3 Questions to Ask Before Going on Tour

You have heard it several times already: the music industry is not the same as it was 30, 20 and even 10 years ago! Today, you have to be a successful indie artist, before one of the Big Three record labels even consider signing you. A great way to promote your music and yourself, and gain more fans is to go on tour. Here are 3 questions to considers before going on tour:

What I learned from the experts

On the last post I learned several key factors for when I create my business plan. From the experts that I researched, I learned the importance of demonstrating that my team and I are the best to run this type of business. This is for when problems arise, the investor will feel confident that my team and I can handle it. Another key fact I learned was demonstrating the competitive advantage our business has in the market and industry. This includes knowing my business’s barriers to entry, and having a realistic view on raising capital.

            I plan to incorporate these useful tips into my plan by making sure I have industry experts on my team. Having experienced people from the industry on my team that investors can trust will clear them from any doubts they may have. Problems are definitely to be expected when starting a business, but having the right people to manage, execute and solve the problems of a business gives an additional strength to any business. Also doing a thorough analysis on the market and industry is something else I plan to incorporate into my business plan. By doing this, I can forecasts problems as well as the financials of my plan.

            The section of my plan that I consider most important for the investor to read is the Management section. I want to make the investor feel confident with the team’s ability and potential to run such a business. Other sections that are important in the business plan are the Market Analysis and Industry Analysis. When creating a business plan, you can never research enough. Showing the investor that I am knowledgeable on these sections will prove that my team and I know what we’re doing. The advice from experts to create the business plan will help me a lot next month.

Experts Views on the Value of Business Plans

The first expert is Akira Hirai from Orange County, California. He is founder and CEO of Cayenne Consulting. He has over 20 years of experience entrepreneurship, management, business planning, financial analysis, software engineering, operations, and decision analysis (Caycon, 2013).

In his company’s blog, Hot Sauce! He writes the important questions that every business plan must answer. One questions that stood out to me was, “Why are you the best team to do this?” (Hirai, 2012). This is a very important question to answer in your business plan because you have to convince the investor that you are capable of handling the problems that will arise once the business starts making money. As Akira Hirai states, you have to make the investor trust in your team as well as your business before they give you their money (Hirai, 2012).

The next expert is Ellen Sandles, an executive director and founder of Tri-State private investors network, a private investor membership organization that serves the interests of private investors who wish to invest in early-stage opportunities. Her specialties include angel investing, venture capital, private equity and business plan analysis (LinkedIn, 2013).

            In her website, Angel Investing Funding, she gives ten tips to appeal to investors. One point she makes in the list is the importance of emphasizing your competitive advantage in your business plan. It is important to write a well “barriers to entry” for the investor. Another point she makes is having industry experience, either yourself or someone on your team. Showing that you know the industry, and have relevant experience in your plan is valuable to investors. Finally, another one of her tips is “You should recognize that raising capital takes time” (Angel Investing Funding, 2013). Raising money usually takes longer than you think.  Answering and handling questions objectively in your business plan is important to investors. The entire list is valuable so please look for the link in references, and check it out (Angel Investing Funding, 2013).

References:

Angel Investing Funding. 2013. Retrieved from: http://www.angelinvestorfunding.com

Angel Investing Funding. Ten Tips to Appeal to Angel Investors. 2013. Retrieved from: http://www.angelinvestorfunding.com/tentips.htm

Caycon. Consultant Akira Hirai. 2013. Retrieved from: http://www.caycon.com/consultant-Akira-Hirai.php

Hirai, A. Hot Sauce! Blog. Ten Questions Every Business Plan Must Answer. Aug 1, 2012. Retrieved from: http://www.caycon.com/blog/page/3/

LinkedIn. Sandles Ellen. 2013http://www.linkedin.com/in/sandlesellen

The BIG THREE in the Music Industry

The Big Three often refers to the 3 major record labels in the music industry. They are Universal, Sony and Warner. In the 1980s, the Big Six ruled the industry, and little by little they started consolidating. Is the consolidation of the record labels good for the music industry? Or are we just making way for an even bigger problem in the future of music?

History

The BIG SIX

In 1980’s the Big Six consisted of EMI, CBS, BMG, PolyGram, WEA, and MCA. There were more smaller and significant labels at the time, but these were the top dogs of the music industry. In this decade, MTV began streaming video clips, and the CD became firmly established. Michael Jackson’s “Thriller” album was also released during this time, sold 40 million copies world wide, and became the most successful product in the history of recorded sound. Towards the end of the 80s, Sony bought CBS records, and named it Sony Music (MacQuarrie, 2000).

The BIG FIVE

The Big Six dominated the music industry until 1999, when PolyGram defunct, and as a result merged with MCA to form Universal Music Group, which is the label with the most control as of now in the industry. During the Big Five era, we were introduced to the mp3 format, and music piracy became a “normal” activity among everyday people (Garrit, 2003).

The BIG FOUR

As music piracy was at an all time high, thanks to programs such as Napster, and Limewire, the record labels struggled for solutions and legal actions. Amidst of this music economics crisis, in 2004 Sony Music acquired BMG, and the Big Five were suddenly the Big Four. This is when the music industry started adopting business strategies. Less and less were record labels signing artists they believed in; they simply couldn’t afford it. Music executives only invested expensive deals to artists who could guarantee a return of investment (Garrity, 2003).

And then there were three. Earlier this year, two major record labels consolidated, again. EMI was bought by Universal Music Group in September, giving more power to the record labels that are left. These major music company now monopolize the music industry. Right now, they are all figuring out an economic model to earn higher profits.  What’s the pros and cons of the Big Three? Are these business decisions a temporary save, or is it going to be just the Big Three for a while?  What do you see in the future of the music industry?

This is open for discussion so please comment. We will analyze the Big Three more in depth next month.

Garrity, B., & Christman, E. (2003). Big Five On Way To Three. (Cover story). Billboard, 115(46), 3-85.

MacQuarrie, R. & et al. (2000) Music CD Industry. Page is: http://www.soc.duke.edu/~s142tm01/history.html

The Impact of the Digital Landscape in the Music Industry

It isn’t breaking news to hear how drastic of an impact the Internet has been to music industry, much less to the world. As Jay Cooper, a music lawyer, puts it, “We’re in the biggest sea change ever in the music business”. It is important to understand, not only know of, the digital age and its effects in the music industry.

After Napster, the decline on CD purchase took a plunge. Less and less music videos were being played on MTV, the “Music” television. Labels, artists, songwriters, producers, engineers, etc. were no longer being paid, but the demand of music was, and still is, at an all time high. Everyone is watching videos, listening to music and downloading songs for free. It is easier and cheaper to obtain, which is why music is consumed now more than ever. The following is a chart from Digital Music News. Click on the image and watch its animated version.

When referring to music as a business, the digital age has permitted unrestricted access to the product. If music is being downloaded without paying a dime, how do the professionals and artists in the music industry get paid? When asked what was the biggest challenge right now in the music industry, Jay Cooper responded that the entire industry is concerned with the economics portion. Labels and companies are desperately trying to create an economic model to allow artists to survive.

Jay Cooper went on to describe the possibilities of the “ultimate economic model”. Would music be paid for per stream? Download? A possible combination of the two? Another idea he mentioned was a monthly subscription, something similar to television. The fee for music will most likely be discreet, but there will be one.

We will see in a near future if Jay Cooper’s ideas for the “ultimate economic model” come to realization, or if something else will be innovated. This is the digital age, and it has effected the music industry in major ways besides economical. There is much more to discuss such as the discouragement of technological sector in the music industry, as well as liabilities such as copyright laws. The digital landscape is massive, and this post barely scratches the surface.

What's an indie artist?

In today’s music industry, an indie artist has taken a more relevant role than ever before. Major record labels won’t even consider signing an artist if they have not proven some sort of success as an indie artist. So what exactly is an indie artist?

5 Key People You Need in Your Music Team

If you want a long-term career in the music industry as an artist, you have to have a team; there’s no exception to this. Whether your goal as a musician is to be a local artist, achieve indie success, or get signed by a major label, having a music team will help you attain your goals. A music team can be made up of as many people as you like. George Howard, founder of Slow River Records, gives great suggestions about including a web developer, tour manager, and song pluggers in your own music management team. Nonetheless, with out these 5 key people in your team, you will not take your career in the music industry to the next level:

Informative Podcasts about Music Law

Whether you are a professional or an artist in the music industry, it is important to be well informed about the law and to have an attorney. The following are the titles, URLs, and reviews of podcasts related to legal liabilities in business:

The State of the Music Industry

Legal Disputes in the Music Industry

In the music industry, it is fairly common to hear about or know someone who has entered into a legal dispute. Whether it is about distribution rights, a copyright claim or a contract, they are all matters that can greatly delay if not end your career in the industry. This post provides 3 articles that provide examples of popular artists and the lawsuits they've recently dealt with. I feel that as inspiring artists, bands and music industry professionals, we can all learn from these court claims.