Allen's Blog

Let's talk about the most important factor within the music business MONEY.

There are several ways to make a decent living within this industry and I want to bring you up to speed with only a few.

RECORDS:

The majority of my readers figure that if you sell millions of records you will become extremely wealthy. Well if you don’t OWN the company that manufactures, markets, sells and collects monies from records you will only receive a small portion or percentage of the sales. Major label recording artists normally make between 10% and 18% of the retail sale price on every CD of theirs that is sold. From this percentage any recoupments most be deducted. So if you sell $1,000,000 worth of product your share is $100,000. From your share has to be deducted that $50,000 advance you took, the $60,000 paid to the promotion company to promote your CD, the $65,000 spent on your 30 city promotional tour, the $30,000 owed your producer, the $10,000 owed to your manager plus packaging deductions, attorney’s fees and anything else the label has “slipped” into your contract.

REALITY ONE – From the first Million dollars made you owe $115,000 after your $100,000 has been recouped.

Doesn't seem like a very profitable business at this point does it? Especially when you take into consideration that most new artist like to buy the accoutrements having a HIT record requires. Things like jewelry, clothes, cars and occasionally houses. Yesterday I was on a video shoot for a new artist and his management team “borrowed” $500,000 worth of Cartier jewelry. I remarked that the ice and gold on his body could probably buy 40 acres and a tractor with enough money left over to build a $300,000 house. It’s REAL EASY to be a broke new artist in the record industry.

But let's discuss a few ways to make money.

TOURING:

This is the quickest way to put cash into your account when your record is HOT and when it is not. Developing a strong stage show and keeping your act small and tight, not only will allow you to tour continuously but also allow you the freedom to build your fan base, promote your product and sell MERCHANDISE. Developing a strong fan base will keep you touring even after your video has been dropped, your single is not getting airplay and your record label has moved on to the next hottest act.

REALITY TWO - A small team will always make more money than the act that has an entourage. Besides the act on stage one road manager is sufficient to not only handle the financial particulars, act’s itinerary and sound requirements, but to also sell the acts merchandise.

MERCHANDISE:

Here is where a little investment can go a long way. There are several different types of goods that always sell at large and small venues alike. Color photos autographed by the act are the leading sellers. If you can have someone available to take photos on the spot with your fans you will make a lasting impression and more money. T-shirts are good however unless you have a unique logo or T-shirt design you may windup giving your shirts away to record store sales people. When working large venues almost anything that glows in the dark and makes noise will sell. Whistles, blowers, horns, clappers, etc just keep it inexpensive and cute.

REALITY THREE - There will be times when your merchandise sales will be larger than your show payment. Be prepared to budget your money wisely.

On the next writing I will talk about:

Endorsements

Publishing Revenues

Video / DVD sales