The Three Wows

2

Good Enough

Are you good enough to compete with the best in the world already in place and rocking it as entertainers and industry leaders? The answer is yes, of course, but it’s not easy to learn all you need to know at the entry level, let alone become the CEO of a major label. Do you get ahead with luck? With who you know? How about talent? Be yourself, whoever that is, and be nothing short of great. Be as weird as you want, just be great at it, and then hopefully, someone in the industry will take a shot at seeing if there is a viable, profitable market for it.

The Three Wows

When it comes to advice about how to “make it” in the entertainment industry, there are lots of opinions, and some advice is better than others. For instance, my long-time friend and successful music industry artist manager Louis O’Reilly has three things he considers when looking at signing an act. He calls them the three wows and you’ve got to have at least two of them. They are a wow song, wow brand, and wow show. Wow! Just say it to yourself out loud and you’ll start to understand what Louis is talking about. In the theater and film business, it’s a wow screenplay, script, or story, a wow brand in this case means a wow metaphor (The Godfather, Harry Potter, Star Wars as movies, Cats, Chorus Line, The Music Man, and Rent as stage play), and a wow show means the creative team of famous actors led by equally experienced producers and cutting-edge, creative-minded directors.

If you want to be a major recording artist, you need the three wows—song, image, and live show—to make enough money for you and those who work for you to become successful. One of the biggest mistakes you might make is to assume because you have talent you should become a big star. But as you can see from Figure 2.1, you need all three to become a sellable personality.

The Wow Song

Think about the wow songs from Lennon and McCartney, Roy Orbison’s “Only the Lonely” and “Oh, Pretty Woman,” Hank Williams’s “Your Cheatin’ Heart” and “I’m So Lonesome I Could Cry,” The Beach Boys’ “In My Room” and “Good Vibrations,” Abba’s “Dancing Queen,” Freddie Mercury and Queen’s “Bohemian Rhapsody,” John Fogerty’s “Proud Mary,” Jagger and Richards’s “(I Can’t Get No) Satisfaction,” and Dylan’s “Just Like a Woman,” “Knockin’ on Heaven’s Door,” and “Like a Rolling Stone.” All wows and, of course, each a cash machine for the writers and copyright owners. Figure 2.2 shows the top-selling songs of 2015.

The Wow Brand/Image

The second wow is about image and branding. Notice that Louis didn’t say anything about talent, the ability to sing, write, act, and so forth, as they are ingredients required in building a consumer wow. Also notice that you need more than the ability to sing kind of in tune or to have a voice or sound. It takes more than hitting the notes to really deliver a believable live performance as an iconic hero, villain, good old boy, sexy dude, bad guy, rebel, or whatever. Think about an image as an identifier of an iconic image tied to an emotion and the “brand,” as everything done to enhance it, connect it, and sell it as a very cool lifestyle. Think of the bee-to-honey attraction of women to Elvis and the Beatles. The sexy voices of Karen Carpenter and Patsy Cline, the way Roy Orbison describes his desire for a pretty woman. There’s also Frankie Valli, Sam Cooke, Elvis, Bob Dylan, Whitney Houston, Bono, Stevie Wonder, Aretha Franklin, Buddy Holly, Etta James, Johnny Cash, Gladys Knight, Chubby Checker, Janis Joplin, Alicia Keys, Donna Summer, The Police, George Jones, Billy Joel, Sinatra, Hank Williams, The Bee Gees, Adele, Al Green, Don Henley, Brian Wilson, Freddie Mercury, Tina Turner, Marvin Gaye, Ray Charles, and all of your favorite acts, too. I hear their voices in my head right now and I can even feel the emotion tied to each one. Every one of them a wow and industry cash machine!

Image

An image is a one- to two-word descriptor of the emotion people might feel when they hear the act’s recordings and see the act live. A good old boy image with the youthful appearance may also be seen as sexy and fun, a villain or rebel might be emotionally felt also as a leader rebelling against the man, or as an outlaw playing Robin Hood. A funny but smart bad guy may be seen and felt by women as exciting and a challenge. The list goes on and on, and the most important thing for both the artist and industry executives is that it really connects with fans. That means buzz, fan base, and possible profits. As far as the acts are concerned, my belief is always be honest and portray your true passions. If you can’t do that, then the act better be a great actor as it’s difficult to fool the true fans.

A producer/engineer friend of mine told me a story about Johnny Cash, who was often seen as a rebel, and as a hero of the working class against the man or the system. Cash wanted to sing better, be more believable, real. So, he asked to be dropped off in the middle of the desert and left there. He felt he could sing about thirst, hunger, suffering, life, and the will to live if he really experienced a little of it. If he had not found a cave after a few days and had a spiritual revelation he later claimed he’d never have made it out alive. Listen to his voice over his career and listen for the difference. He also said he was really stupid to do it and would never try it again. So take his advice and don’t try any death-defying adventures or drug-induced escapism in the name of “art” as there are many who do who are gone before their time.

Branding

Brands are a different and a deeper stage in the image game. The first connection to fans is usually an artist’s “sound” connected to their image. If anything other than the music will get their attention, it’s the image. Psychographic lifestyle analysis to determine the brand used in different fan lifestyles is then connected to the image and the act. Why do you like your favorite act or actress, recording artist, author, and others? In the music and entertainment industry the process of branding is the association of products or services to your fan base. The fans have in their heads their image of you (the artists) and the emotions (whatever they are) about you. Companies want to connect to your fans to expand their market, image, and profits. It often costs millions for them to make a deal with the people who control the act’s image, which is usually record labels in 360 deals and personal managers in independent deals. Acts are regularly offered the same types of deals from different companies. So it falls to the labels, band members, and their management to determine which ones they should accept. It’s not the act working for the company, who is trying to sell products and services, but the other way around. Now the automobile company, as an example, pays for the association with the act and their image through their brands of products with large sums of money.

Branding is usually tied to psychographic research based on lifestyles of the fans (see Figure 2.3). It’s the fans’ desire to enjoy the perceived lifestyles of the famous acts that connects the fans to the companies through the act’s image and corresponding emotions. Sports clubs in the United States make about $12 billion a year from companies paying their leagues, teams, and players for the association. Bands, labels, and managers use branding as an additional income revenue stream to try to cover moneys lost to the decline of unit sales.²

Major acts often tell newer artists to select companies their fans will find cool, trendsetting, and worth celebrating. The key element of success is pairing the act to the right product in exchange for tons of money. It’s a win-win-win situation for everyone who embraces the acts: image and pocketbook, management and label revenues, and fans discovering products and services that fit their preferred lifestyle and world mental frame of reference. A second level of branding is to associate your company with the business of the band, such as a bank checking account, clothes, or whatever.

The Wow Show

Louis’s last wow is the show. I’ve seen many famous artists performing wow songs live. Goosebumps! Most didn’t need any glitz, fireworks, or stunts like riding a motorcycle over the audience’s head as they’re trying to sing a hit. The Canadian artist Gordon Lightfoot (look him up) once blew me away with just himself, guitar, and a bass player. Standing ovation. Here’s the bottom line: the less talent, the more tricks, stunts, dancers, strobe light, and explosions are needed to stage the show. And in the end, it doesn’t matter as long as the consumers are thrilled and pay for the thrill (see Figure 2.4).

The Event Business

Think about a concert as an experience or event instead of a time to sit and listen to the music. For the fans it’s all about the excitement, fun, and being a part of the environment. For the promoter, venue, and acts it’s all about making money. I was a very young guy when buddies of mine and I saw the Beatles. Of course, in a packed house of thousands it was just our luck we had some really good-looking girls right behind us in the cheap seats. Being the fool I am, I asked one of the girls directly behind me if she was going to lose it and start screaming when the Beatles hit the stage. She laughed and said, “No, I think that’s just silly.” The lights went out and we all pulled out our cigarette lighters (now it’d be a cell phone) and the Fab Four energetically hit the stage. The place went nuts. We heard the first part of the song drowned out by the screams. I felt the fist of the girl behind me hitting my head and shoulders as she uncontrollably screamed Paul, Paul, Paul … I learned a lesson in humility and kindness out of the deal. That’s a wow show. What promoters want is a loud buzz from the audience as they leave the concert as that’s an indication they want more and will come back next year for another experience or thrill. And how many billions of dollars did this wow show make and does still make for the individual Beatles and wannabe acts?

Artists Career Timeline—Beginnings

The biggest mistake you can make if you want to be an artist is to assume your gift of talent is special. It may be something you and your family enjoy, but in all honesty there are millions of people (out of billions on the planet) with the raw talent required to make it in the business. However, very few have the passion, drive, guts, and saneness of mind to give it a serious shot. In the beginning, consider your abilities in being a performer. Several steps or processes are usually required to determine if you’re into performing for the sheer enjoyment of it or to perform for a career, making enough for a decent living, or to become a famous, glamorous, rich, world-renowned opera or rock star. We may discover a joy of music as a kid in school, church, choir, or even when singing with our favorite recording artist with our iPhone headphone buds, or whenever the idea of the joy of performing may come to mind. Take a look at the following steps (Table 2.1) to evaluate your ability to perform and think about what it will cost and your personal enjoyment.

The Do-It-Yourself Process

Digital products increasingly make almost everyone think that they can become a rock-and-roll star, glitzy movie star, or famous person. Good luck. The fact that we can make a singer sound talented with auto-tuning, create great music tracks without real musicians using Pro Tools, shoot a video or film with a cheap store-bought HD camera, and then upload the results to YouTube, SoundCloud, CD Baby, iTunes, or some other site does not mean that anyone will like it, enjoy it, or throw any money our way (see Table 2.2). Industry sources provide various numbers on the size of the web, ranging from about 250 million to more than 759 million, with a quarter to half a billion active. In addition, various sources state between 8 million and 9 million servers appear to store 14.3 trillion to 40 trillion webpages. Each website has various costs, including hosting, planning, design, maintenance, and marketing expenses often between $5 and $20,000 annually in a small, solely owned page. Talk about a needle in a haystack—an illusion or naivete on a grand scale. The odds of anyone even finding a site are extremely low.

Table 2.1 Artist’s Career Timeline—Beginnings. Playing a musical instrument, singing, painting, writing, and shooting film (as examples) are fun and very satisfying. Turning pleasurable creativity into a professional career is taking something we do for enjoyment and turning it into something very different … work!

Artist’s Career Timeline: Beginnings
Discover musical preferences (genre)
Shape your abilities through private lessons and gigging
Discover performance abilities (instruments and vocals with others)
Develop musical style (based on your own creative personality)
Find other artists with similar styles, creativity, talent, and abilities)
Perform with others in choir or band to discover joy of performing with others
Learn to be the best you can be (what makes you unique as a vocalists, musician, or both)
Be a solo and a performing group/band
Evaluate crowd reaction of your performance (quality of talent, showmanship of yourself as a solo act, and member of performance group)
Evaluate crowd reaction of band or group (quality of talent, showmanship of act/show)
Evaluate performing for enjoyment vs. possibility of making it a business and career
Decide if you want to turn fun/hobbies into a business

Table 2.2 Artist’s Career Timeline—Turning Professional. The career time line: Turning professional is a different story than entertaining or creating artistic works for fun. Work is work and, to be honest, darn hard at times. Being a creative artist for a living raises consumers’ expectations of the act to be professional as now they are paying for the experience.

Artist’s Career Timeline: Turning Professional
Decide if you want to turn fun/hobbies into a business
Form the professional act either as a solo or band
Decide on your legal form of business by making the following decisions and then filing the paperwork with the local, state, and national authorities	Who owns the business of the band?
	Who owns the name of the band?
	Who is the boss or is it shared (which will not work in the long run)?
	Who will control the books and pay the bills?
	How will you pay bills?
Develop the unique qualities of the band (what will make it sellable to night club owners, promoters, and booking agents)	Sound
	Visual performance
	Material to be performed
	Songs to be written
	Vocal blend and performance
Time to get serious about the band as a career and profession. All members of the band should sign a partnership, LLC, or corporation agreement that sets in writing the decisions made earlier about your legal form of business.

Anyone can use an inexpensive Mac or PC and GarageBand, Pro Tools, or Logic software to record a great-sounding song. Almost anyone can use ChordBank, Tabletop, Animoog, iMaschine, Traktor DJ, and Beat Maker to create various chords and sounds.⁵ If you don’t know how to operate the software, simply register at Lynda.com and follow the step-by-step instructional videos. You can also buy or rent an inexpensive 1080 to 4K high-definition camera to shoot a music video or movie to dump on YouTube or any of the other sites. The industry already uses RED cameras (high-quality digital cameras) and Final Cut Pro software to shoot and edit movies. So can you! You can even record your latest song on your iPhone.

The DIY Infrastructure

Once you’ve created a recording, won’t you need some seed money to get started? Register a request for funding with PledgeMusic, BandPage, Patreon, See.me, and of course, Kickstarter. Then upload the recording to iTunes, CD Baby, TuneCore, DistroKid, The Orchard, and Ditto Music to distribute it for sale as a CD or digital download. For a better understanding of your potential costumers (demo and psychographics) consider using Next Big Sound, Musicmetric, Buzzdeck, Google Analytics, or Prizm (Claritas). For promotion, catalog your tracks at BandPage, SoundCloud, Bandcamp, and other providers. Use the same sites to “brand” your image and sound to potential consumers. Register with Bandsintown, Sonicbids, ArtistData, Stageit, and Concertsinyourhome.com to book a live appearance or event. You may have to pay Eventbrite, Brown Paper Tickets, Splash, or Ticketmaster (if you become big enough) to sell tickets to the event. Download AmpKit, iLectric, and Audiobus to enhance the sound of your live performances. Provide and sell merchandise through Chirpify, Limited Run, Square, and Thehub.fm. Finally, join Artist Growth, Topspin, and other software providers to learn how the industry works, make industry connections, and control your financial events and books.⁶

Many Internet start-ups offer a viable business model by providing a free platform where artists can (in effect) give away all their rights and recordings in exchange for the hope of being discovered. The sites make money from the joining fees, upload cost, or, if they get popular enough, advertisement money. However, most labels are not interested in an act that has already given away its product to be discovered. What are they going to sell? Which is why labels are now music companies marketing acts and products to fans for money. They want to sign acts that have developed a fan base willing to pay or at least steal the recordings, and then purchase the corresponding merchandise, touring, and so forth, marketed worldwide. In other words, do not be in a rush to give your recordings away as it may destroy any serious possible future market and major label deals.

Money, Money, Money!

Now that we have computer-generated music production software (e.g., Pro Tools, Q, Logic Pro), and computers used in the daily production of movies, has the value of a recording studio engineer increased or decreased because of the use of computers? Strange to think that one’s worth as a professional could be devalued by technology, isn’t it? But today worth is measured by whether technology changes what you do. Some skills and knowledge prized today may be worthless in the future. The future for people who want a successful career in the production of movies, video, and music is therefore tied to … computers! The key is lifelong learning and keeping up with the technology, economics, and social changes, growing with the times and creating experiences to keep yourselves ahead of the herd of people who’d like your job. That’s true in any business at any time. And by the way, great audio engineers and producers are considered almost priceless in the eyes of the artists whose careers depend on their knowledge and skills to help them become rich and famous. Value and worth are part of the economics of the qualitative side of entertainment; money and profits are what make the business tick and are a key measure of success of the wow.

So, what is money and how is it viewed? We use it every day, yet do we really understand what money is and its functions in our society? Thousands of years ago, bartering was used instead of money, because money didn’t exist. Cows, grains, leather, gold, silver, diamonds, and many other things were exchanged for goods and services. How many cows are you worth? Will you dig this ditch for an old cowhide? As an audio engineer what is your value or worth? If audio engineers were around thousands of years ago, you’d have to decide how many cows, grains of wheat, pieces of bronze, or whatever your “work” was worth. A record producer would be worth more “cows” and so forth than the audio guy, just as they are worth more green paper today. Actually, the audio engineers and record producers were “worthless” thousands of years ago because electricity and the technology didn’t exist. Yet time changes things and so it goes … wonder what is next?

Let’s dig deeper into the revenue streams of entertainment: How is money made? Who makes it? How do we establish value for what we create? Does it matter if we go it alone or sign with a label?

The Value of Knowledge

People got tired of trying to figure out the value of “cows” compared to labor or skills so in about 550 BC, King Croecus of Lydia (now part of Turkey) pressed the first official gold and silver coins (currency).⁷ One last thing to consider: different countries use different types of currency that often have “floating” value or worth. Who cares? Probably you, if you’re an artist, label, songwriter, publisher, and so forth, as the amount of money paid (royalties) for use of your copyright in the United States may not be the same as in other countries, due to their laws or lack of them, and as the exchange rate between the dollar and other currencies changes daily. Starting to see how crazy it gets? How much money (cows) will you agree to exchange your recordings, movie script, or songs for? Well, what are they worth? That’s another great question, as in this business we’ve got to make it and distribute it (usually with promotion) before we know if anyone is going to find enough “value” in it to even steal it (see Table 2.3)! Okay, let’s hope they buy it or at least pay for streaming it!

Table 2.3 Artist’s Turning Professional as a Performing Act. The Artist’s Career timeline: turning professional as a performer is difficult, as we have to combine the oil and water of creativity and business. First develop a product or service that consumers will find valuable. That means better than what exists in the popular culture or at least as good as (but not the same as) the famous acts, artists, and authors who thrill us now.

Artist’s Career Timeline: Turning Professional as a Performer
Use your unique sound, visual performance, and musicianship to determine these elements	Image
	Brand
	Show
Practice, practice, and do it again, again, and again
Put on a small show and evaluate the response to each song performed by observing the fans’ attention and response to each song. Have a person nobody knows mingle with people attending and listen for their comments. If possible, have that person ask people enjoying the act what they like most about the act. Note the responses and gender, age, and other possible demographics of the respondents. If this is working, use the information to determine the act’s potential market. Then once again, review your band agreement and these elements.	Who owns the business of the band?
	Who owns the name of the band?
	Who is the boss or is it shared (which will not work in the long run)?
	Who will control the books and pay the bills?
	How will you pay bills?
Develop the unique qualities of the band (what will make it sellable to nightclub owners, promoters, and booking agents based on the audience responses and comments).	Sound
	Visual performance
	Material to be performed
	Songs to be written
	Vocal blend and performance
Develop a business plan to determine the feasibility of turning the band into a profitable venture. Complete these steps.	Describe your company (what it offers to others).
	Products (shows, recordings, merchandise available).
	Market analysis (research the market place and the local industry to determine your potential market and income)
	Build your business team model on the management structure that fits your band’s business.
	Determine your marketing plan, including an electronic press kit, promotion, publicity, website, aggregators, distribution, and partners.
	Complete your financial projections to run the business, and profit and loss statement. Write the executive summary.

Value of the Wannabes

The traditional industry has suffered financial direct hits in the marketplace due to consumer access to entertainment products without payment. Still, the recreation, leisure, and entertainment global market is estimated to be $1.8 trillion and growing at a rate beyond 6%. How large is the independent industry that is not part of the established industry? Probably a few million, but if we really “stretch the rat,” cross our fingers and legs, and throw in everything including a kitchen sink, it’s probably between $100 million and $1 billion. That is about .5% to 1% of what the established industry RLE global market generates. Want to be a songwriter? What’s the value of your songs used in recordings or movies to the public if they can get them free?

The Net Zero Market

What is your independently released upload (songs, videos, films) worth to consumers who don’t even pay for the established industry’s products? With the Internet and computer software many have created their own computer-based recordings and videos and thrown them up on YouTube or another site. Sadly, very few indie products show the quality of innovation and creativity it takes to get people very excited. The fact that we can now use technology to make a recording, video, or film that sounds and looks good doesn’t mean they’re good enough to make any money, let alone launch a career. Millions have tried and very, very few have succeeded. They simply do not have any of the three wows that are usually produced only by the pros who over years have gained the knowledge, skills, and professional talent required to create wow products and shows consumers dig. The quality of the indie lyrics, musicians, camera people, directing, and singing (without auto-tune) simply can’t compete with the pros. Why do cover bands sing only others’ hit songs and recording? Because they don’t have the talent, experience, and knowledge to create it themselves and in most cases if they do have the talent, the songs or their “sound” has never been promoted or marketed. And they rarely sound or look like the real thing! People who hit the clubs get only “part of the emotional experience.” All they may see is a knockoff band that sounds a little like the real thing. It’s rare for a band to play their own material or someone make their own film that blows up into a wow hit and serious moneymaker. Why?

Drumroll, please—because there is a brand-based message in a song, storyline in the video, plot, acting, and about a million other things rarely found in a self-made recording or movie. Many have known this for generations. The fact that we want to write a book doesn’t mean we have the skill, persistence, or even talent to finish a novel and sell it. Even great writers have agents. And to make it more difficult the amateur stuff is competing with the best in the world, created, financed, and marketed by the preeminent folks in the established industry. But what the heck—take a shot at it anyway! You will learn a ton and get nailed with a dose of reality.

Just Do It Anyway

I love a challenge! It tends to make life a little more interesting. Wisdom comes from experience, success, and failure. But as most of us know, failure is a sure thing if we don’t take a shot. So, take it and get the education, experience, knowledge, contacts, and everything else you need to be or create the best you can be. That said, because you can create an entertainment product does not mean you should post it and give it away online. Why would the industry want to hire you or sign you as an artist or songwriter if everything you’ve created has been given away? And the industry is really going to be interested in you or your products if they perceive that hiring you (for you knowledge, talent, and skills) or signing you or your creative works—songs, recordings, and so forth—can help them make a profit. Remember, it’s a business after all.

The Phony Success of Virtual Media

It’s very cool to have a song, recording, or video posted for billions to catch. Want to give it a shot? Buy a computer and software and get creative. To get better at what we do, hopefully it will not cost us 10,000 hours to get good enough to create something good enough that consumers want it. As only one or a few people are involved in the ownership, the costs for creating the recording, uploading, and collecting any royalties are far less than in the traditional industry. If you understand the industry’s business principles, the profit margin is lowered to almost zero. That means the odds are really in the independent industry’s favor. Instead of paying thousands of employees, as an indie only you and the corresponding companies, such as CD Baby or SoundCloud, are involved. If you can get just a few thousand to buy an album or streams, you can make a living—maybe.

Levels of Success

Success on YouTube, Beats, Spotify, and other sites is laughable until you hit about 20 million or more hits. Let me explain. How valuable are the songs and recordings you’ve uploaded to SoundCloud, Soundcast Music, ReverbNation, MySpace, #music, Earbits, Last.fm, Beats, or even Spotify? The answer is zero or darn close to it. Some of the sites pay nothing or next to zip, and others pay legal rights royalties that are sadly significantly less than a penny per stream or video. So in reality, loading your song as a recording or video (property you own) to an Internet site is about the same as giving it away. If you are lucky you’ll probably make enough money to buy a cup of stale coffee at McDonald’s, and only if you get a few hundred hits. Sadly, even a million streams on Spotify will gross less than $5,500 for the master right (copyright of the recording) and less than $550 paid to the songwriter(s) and publisher(s), usually split between the two. That turns out to be only $0.00521 per play on Spotify, $0.00012 per play on Amazon Cloud, and $0.01122 on Rhapsody.

YouTube videos pay between $0.00175 per play for all rights, including video, master, and publishing, and only $0.00032 per play or view for only the master rights. Get a million streams on Spotify and you’ll receive a whopping mailbox check for $5,210 if you’re the label and about $260.50 if the sole songwriter. Add a cowriter and that amount is halved.⁸ And to make it even worse, the majority of videos on YouTube (which controls most of the market) are not monetized! Which means no royalties are paid and you’ve given the products of your creative efforts away. At that point, they are basically worthless to the established industry. Be careful about signing away your copyrights (songwriter, publishing, and recordings) to some of these “Internet suppliers” as you’ll need to have them if you become popular enough to seek a major label or publishing deal. Labels have been squeezed by the economics of scale of illegal downloading and need all the revenue streams possible when making a decision about which acts to sign. If your publishing is already gone, they may pass on signing you as an act, as without the music publishing royalties their risk for making a profit increases.

YouTube Royalties

The different levels of royalty payments for audio streams vary as the rates are based on profits, or the amount of passive to interactive use, and the year the provider was established. The rates for audio streaming are so low they might just as well be free. Videos are the same situation, as YouTube controls most of the market and it pays on the type of channel deal, the number of plays, and third-party involvement, plus or minus advertisements; but you have to hit about 100,000 views or more before advertisements are added and the majority of videos receive less than 500 views. Oh, yes, one other thing: the more plays or views on YouTube the less each is paid, meaning the more popular the video the less its rights holders are paid per stream, view, or play.⁹ Confused yet?

The amateur independents get the double shaft. If they control all their property rights and receive a million streams, mailbox money will still be only about $6,000. Hard to live on that! If the song is ripped a million times the pay is zero, which is not a heck of a lot different than getting legally paid. Now if we could just sell our recordings on iTunes we’d receive 70% of the purchase price or $7.00 per $10 album and a little over 90 cents on each single. But sales at iTunes are fading quickly (down 13% in 2014) and less than 5% of cataloged albums sold more than 2,000 copies.¹⁰ Indeed, why buy when the cost of one album lets us subscribe to Spotify or one of the other sites and we can listen to anything we want, anytime we want it, anywhere. Or we can wait for the advertisements to finish and pay zip. Who is making the money off the amateur creative individuals using their computers and a little sleight of hand to “distribute” their songs and recordings to the billions on the planet? Not the people who create and own their entertainment products but the Internet companies that claim that for just a few bucks, they can provide global distribution, international Internet radio, and so forth. Most indie acts that follow this path end up learning a tough street lesson: without massive publicity, promotion, and marketing, the chances of financial success are about as secure as winning a lottery. The actual odds are even worse.

Aggregators

Let’s see now, one song divided into about $1.8 trillion? How much of that pie is yours? The answer is probably zero, if you forget to connect to the right business organizations in the industry that represent you and collect license fee royalties, and pay you. If you want to be paid, then join the industry agencies or pay an Internet aggregator, such as CD Baby or Ditto Nation. You pay them and then they’ll collect the money and take their share out, reducing the amount of royalties you’d receive, if any. In the States, if you’re a songwriter or music publisher, join ASCAP, BMI, or SESAC, as they collect “performance royalties.” A record label must pay for a mechanical license fee, usually to the Harry Fox Organization or directly with a publisher to legally record a song they do not own. Labels also join SoundExchange if they want royalties collected for various types of digital transmissions of the recordings they own. Songwriters and music publishers must remember to notify the performance rights organization (PRO) (ASCAP, BMI, or SESAC) of which they are a member if they want royalties paid directly to them. Or you can a deal with a middleman company, such as SoundCloud, CD Baby, or many others that may need a registration fee to upload your album to a streaming service, iTunes, or whatever. They take a percentage of the royalties from the collection agency (Harry Fox, ASCAP, BMI, SESAC, SoundExchange, etc.), which also took out its percentage first. Therefore you’re being paid the remaining amount after two commissions, plus a registration fee you could have done yourself. But they’re actually a bigger problem.

The Money Changers

There is little doubt the independent industry middlemen are making the majority of their money off of the amateur creative marketplace. Clearly from the streaming rates where a million streams is worth about $6,000, if CD Baby posts your recording for streaming, it will also take a piece of the pie for administering your rights and royalties. Most of the deals, connections, and streaming could be done by yourself, but for a few bucks it will connect the dots and put your material into its system, plus take a percentage of whatever royalties roll in, if any. CD Baby is a company out of Portland that merges the manufacturing process for CDs or vinyl if needed, the iTunes, Amazon, Google, Rdio, Spotify, and other digital registrations, and a distribution link to the Orchard and other distribution to 15,000 retail stores (usually if your CD is ordered), and provides promotional distribution through SoundCloud, PledgeMusic, and others for Internet radio airplay. It will keep you legal if you use a cover song in your own recording (which is a good thing); however, this is something you can also do yourself by checking out the agency that industry uses, harryfox.com.

CD Baby or some other website may also have its own store to sell your product and pay royalties on each unit sold. It may cost you about $10 for a single and $50 for an album to get the process started. It also registers you as a writer/publisher with ASCAP or BMI and other agencies that collect money in foreign territories. That costs about $35 for a single and $90 for an album. It fulfills a valuable niche for the independent artists who want to take a shot at uploading their songs and recordings to the distribution and streaming companies that use and sell them if there is a demand for them. And that’s where the problem is! Most of the streaming and retail markets will not stock, play, stream, and so forth anything from these types of middlemen distributors unless they can profit from it. You’ll probably see advertisements that your CD will be available in thousands of stores worldwide, which is true, but they’ll rarely have it in stock and then will tell the customer “we can order it for you.” So what—customers can buy it themselves or rip it if it’s popular enough, so why would anyone buy a copy at a higher price with a retail or online store that has to sell it at a higher price to survive? Just a word of caution: most of the sites offering you streaming to the planet are making their profits off of your registration and/or subscription fees. And in most cases, you could have joined the professional industry organizations yourself. But it takes much more than uploading a song, recording, video, or homemade movie to the Internet to become successful. Let’s face it, who even knows it exists? Maybe there’s a different way.

The Foundation

What does it take to create a profitable book, poem, film, game, video, or recording that catches consumers’ imaginations? The answer is the talent of creativity and the business of entertainment. The foundation of a house or building is what everything else in a structure is built on. Same thing in the entertainment business, and this time the foundation is a wow story presented as a song, script, book, or whatever. With a foundation of sand, instead of solid rock, the first real storm that hits it will probably destroy it. In the entertainment industry the business is built on a solid foundation of a wow story, fairytale, book, or song that becomes a communicative link between the actors, artists, and consumers. That’s where it begins, looking for a great story to tell, even if it’s only three minutes long. What does it have to say, how can it provide a humorous, courageous, or scary emotion created by the actors, artists, singers, musicians, and others, who usually have to work together to create magic? The actors, recording artists, and lighting and sound guys are not the story, but they are responsible for how well the story is told through their body movements, speech, facial expressions, singing voice, and musical talents! It takes time to learn how to do it well and money to make it, usually lots of it. Unfortunately, a bad song, script, or story is just like building your million-dollar beach house on sand. Bad investment! How can we gain the knowledge and experiences required to write, create, and sell foundational creative works to the industry?

The Traditional Process

The best directors understand how to motivate great performances out of the actors, producers get it out of recording artists, and even agents have to sometimes bug the heck out of writers to get what they need to sell. They have to know who’s looking and what they’re looking for before they can slide into their glass-walled executive offices. And the industry moguls and movers and shakers need to know who the agents or you are before you’ll get an appointment to get past the front door. If they don’t know you, forget it, unless they’ve heard of your work or you’ve got a credible insider referral. The technicians from lighting to sound to the cameramen and women are usually passionate workaholics, proud of the quality of their work and reputation, respectively of all others including coworkers and executives, as they are often asked to accomplish the impossible. It’s a process to create and almost always a financial risk to stand up a Broadway play, wrap a movie, or close a recording project. Computer games may start with the spark of an idea, but it’s the storyline in the game often detailing the battle between good and evil, win or lose, and we get to play the hero. Think of the types of skills and knowledge required to develop just one new game or software, let alone sell millions of copies to consumers.

The Profit Motive

Thus, the business side of the industry is built on the shoulders of a great story positioned into a sellable product for the purpose of making a profit. Once completed, experts in sales, promotion, and marketing have to spin it out in a way consumers might “discover” it. Sometimes anything goes, but the names of the iconic actors, directors, and performing artists are branded and pushed out to fans and new potential consumers on a global scale. That also costs money! Media—traditional, mass, or social—is not free. The problem is how to get people to notice the product, connect emotionally with it, and then to buy or use it. Over the years, the business side of the industry has developed many tricks to help that happen. The industry discovered in its beginning that making some of the actors and singers famous personalities actually increased profits. That was a business decision that continues today.

The Deal—Get It in Writing

The legal side of the industry represents the laws of the countries we live in, which allow for ownership of created products (called copyrights), and lawyers who make sure that everyone plays by the rules (laws) of the game. Even the people who are creating and financing the products are locked into paperless contracts. Sadly, we already know what a disaster parts of the music and film industry have experienced because of the naive and discouraging lack of enforcement by our representatives. But attorneys are even more important as they provide the legal glue that often holds the players in the creative process and businesses to their respective tasks. Guess how this trillion-dollar business operates? As a business, with contracts being offered and signed daily and decisions about investments and careers that are difficult to make every day. But never forget that it’s a business first, right after the importance of the art, without which there is not a business.

Changing Markets

Film production companies are realizing that many fans have moved to Netflix and other streaming sites. The labels have had to change from a “purchase the CD model” to market an act’s image as a “brand” in order to recoup investments and profit. Labels brand the act with the song, image, look, or “feel” of live performances, to perceived consumer emotions that will (hopefully) make them want to buy it, creating sales for the label, leading to merchandise, corporate sponsorships, concert tickets, and anything else you can think of, but mostly profits! The film industry is the same way and has been for a long time. George Lucas reportedly made more money off Star Wars merchandise than as the producer of the actual film. First and always, this is a business, maybe glamorous and crazy, yet the successful products customers fall in love with are mostly made by extremely professional techniques, producers, directors, creative performers, and others working with executives and administrators to make money. Simple, isn’t it?

The Industry Perspective

Far worse is what the industry thinks if you posted your creative works online and failed to get millions of sales, streams, or hits. Why would anyone want to employ or sign a writer or act if “the best stuff they’ve got” is already available free online? Why would anyone want to employ someone stupid enough to give copyrights away? Starting to see the problem? Now, prospective acts and writers need a fan base or previous success to prove to the labels they are profitable. Failure to monetize creative products at a significant level is an indication you’re not ready, don’t know enough about the business of entertainment, or are just not good enough. There’s nothing wrong with trying and making a few bucks, however, even when a million streams or rips are seen as a failure by the industry. At least they’ll take notice. But consider this: it may be smarter to perfect your knowledge and creative craft before trying to get noticed by giving it away. Failure has always been my greatest teacher—passion, confidence, and faith my foundation, which have always helped me not to give up and to be a little smarter next time.

The Professional Advantage

Great films, recordings, computer games, software, and other entertainment products take a significant financial investment, usually a great song or story to tell, lots of very expensive creative technicians, a real producer and directors to make, let alone additional millions to promote, distribute, and sell. Roll the dice. People who make this stuff have a passion and love for the art and craft. They are the very best at what they do. People who financially invest in the process and products also have a passion for it, but they invest to make profits and are smart and wise about the risks and opportunities. Consumers who acquire the products free or rip them are seen as %@*&#^ (I better not say it) by almost everyone in the industry. But their kids do it too. Young people who want a career in the industry need to understand it, know it, have a passion for it, and start protecting it.

Talent and Knowledge

You can’t wait around to be “discovered” because, honestly, nobody’s looking for you unless you give them a reason! What are the laws that affect this industry? Who do we need to know? What is unique about the business? How can you connect with the important key people and businesses? By the way, that’s called “networking.” Where can we find the money to learn and maybe start a company? What do we need to know about copyrights, laws, and contracts? What qualities and quantities are required to market, promote, financially break even, and make a profit?

Why would another company want to acquire my creative products or me? The two most common abilities required are talent and knowledge. Consider the who, what, where, when, and how questions about what you want in the industry to help you start making a plan for career success. What do you want to do? How are you going to do it? What do I need to know before I jump in? Who do you need to know? What’s the industry looking for? How can you contribute? Where can I find the right connections? When are opportunities available? How will I pitch my creative works or self, if seeking a job? Who to? Who are my ideal mentors, customers, bosses, markets, and coworkers? Ask yourself, how and where I can improve my abilities? When can I gain networking or interning experience, or work daily in the industry? One way is to start your own industry-related business and find, meet, and gain what you need to know to make yourself a valuable asset. Daydreaming, wishing, and throwing up your song, recording, or film on the Internet isn’t enough unless you make a great buzz in the millions.

Professional Opportunities

The key is to use the business of the industry to your advantage. Contribute a creative work someone in the industry decides to finance, and you are on your way if you do not sign a foolish contract. Learn and breathe how the business works and figure out what you’re good at. Grab your chance at a wonderful lifelong career working as a technician or businessperson making and selling products that entertain almost everyone on the planet. Jump in; don’t be afraid to get wet or make mistakes. However, if you never try, you’ve just made a fatal mistake. It is not easy, but great things never are, so the decision is yours. According to 2014 U.S. government employment data sources there are 46,600 people employed as independent workers in the industry, which should increase by 12.5% over the next eight years.

Creating Value

Instead of waiting to be discovered, proactively pursue your career passion by perfecting your talents and knowledge of the arts, culture, humanities, and the business of entertainment. Network to meet industry insiders and have something of value to show them in the manner of talent, knowledge, product, or skill. It’s not easy, but it’s worth it and then some. Don’t be a fan, asking for an autograph or “selfie,” for as much as this industry loves its fans, very few are considered seriously to be given a shot at a career. Additionally, there are many opportunities for careers in the business according to our government’s data. Take a look at the following summarized reports (Table 2.4) and think about what you would like to do and where you fit in. These are the latest figures available (2012–2014) showing the number of businesses, jobs, and the average wage. Notice the total wages of American workers in the following information: $5,927,513,234,040.00. Check please! Then notice the numbers of businesses in the industry you may want to work for (if you enjoy it) or seek a gig from and the total number of employees. The total number of employees into the gross revenues generated provides the last figure, which is average salary, based on the value of your occupation. Notice that it ranges from $10,801 if you want to work at a drive-in theater (I didn’t know they still existed) to $141,541 if you become a software publisher or (as another example) $130,000 if you would rather be a film or video distributor. Maybe you should consider making sure the person at the drive-in gets the film, instead of just working at the drive-in.

Independent Artists, Writers, and Performers

While change is natural, developing or adapting a new business model is hard, and managing creative content is even more difficult. Almost everyone in the industry has changed the way they accomplish business by adapting traditional skills to the new paradigm. And yet, at the same time many of the same “talented gifts,” creative abilities, networking, communication skills, courage, and business practices that made musical recordings such a pleasure (should I say treasure) in the past are still absolutely required to make great new music and entertainment products in the future. About 15%–20% of the total market is independent. It fluctuates annually. The figures are based on revenue, not on uploading or projected sales by individuals.

There’s another list of creative career facts and figures provided by government sources that gives us additional information on the entrepreneurial side of the industry (Table 2.5). These are the latest figures available (2012–2014) showing the number and occupations of small entrepreneurs, work-for-hire, and independent contractors, such as producers, musicians, and camera operators, and the average wages. Notice the total number of employees, the percentage of jobs in the indie side of the industry, and the projected increase in employment over the next few years. The projected increase for creative, innovative, skilled, bright, educated artists, technician assistants, and bookkeepers is a shockingly high 12.5%. Far ahead of almost every other industry. Sounds like a heck of an opportunity to me! So what do you need to have and know to fit into the industry’s bright future?

The Industry Team

You need ideas, a team of creative individuals and business executives who together make stuff we want because when we use it we seem to help ourselves feel … something. You need to understand the basic business processes that are used in the entertainment industry and what questions to ask to determine if you have a shot at success. What’s your “value” to the people who create entertainment products (as we saw in Fig. 1.9)? Excellent creative final products they can sell. What’s the value of your talents to yourself? A great career! Should the people who create the entertainment we enjoy be paid anything? If the money stops, you can bet so will the classic creative products. What is the value of creative hard work to consumers? Damn good question! Stick with me now to find out how to protect, sell, and sustain what you want to do, which is why you are reading this book right now!