Money Matters in the Music Business - PART 1

Contribution by Jonathan Shaw
Things have changed an incredible amount in the music industries, but many perceptions of the industries have not. Being an artist that hit it big was how it was done, and by getting on to radio and television a deluge of record sales would result. It was also not easy to record music, so if you did have an album chances were that you would get some sort of feedback and airplay through media.

recording industry graphNew artists and their album ambitions
Today, anyone can record but a good track still takes a lot of time, effort and money to make. Albums are an expensive, but not out of reach luxury, for those who are willing to make the financial leap of faith. Given that many new artists are making their own choices about their creative output, this leaves room for bad marketing decisions. Whereas in the ‘80s and ‘90s many new artists were under the supervision of Artist and Repertoire people (the team who picked and developed new talent at a label) and experienced record producers, new artists are now making their own artistic and business decisions when it comes to product development. By putting their own investment into making a record, new independent artists face a deluge of problems when it comes to a single release, album consistency, technical standards, performance proficiency, and variation in style, and so on. And when it’s all done, marketing seems to be a side-line that, when a setback happens like radio turning down a single, grinds to a halt as the artist loses self-confidence in their work.

Students will quote me for saying that the cost of an album and music video is only one third of your total budget and effort, the other two thirds go to marketing once the record is complete. This means that you have to spend twice as much money on marketing as you would on developing music content. This marketing budget should be focussed on things with tangible returns such as photographs, artwork, website design, social media maintenance and advertising. You also need to factor in networking/conferencing, mailing out CDs (as some broadcasters insist on this still), gig expenses and so much more you didn’t think about while in the bliss of the studio. For many broadcasters, the appearance of the whole package (the artists management team, their image, style and investment value) is often a prelude to even playing the music and making a decision to play the music. The budget doesn’t include payola – the insidious practice of paying radio stations to play your music! Payola only ingrains the expectation of certain radio people to get paid to play new music and brings the whole record business down. If I had to guess at a statistics, based on airplay stats I have seen and an analysis of local radio music content, about 60% of music submitted to radio is turned down on the first submission and 75% on the second. So your chances of getting airplay is slim but not impossible, the irony is that you have to drive other areas while monitoring and probing radio.

Jonathan G Shaw
Jonathan is a studio owner, record producer, music business analyst, lecturer, author and musician.
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