Funding Your Music

We all know the saying, it takes money to make money, and sometimes it is true. Every business has start up costs, be it for overhead costs such as rent, insurance, or inventory. A band has the same hurdles to overcome, merchandise, instruments and parts, and travel expenses. For most of it the band pools together money or saves up money from gigs, but what about bigger purchases. What if your band was offered an opening slot on a world tour but pay was not given till after the first show...overseas. Or your band wants to record a ten track album at Ocean Way Studios in Nashville, but you only saved up enough for a bathroom recording by your wanna be engineer friend. These are times when you may want to look for an investor.

Investors come in many types with much small print to understand but when it comes down to it, besides a family or friend, they will require a business plan to even consider loaning you money.  The Music Industry is a very risky business for an investor and a business plan lays out all the elements of your band.  From your mission statement to your sales figures and projections. Before putting in even a few thousand dollars into a project an investor basically wants to know his odds of recouping his money and the potentially return on his investment. Is it a simple loan with interest or is he getting a portion of you business in return for his money. How long is it going to take for the money to be returned and does he have a say in how your business is run after the investment.

Some bands who are established are able to go to a bank and get a loan, these are generally ones who have established a bank account in the bands name, have a good paper trail of income and can prove it can be repaid in a given period of time.  More than likely this will not be the case so you are going to want to turn to professional investor capitalists who will demand a well thought out business plan.

Mark Zwilling is a contributing writer for Forbes. He specializes in content to help entrepreneurs be more successful in a competitive world  In a recent article Top Ten Investor Turnoffs Around Business Plans, Zwilling walks us through the worst things to do or send to an investment firm. As stated, the Music Industry is a hard sell to any investor which is why I believe Zwilling's second tip is the most important for a band.

"Send the plan without a summary. An Executive Summary is a one page elevator pitch of the whole plan (may be separate from the plan), which gives an investor a net perspective on the key business parameters. Too many plans don’t have a summary section, or the summary is all you get. You lose in either case.?" (Forbes, 2011)

Zwilling also talks about how not showing the financials can lead to an immediate no, and how bugging the investor will lead to him probably not reading it. Some investment capitalist are obligated to review your business plan, well maybe on four of them. The show Shark Tank on ABC has a line up of investors who hear your business plan in a verbal and visual pitch. The business owners start out with an executive summary that hooks in the investors with the plans benefits and a summary of the companies sales and value. Then they ask for an investment for a percentage of their company. Kevin O'Leary is one of those investors and is known for being a little bit of a hardball player.

O'Leary sold his software company for billions of dollars and since has invested in hundreds of companies and products. He has no problem putting owners in their place when they have a stupid idea or are over estimating the value of their company. One of his questions always will revolve around the price point and the size of the market. In his blog on his website he listed Five Business Lessons Learned from Steve Jobs, one of the lessons was to know what your audience wants.

"Business is fundamentally about creating things that people want. But to do that, you have to know your customers inside and out. Do they want simplicity? Lower pricing? A better experience? More convenience? The answer is different for every business, but every business has to know the right answer for itself." (O'Leary, 2011)

As a band your product is generally music or merchandise, but you still need to know what they want. In a previous blog I talked about creating the correct merchandise for your audience and knowing how to price it as well. Take those tips when developing a business plan and the words of wisdom O'Leary has to offer.  For someone like O'Leary, funding your music isn't about if it is good or not, its about the money. Can you get your audience to pay ten dollars for a CD rather than just seven, can you make those CDs more cost effective. Do you have the ability to expand to other geographical markets and there for raise your potential for profit. The market analysis portion of your business plan will need to include information like this. Luckily this is not hard to do, Facebook Insights and Google Analytics help track geographic information of who is checking out your band.  Keeping a tour history that includes turn outs at each venue is also helpful.  Back Zwilling's list of things not to do is to say "see attachment" throughout your business plan.  Include the basic info but go ahead say see attachments for the break down of markets.  Again, funding your music is going to be more difficult than any other business, do what is necessary and include the selling points to help make an investor feel confident in what they may be giving a large chunk of money to.

A final comment is to play off an investors likes, research each investor to know these things.  For instance O'Leary calls him self an eco-investor, meaning he loves going green products.  So for him maybe push your ideas to tour eco-friendly, and produce recycled CDs, or how you rigged your equipment to run off a bicycle generator your road hands power. A business plan that has a hook is going to make you unique from other businesses looking for an investor.

References

O'Leary, K. 2011. Huffington Post. Five Business Lessons Learned from Steve Jobs. Retrieved 

      from: http://www.huffingtonpost.ca/kevin-oleary/steve-jobs-business-lessons_b_1001669.html

O'Leary, K. 2011. Kevin-Oleary.com. Five Business Lessons Learned from Steve Jobs. Retrieved 

      from: http://kevin-oleary.com/posts/mentor/five-business-lessons-from-steve-jobs/

Zwilling, M. 2012. Forbes. Top Ten Investor Turnoffs Around Business Plans. Retrieved from:     

      http://www.forbes.com/sites/martinzwilling/2011/02/04/ten-top-investor-turnoffs-around-business-   

      plans/ 

How to Get More Likes

Every band, company, and organization out there asks themselves how to get more likes on their Facebook pages, blogs and other social media outlets.  The answer varies from spamming current followers to spread the word, to adding tags and keywords that will attract everyone, despite not having the content they are looking for. Be ethical in your attempts, provide relevant content and push it to an audience you think will truly enjoy it.

For a band you will want all your fans to follow all your outlets and that can be done by giving previews of special content from all your sources. Leave a link and a few lines from a new blog, on your Facebook. Or direct blog followers to a video only hosted on Facebook fans only page. Be creative in pushing people to other sites and then pulling them into a committed relationship such as pressig the like or follow button. Make sure you offer ways for them to share or easy buttons to other sites.  For instance you can use a Twitter button on your blog that will automatically Tweet a link to your blog to that persons followers. It is easy to install just by going to here. You can do the same things with Facebook buttons and other social media sites.  Having these follow buttons available makes it as simple as a click to become a follower on other sites.  It takes five minutes to add to your blog and can result in hundreds of effortless new followers.

As a new band you will have a lot of people searching for you the first time on a site like Google. You want to make sure to use keywords effectively so that all of your sites show up on that first page.  What are Keywords? Good question, without giving a detailed speech that goes into SEO marketing, keywords are simply a phrase people plug into Google to find webpages with relevant information.  So for your band you'll want to use your band name but maybe something extra to draw in people looking for live music in the area which I will go into a little further in a minute.

Everyone has their preferred type of resource site, some use Facebook, others websites, and some like Blogs or profile pages on Reverbnation or videos on YouTube.  Make sure all your sites use keywords that will push them all to the top page of Google.  So if your band is named Magnus Pym, it might be beneficial to add the word band to your keyword phrase.  People searching for the band will initially search for Magnus Pym until they realize they are getting results for a detective show.  Instinctively they will add the word band or music after Magnus Pym. Putting this in the title section of websites, and use it for tags will result in getting the search results you are seeking.

I've discussed this in past blogs but you can also use keyword phrases to attract new fans. Use Googles Adwords tools to discover good keyword phrases to use in things like your bio, blogs, and descriptions. A few years ago I was designing a website and writing a biography for a local band who had great appeal to the general music lover who goes out just to see new live music.  I wanted to capitalize on that, so using the Adwords tools I was able to discover that several thousand people locally searched the keywords 'Milwaukee Music" each month.  At the time few sites were using these keywords together, so it was implemented into the bands biography and website title.  The trick is to make these keywords feel natural in your content, you can't just throw it between sentences, you must work it in.  For example: Band X is a great addition to the Milwaukee Music scene. The band dove right into the competitive and diverse Milwaukee Music scene.

It is important to maintain your keywords, if one big company starts using the same keyword it could easily push you pages away on a search engine.  Prime example, Summerfest finally started to use SEO and yanked the example keyword phrase and now dominates the top search results with it.

The best answer I can give to someone on how to get more likes, is to create a good foundation online. Utilize the one click buttons to share and follow, think outside the box when construction keyword phrases to incorporate into your content and make sure to include discriptions and tags to everything you post.  Don't just supply content that tells fans what you did that day, talk about the lighthouse in Fond du Lac, Wisconsin you visited after playing at Ziggy's Corner Pub. Or take a photo of Loveless Cafe' outside of Nashville Tennessee, and a video of you failing at wake boarding at La Jolla Beach in California.  Tagging these videos and pictures and using the long tail keywords in your blog will attract people who might get side tracked from their original search to check your music out.  Capitalize on things that interest you and your band, you never know who else is searching these things because they sparked interest in them.  It is just like a normal friendship, it usually starts with a common interest.

Increasing Traffic to Your Bands Content

Facebook has been the leading place for fans to interact with bands for a few years now, but some fear with the Timeline template being put into place will make it more difficult for fans to navigate through a bands page. Facebook also limits what bands can put up, they can't sell items on the actual page, and there many rules revolving around content and contests.  Avoid the hassles and start giving fans a nice alternative with a good old website. This is also a great way to attract new fans using the science of SEO, Search Engine Optimization. It sounds scary, but you do it with a little reading up.

If you have a band name that is borderline trademark infringing on another product or company, you are going to be competing to be at the top of a Google search.  For example the band Sunday Sunglasses.  Working with them, one big challenge was utilizing SEO while still using a flash based point and click designer. The reason for SEO for this band was to get above the Sunglass Company with the same name. Luckily that company is not very active online, so using the keywords of Sunday Sunglasses in the landing page header was all it took to get up in the top five search results. Same with tagging YouTube videos, now they show up in searches so its important to put tags on all your videos.

Most of the time you want to try and attract people who may be searching for you or something, but they don't know your band name.  For example with Sunday Sunglasses, they are near the city of Milwaukee and of course they play music so we did  some research and at the time thousands of people were searching on Google "Milwaukee Live Music" so we decided to use that as our main keyword phrase.  That way when people search that phrase, our site would be on top.  We put it in the bands biography, put it in the header, and other places as naturally as possible.  At the time, we made it to the front page.  Sadly it has been a year since working with this band, and Summerfest found the keyword useful to them as well and now they dominate the search results.  Which is why SEO is not just a one time thing you do to a website, you have to stay active with it, get other websites to link to your website as much as possible. Keep up on the frequency of the searches for your keywords and update them as necessary.  Click here for a great site to teach you more about SEO techniques to get you started.

If a website really isn't a priority for you, you need to maximize your YouTube channel. Remember only your fans will be searching for your name, so broaden the words that define you. If you are an acoustic artist, putting that definition in your title, description and tags could increase your views.  Cover songs are also great ways to get new fans, but do the audience a favor and clearly put that it is a cover song and not the original artists.  I've worked with artists who have done this, and the actual band discovered it and put it on their favorites list. How great of an honor is that, and the traffic impact is amazing.  Here is a video about a publi speaker who goes around discussing SEO for bands, he gives some great tips in his video.

Why it is Still Important to Publish Physical CDs.

Many bands and artists now days are cutting their expenses by leaving the physical CDs in the past. They rely on iTunes sales, YouTube plays, and AmazonMP3. Which is not a crazy idea to go with, digital music outsells physical music sales now. Sales is the key word, people buying music, what about the people you show your music to who aren't buying it, but may be buying you so to speak. Many people in the industry still live in the ancient ways of listening to a physical album, I'm one of them.  While working for a management firm, we would only send out physical albums to radio stations. that was 2010, and it is still their practice.

It isn't all about the men in suits that you should make some physical copies of music, its for your fans.  Not everyone has a computer to download music on, and if they do they may not be ones to do it the legal way that financially helps you.  At shows giving them a physical option to purchase, listen to right away, and love, will save you from them stealing the music later digitally where you can't detect it.

As discussed there are ways now days to make low quantity copies of an album through self publishing websites like CreateSpace.  Take advantage of this and try it out, if your music is good people, despite being internet savvy will want to buy the music right away at your show.  Its the music version of POP sales, you know, where despite not wanting it initially, you walk out of the store with a candy bar because it was there where you were checking out.  Same idea applies to having a physical CD, you have the customer there, they love'd your music, paid to see it, not pop in there and get one last little purchase out of them.  Unlike a candy bar this is an item that not only satisfies their needs but helps you. It is promotional material, it says your name on it, it can be shared, and it is physically right there for them to touch and play.

You can charge more for a physical CD because it holds art work that many music lovers appreciate, by offering bonus tracks and digital download options free with the physical CD you can easily overcome those price hurdles.

Always remember not all fans are tech savvy, they wont all download the legal way, so offer a solution that is mutually beneficial.

Self Publishing Your Content

It is so crucial to have content available for your fans to purchase, but don't forget about content for potential fans to to uncover. We will cover some inexpensive ways to cover both types of content by publishing the content yourself.
 
Digital Distribution Options

There are many ways to get your music on all the major online outlets like iTunes, Spotify, AmazonMp3, and hundreds of others.  My first choice is Catapult Distribution.  Low cost, low share of profits, and best of all super quick.  I've seen a turn around of less than 24 hours to all the major online storefronts. You will need a UPC for this process, just pay the extra amount they offer to do it for you.  There are ways to go around this and save a few dollars, but it really isn't worth the time and effort. If you already have a physical album done, you can use the UPC from that but it is better to have two different codes because it is technically two different products.

CD Baby also offers similar services and a nice storefront to send fans to but it is becoming a little outdated and not as quick as the up and comers. For physical CDs, you can do both, and getting out and making a presence in every distribution outlet is important.

Self publishing isn't just all about getting your music out, you still need to take the steps to copyright your material and decide which PRO you want to be a  part of and register your songs with. There are also things like Gracenote to make sure your final songs are inputed into, this allows devices to recognize the song and provide information like artist and song title. This can be done as easily as clicking a few buttons in iTunes.  Check with your digital and physical distributor to see if these little details are taken care of or learn how to do them yourself.

The most important part about self publishing is to read the small print, double and triple read the royalty calculations and compare the features distributors offer.  It truly does come down to the details on what is right for you and your band.

Interview With Rush Hicks, Entertainment Lawyer

Rush Hicks is a well-known Entertainment Lawyer in Nashville, TN.  His most notable clients he lists are "Randy Travis, Take 6, Larry the Cable Guy, Luke Bryan, Bryan White, Leann Rimes and Paramore". To get some insight into the music industry I asked him a few questions.

Where did you attend law school and how to do obtaining training for the specific role of an Entertainment Lawyer?

Hicks: Mercer University.  The training really came after I finished law school.  I took an unusual route in that I attended a semester of Belmont after law school taking music business classes.

What drove you into the specialized field of Entertainment Law?

Hicks:  I have a music degree from college and have always played music.  It seemed a natural for me.

How many years have you been practicing law?

Hicks:  30 years and I've represented record companies, artists, songwriters, music publishers and managers. regulations to follow.

Being interested in venue management I asked Rush Hicks if he had ever represented a music venue, unfortunately he had not. He did however offer some words of wisdom for someone looking to open a music venue. "Be extremely careful. Lots of local regulations to follow."  He is correct; many communities have sound ordinances, building codes, and require special permits to have live music.

In a past blog I talked about Performance Rights Organizations and how a venue must obtain a license from one or all three of them to play music.  I asked Hicks if he had an experience representing a client dealing with a PRO issue. 

Hicks:  I did represent a club in Johnson City, TN that was sued by BMI.  I convinced the club owner to settle because he was violating Copyright Law.

It can be a long and expensive journey fighting a PRO lawsuit.  Hicks was very ethical in convincing the client to settle, the club was in the wrong by not getting a PRO license.  Maybe they did not know or maybe they were trying to save money. Either way, it is very important to know what is necessary to obtain when running a club or venue.

If you want to open a music venue, you may not need to pay the extra money to hire a specialist in the entertainment law field, but you should get a lawyer. Most lawyers have a basic understanding of the legalities of starting a business and can help you get an organized and informed start to your business.  The courthouse will also be your best friend.  That is where you will go to get all your permits, licenses (not PRO licenses) and you can learn about all the local regulations you will have to follow.

Rush Hicks did have some advice for bands as well. I asked him when he thinks a band should bring in a lawyer to guide them through the legal processes a band faces.

Hicks:  From the very beginning.  It's expensive for a new band to hire an entertainment attorney, but it's well worth it.

When artists like Paramore come to you, do you find that they have everything legally in line? Songs copyrighted, band agreements, contracts, etc.  Or is it just a mess of backlogged work.  Do you take care of these things for the band or do you leave that up to their managers and labels to sort out?

Hicks:  I represented Hayley and the band from the beginning of her career so I handled their recording and publishing contracts, incorporating the band, trademarks, and touring agreements.

Hayley from Paramore was brought up in a music business oriented family who knew the importance of making everything legal. Most bands don't have that advantage so they do much of these tasks themselves and then once they start getting success is when they turn to a lawyer.  Rush Hicks handles documents that confuse most band members, even if you are small band, it could be wise to seek legal help rather than investing in equipment or studio time.  The perk about Entertainment Lawyers is they work in the Industry, meaning they know people who could potentially help your band succeed.  This can be applied to a venue owner as well; the Industry is all about networking.  Even if you are paying to network with your lawyer, the connections he can bring to you could be priceless. Networking options or not an Entertainment Lawyer as Hicks describes is there to "offer business advice and assistance to help them keep more of their money." 

Finally, I asked Hicks if he had any words of advice for a young band.

Hicks:  Make great music and then hire an experienced business team to protect your interests.

Can I be sued for that?

As a band or a venue owner there are many things you may do on a daily basis that could get you sued if the right person came into the establishment.  Bands, you have it a little easier but do your venue a favor and ask a few questions before you write your set list.

Does the establishment have a PRO license and for which PROs?


Establishments that make money off of music need to have a license from a Performance Rights Organization (PRO).  There are 3 organizations out there in the USA that represent artists, ASCAP, BMI, and Sesac.  Each have a different line up of artists and songs that they collect royalties for.  Every time a song is played on the radio, or in public, it is making the copyright owner money.  If you play a cover of a Bruce Springsteen song you could get the venue in a $30,000 lawsuit, just as a band did in 2010 at the Connelly Pub in Chicago. (Read full story by clicking the link) Although the lawsuit was dismissed by The Boss himself after finding out that his PRO, ASCAP had filed it, many venues aren't so lucky.

Some venues will tell you up front, no cover songs, if you thought it was because they hate renditions of "Hit Me Baby One More Time", you are probably right but its mainly because they don't pay the several thousand dollar fee for a PRO license.  Many ASCAP artists know they can make money even as a small indie band by reporting their tour dates to ASCAP, do the venues a favor who are cutting their budget and exclude them from your tour schedule if they don't hold a license.  You are red flagging them to the PRO, and if it comes back to the venue, it might stop live music at that location.

Ask first, you may be informing the venue of something they didn't know they needed, in the end helping them, and they will appreciate it. Sign up for ASCAP as well so that you can add another revenue stream to your bands income.

Being taught all I know from one of the vice presidents of ASCAP, I am a little bias on my love and respect for PRO's but ponder this,  music is work, and some venues can not afford to pay every band that plays, if you register with a PRO, track your performances, and help venues get licensed then they are going to want more bands to play, to make up for the costs of the license, inevitably getting you another gig and more performance royalties.

Does someone else have the same name as us?


Businesses and Bands need to do some research to see if they are using a unique name or logo. It is not required to register your name with the government and essentially trademark it but it will help prevent being asked in the form of a cease and decist letter to stop calling your band something or make you change your companies name. Trademark Infringement is basically using a name or logo already established and in use by another entity. No matter the size of the business or band, if someone feels like you are gaining business or awareness because the name is recognized by people who think they are listening or visiting another entity, they have the legal right to sue or ask you to stop using the name. A small punk band in  Colorado was politely asked to rename their band 'Elway' to something less related to John Elway, the football player. Read the full story at Punknews.org. It may seem silly, but John Elway has his name trademarked, so that companies can't use it to make money off him.  If the band were making tshirts that looked like Denver Bronco jerseys with their name on the back, you can see how this would create a legitimate issue, right now it's just comical.

A business has to watch their names as well.  A local hub cap retail store, in business for nearly two decades made the news when a car ran into their building.  The bad day was ended with a cease and desist letter from Auto Zone stating that its customers could be confused that the small local business called the Hub Cap Zone, was associated with Auto Zone. The small business managed to continue under its chosen name, other companies though have to spend thousands of dollars to change their names to avoid a lawsuit.  Examples of bands with this issue or who were challenged, Fall Out Boy, The Academy Is (previously The Academy), Sublime with Rome (previously Sublime, with different lead singer of course), the list is pretty lengthy, these are just some notable ones.

Trademark Infringement laws are a necessary evil.  In the examples above, they are pretty comical that anyone would bother paying a legal team to get these bands or companies to stop using the name, but if not tackled right away, it could become a large issue.  What if the band not only made jersey like tshirts but got a new lead singer who happened to be named John...and the name changed to "John and the Elways".  A club books them and bolds the words John and Elway and you are really confusing people who now think John Elway is going to be there.  I went to a concert recently to see the band Saves the Day.  Been a slight fan for years, and was really excited to see them playing a show in my little town.  After paying the cover, buying a drink, and getting ready for the event, I was extremely irritated to discover the band was Save the Day, not the iconic punk rock band SaveS the Day.  I was in a music nightmare watching a horrible 90's alternative rock cover band. The cover band made money off of the money intended for another band.  That is why trademark protection is so important.

That song isn't ours but can we say it is?

Copyrights are stolen probably on an hourly basis.  Just writing a quote from a book on a wall without siting the source can get a business in trouble if they didn't negotiate the rights to use it.  This goes for bands as well, just because someone may not know the song isn't written by you doesn't mean you can pretend it is.  I will leave band names out of this, but a few years back a band from Wisconsin started making a name locally for themselves.  They decided to into the studio and start recording the tunes that were making fans come out to the local shows.  The EP was taken off the shelves and merch tables when a band from New Jersey asked them why they were singing all their songs and saying they were their own.  The Wisconsin band had discovered this band on Myspace and just started to steal all their songs.  Though hundreds of miles apart, nothing really in common, the bands had discovered each others music, essentially ending the Wisconsin bands career in music.  Many local venues once they heard about their deceit, stopped booking them, fans were hurt, friends were shocked, band members irate with the thieves, no one was happy.

Even with legal approval to use another bands music, you can still get in trouble.  Take the song "Bittersweet Symphony" by the Verve, I'm sorry thats incorrect, its by Mick Jagger and Keith Richards.  Do you recognize another song in there?

It has a sample of The Rolling Stones "Last Time", that which The Verve got a license to use. According to Andy Klein, the Rolling Stones business manager at one time, they used more than the license said, and sued the Verve for in the end, complete rights to the song.  Mick Jagger accepted the Grammy for "Bitter Sweet Symphony" that year, and then exploited the song to movies, commercials, and anyone that would give him money for a song he had no part in the making of.  The song that was sampled was actually another artists orchestra version of the song, not the original that Jagger and Richards had written.  Check out the similarities, they are there.

If you read further into this you will learn that Andy Klein didn't own the copyright to this particular version of the song, just the Stones' songs from the 1960's.  He was later sued if I recall by another ex manager of the Stones who did own the song, who initially went after The Verve first to obtain money for use of his song.  The Verve was so young and not interested in legal battles, they barely put up a fight which is why they lost the rights to the song. (read more here)

In short, don't use other peoples music, if licensing a sample, use less than what you requested to use, double check to make sure you are negotiating with the correct owners, and NEVER give your rights away, even if it means fighting for them. The song truly is a bitter sweet symphony.

Those are the three big intellectual property issues that can cause a band or music venue big issues. Learn from the stories here to protect your band, music, logos, trademarks, and rights.