Your Own Barcode

Musicians like to spend money on equipment: new instruments, new amps, or some new digital device they think will help them create their music more easily. Musicians do not like to spend money on anything to do with protecting, promoting, or selling their music. So, when I bring up the issue of investing in a barcode for your independent record release, I can already hear the a lot of whining about the huge investment they might have to make in getting a barcode.

It may cost you close to $1000 to get your own barcode. There I said it…now, some of you might remember that just a few years ago it cost $300 for the barcode. That is true, (ever heard of inflation?). But believe me, there was just as much whining back then as there is now.

However…you may not need to invest in your own barcode, for awhile anyway.

A few years ago Disc Makers became the first CD manufacturer to offer their clients a free barcode when they ordered a specific number of CDs. Today, several other pressing companies offer them as well.

What these companies do is apply to the Uniform Code Council for their own barcode number, and just change some relevant numbers in the codes ascribed to each barcode, so that the novice independent label or entrepreneurial musician putting out a limited number of records can use their barcode, and yet still be perceived as a legitimate label by distributors and stores who may stock music CDs,DVDs, tapes, and vinyl.

Remember, the manufacturing company is the registered owner of the first five digits of the barcode number, and each barcode assigned to one of their customers is a unique 10-digit number (with two additional check digits). Disk Makers, for example keeps a numeric log on their computer system, which automatically assigns a unique barcode number to each customer who wants one. Apparently, it is not possible to duplicate a number, so you can relax about that issue. Each customer is guaranteed a unique number. When a distributor or retailer scans the record's barcode number into their inventory they scan the whole barcode number, which really is a unique number, and can be handled by the store's inventory systems. The recording artist owns that unique barcode sequence for their release. No one else will be using it.

The main purpose of having a barcode is so the Neilson/Soundscan company, which tracks retail music sales with their trademarked system, can track your particular release properly. If a manufacturing plant offers a barcode to a customer, that customer's product may start tracking on Soundscan but, the default record label that shows up is Disc Makers. ( They bought the original code, remember? ) But again, relax, there is a Soundscan form available that the recording artist can fill out and submit which changes the barcode registration on that specific 10-digit number to the recording artist. The recording artist will be listed as a "sub-label," by Soundscan, but all their contact information will register with SoundScan. In case you are interested, you can download the relevant Soundscan form from http://www.discmakers.com, if you want to.

Now, having said all this, I feel taking advantage of this type of deal is a band-aid. In other words, if you are just releasing a few records, as a vanity project, or as a hobbyist, this may be a great, money saving deal, and you should do it. However, if you are trying to run a real record label, and have the intention of releasing many records over time, then you have to face the music, and invest some money in getting your own barcode.

You can only play at being a real record label for so long.

Manufactoring and Distribution Deals

M&D is short for manufacturing and distribution and refers to a kind of deal between a record label and a music distributor. Under an M&D deal, the distributor pays for the manufacturing of the album, and then recoups those costs from sales. These kinds of deals are getting harder and harder to find in the face of falling music sales and increased digital distribution, but from a record label's perspective, especially an indie label, an M&D deal can be a lifesaver.

Some pros of M&D deals for record labels:

* You can press records without any up front expense, meaning when the bank account is a little light, the business does not grind to a halt. Bridging this cashflow gap can be one of the biggest challenges facing a small label.

* You pay less for manufacturing. Because the distributor manufacturers albums in large quantities (on behalf of all the labels with which they have M&D deals), you can cash in on their preferential rates.

* Because the distributor has invested in your release, they will be motivated to get it into the stores and make some sales.

Of course, where there are pros, there are cons. Some things that labels should keep in mind about M&D deals:

* You don't get any money at all for your releases until the distributor has recouped the manufacturing costs, which could make your cashflow problem drag on.

* If your release schedule is fairly busy, you could end up in serious debt to the distributor, pushing that pay day even further away (especially if each release is not treated as a separate account).

* You could end up ceding some control over your releases to your distributor - for instance, they may object to the cost of printing that 16 page color booklet you want or that clear vinyl 10".

On balance, however, a carefully managed M&D deal can be like striking gold for an independent label.

Artist Quote of the Week

"If we do our job...Music's not black or white, it's green."

-Jim Caparro, PGD

EMusic Sales- Surpass 200 Million Downloads

eMusic, the world's largest digital retailer of independent music and the world's second-largest music service after iTunes, announced that it has sold more than 200 million downloads since establishing its current subscription model in November 2003. The total comprises music downloads sold in the U.S. and the E.U., where eMusic has been available in all 27 E.U. nations since September 2006. The company is now selling more than 7 million tracks a month across all territories. The 200 millionth track downloaded was "Fiery Crash" from Andrew Bird's Armchair Apocrypha (Fat Possum Records).

eMusic also reports that it has sold 40 million downloads since the launch of Amazon MP3 on September 25, 2007.

"As more choices emerge for consumers in the digital music space, eMusic continues to grow, attracting new customers and selling more music every day," said eMusic President and CEO David Pakman. "We've been ahead of the curve on DRM-free formats and price since day one, and we believe these numbers show that eMusic continues to sell more digital music than any other service apart from iTunes."

"Most importantly, we are doing a great job satisfying customers' needs, helping them discover music they otherwise would not have found, and giving them a reason to spend money on music," he added.

The company reached the 200 million download mark in less than a year and half since hitting 100 million downloads in December 2006 - less than half the time it took to reach 100 million downloads. These royalty-bearing downloads reflect how eMusic is helping independent labels gain market share by selling albums and songs that wouldn't have sold otherwise to customers interested in music outside of the mainstream.

eMusic offers the serious music fan a place to find the best online music in all genres, including indie rock, classical and jazz. With deep relationships with the world's top independent labels, guidance from the best music editorial experts and a passionate music community, eMusic caters to music fans aged 25+. It provides all tracks in the universally compatible MP3 format at prices as low as 33 cents (30p/ 43c) a track.

How Record Companies Make Money

Record companies make money by selling recordings. It is a high-risk business. According to the Recording Industry Association of America (RIAA), approximately 90% of the records that are released by major recording labels fail to make a profit.

Independent labels have to be more careful in their choices and in their allocation of expenses because they do not have the resources to cover many failures. However, they can make and promote records for far lower costs than major labels and be profitable with far fewer sales.

The budgets for making and selling recordings are tied to what labels estimate they will sell. Knowing how many recordings might be sold makes it possible to budget recording costs. Most profitable labels have histories of selling and promoting that enable them to estimate gross income.

Read the entire article @http://www.music-business-producer.com/record-companies-money.html

ASCAP Launches Bill Of Rights For Songwriters / Composers

To remind the public, members of the music industry and U.S. legislators of the central role and rights of those who conceive and create music, ASCAP (the American Society of Composers, Authors and Publishers) today officially launched a 'Bill of Rights for Songwriters and Composers.'

This awareness-building initiative centers around 10 core principles, including "We have the right to be compensated for the use of our creative works, and share in the revenues that they generate" and "We have the right to license our works and control the ways in which they are used." (See full text of the Bill below and at www.ascap.com/rights/billText.aspx)

These rights, all of which are already inherent in the act of music creation and protected by U.S. copyright law, are increasingly under threat as competing interests argue over the future of the business of music - and as growing numbers of individuals bypass payment altogether to illegally share music online.

"Given the many issues surrounding the music industry today, it can be all too easy to overlook the source of it all - individual songwriters, lyricists and composers," said ASCAP President and Chairman and Academy Award-winning lyricist, Marilyn Bergman. "That is why ASCAP has launched this Bill of Rights for Songwriters and Composers. Our goal is to remind lawmakers, the general public and music creators themselves of the rights that are inherent in their art. We simply cannot allow the original source of all music to be lost in the shuffle."

Developed by ASCAP to support and empower all those who create music, the 'Bill of Rights for Songwriters and Composers' debuted during ASCAP "I Create Music" Week at the 25th Annual Pop Music Awards held on April 9 and was also introduced to attendees of the third annual ASCAP "I Create Music" EXPO (April 10-12). In just a few days, more than 500 signatures were collected including: Lionel Richie, Stacy "Fergie" Ferguson, Justin Timberlake, Desmond Child, Jackson Browne, Steve Miller, Marilyn Bergman, Alan Bergman, Jerry Leiber, Mike Stoller, Chamillionaire, Keri Hilson, Johnta Austin and John Rzeznik.

These 500-plus signatures served as the kick-off to a grassroots campaign that, over the next few months, will collect signatures and support from both established and aspiring songwriters, lyricists and composers from all genres of musical compositions. Those who wish to add their support to the Bill can sign it electronically at www.ascap.com/rights.

As part of this initiative, ASCAP also wrote a perspective piece on the relevance and importance of music copyright protection, titled "Music Copyright in the Digital Age: A Position Paper" which may be viewed and downloaded from www.ascap.com/rights/billText.aspx

"The signatures that we collect on this Bill of Rights for Songwriters and Composers will be shared with key legislators in Washington, as well as numerous other leaders both inside and outside the music industry," said ASCAP CEO John A. LoFrumento. "Now is the time to ensure that everyone who has a stake in determining the future of music, both as an art and as an industry, recognizes the importance of protecting creators' rights."

Artist Quote of the Week

"The hardest thing in the world to do in this business is start a band nobody's heard of."

Tom Whalley, Interscope Records

Music Producer - Deal Points

A music producer or the producer’s "loan-out" corporation may sing a deal with artist, a production company, or a record company. The producer’s job is to help create and deliver quality master sound recordings. A music producer’s agreement may be for a single song (master), or may cover an entire album. Some of the following key terms may be addressed:

(1) Responsibilities: In your music producer’s agreement, make sure to clarify what is meant by "production." For example, does it include selecting the songs, selecting the instruments and vocals, and help in writing or arranging songs, etc.

(2) "All-in" Deal: An "all-in" record company agreement is in which the artists is responsible for hiring the producer. In this case, the producer will want the artist to be responsible for any "overages" in the recording budget. Try to limit your liability for overages to only those caused by you (the artists), and not caused by or within the control of the producer, engineer, or recording studio.

(3) Producer Royalties: Producers generally charge royalties ("points) which range from 2.5% to 3% of suggested list retail price (SLRP) of an album, depending on the producer’s reputation, skills, and track record. For beginning artists, you can usually get a new (unestablished) producer to charge from 1% to 2% of records sold. Hot (established) producers can charge from 2% to 4%, while superstar producers can demand from 5% to even 6%. A producer’s royalty rate may also be increased at specified sales plateaus (e.g., an increase of 3% to 5% after 500,000 record sold.)

(4) Record One Royalties: Unlike artists, producers are customarily paid on all records sold, without recoupment of recording costs. These are called "record one" royalties because they are paid from the first record that is sold. Try to strike this language, if you can. If you are unable able to avoid a "record one" clause, you may be able to negotiate a better deal in terms of when those record one royalties will be paid.

(5) Other Royalty Deductions: As an artist, you may be under contract with a record label whose recording agreement provides for various royalty deductions, exclusions, and limitations. Producer royalties are generally calculated on the same basis as the artist, including the same deductions for "packaging", "CDs", and "free goods." Moreover, producer royalties should also track the lower royalty rates paid to the artist in the same proportionate reduction (e.g., lower royalties from foreign, budget, and mid-price sales.).

(6) Producer Advances: Like artists, producers also get "advances." The amount of the advances varies (like the points), depending on the stature of the producer. New (unestablished) producers can get anywhere from free, to $2,000 - $3,500 per master (song). A mid-level producer can charge anywhere from $3,500 - $7,500 per master. And superstar producers can get up to $10,000 - $15,000 per master, and sometimes even higher.

(7) Masters: Take time to commit in writing what each others’ rights are vis-a-vis the finished product, i.e., the masters and CD’s. Obviously, ownership of the masters should be in the artist.

(8) First Right of Refusal: Sometimes a producer will want to do the first re-mix and/or recording of the masters that he/she helped to create. If you want total creative control over your masters, avoid this.

How To Write The Release Part II

There is a simple format for press releases and it’s easy to learn.

Start with an 8-1/2 x 11 sheet of paper. Many people suggest 1-1/2 spacing or double-spacing and leaving a minimum of a one inch white border on all sides of the paper. Use an easy to read font (type face). You can use any word processing program to build your press release.


Press releases follow the same similar format and are easily recognizable to writers and editors.

1) All Press releases start with a release date or FOR IMMEDIATE RELEASE.

2) Contact Information. Make sure that if you send out a press release that the phone number will be answered promptly during the period that the release is sent out. If there is interest in running the story, the writer or editor may want to contact you directly. Keep in mind that writers and editors typically work during the day and will contact you during their work hours.

3) The Headline. This should be typed in all capital letters and is the single most important item in your press release. If the headline sounds interesting, the reader will read further. If the headline is boring or has the “So-What?” factor, they will skip the article and will move on to something else. Take a look at some news sites and look at the articles that are there…get a feel for what sounds interesting and what sounds dull or boring. Draw the reader in. Remember the discussion that we had before with the three scenarios of headlines.

4) The Body of the Press Release. Just like the headline, the first paragraph needs to be attention getting. The press release should be concise, easy to understand and written in the third person reading as if someone else wrote the story. Use “he” or “she” instead of “I” The only exception to this is if there is a quote in the article. Maximum length should be two pages and preferably one page. The body starts with all of the important facts starting with the city, state and date descriptions: August 1, 2008 (Oakland, California)

Do not abbreviate the state and include the full date description. Be sure to use Who, What, When, Where, Why and How in your news release and be sure to share your news without any flowery or fluffy adjectives. Remember, it’s supposed to be news. You can use quotations to add more interest.

”We want to show our fans that responsibility for the earth starts with ourselves” says band leader Ryan Williams, “by going green and sharing profits with the Save the Earth foundation we are sending money and a message that will make a difference.”

5) At the end of the release summarize your story and add the “About Us” information that is necessary along with a link to your website.

6) End your press release with the symbols ### after your last lines of text. This lets the editor know they have successfully received the entire release

Sloveling Snocap, Walmart Madness

Snocap was an over-hyped tech play from the very beginning, primarily because of its association with the former Napster-era bad boy Shawn Fanning. It hinged its digital registry hopes on the mistiest of all vaporware that is/was Mashboxx, and never really found that marquee partner it needed to get established.

So it went to Plan B -- MyStores. Again, it made waves by becoming the vendor of choice for full-song downloads on MySpace. While it found the marquee partner it needed, this time the artists and labels didn't play ball. Dubbed "SnoScam" for the expensive per-track fees it charged via the service, Snocap failed to gain critical mass among the indie artists it was designed to attract.

None of this, however, means that Snocap's digital registry or download service weren't good ideas. They were just executed badly. Imeem was smart to pick up the service (at what is said to be bargain-basement prices compared to its $15 million-plus funding).

Imeem is an up-and-coming online music service that needs the functionality Snocap brings in order to effectively compete with MySpace Music. Specifically, imeem can use it to begin offering song downloads in addition to full-song streaming. That will give imeem a leg up over rival Last.fm, as well as prepare it for whatever MySpace has up its sleeve.

Now all imeem needs to do is get its label partners to start populating its site with music themselves, rather than waiting for users to do it for them, as well as tweak its playlisting interface a bit. Then we may start seeing some real competition in this space.


UNPLUGGED

So as part of its drive to go DRM-free, Wal-Mart had to stop selling music from Sony BMG and WMG because it hasn't yet finalized a deal with those labels to sell their catalog in an unprotected format. This seems particularly dunder-headed on several levels.

The move is an obvious negotiating ploy, and one that will fail miserably. Wal-Mart hopes that by blaming thick-headed labels it will somehow put public pressure on them to relent and offer a better deal. That hasn't worked in the past (EMI just broke off negotiations with the services that tried this exact tactic when it was shopping around for a DRM-free partner, and just struck a deal with Apple instead).

Does Wal-Mart think that either Sony BMG or WMG are going to lose sleep over not having their catalog on its digital music service? The store is the very definition of also-ran in the digital music space. If the whole thing closed down tomorrow the labels wouldn't even notice.

Yes, going DRM-free will likely help its prospects, but it would make much more sense to have a little patience and get all the deals necessary before making the switch. What happens now is that the few customers Wal-Mart had buying music online will now go elsewhere to get their music, because it no longer has a complete catalog. Then, when and if Wal-Mart finally gets the deals needed, it will have to spend heavily to re-acquire those customers (and don't hold your breath on it being successful in doing so, either).

Wal-Mart isn't the only former DRM-laden service trying to take advantage of this new age of freedom. Napster is working on doing the same for a la carte downloads. But that service is waiting for all the deals to get in place first, and has enlisted the help of heavyweight mobile partner AT&T to put pressure on the labels to strike workable deals.

Wal-Mart needs no such partner to apply similar pressure. It's only the dominate CD retailer in the country. Can anybody think how that might be leveraged? But Wal-Mart hasn't done anything to tie its digital music service with its physical one, not with its deal-making activities and most certainly not with its marketing.

This little squabble with the labels is a red herring. Wal-Mart's digital music woes go far deeper than whether or not it sells music or without DRM, and the onus lies with the company itself to turn things around.

Artist Quote of the Week

"Music is the mediator between the spiritual and the sensual life."

Ludwig van Beethoven

Success without a Record Label

Unsigned artists have a greater chance of success today than ever before. On one hand, composing and performing songs without the shadow of a struggling record label hanging overhead leaves musicians free to express themselves instinctively from the soul. On the other, it requires a lot of work behind the scenes, but can offer can offer greater rewards in return.

Brooklyn-based band Clap Your Hands Say Yeah broke through in 2005 as a result of the commotion started online among a community of blogs and music sites, such as Pitchfork Media. As a result, their self-financed, self-released and self-titled debut album has sold more than 200,000 copies. Band bassist Tyler Sargent explained to Paste magazine (12/6/06) why the band has remained unsigned, despite their success: "Because there are so many new avenues opening up these days...if you have good songs and the right relationships you can just totally bypass this whole label system. Which is just great for independent music...and this way, we get 80 percent, or at least a larger chunk of (our earnings). And it just makes more sense."

The truth is, the major label end of the music industry is in "turmoil", as noted by CBS Evening News (5/28/07), as "CD sales plummeted 20 percent the first three months of this year." In the same piece, Wilco's lead singer Jeff Tweedy stated that "Technology has evened the playing field. If the artist can gain more power over the situation--over the economics of the situation--why wouldn't they take it?"

While the internet has become the most vital and effective marketing tool, taking music to the streets has become the bread an butter for many acts. On a smaller scale, Heath & Jed have made a living off of the CD sales and tips they've received playing the streets and subways of New York City. In their Gothamist tour diary (8/14/06), they revealed: "We’ve sold over 10,000 CD’s this year. One fan at a time...We came and we conquered and we made some money to live another day as musicians, doing what we love."

Sony's Connect music site did a feature on unsigned Fullerton, CA band Cold War Kids who "have risen to the top of the hipster rock heap through their relentless touring." In the related interview, lead singer Nathan Willett talked about the process of peddling their homemade EPs during their non-stop tours: "Basically (the EPs) were available at our shows at best, and we ran out of them a lot, and it was kind of a bummer because we couldn't put the effort into being at home and getting more made. But it was cool because we had a limited amount of them and people seemed to want them, and we were surprised that people wanted them as much as they did."

There are no rules to follow when it comes to unsigned bands promoting their music. From utilizing their fan base to promote local live shows, new releases and merchandise, to reaching new fans outside via online communities like Facebook and social music sites such as Echoboost.com, the extra effort will only aid them along the way. As long as they have quality songs, the talent to perform them live and a dedicated work ethic to spread the music, nothing can stand in their way.

Saving on Taxes

One easy way to reduce your tax obligation is for your band to take, or declre, every permissible deduction. The IRS lets musicians deduct ordinary and necessary business expenses. Deducting these expenses from taxable income will reduce the net amount that is subject to taxes. Despite this opportunity to save money on taxes, IRS examiners routinely find that musicians fail to claim expenses. In other words, musicians often pay more taxes than necessary because they don't deduct their costs.

A deduction is an expense or the value of an item that you can subtract from your gross income to determine your taxable income-that is the amount you earn that is subject to taxation. The more deductions you have, the less income tax you pay. Let's say your band earned 10,000 in one year. If your band deducted its expenses of $10,000 that would wipe out all your income, so you would owe no taxes. This simple principle- reducing taxable income through deductions - is a mantra of most businesses, and you should use it in your band's business as well.

Reggaeton Business

Despite what critics said when reggaetón first came on the scene, it proved to be a force to be reckoned with as a genre of Latin music. In 2004 and 2005, reggaetón artists and producers established that the genre had the ability to appeal to a diverse audience. Now, with sales cooling and failing to meet expectations, the industry is trying to find ways to revitalize the genre and ensure that it will continue to be a viable source of entertainment.

But there are a few problems that have plagued reggaetón since the beginning and more that have surfaced because of today's technology.

On the business side, many managers and artists suffered from a lack of experience. In the past, numerous deals based on handshakes went wrong, and signed business contracts were one-sided and unfair. As a result, in recent years there have been lawsuits brought on by artists whose managers have not paid them for all their work, and phantom songwriters and background singers who never received recognition or pay for the productions that they have been a part of.

Promoters complain that overall, artists have quadrupled the price of what a concert is actually worth in places like the Midwest. And many artists and managers forgot that when expanding the music to new countries…



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Artist Quote of the Week

"You've gotta be business savvy really, or elso you get the piss taken out of you."
Melanie B, Spice Girls

Digital Business For EMI

The appointment of former Google chief information officer Douglas Merrill to the position of president of EMI's digital business is certainly one of the more innovative executive moves made by a major label in recent memory.

Merrill -- an outsider to the music industry -- comes from a company known for championing experimentation and innovation, for taking a customer-centric approach to all initiatives, and for making information universally accessible in any from. But don't let Merrill's tech-geek background fool you, he's a music nut as well -- as evidenced by an impromptu jam he gave in the office of EMI chief Guy Hands.

Among the row of gold and platinum records on the wall in Hands' office is one of Merrill's favorite bands -- the Sex Pistols. Without missing a beat, the long-locked Merrill busted out his own rendition of the punk pioneers' "EMI" as Hands looked on, during their first meeting. There's no telling whether that performance played any role in his landing the job, but what's clear is his passion for music.

"Music has been a huge part of my life since I was a kid. I think back on the memories of my life and I can remember the songs that were playing at the time. I hear a song on the radio and it will remind me of them. I'm so excited to being a part of the industry trying to figure out what the next business model for it is.


Read the entire article@
http://www.billboard.biz/bbbiz/content_display/industry/e3ia7d764a8e48a14e6622ecfce297f5902

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