist really entails.

Particular attention should be paid to the site’s sections that do not change very often, but are of great focus. It is a good idea to strongly invest in the content, structure and layout – to meet the artist’s image. It is also good to post artist-related communications elsewhere in social media, rather than just on the artist’s home page. Some news are just better to place on artist’s Facebook page, where it disappears with the news stream. Visitors usually tend to pay attention to the issues that the artist raises. If the artist’s current plan calls for more sales, it isn’t wise to talk about the new album and associated pre-production – as this topic is premature. It only takes the focus away from the current agenda.

It is time to remind the concept of footwork. The active stage favors regularity. It is highly recommended to build a communication plan, the protocol. To map out all the things the artist wants to share and/or how to react to the echoes. Fans who regularly visit the artist’s ‘premises’ are surprisingly aware of the truths behind the scenes. All the lightweight news is better placed in faster forums such as Facebook, Twitter, or Instagram, if the artist feels it necessary. This allows the artist to react quickly in a situations where the artist is expected to respond. The bigger news and more time-tolerant stories are worth to put on the homepage.

All in all, communication on the homepage and its relation to the artist’s other information channels is a matter of choice. No single truth exists. It is about the artist’s career stage that usually determines the contents of the artist’s homepage. In any case, it is always wise to plan in advance how to meet the different situations – and through which media different things will happen. At the beginning of one’s career when knowledge of an artist is limited, it is important to be clear and honest. Everything leaves a mark on the search engines.

Why homepage and its communication should be aligned can be read from this The Art of Music Business Management - For Artists & Managers book

Passive Income In Artist’s Revenue Generation

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In an ideal situation the artist’s distribution network and prevailing popularity match. Each measure transpires effectively towards the goal and allows the public make positive purchasing decisions. When the artist give interviews, perform live, or otherwise appear in public, the public have immediate access to the artist’s products, but they also have a prior information where to find them. If the artist or management neglects this, the artist cannot take advantage of passive income, at least to its fullest extent.

When the artist’s distribution network is setup, it takes care of bringing the products to dealers – in both physical and electronic forms. It is completely up to the artist’s management to decide how this task is taken care of. Many artists, because of the small size of their activities, do most of these things themselves – however this is not always an ideal setting. The goal of many artists is to achieve such revenue that they are able to outsource these activities to the record company or some other relevant player – depending on the business area in question. Here we come to what was meant by the prevailing popularity and efficiency of the distribution network. The more familiar, the more popular, or the more promising the artist is, the greater is the likelihood of industrial cooperation with the artist. Here we come to what the another article here meant about footwork. It is the main task of artists to make their activities interesting – it’s about pop music.

Passive income doesn’t mean the goal is to desire a state of affairs in which the money should come without doing anything. Not at all – it is the complete opposite. The job has to be done, but in advance. Music business earning logic has been arranged so that it possible to enjoy passive results. The clearest manifestation is found in music publishing. Song-writers get remuneration for the use of their songs whenever their music is publicly performed, or music recorded to a phonogram – as it is simply expressed. Copyright collecting societies and collective management organizations monitor the use of copyrighted music and collects royalties of their use. These organizations pass on royalties to the artists, provided they have affiliated with the organization as a clients or members. Copyright collecting societies, for example, grant licenses to radio stations or TV-stations when they play music in their programs. They also grant mechanical reproduction licenses when music is recorded on a phonogram. In this way it is perfectly possible that after writing a song an author of such piece can enjoy the copyright revenue only by joining such an organization. After that moment, he or she may no longer need to do anything, as the organization takes care of the monitoring of use and distributing royalties from the users to its authors. This is the passive income referred to in this article. The money doesn’t come from nothing but requires a prior work.

Here we come to the need of external help and the justification of its cost. In order to make passive income, the artist usually delegates powers to those who make the production available to the public. It is also about acquiring strategic know-how making that happen. Many record companies and music publishers are able to gain more revenue to the artist, even though they take part of the revenue. The question here is the price an artist should sensibly accept – as well as how much it is wise to give up decision-making power.

No one can find a song unless they know of its existence or various playlists or other industrial mechanism push it through. In the industrial sense, music producers and/recording artists don’t go looking for music they want to use from the massive registers of copyright organizations. To this end, the area has its own operator – music publishers. On a professional scale, their job is to do the footwork on behalf of the song-writers they represent. In this context, we do not take a stand in the legitimacy of music publishing. No – we want to demonstrate passive income and the meaning of its accumulation. If the author and music publisher end up in a music publishing agreement, the publisher will participate in the ownership of the catalog, yes. Consequently, the publisher gets the other half of the artist’s catalog insofar when it is associated with the publisher’s share. At this point, it is good to point out that 50/50 is not the only method of calculation used. There are also other kind of arrangements. It’s common practice that the artist gets to keep the writer’s share in full, but the artist and publisher share the publisher’s share equally. However, you cannot rely for this main principle – read the contract carefully. It may well be that with some income types, the split is something completely else. If this income generates a main income for you, even a small deviation can be meaningful.

When it comes to rehashing old songs, we find ourselves at the heart of the passive income. Previously released piece starts to generate additional revenue for its rights-holders. Kate Bush’s Running Up That Hill is a perfect example. When it got connected to Stranger Things in its Season Four, the song skyrocketed to multiple charts. For such songs, the footwork has already been done and its authors are in the ‘public domain’. Not to mention that for younger viewers, this song is completely new.

If the authors themselves intend to find performers for their songs, this footwork becomes their responsibility, in which the existence of the songs and their elements are brought to the attention of potential artists and producers. If the authors want someone else to do it, they will likely have to convince music publishers of the excellence of their songs. In a nut shell, in order to enjoy passive results, you must first succeed in footwork.

Passive income occurs also in record sales and streaming. All royalties received by the artist can be classified as passive income. When the artist has recorded the music and made it available to the public, the artist no longer needs to do anything. The operation is over. The popularity of the album determines the amount of revenue. If the artist succeeds in the promotion and gains popularity, this usually results in additional revenue. At this stage it is good to point out that communicating music to the public via radio and television or online is also a subject to copyright remuneration, not just album sales and streaming. Both the artist and the financial producer of a phonogram are entitled to earnings when the recording is played public. Just as it is the case for song-writers and music publishers, the recording artists also have their own copyright collecting societies. All the revenue gathered here is also classified as a passive income.

It is possible for an artist to become involved in passive income through other contexts than recording or music publishing. For example when their merchandise is sold on the internet by authorized dealers, or their music is associated with the film or other moving images. Passive income therefore concerns all activities that no longer require the artist’s physical presence.

As a comparison, live performances usually require a full show. Active income requires a physical presence and real-time performances by the artist before it becomes topical. It should be noted that passive income does not exclude income from active sources. Consequently an artist, acting as a performer of their own music, not only receive compensation for the show, but also as a copyright remuneration when their music gets performed publicly. The set information of the show, especially in festivals, can be a valuable thing. If the artist performs music created by others, then the authors of the musical piece will acquire passive income from that same public performance – and the performer will obtain direct premiums for the show. 

Passive income has a meaningful plug-in to the artist’s business plan. The artist must be able to organize their activities so that it matches the prevailing popularity and physical presence of the artist. Otherwise there is a risk the artist’s promotion is done in vain. However, at the beginning of a career, when still making name for themselves, this is not always possible.

The meaning of passive income is explained in this The Art of Music Business Management - For Artists & Managers book

Navigating Transferred Rights: Understanding the Artist’s Position

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Here is the article discussing transferred rights and various contract types, as I had promised. Without any more delay, let’s get straight to the point and dive into the subject.

Frequently, artists find themselves in a situation where they must relinquish certain original rights in order to pursue their business objectives. In the execution and management of their business affairs, the responsibility lies with the artist’s management (whether outsourced or not) when it comes to granting or licensing these rights.

This article delves into the processes of assigning, granting, or transferring rights—depending on the terminology employed—and examines their implications for the artist’s personal life, decision-making authority, and economic circumstances. Each instance of rights transfer imposes certain limitations on the artist’s standing. A fundamental prerequisite for exercising these rights should be a corresponding compensation, typically in the form of royalties. Undoubtedly, copyright stands out as the paramount commodity in this industry.

The objective of artist management is to construct and cultivate the artist’s enterprise in a manner that aligns with their requirements and aspirations. The artist’s merchandise encompasses their persona, live and recorded performances, and, naturally, the music that forms the core of their acts. All of these endeavors are intertwined with distinct copyright considerations. Consequently, obtaining the artist’s explicit consent is typically imperative.

Given the unpredictable nature of success, caution is advised when considering rights assignment. The substance, potency, duration, and extent of these granted rights hold significance in evaluating the intentions and dedication underlying each transaction, as well as the potential partner the artist seeks to engage with. To counterbalance the transfer of rights, it is prudent to ensure reciprocity or compensation. Hence, the transfer of rights should never be devoid of remuneration. The artist’s business strategy and current level of popularity serve as indicators for identifying pertinent rights and determining exclusions.

The cardinal rule remains that no rights should be bestowed gratuitously

The rights subject to transfer fall into categories of fixed-term, indefinite, or permanent. The most comprehensive relinquishments occur in instances of perpetual transfers. The music publisher’s entitlement can mirror that of the author (songwriter), where their copyright claim endures for the entirety of the copyright’s lifespan. However, the publisher’s right diverges from the author’s in being derivative rather than original. This right comes into effect upon a duly executed music publishing contract.

This agreement bestows upon the music publisher substantial rights originally belonging to the authors themselves. The contract not only constrains the artist for the agreement’s duration but extends its impact beyond. To warrant this arrangement, the artist must ensure the publisher fulfills their role; otherwise, justifying the music publishing agreement becomes challenging. The music publishing agreement affords the publisher up to 50 percent of the copyright-related revenue from the songs.

It’s important to note that the termination of a music publishing contract doesn’t always nullify the publisher’s rights to songs encompassed by the contract during its term. Even if the active phase of the parties’ agreement concludes, the pertinent rights of the publisher remain in effect.

A parallel permanent entitlement can be linked to recording agreements. In such scenarios, permanent rights pertain to the phonograms and additional recorded content that the artist has produced for the company during the contract’s duration. According to the agreement’s terms, the record company acquires the role of the financial producer, granting them the producer’s right for the valid span of protection.

Typically, the record company gains authority over decision-making regarding the phonogram, similar to how the music publisher obtains control over the catalog they manage through the music publishing agreement.

This, for instance, has an impact on the artist’s standing through the potential inclusion of a non-competition clause within the agreement. Broadly speaking, the artist is prohibited from recording any songs for other labels during the duration of the recording contract. The standard practice designates this protection period as five years. Consequently, the artist is free to re-record the same songs once five years have elapsed since the contract’s conclusion. This restriction is intended to provide the company with an incentive for their investment, or at least that’s its purpose.

Hence, the fundamental principle is to avoid granting these rights more extensively than necessary.

We are dealing with two fundamental concepts: a musical composition and its recording. It’s crucial never to conflate these two concepts. This forms the crux of this article as well. The duration of a music publishing contract does not equate to the terminology of a recording contract, even though these two aspects are closely interconnected. While the music publishing agreement pertains to the song itself, the recording contract is associated with its performance captured in a recording. Consequently, the subject of protection differs despite involving the same content. This division holds particular significance for artists who both create and perform their music.

To implement their business strategy, an artist can also employ fixed-term grants. This approach has gained traction among contemporary artists. It ensures that the artist does not relinquish their rights beyond necessity.

For instance, a booking agreement grants the agency the right to arrange performances within the bounds specified by the contract. As previously highlighted, the transfer of rights in these cases is frequently long-term, spanning wide geographical regions, and exclusive in nature. This implies that artists must navigate through contracts across numerous interconnected business domains simultaneously. This intricate situation often leads to complications when dealing with contractual relationships.

The artist’s various business facets are closely interlinked. If certain sub-areas encounter difficulties, the impact ripples through other spheres of activity. To address this uncertainty, it’s prudent to incorporate contingency measures. The artist would certainly not be content if performances are planned, streaming arrangements are in place, yet no follow-through is ensured for some unforeseen reason. If the artist cannot meet existing demands, or if there’s a mismatch in agendas, being tied to an exclusive contract that hinders progress in other avenues becomes undesirable.

Each agreement should include an exit strategy in case the collaboration becomes unviable due to escalated issues between the parties, or if the partnership simply proves unproductive. This underscores why each rights transfer should ideally carry conditional terms, if feasible.

When crafting the artist’s business plan, effective risk management assumes paramount importance. While the business plan primarily centers on upholding and enhancing the artist’s financial prospects, the agreements should factor in the possibility of unforeseen deviations. Consequently, hybrid contracts should be avoided. It’s not uncommon for enthusiasm to dominate the negotiation phase. The artist’s stakeholders (record companies, music publishers, booking agencies, external investors, merchandise holders, etc.) might express interest in participating across domains beyond their core expertise.

In an ideal scenario, everything would remain under the purview of a competent, dedicated, and trustworthy group, with disagreements unlikely to arise over time. Unfortunately, such ideals rarely align with reality. All it takes is a single key player’s departure, an industry shift, or a shift in priorities to completely alter the trajectory of operations.

Amidst all these complexities, it’s easy to lose sight of the core objective. Driven by the copyright dimension and its alignment with the business plan, the focus remains on the transfer of rights and the value attributed to this process. Each business segment necessitates distinct organization, even if managed by the same entities. Each sector should be treated as an independent entity, not reliant on others in case of contingencies. This approach facilitates the efficient elimination of non-functional aspects, retaining only the effective components.

The boundaries delineated by contract types become evident in the ensuing example. Parties often find themselves engaged in an extensive collaboration that spans multiple aspects of an artist’s business. In such circumstances, the parties are likely to resort to contract types familiar within the industry. If any of these agreements resemble a recording contract, it might inadvertently suggest the presence of an exclusive right across all agreements. If this isn’t the case, clarifications become essential.

When granting rights that are inherently yours, exercise caution in ensuring they aren’t extended beyond the parameters essential to your business plan. Never surrender rights unconditionally. Should the promised performance of the counterparty fall short, you must retain the ability to respond. Particular prudence is advised concerning music publishing contracts, given their potentially perpetual nature. Every song incorporated within the music publishing agreement grants the publisher a standing that confers the right to administer the songs and secure up to 50 percent of the revenue generated through copyright.

Irrespective of your enthusiasm for a new partner, it’s crucial to maintain a clear distinction between plans and agreements. Terminology that ventures beyond the intended scope should be subjected to critical scrutiny. This is to avoid any interpretation that might suggest an expansion of rights beyond the original purpose. The same caution applies to options. For them to be valid, their realization should be reasonably feasible. If an artist embraces an option that surpasses the partner’s resources or willingness, their entire career could be jeopardized.

Mixed-type contracts can introduce challenges, even within functional relationships. A well-functioning management agreement between parties might coexist, but issues could arise in the realm of production collaboration. If the agreement is predominantly exclusive, the productive components might also be deemed exclusive. In such an asymmetrical scenario, the management side might readily step back from the production aspect. However, if disputes were to emerge for any reason, the contract and its contents would undoubtedly require interpretation.

While some of the examples in this article might seem extreme, it remains prudent to maintain a clear demarcation between contracts – even for your own peace of mind. By easily excising obsolete elements from any collaboration, it becomes simpler to strategize for the future.

The purpose of this article is not to provide guidance on how artists should organize their background operations and business. Instead, its aim is to underscore the significance of copyright. It’s crucial to recognize that copyright doesn’t have a uniform impact across all areas of activity. The artist’s business plan is dynamic and ever-evolving. Collaborative business plans and related agreements should be structured to safeguard the interests of all involved parties, enabling them to concentrate on the essentials.

When parties opt for a collaborative model where one contract partner handles both artist management and booking, each function needs to be addressed through distinct agreements. If, for instance, the management or booking aspects are discontinued, the relevant part can be terminated while the remaining collaboration continues. In cases where the artist’s record company and music publisher are the same entity, these matters shouldn’t be consolidated into a single agreement. In the unlikely event of such an arrangement, special attention must be directed towards publishing rights. Particular care should be taken to ensure the artist retains the capacity to change the record company or terminate the agreement if necessary.

If publishing rights are intertwined with the recording agreement, any termination must extend to the publishing segment as well. Consequently, only the songs recorded by the artist during the agreement’s term would fall under the publisher’s purview. Newly composed songs wouldn’t be incorporated into the catalog.

 

The cardinal principle is that when transferring rights, they should be conveyed with utmost specificity. There’s always room for future expansion of these rights should circumstances warrant. Yet, it is incumbent upon the artist to substantiate the economic rationale for each rights transfer. The counterpart to the artist’s freedom is the presence of exit strategies. While contracts within the music industry frequently extend over extended periods and encompass options, a pragmatic approach is essential. The artist must retain the capability to terminate contracts if the business plans underpinning them cease to align with reality.

If the topic piques your interest further, consider reading this book. It provides more examples of contemporary methods to safeguard your rights.

Navigating Transferred Rights: Understanding The Artist's Position

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 copyright or the meaning of ’footwork’ plays a significant part in it. To an unacquainted viewer, this can be a challenge. The idea behind the music business is present beneath the surface. Instead of monitoring by eye, the focus should put more into tactics and strategies behind them – and even more to the core intentions that each operator truly is aiming for. The idea of everything is to get produced material along with immaterial elements into the profitable form for consumers to listen and watch.

People consume products of music for many purposes and reasons. More there are possibilities to enjoy music – more roaring each prospect 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 is a two times expense. The process should entitle the licensee to produce music into different formats or products for sale or to be streamed. Booking a studio, hiring the personnel or a pre-production is the physical part –  a ’courier service’ to record a specific amount of performances to be released in future. However, the production cannot be exploited without the relevant grants for its immaterial content – the composition and its recording.

The twist comes along with copyrights and other immaterial property rights. 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 licensing agreement. All commercial use of music requires a notification of copyrights in order to be exploited and used.  It is usually considered as royalties and other copyright compensations to the relevant rights-holders. It is natural that copyrights reduce the profit of every manufacturer and operator who wants to exploit the music in itself or as a part of their own commercial operations. For the industry this share is an important cash-flow-channel, a reason to produce music.

Footwork in turn, that non-profitable activity, is something to be addressed. Footwork is something that starts all. It is the way in. Everyone has heard about connecting and its meaning for career. This is one of the most misunderstood issues. It is – as usually associated – not ’connecting’ at all. Connections are the consequence. They happen while working together for the joint destination. It all starts from the little circle and the bubble grows bigger – at the same time the operative environment gets larger. There are no short cuts in building your network. Meeting people at the parties and in other similar events is not so meaningful as people often tend to think. The initial meaning of networking is to get know each other via actual work, activity or common business, not only in Person. While working in that stage, it is easier to develop and learn. This is what the word footwork basically means. The same applies to business. True connections are always earned. Usually the release is the moment that fulfills the said requirement.

If every accomplished session is taken as an acquired connection, each release is then counted as a resource. Discography or back-catalog is comparable to money. The 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 the rights are originally, or as a derivative, established.

The idea of the music business is to get that immaterial substance into the physical, profitable form. It is important to make a distinction between direct and indirect goals. Direct goals occur when money change hands. If you sell your album to your fan, you will receive the payment. If your recording gets streamed online, you will get royalty. All this happens due course. Direct goals are something you can more easily affect. You may convince your fans to buy your record. Or you can get people stream your music on Spotify. The end user has made a decision to listen to your music.

Indirect intentions are the other side of the matter. You now need to convince the gatekeepers first. If they like what they hear, they probably place your music available. For example, if some radio station decides to play your music, you will receive performance royalties.

It is the copyrights and related rights which have an elementary role in pricing. The physical production of the recording isn’t necessarily an expensive operation. The use of its commercial exploitation can be. If you get an offer to place your music with the next Marvel movie, you will probably receive a substantive compensation for it.

An artist’s total income or turnover is a combination collected from the different sources. Availability is dependent on how largely the artist and their production have been distributed and made available for the public. This is always a choice and affected by many things. Not all the artists want to be present everywhere, when with some artists, this is exactly their goal.

At its most authentic form music industry introduces itself when the artist is having a show in front of the audience.

Popular music is a phenomenon that breaks customary barriers whenever it is possible. The origin of a 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 the technology reduces the margins, distribution have become easier and cheaper. That progress is a double-edged sword. Some artists benefit of this and others don’t. The fact is 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 came 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 the industry have to answer – everyday.

The songwriters are the production units of this branch. They either by themselves or jointly bring forth the substance for the performers to record. Technically this production is provided by composers, lyricists, arrangers, producers and sound engineers. They create the facilities for the performing artist.

When the artists then make themselves known with the footwork and make their music available to the public, we are reaching the level of artistry in which the enjoyment of passive income is enabled. The turnover and its magnitude are not relevant here. The main goal is to get something released. What it ultimately generates, depends on the reception of the audience.

to be continued..

The idea of music business management can be read from this The Art of Music Business Management - For Artists & Managers book