I’ve noticed that many artists need more guidance then they believe they do. Once, a client asked for the price of a Sony meeting. When paying for a label meeting, it’s often an expensive price for a 30 minute consultation with a 1% chance of being signed. Being signed for a distribution deal is different from a recording contract. One is a way in which to release music but offers no money. Though a recording contract may offer a signing bonus, it can also end up being an incredibly large loan possibly making you a prisoner.
Does that mean you shouldn’t sign? No. It means you should consider all options thoroughly. The label is going to tell you the same thing they tell those who’ve been in the game for a while. Monetize yourself ASAP and invest in marketing.
- 1000 fans x $10 iTunes album = $10K.
- 1000 fans x $25 t-shirt for merch = $25,000.
- 1000 fans x $20 tour ticket = $20,000 + streaming royalties + publishing + YouTube revenue = $60-$70K (roughly).
This kind of income could easily suffice as an annual salary. In order to convert social media followers to fans, you must engage with them. Once you’re set up with proper monetization you will become profitable. Don’t just take my word for it, take the word of some industry moguls I’ve had the pleasure of speaking with.
Kevin Oboh, Rxdical Records CMO, says:
“Monetization is everything, it changed the landscape of music. Before there wasn’t a proper way to gauge your audience and it was impossible to know how many people were listening to your music at once. There wasn’t a way to calculate how many people were streaming your music and with monetization you’re able to gather that data. It changed music forever. Artists who are smart about their craft and brand utilize monetization and are very successful in doing so. If you have a good amount of followers that listen to your music you can live off monetization alone. First, get a strong management team that could help fund your career and put you in certain positions to help you excel in your music career. Also look into getting a lawyer too.
What do you think about these new artists who don’t understand their money? Unfortunately, if they’re only thinking about the now, it works for them, if their thinking about later in life being an artist at 50 or 60, it can get very scary, if they don’t have any ownership, for the now it works, for the future when they’re not getting the show money any more the artist will think twice about signing. Invest your money and time in taking money management courses. I can’t blame these kids or younger generation who get the money and blow it because they never had it – you get a certain rush when you get that money. Best thing you can do is get a financial advisor or counselor and take a money management course. For us young black men, we don’t have as much opportunities to be successful, to be wealthy, when we do get that time without proper advising and people properly handling our finances, it can be mismanaged, you want to have proper counseling and people around you, who have your best interests in mind. invest your time into saving as much as possible.” – Kevin Oboh Co Founder of Rxdical Records & CEO of Vintage Stereon
Joseph Adeife, Owner of Rxdical Records, explains:
“I think the educated artist is the wave of the future, it’s what most artists need to do now if they want to be successful. To retain or align yourself with a micro-label or quote unquote independent label is the new business structure; the industry is molding itself into for artist to take their careers to the next level and includes the benefit of protection. What do I mean? Right now, if you want to be a working actor or actress you’ll need to have an agent procuring work for you but it’ll be in the best interest of the respective agency their working for and your manager is the one responsible for acting in the best interests of your career and future. Likewise, a micro-label provides protection for the artist by acting in the best interests of their overall career, sustainability, and development, which is in contrast to the major label’s interest in making a return on their investment.
These competing interests are vastly different and it’s extremely important for an artist to understand its distinctions and navigate accordingly. So much is changing in this digital age, young kids are lost and just releasing music – there’s no foundation. It seems like they’re just shooting in the dark, hoping a piece of their content goes viral, which is like playing the lottery. I, myself, have been in the entertainment industry, specifically tv and film, since 2010 and I haven’t seen such an awakening of reform in any industry like this so it’s exciting to see it unfold. The Music Modernization Act is evidence of such reform so protecting the interests of artists and advising them on the importance of intellectual property rights, ownership, investments, and financial literacy is our focus and practice as a label and I’m actually glad that your putting out this article because it’s something the youth can understand and it will prove to be a great benefit in the future.” – Joseph Adeife CEO of Rxdical Records
Vince Valholla, Founder of Valholla Entertainment, is no stranger to the game. Not only is he the host of The CRIB on Dash Radio but his record label was named best in Miami in 2017 by Miami News Times newspaper. He talks about his experience in the business.
“I started my label in 2005. We were doing it like there was a focus on physical. Because like online there wasn’t really around the time when we started really putting out records ‘06-’07 it was about like it was a heavy influence on mixtapes, physical copies of projects was the way to go back then, our goal was to actually sell units, pretty much out the trunk like how Master P would do, and then around 2010 is when we started actually selling music online. We had commercial releases online, every time, we kind of always looked at the industry as if we were a major label. We looked at how are artists making money or labels making money right now, during that time physically and it was moving towards iTunes and so forth and that’s when we moved our strategy to iTunes, around 2015 is when we really got a real grasp of selling units. In 2015 we released an album from Kirby Maurier, doing the most, it was that year one of the highest selling independent R&B albums in the south Atlantic regions. We really got a hold of how to sell units digitally, then streaming came, and we had to kind of figure that part out. Now were in a streaming phase, to answer your question, monetization has to start on the music end with streaming.
Streaming is how 75% of the revenue that’s coming in from music. That tells you that you have to make sure you have a strategy to do, and many people focus on Spotify. Looking by how many streams they get, if you can get more streams on Tidal and Apple Music or Spotify you’ll notice you’ll get a little more because Spotify is less, monetization focus on artists. My suggestion for artists in this day and time in 2019, focus where your fans are. You might have more streams on Spotify but your making just enough on Apple Music with less streams. My goal would be too get fans on platforms that pay more, like Apple Music, but of course still focusing on Spotify. Then obviously, merchandise. Last year we put out merchandise with particular artists specifically for an artist we manage, [SIN], he put out an exclusive hoodie, we did a limited edition of 100 units, it sold really well. Merchandise, especially limited runs, is an opportunity for some extra money that can be used to marketing. Not only can this be used to pay for studio time or marketing, but can be used to pay bills. For artists, they need to start to see how their money is coming in through streaming & limited runs, then they’ll start to see where they should have a focus on, and then of course shows. Especially for new artists coming out, they may not make crazy money out the gate, they might just break even, if that. When it comes to touring, if you’re a new artist or not a well-known artist, your probably either self-funding or on someone else’s tour, you either breaking even or losing out on money by going out on tour, so selling merchandise while your on the road gives you the possibility to make a profit on the road.
I’m actually starting an app supposed to launch sometime at the end of this year and it’s going to help connect artists and fans, I do obviously want to mention licensing, like getting music licensed for a tv show. One of my artists recently even got a song licensed on a tv show. I manage a production team and also artist and we have our music in circulation to get through to tv shows and video games. As far as getting your music out there in tv shows and movies, a lot of those situations, your song gets picked up they might just pay a one- time fee or royalties. You might get 10k or 5k, whatever the case may be. When we’re talking about tv, you kind of have to make a certain type of music, but of course that’s another way, licensing is definitely one of the big ways of how you can get some small bags and big bags. In some cases you don’t have a choice between royalty % or flat fee, if this is your first placement and their only offering a flat fee, take it. The actual revenue that the song could make by being on tv could outweigh that $5,000 amount, the main thing here is exposure. Sometimes monetization can actually be free exposure. Sometimes you might actually have to do certain things that don’t provide money but provide a boost in streams, like articles, anything that could actually lead to exposure and get them to a wider audience, sometimes it’s not just really about how much money they can make right now, the artists and the teams have to be a little bit of visionaries to see things that can happen after the fact instead of looking at one thing, in my career a lot of things I did laid the foundation to other things happening.
Perfect example Kirby Maurier, when we really wanted to get something nominated for a Grammy, it was a far reach. We got involved with the recording academy and did the submission process however, we didn’t get nominated When the Grammys were doing the Grammy amplifier they picked Kirby Maurier out of 10 thousand artists and she was on tour. This was a learning moment, if I never started the process of nomination that tour never would’ve started. You just have to put yourself out there so the dots start connecting. Monetization isn’t always up front, it’s sometimes on the backend. People have to kind of think long term, the more situations you think long term, the more ways you provide your career to grow. There’s a lot of people that are in it for the quick buck, they want it right this second, if you really take your career to the level of thinking long term, your going to have a long lasting career, your thinking of tomorrow. Baby steps would be for every artist to figure out how streaming revenue works and they should learn as much as they can about the business starting off, the more you know, the less of an opportunity someone has to finesse you, there’s people thats been in this industry for decades and they don’t know everything because things are always coming out. I’ve been in this game for decades and I still don’t know everything.” – Vince Valholla Founder of Valholla Entertainment
When asking Jennifer Desire, the Founder of Fusion Showcase, what are some of the most common mistakes artists make, she replied, “Not making money from their shows, you can receive royalties when you perform at shows. Not bringing merch to shows to sale; you may not make a lot of money but you will make something.
Focusing on everything but gaining fans, having genuine fans is what matters, you can’t make money without fans who wants to buy your merch, music, and concert tickets.
Not learning the business side to the music industry, as much as you want to have a team, learning the basic of running a business will help you make a lot of money and save a lot of money.” – Jennifer Desire Founder of Fusion Showcase (#1 Artist Showcase in Orlando)