Episode #116 – Get Confident about the Business of Music

So today let’s start the process of getting really confident about the business of music.

All of us get into music because of our passion for the actual music, and what it has brought to us and what it brings to the world. And essentially we want to create it so we can bring more of that to the world, and we can have that kind of impact in the world. But the problem is that you soon figure out that you are spending more time on admin and business than you ever thought you would, and way more time on that then the music. You have to figure out how to get as passionate about the admin and the business, and the business of music, as you are of the music itself.  Otherwise the incredible music that you make will never have the impact that you want it to, because it just won’t be heard, it won’t reach the people that you need it to reach.

I’m sure you’ve heard this before but, talent is not only the defining factor of whether you are going to be successful in the music business or not. Understanding the business is.   Understanding how you fit into that business, how your customers, your fans find you, how to access them and understanding yourself as an artist is all a really big part of that journey.

So, I think there is still an underlying feeling in the music business, that the business portion of it is so mysterious. And that you are either on the outside looking in and not having the information or the connections or someone, a team who understands it. Or if you’re really lucky, if you’re one of the chosen ones, someone will bring you in and show you around. And that may have been true back when you needed to be signed to a label to be successful, but you don’t need that today. And those stories still exist of course and we hear them all the time, they’re the ones that you hear about in the media, but there are indie artists who get to understand the business. They get to understand how they can exist in the business who are making an abundant living on their own terms. And they are kicking butt in this industry my friends right now. So if you want to be a part of that, I’m gonna show you how to bring yourself in. I’m going to bring you in and show you around. And I want you to get comfortable and confident that you understand how the music business works.

In order to do that today I’m just giving you the top 3 things, just the top 3 things that I think you need to start breaking down and understanding the business at a really foundational level.

The first thing is to…

#1 – Understand How to Build Your Fan Base

Now these are your paying customers, so let’s call them customers if you want to. I think fan base is a little bit confusing for some people, I’m not talking about to 10,000 followers you have on twitter or on tik tok. I’m talking about understanding why people will become your paying customers. Why they will share your music, buy your music, stream your music, talk to their friends about your music and get really invested in you as a person, as a band, as an act or as an image of how they see themselves.

• What makes your music different and worthy of somebody’s time and money? That is really what you have to figure out?
• Are you capturing these people in a place where you won’t lose touch with them. Where you can engage with them that is not just a following online.
• Who are they? Who is buying from you? Are you actually tracking who is buying from you so you can ask them if they want to buy again, or if they want to ask other people to buy.

Understanding your paying customers is the number one thing that everybody in this industry needs to do. 

The second thing is to understand the…

#2 – Revenue Streams 

In my opinion there are only 8 income streams that cover everything that you can imagine  in the music business. And I’m going to go over all of them in detail in an upcoming 5 day crash course that I”m going to be doing about the music business. So if want in on that course, come join my FB group it’s Meant4Music with Jo Janzen on facebook, you can look for it. The link will be here in the notes for it as well.  I’ll be notifying you when that is going to start so that you can really dig deep into all of these things plus more and all of these 8 income streams. 

The first 4 are what most people understand, gravitate towards and begin to make money on in the music business, and they are…

1. Live Events – And I’m talking about everything from performances, to speaking, to appearances, to virtual events, which have become a big part of our life in the last 12 months.The second thing is..

2. Merchandise & Products – Going back for as far as I can remember bands have had, t-shirts and hats, and the actual music product itself. Third thing is…

3. Royalties & licensing – I still think that there is a huge misunderstanding of how royalties and licensing works, but most people understand that they need to be registered and be getting royalties from places. So I’m sure most of you know that is an income stream, especially if you’re in the songwriting business. But there are a lot of great royalties for being the artist and the person who owns the master now as well. And the forth one is…

4. Sponsors & Endorsements – So I think these first four are really something that everyone gets and understand and you may have dabbled in. Of course you’ve probably played live and been paid for it, you’ve sold your music and merchandise. You’ve probably signed up for royalties and if you’ve gone to radio and you have streaming or is somebody had licensed music from you. And you may have even reached out to somebody for an endorsement or a sponsorship to help you get along with an event, or as a band or an artist. But there are 4 more that really get things hopping, and I’ve going to be really diving into these in my 5 day crash course. The first one is…

5. Partnerships & Collaborations – These four, by the way, are four that you can really start digging into once you have built a decent audience. So if you don’t get the #1 – Understanding your customers, your audience, your fanbase, these next 4 are going  to be really hard to implement. If you do and you start to build an audience you can then partner and collaborate with other people, who want to be partnered and collaborating with you, because you have an audience that makes sense for them. There is…

6. Recurring Revenue – Once you have a decent fan club or audience, you have super fans, you can start memberships, you can start subscriptions, you can start selling at a level where it’s a recurring income from your fanbase. The third one is…

7. Affiliates – Now this is for any business, by the way, these actually cover most online marketing business. So think of yourself in the music business as not only as artist but kind of an online marketer, that’s kind of where your thinking needs to go. Affiliates, so imagine that no only do you have you and super fans out there telling people about your music. But you have a whole other group of people, who are selling your products and services for you. Your music, your merchandise, whatever you have on the market, they are out there helping you sell it they are called your affiliates and you can start those types of programs once you have a bit of an audience. And the fourth one in the second set, so the 8th one I guess is…

8. Other People’s Products – So like affiliates, but opposite, because you have an audience, because you have a fanbase, because you have people following you who are your superfans, you have the ability to sell other people’s products that makes sense to your fan base and to receive a commission for it, that’s called other people’s products. Now it’s not as hard as you think it’s going to be but it all does begin with building your fanbase.

The third tip that I want to give you that I think is super important, from here on out is that you have a….

#3 – Legal Business Entity

If you want to be taken seriously as a music business and as somebody who’s really not just hobbying and being a hobbyist. Get yourself a legal entity. Whether that be a Limited Liability partnership or a Corporation it doesn’t matter. I can go over all of those details with you if you want to know. But you have got to get into the thought process that you are a legal entity, you are a business. It’s not different to any other business out there it’s just that your activities pertain to the music business and taxes are are not terrible my friends, especially when you’re first starting out. There are actual tax incentives that are given when you have a legal business entity, especially in the first 7 years when you’re not and if you’re not making  alot of money, you can actually be getting back the taxes and those types of things. You can actually be writing off anything against your income if it’s on a personal business. If your on a corporation you’re going to pay less taxes so it’s not as confusing as it sounds. Get yourself somebody who understands it, get in front of an accountant or a lawyer and get yourself a legal business entity and start tracking your income. Know your numbers, know what each project costs you, know what your songs cost, and what your merchandise costs you because then when you know you can increase any profit margin or you can decrease the expenses that go along with it. A legal business entity is absolutely required. A lot of people when I first coach them tell me that they want to be taken seriously, that they want people to see them as a serious artist. They want to be validated that way. One step towards doing that is to be an actual valid business, if you’re not a valid business it’s difficult for anybody to take you seriously.

So those are the basics, there are so many more but here’s the kicker. If you do these things, if you get a handle on the three things that I’ve given you here today and start learning about it and start diving into a little bit more, you are well on your way to making a decent living in the music business.

Imagine feeling about the business you are in, very confident. Imagine feeling like you actually like the business and you want to be a part of it and you want to get up everyday, and you want to figure out the next step. Understanding brings confidence! And that is why it’s so important to gain a really great understanding of the business that you’re in. 

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