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Creativity in Business

"Músic" by Joan Sorolla

“Músic” by Joan Sorolla

Musicians are creative. They can turn words and notes into sonic emotion. Everyday, musicians find new ways to express themselves creatively, be it through a new guitar tone, a visual idea for a music video, or that perfect vocal melody.

Musicians are smart. It’s often overlooked how complicated playing and creating music really is. Reading, comprehension, listening, motor, memory, and creativity all play a part in playing even the simplest songs. People don’t decide to become a musician because they’re not good at anything else. If it was that easy everyone would play music. That’s one of the reasons why we’re all so fascinated by musicians – because not everyone can be a musician. They can take an idea, turn it into a song, and touch thousands of people in a unique way.

There’s this notion in the music industry that music and business are two completely separate entities – two separate parts of a whole. One without another would not survive, but they rarely cross. It doesn’t need to be that way.

A musician’s creativity need not be limited to music. Many musicians who are going at it alone or are just starting their career are overwhelmed by the business side of the industry. They are told that they need to understand law, marketing, accounting, and more if they want to make it today. To a musician who is used to solving things creatively, looking at their career from this other perspective seems daunting.

It’s important to know some things about the music business, like general copyright law and basic accounting to keep track of your money, so you should have some business mind you can consult with. However, many aspects of the business can be approached with a creative mindset. Instead of thinking, “Well this is how everyone else releases their albums, so I guess I’ll do that too,” try using the same creativity you put into your music to try something new, something that fits with your message and image. Don’t think of it as a completely separate, logical process. Think of it as an extension of the song or album you just created. How can you extend your song or album’s message through the release process?

Today, challenge yourself to think about the business side of your career with the same creativity as your music.

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Tips for Your Facebook Business Page

 

A Facebook business or band page is different from a personal page, and therefore requires a different approach.  Once you get a hang of it, it can be a great way to create a more meaningful relationship with your fans and customers.  Facebook allows you to talk to them directly, offer Facebook-exclusive promotions, and get instant feedback, just to name a few.

Check out this infographic with lots of tips to make your Facebook page more successful.

tips-facebook-business-page-infographic-e1372797853416

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Leadership Lessons from Jazz Musicians

Musicians are smart, creative, and innovative thinkers despite what popular culture would have you believe. Too often, when we think of musicians, images from Spinal Tap come to mind, but this is not usually the case. Being a musician requires a mix of extreme creativity and logic, collaboration, listening and multi-tasking skills, and complete dedication  – a mix that not many professions require.

Many entrepreneurs would do well to take up an instrument, as many of these skills are also required in business. Here’s a list of 11 leadership lessons to be learned from musicians:

1. Playing it safe gets you tossed off the stage. Some executives would say that in today’s turbulent economy, takings risks isn’t wise. If you don’t take risks you’ll never excel. Playing it safe all the time becomes the most dangerous move of all.

2. There are no do-overs in live performances. For every hour in a “performance” setting, you should spend five hours practicing. Athletes do this, musicians do this–muscle memory is no different in the board room, in front of a new client, or with your team. So why aren’t you doing this?

3. Listening to those around you is three times more important than what you play yourself. If you’re the one talking all the time, you’re not learning anything. Listen, absorb what you hear, and use the information to make a conscious choice about whatever you’re facing.

4. There’s a time to stand out as a soloist and a time to support others and make them shine. You rocked a project–nicely done. Praise is well-deserved. However, as a leader, it’s more likely the case that your team members rocked a project, together. Susie was on top of her game with the slide deck? Tell her–and tell the client. Johnny couldn’t have articulated the challenge to the press any more astutely? Refer back to his commentary as a stellar example. When you can share the wealth, everyone wins.

To see the full list, visit Inc.com.

Characteristics that will Destroy your Startup

A “startup” can be anything from a business making a new product to a starting band looking to make it in the music industry. And, no matter what your startup is, there are certain characteristics, such as stubbornness and arrogance, that will doom you to failure if not addressed.

1. Stubbornness

Entrepreneurs become passionate about their topic and to some degree that’s critical to success. However, when the passion keeps you from being flexible and open to new ideas, you may as well start ringing the death-knell for your business.

It is important to remember that your idea may not be what your customers really want. If a new song is just not receiving positive feedback from fans no matter how much you push it, perhaps it is time to move on. Similarly, if every focus group hates your product, adapt and accept that, although you loved your idea, it may not be right for the market.

2. Arrogance

You know the product or service inside and out; you’ve been formulating it forever! You have a vision and you feel certain that you are the best person to carry it out. But if you think you know it all, you’re in for a bumpy ride.

Being an entrepreneur is a learning experience, and the most important thing to accomplish along the way is the creation of a good team. You cannot know everything about your particular field of business – no one can. If you try to learn and know and do everything yourself you will surely not have enough time for what you do best, be it making music or running your business.

To see the full list, visit Inc.com.

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Startup Strategies – Best of 2012

Here is a fantastic compilation of posts and articles from 2012 about managing startups from  Professor at Harvard Business School who studies lean startups, entrepreneurship, platforms, and network effects (Twitter: @teisenmann).  This is so much information and wisdom here for anyone starting a new venture or trying to make their startup successful.

As Tom says “The generosity of the startup community is amazing, and these insights are invaluable to those of us who teach and coach aspiring entrepreneurs.”  Dig in, there is a lot to digest:

Lean Startup

Business Models
Customer Discovery and Validation

Marketing: Demand Generation and Optimization

Sales and Sales Management
Viral Marketing
PR Strategy

Branding/Naming a Startup

Product Management/Product Design

Business Development

  • John O’Farrell of a16z describes how quality trumps quantity and clarity regarding mutual objectives is crucial in doing business development deals, using Opsware’s transformative distribution agreement with Cisco as a case study.
Scaling

Funding Strategy

Founding Process
  • My colleague Noam Wasserman published his book, The Founder’s Dilemmas, that describes tradeoffs that founders confront when deciding when/with whom to found, how to split equity, how to divide roles, etc.
  • Blake Masters’ summary of Peter Thiel’s Stanford CS183 lecture on the importance on early founding decisions.
  • Charlie O’Donnell of Brooklyn Bridge Ventures on questions that co-founders must address ASAP and the concept of the “minimum viable team,” i.e., the smallest set of skills needed to get traction in an early-stage startup.
Company Culture, Organizational Structure, Recruiting and Other HR Issues
Board Management

Startup Failure

Exiting By Selling Your Company

The Startup Mindset and Coping with Startup Pressures

Management Advice, Not Elsewhere Classified
Career Advice (Especially for MBAs)

Startup Hubs

  • Brad Feld of Foundry Group and TechStars has published the book Startup Communities, a guide to building an entrepreneurial ecosystem.

Tools for Entrepreneurs

  • Beyond Steve Blank’s Startup Owner’s Manual, a book he co-authored with Bob Dorf, here is a list of the fantastic resources Steve has made available to the startup community — mostly for free.
 Original post is here.  Thank’s for compiling and sharing this Tom.
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Economics of SOPA from Indie Rap Artist MC Lars

Here is a guest post excerpt from my friend and artist MC Lars from the Huffington Post UK.

“In last week’s State of the Union, President Obama stressed the importance of creatively revitalising our nation’s economy. He called for “an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values,” the blueprint for lasting domestic prosperity. There are some parallels to this shift in thinking in today’s indie rap game, specifically in application of sustainable new media economics.”

“What this means then is that in order for artists like me to survive, I must be creative with how I let people hear my music. A primary means of distribution in 2011 was my USB robot, a two-gigabyte hard drive keychain that housed all of my albums digitally. I also sell t-shirts with cartoon characters I draw myself and I try to print on shirts manufactured domestically when I can. 47% of my income comes from merchandise, 40% from ticket sales, and 13% comes from iTunes, Spotify or other paid music services through the internet. I used a crowdsourced funding site called Kickstarter to produce my last album, with added bonuses of drawings and personalized songs to the highest contributors.

If the internet were compromised or regulated to the point where the 13% of my traditional digital income (from iTunes, Spotify, and others) were to disappear, it could likely mean that people would turn to getting my music for free, which would then mean that I would need more ticket and t-shirt sales in order to maintain my income level. (My income, by the way, covers my expenses, taxes, and health insurance, and that’s it.)

“Economically, we are living in an era that takes us back to the punk and indie roots of the 70s and 80s. Musicians must be able to go out and perform for years in small clubs to tiny crowds; it’s the way one perfects his or her craft and pays his or her dues. It’s how bands like Black Flag and Minor Threat became legendary, they had explosive, powerful shows and were willing to sacrifice everything to make their music heard. Henry Rollins of Black Flag tells his story in his classic book of journals, Get in the Van, an important read for any indie musician today.

We live in an era of innovative fusion of old and new. Being a musician no longer means simply being a songwriter and performer. One must also know a little bit about business, branding, t-shirt design, social networking, production, publicity, accounting and tour managing.

Ultimately, what this is means is that if you own and run your own business, no one can take that away from you. (The MPAA and RIAA exist to maintain the status quo of the entertainment industry, but I don’t need someone with a large salary lobbying for my interests as an artist when that person is disconnected from the reality of new media economics that I’ve described above.)

The internet in its current free and open format is important to me as an independent indie rap musician and artist. In fact the internet is essential to me and to all of the other artists who are like me. The government’s harnessing and regulating the internet and its free flow of information would be a dangerous thing in that it could lead to government control of a very important channel of a portion of the income that I earn – and through which I express myself freely, exercising my First Amendment rights as an artist.”

Read the whole thing here from the Huff Post UK.

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How Will Musicians Earn Money in the Future?

Here is an excerpt from a great piece from Wyndham Wallace of The Quietus on how the music industry is killing music and blaming the fans. This rather dark opinion is spot on in so many ways and raises some very difficult questions about the future of the music business that most people do not want to talk about.

“All the time the industry talks of money: money it’s lost, money it’s owed. It rarely talks about the effects upon artists, and even less about how music itself might suffer. But no one cares about the suits and their bank accounts except shareholders and bankers. People care about their own money, and the industry not only wanted too much of it but also failed to take care of those who had earned it for them: the musicians. And it’s the latter that people care about. Because People Still Want Good Music.”

“In March this year, for instance, the RIAA – the Recording Industry Association of America – and a group of thirteen record labels went to court in New York in pursuit of a case filed against Limewire in 2006 for copyright infringement. The money owed to them – the labels involved included Sony, Warner Brothers and BMG Music – could be, they argued, as much as $75 trillion. With the world’s GDP in 2011 expected to be around $65 trillion – $10 trillion less – this absurd figure was, quite rightly, laughed out of court by the judge. The RIAA finally announced in mid May that an out of court settlement for the considerably lower sum of $105 million had been agreed with Limewire’s founder.”

What is questionable about all of this is exactly how much of the settlement of $105 million will flow to the musicians, songwriters and producers whose work was the subject of the infringement to begin with. In previous settlements including Napster ($270 million), Bolt ($30 million), Kazaa ($130 million) and MP3.com ($100 million) it is unclear how much, if any, of the money received by the labels ever reached the pockets of the artists. I have yet to see an accounting of this and many managers I have spoken with have simply laughed when I asked the question if they ever received any payment from these settlements. I suppose that proceeds from litigation may be considered recoupable costs.

“But if the industry wants to talk money, let’s talk money, albeit the ways that developing musicians are encouraged to make up the loss of sales income in order to ply their trade. Someone’s got to bring this up, because it’s not a pretty picture. Consider, first, direct-to-fan marketing and social networking, said to involve fans so that they’re more inclined to attend shows, invest in ‘product’, and help market it. In practise this is a time-consuming affair that reaps rewards for only the few. Even the simple act of posting updates on Facebook, tweeting and whatever else is hip this week requires time, effort and imagination, and while any sales margins subsequently provoked might initially seem higher, the ratio of exertion to remuneration remains low for most. It’s also an illusion that such sales cut out the middlemen, thereby increasing income, except at the very lowest rung of the ladder: the moment that sales start to pick up, middlemen start to encroach upon the artist’s territory, if in new disguises. People are needed to provide the structure through which such activities can function, and few will work for free – and nor should they – even though musicians are now expected to.”

“Still, if an act can find time to do these things, or has the necessary capital to allow others to take care of them on their behalf, then they can hit the road. Touring’s where the money is, the mantra goes, and that’s the best way to sell merchandise too. But this is a similarly hollow promise. For starters, the sheer volume of artists now touring has saturated the market. Ticket prices have gone through the roof for established acts, while those starting out are competing for shows, splitting audiences spoilt for choice, driving down fees paid by promoters nervous about attendance figures. There’s also a finite amount of money that can be spent by most music fans, so if they’re coughing up huge wads of cash for stadium acts then that’s less money available to spend on developing artists. And for every extra show that a reputable artist takes on in order to make up his losses, that’s one show less that a new name might have won.”

“Touring is also expensive. That’s why record labels offered new artists financial backing, albeit in the form of a glorified loan known as ‘tour support’. Transport needs to be paid for, as do fuel, accommodation, food, equipment, tour managers and sound engineers. These costs can mount up very fast, and if each night you’re being paid a small guarantee, or in fact only a cut of the door, then losses incurred can be vast, rarely compensated for by merchandising sales. Again, financial backing of some sort is vital, but these days labels are struggling to provide it. In the past, income from record sales could be offset against these debts, but with that increasingly impossible, new artists will soon find it very hard to tour. Everyone’s a loser, baby.”

From Beck’s ‘Loser’

Forces of evil in a bozo nightmare
Banned all the music with a phony gas chamber
‘Cause one’s got a weasel and the other’s got a flag
One’s got on the pole shove the other in a bag
With the rerun shows and the cocaine nose job
The daytime crap of a folksinger slob
He hung himself with a guitar string

Soy un perdidor
I’m a loser baby, so why don’t you kill me?
(Know what I’m sayin?)

“Whether the industry likes it or not, music is now like water: it streams into homes, it pours forth in cafés, it trickles past in the street as it leaks from shops and restaurants. Unlike water, music isn’t a basic human right, but the public is now accustomed to its almost universal presence and accessibility. Yet the public is asked to pay for every track consumed, while the use of water tends to be charged at a fixed rate rather than drop by drop: exactly how much is consumed is less important than the fact that customers contribute to its provision. Telling people that profit margins are at stake doesn’t speak to the average music fan, but explaining how the quality of the music they enjoy is going to deteriorate, just as water would become muddy and undrinkable if no one invested in it, might encourage them to participate in the funding of its future. So since downloading music is now as easy as turning on a tap, charging for it in a similar fashion seems like a realistic, wide-reaching solution. And just as some people choose to invest in high-end water products, insisting on fancy packaging, better quality product and an enhanced experience, so some will continue to purchase a more enduring musical package. Others will settle for mp3s just as they settle for tap water. Calculating how rights holders should be accurately paid for such use of music is obviously complicated but far from impossible, and current accounting methods – which anyone who has been involved with record labels can tell you aren’t exactly failsafe – are clearly failing to bring in the cash.”

“The problem is, it’s not really the industry that is being cheated. It’s the artists and their fans. People get what they pay for, but – whatever the industry claims – most fans know that. They just don’t want to hear the businessmen fiddle while the musicians are being burnt. Revenues are unlikely ever again to reach the levels of the business’ formerly lucrative glory days, but in its stubborn refusal to recognise that both the playing field and the rules themselves have been irreversibly redefined without their permission, the industry is holding out for something that is no longer viable. Lower income is better than no income, and the industry has surely watched the money dwindling for long enough. Musicians, meanwhile, are being asked to make more and more compromises as they’re forced to put money ahead of their art on a previously unprecedented scale.”

Read the whole ugly story here at The Quietus.

The comments alone tell the sad story of the state of affairs in the music industry today.

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Making a Living as an Artist in the Future

Photo by Robert Couse-Baker on Flickr

Photo by Robert Couse-Baker on Flickr

From the Wharton School, an article on the new economics of life for creators and how they will be compensated in the future.

Making a living as an artist has never been easy — whether in film, music or publishing. But the digital revolution — and to a lesser extent, the global economic crisis of the last two years — is transforming the business of content creation. One of the biggest shifts is in how filmmakers, musicians and writers are compensated. There is an evolving relationship between creator and publisher in which the artist bears a larger percentage of the upfront costs for the production and marketing of his or her work. In this new world, artists’ pay is based to a greater degree on how their product sells in the marketplace, a change that has major implications for the content creators themselves, large firms like Hollywood studios and music labels, and consumers.

“In the past, it used to be the case that content creators got paid the bulk of their salary in advance and whoever made that payment — whether it was the music label, the book publisher or the studio — would take on the risk of marketing and distributing that product,” says Kartik Hosanagar, a Wharton professor of operations and information management. “If [the project] was a success, [the publishers, studios, etc.] kept the upside, and if it was a failure, they bore that failure. Now the upside — or downside — is shared with the content creator.”

This shift is largely driven by the move away from shipping physical products toward increasing digital distribution. In music, the threat of digital piracy has made the business of selling songs more challenging, even as the shift from album sales to digital singles has further undermined traditional revenue streams in the music industry. In film, the decline in home entertainment revenues as consumers switch from DVD purchases to online streaming video has also put pressure on profits. And in book publishing and journalism, the move toward e-readers and online news platforms where revenue models are still in flux has created additional uncertainty. The difficulty in predicting the profitability of these products, Hosanagar notes, means that marketers are trying to shift their cost base. “A lot of firms are asking, ‘How do we move from fixed costs to variable costs?'” he adds. “That makes a lot of sense when you have unpredictable returns.”

In the music industry, the pressures on the business model have been even more intense. Ed Pierson, a Seattle-based attorney who represents musicians, says the 1990s were the heyday of big advances for musicians. According to Pierson, easy credit and a war for talent led labels to pay escalating upfront fees to musicians. But as music sales began declining, in part due to piracy and digital downloads that allowed consumers to buy just the songs they wanted and not the entire album, the flush times came to an end. The result these days, notes Pierson, is that labels are making fewer advances and the upfront money they do dole out is smaller.

Artists have responded by taking greater control of their business. “The risk is shifting away from the label and toward the artist,” says David Kusek, chief executive officer of online music school Berkleemusic.com and a digital music technologist. Some big names, including the Dave Matthews Band or the Eagles, have created their own recording labels. Lesser known artists have been forced to become entrepreneurs of sorts. Kusek points to firms like ReverbNation and Top Spin Media that have sprung up to help artists sell their music on platforms like iTunes, to promote a group or artist, or to help sell merchandise. Those firms, in many cases, will charge a small upfront fee and then get a cut of the sales the act generates. “It is a different gamble now,” adds Wharton’s Whitehouse. “The corporate players may be gambling a bit less and the artists may be gambling a bit more. But those artists can now have more control over their work than they did before.”

Read the whole article here.

Listen to the podcast here.

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A Shift Towards Legal Solutions for Music

From Katheryn Glass.

Photo credit: http://bit.ly/1fdzGvS

Photo credit: http://bit.ly/1fdzGvS

After years of attempting to battle illegal downloading of musical tracks on the Internet, the recording industry has taken its case to Washington. The industry backed a bill, which was introduced in the US Senate this fall.  The bill would shut down sites facilitating illegal downloads, and this idea that fans should actually pay for music seems to be gaining traction, both legally and among consumers.

It won’t be easy: only one in five digital music tracks is downloaded legally.

Now, the combination of legal progress, coupled with a shift in listening patterns, appears to support a system where consumers would ultimately pay for the privilege of listening to music. It also begs the question: Is a truce in the battle between fans who support free content, and an industry that wants to monetize music, on the horizon?

Even if it is, the road to harmony will be a long one. The Senate went on recess before the industry’s bill could be voted on, thus prolonging the debate about whether or not legislating curbing file sharing will be able to stop the problem.

“It’s convenient, it’s right there and no one is watching. So what you’re saying is that if somebody is watching you, it will stop you?” said Michael Wood, a former recording artist who’s now a music professor at Algonquin College in Ottawa, Canada. “If they can’t illuminate something so vile as child pornography on the Internet, then where does file sharing fit in?”

Musicians’ core complaint is that the illegal distribution and download of musical tracks violates intellectual property rights.

“We’re a country where manufacturing has gone south, customer service industries have moved abroad, so what do we have left? We have intellectual property,” said Rich Bengloff, president of the American Association of Independent Music, a nonprofit trade organization for independent music labels. “Intellectual property needs to be protected because that’s all we have left to make a living in this country.”

Record labels argue that piracy diverts more money away from the label, which leaves less funding available for the label to spend on the development of new artists.

“You need the sales of your current artists to invest in new artists,” said Jonathan Lamy, senior vice president of communications for the Recording Industry Association of America, a trade organization representing artists.

Finally, there’s the question of whether file-sharing is actually a hindrance or a help to artists, since more downloads — legal or not — help to promote artists’ music further. For all of the difficulties the Internet has caused for the music industry’s traditional business model, many musicians have certainly benefited from the array of websites that help with promotion, merchandising and fan connections.

Nevertheless, momentum seems to be turning against the tide of “free,” Internet content, as musicians, as well as artists from other creative fields such as writers and video producers, seek methods to assist them in monetizing their creativity.

Many fans argue musicians and labels are still making money. Live performances, endorsement deals and merchandise sales are all valid sources of revenue, but the industry says that those revenue sources are not enough to make up for the loss of album sales.

Lamy concedes that legislation isn’t the only solution and that the music industry needs to be able to offer fans a “compelling legal experience” in which to consume music, but he thinks having the ability to shut down illegal sites would go a long way in restoring a stable revenue stream to the industry.

Pay to Play

In the attempt to devise a new strategy for monetizing the music itself, a plethora of new ideas have been bandied about. The Internet has clearly emerged as the designated location where music is, and will continue to be, consumed, and many tech companies have attempted to create a legal model for consumption. Apple, Inc. (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN) both have pay-per-download systems, which have succeeded in getting some consumers to pay for their tracks, but have yet to eclipse peer-to-peer downloads.

Pandora, an online streaming radio site which has become immensely popular, hitting 65 million registered users earlier this month, has helped generate revenue for the industry. The site provides exposure for new artists and encourages listeners to pay for songs they like by linking to legal purchasing sites.

Spotify is another music service that looks promising. It exists now in Europe, allowing fans who subscribe to a free service (or low-cost premium option) that permits unlimited playback of favorite songs, stored in a “locker” in the cloud, and also promotes legal purchase and downloads. The company is working to bring the service to the United States, but it is not yet available. MSpot, a similar idea, facilitates web-streaming of Android users’ music once they upload it to the cloud.

Google (NASDAQ:GOOG) is unveiling its own music store, according to a Billboard magazine report last month. Google’s marketplace would offer pay-per-download as well as cloud storage, or a music locker that consumers pay $25 a year to use.

While the industry seems poised to see legal sales of music increase, some say its reluctance to adapt to a changing consumer landscape is still a hurdle, which may further delay the “truce” many fans and artists seek.

Wood, the Algonquin College professor, said when he and a business partner tried to set up a system in Canada that would make digital music available for legal pay-per-download, they ran into difficulties. He said the record companies wanted too much money for the sale of the track.

“They still wanted 73 cents a track and other royalties to be paid on top of that,” Wood said. “You’re trying to negotiate a deal with a bit of an archaic system that’s not willing to bend.”

LimeWire chief executive George Searle agrees that the music industry’s reluctance to change its business model has added difficulty as it tried to combat peer-to-peer sharing.

“If as a community we have achieved nothing else, we’ve come to recognize that containment is a red herring,” Searle said. “We’ve got to do more than stop people from sharing copyrighted files. We’ve got to provide advanced, legal alternatives.”

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Direct to Profit – Trends in the Music Industry

Photo credit: http://bit.ly/17JbZsJ

Photo credit: http://bit.ly/17JbZsJ

Last Friday I was interviewed by Dr. Amy Vanderbilt @DrAmyVanderbilt from the Trend POV Show where we discussed the changing distribution in the music industry and what it means for businesses everywhere.  Here you go:

http://www.trendpov.com//sites/all/modules/swftools/shared/flash_media_player/player-viral.swf

Check out lots of great interviews on trends in business at Trend POV.

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Networking Musician Interviews Dave Kusek

Last week host of Networking Musician Radio, David Vignola interviewed me about Music Power Network and the Future of Music.  Here is the audio interview along with a link to David’s site.  Great resource for indie artists.

Music Power Network provides a wide variety of music business education, tools, interviews and lots of resources for the D.I.Y. musician. The site also offers an equal wealth of information / education for producers, managers or publishers.

http://www.podbean.com/podcast-audio-video-blog-player/mp3playerlightsmallv3.swf?audioPath=http://networkingmusician.podbean.com/mf/play/nsumyj/MusicPowerNetwork.mp3&autoStart=no

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Plan for Success

“The best way to predict the future is to invent it.”  This is a great quote from Alan Kay, one of the creative geniuses behind the laptop computer and the mouse.  Musician can apply this thinking to their own careers by planning for success in a dedicated and systematic way.

I came across this great guest post by Kevin English on Creative Deconstruction that talks about the “Lower Class Musician” and suggestions for how to lift yourself out of that class into a middle or upper class status through controlling your overhead, aligning your expectations, creating a plan, getting a good and current education and diversifying your product offering.  These are all things that I have blogged about in great detail in the past and agree with completely.

Here in an excerpt from Kevin’s post:

“Learn to structure yourself like any other startup and formulate a strategy on paper that will sustain you for three to five years. You’ll soon find out that overspending on manufacturing, marketing, promotion and distribution is very difficult to recoup.

Adjust Your Expectations

For some of us, music is a hobby and that is okay. However, if you plan on feeding your children by touring the Chitlin’ circuit, that’s another thing entirely. When I realized that writing songs for Columbia Records and recording demos with The Fugees wasn’t going to sustain me forever, I had to adjust my expectations. These gigs were few and far in between and often times didn’t pay half as much as you would expect them to.

I studied profitable ideas, people, and businesses to find a common denominator. I learned that nine out of ten successful startups had a business plan. Not just any old plan, but one that was standard across all industries. Financial planning, marketing, and the management of people and products/services cannot be done on the fly. If all you want is for people to hear your music that is fine. But again, you can’t necessarily expect to make a decent living.

Accelerate Your Learning

Hundreds of books have been written on the subject of business plans, yet no one in the music business seems to think they need one — until, of course, they run out of cash. I spent years in my local SBA in Newark, NJ looking at sample plans, meeting with retired CEOs of successful companies, and learning how basic businesses operate.

If you do the same you’ll realize that most startups have more similarities than you’d expect. However, it is important to point out that no two plans are alike. You will still need to write a plan specifically based around your music-related products and services. My first plan was a disaster. I asked my uncle for $75K with a promise to return 20% of the loan over the next five years. He had a good laugh over that one, but at least he knew I was serious about my dreams.”

To read his full post look here.

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Insight in music business & management

The music industry is being reinvented before our very eyes. Learn how it is developing from today’s entrepreneurs including Ian Rogers from TopSpin, Steve Schnur from EA, and Derek Sivers and how you can capitalize on the changing opportunities.

MPN is my latest project and an online service for music business people and music and artist managers creating the future of the industry. MPN provides online music business lessons, exclusive video interviews and advice, career and business planning tools and thousands of specially selected resources designed to help you achieve success in this ever changing industry. MPN gives you the tools, expertise and guidance to help you get organized and take your music career to the next level. Learn from industry experts, set your goals and realize your vision.


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Profile of 50 Cent – music business empressario

A great profile by Paul Resnikoff.

Get past the street-tough imagery and braggadocio, and 50 Cent is actually one of the most well-run, well-conceived business entities in music. And like Jay-Z, he also one of the most wealthy.

Spawned by Dr. Dre and Eminem and one the highest-selling rappers of all time, 50 Cent is actually less a rapper, and more a company. In fact, he is one of the most highly-successful examples of a 360-degree artist today, and a template for future artist business models.

In an earlier era, artists would shy away from advertising and sponsorship deals. A tie-in with a major company was usually viewed as a sellout, and often resulted in a major credibility hit. That has changed dramatically, though rappers were never haunted by that sellout demon.

Instead, the opposite is true – rappers are often unabashed capitalist warriors beating the system, and rapping about their exploits. And 50 Cent – who famously survived nine gunshots at close range – recently entered a monetary stratosphere that few enjoy.

Sure, 50 is a mega-platinum seller, and a staple of popular culture. But the rapper, and those orchestrating his career, are mostly focused on pursuing revenues through any channel, instead of simply maximizing record sales. And the moneymaking possibilities are only limited by the creativity of the entrepreneurs involved.

In fact, during the past twelve months, 50 Cent netted $150 million, according to a Forbes estimate. A major percentage of that payout came from an interesting deal with VitaminWater owner Glaceau, purchased by Coca-Cola for $4.1 billion. 50, as part of a broader sponsorship deal, cashed Glaceau shares for an estimated $100 million after taxes.

That adds to an existing stable of other business divisions, including a G-Unit clothing line, a boutique recording label, and even a stab into gaming. “The financials of the music business have changed to the point that we have to find ways to make money in other places,” 50 Cent brand manager Barry Williams recently told Forbes. “I didn’t think six years ago when we started trying to sell music that we’d be selling VitaminWater and shoes and clothes. Now we’re moving into other directions, and four or five years from now, it’s exciting to think about us looking at natural resources and raw materials and other businesses.”

The natural resources discussion could potentially produce a 50-branded series of platinum jewels. The rapper is now entertaining a deal with South African mining billionaire Patrice Motsepe, another creative exploitation of the 50 Cent image that goes way beyond a simple album release.

Of course, 50 Cent is unique entrepreneur and performer, and an extreme example of success. And every successful, 360-degree artist forges a unique business model, one that plays into the strengths of the artist and considers the target audience carefully. But in the modern music industry, the ultra-successful artist is one that successfully exploits a broad portfolio of revenue generators, and approaches the situation like a diversified business. That is the reality of the modern music industry, one that demands just as much business ingenuity as artist creativity.

More info from Forbes here.

Digital Music News.