11 Things Artists Need to Know to Break in the Music Business

Posted on February 26, 2020 by


Entrepreneur and author Wendy Day breaks down 11 things artists need to know to get started in the music business.

Wendy Day, Feb 17, 2020Reprinted from DJBooth.net

Suite case of money, 2020

Photo Credit: S_K_

The music industry can be a lot of fun. If you do it right, you can achieve the dream of fame. However, there are also pitfalls to avoid for artists just getting started. It’s not as straightforward or romantic as making great music, putting it out into the world, and watching the fans roll in. The inner workings of the music industry are incredibly complicated, and you can bet any successful artist had to learn some painful lessons about how it works. This reality is especially true in the hip-hop world, where many companies were happy to take advantage of rappers and producers in the genre’s early days. Now that hip-hop is the No. 1 genre in the U.S., it’s time to take back the power.

Here, I’ll be explaining the 11 essential tips for a musician, singer, or rapper getting started on a successful career in music. Enjoy!

1. Unlike other industries, as soon as an artist creates a song or a beat, he or she is thrust immediately into being an entrepreneur.

Study the business side of the music industry to learn how it works—marketing, promotions, distribution, publishing, royalties, radio promotion, digital marketing, etc. Bonus points for those who study building a brand, content creation, and social media. Music is an industry where what you don’t know can and will hurt you.

2. Sign up for the basic accounts that track royalties and income beyond the money your distributor collects for you.

These include a Performance Rights Organization (PRO) like ASCAP, BMI, or SESAC; Sound Exchange; and a Publishing Administrator. The PROs collect money from radio play and public performances. SoundExchange collects money from the websites and internet radio stations that stream your music, as well as a portion of your income from Pandora (your distributor pays the rest). Your Co-Publisher, if you have a publishing deal, or your Publishing Administrator collects your publishing royalties for you, keeps their contractually agreed-upon share, and pays the remainder to you. Co-publishing deals are often 50/50 splits in income and ownership, and Administration deals usually consist of the Publishing Administrator keeping 10-15 percent of what they collect but none of the ownership.

3. Trademark your name as a performer and copyright your music to protect your rights.

A trademark is a name registration with the U.S. government that protects your right to use your stage name in commerce. It also protects you in case someone comes along and tries to use the same name. You can trademark your artist name, the name of your label (if you own your own label), and your name and likeness on your merchandise. Regarding copyright, you technically own the copyright to your music as soon as you record it. Still, a copyright should be filed with the U.S. Copyright Office so that if you do have to file a lawsuit for someone infringing on your work, you can collect damages and legal fees. While you can stop someone from infringing upon your song without filing officially, you can’t collect damages without a filed copyright, as that is technically the only public way to verify your copyright.

4. Incorporate your artist name as a business so that you can separate your business assets from your personal assets, and don’t co-mingle your bank accounts.

Never buy personal items with your business account and vice versa. Whether you incorporate your new company as an LLC or a sub-chapter S corporation is a discussion to have with your accountant. Still, it is a crucial aspect of being your own business entity. Additionally, you will need a Tax ID number (also called an EIN) from the IRS and a corporate bank account.

5. Hone your craft so you can be the best at what you do!

There are 20,000 songs uploaded to Spotify daily, and to stand out, you will need to be in the top 99 percent of artists. To get there, you need marketable music that a large number of fans want to hear, and it needs to sound good. A well-mixed and professional mastered song matters. In hip-hop, and the music industry in general, playlists are becoming a huge part of music discovery, so your songs must sound good played back-to-back with well-known, established superstars. Be better than everyone else and, more importantly, outwork everyone else.

6. It is imperative to learn how to build your fanbase by marketing and promoting yourself and your music.

Buzz leads to income and fame, both of which create success as an artist. To share your music with the world and build awareness, you must learn tactics to get potential fans talking about you and listening to your music. Standing out in this overcrowded industry is vital. Once you have a large group of fans who like your music and you build a healthy buzz through every available avenue—Internet, street, and club promotions; video and content promotions; digital and social media marketing; radio promotion; touring—the focus then switches to retaining your fanbase while continuing to increase it. It helps exponentially to either have the financial backing of an investor (for a revenue split or equity split) or be signed to a record label, as marketing and promotion are extremely expensive. It can take anywhere from a couple hundred thousand dollars to millions of dollars to properly promote a rapper or a singer.

7. Tour and perform in front of your fans as soon as it makes sense to do so.

Show money is always the first income artists receive. Book paid shows as soon as there is a demand for your music. Of course, you need fans to fill a venue, and shows come from demand for your music, which is driven by strong marketing and promotion. Promoters will call to book you as soon as they believe fans will buy tickets to see you. Try doing door splits with promoters if you know there’s a demand for you, but they aren’t yet booking you. This approach reduces the financial risk for the promoter and proves you care about their ability to make money. When feasible, bring on a Booking Agent to secure bigger shows than club dates and to possibly link you onto a tour with another artist or two who share your target market.

8. Whether you stay independent or sign to a record label, you must learn to monetize your music and performances.

While you may need to do quite a bit for free in the beginning, your focus needs to switch to getting paid as soon as it makes financial sense. Don’t always work for free! Some artists forget they’re making music for a living and do things for free longer than necessary to be accepted or to build their career. This is a business and needs to be treated accordingly. That doesn’t mean great opportunities should be lost if there’s no money involved, it just means you have to weigh the opportunity versus getting paid. Know your worth.

9. The typical artist team consists of a Manager, an Entertainment Lawyer, a Business Manager (also called an Accountant), a Publicist, and an Internet Guru.

Your Manager is the person who helps structure your career and image, sets goals, and handles your business for you. Aside from being someone you trust, they should also be experienced in building artists’ careers and well-connected in the music industry. Managers usually earn 15-20 percent of your total income.

An Entertainment Lawyer looks over and/or creates contracts and negotiates deals for you. They are either paid by the hour or receive 5 to 10 percent of the deals they negotiate on your behalf, such as a record deal.

A Business Manager handles the financial side of your life and your taxes. Most will give you a budget based on your income and help you plan your insurance, such as life, health, touring, and auto insurance. Some pay your bills for you while you’re on tour, and others help you secure loans to buy a home, a car, and musical equipment. They are often paid by the hour or receive 5 percent of your income if they’re handling everything for you.

A Publicist is like a megaphone—they tell the world about you and what you’re doing. They get the blogs, magazines, and press excited to cover you and your movement. Some make sure you get invited to parties and events where you can be seen and covered in the media. Publicists are usually paid a flat monthly rate.

An Internet Guru is the team member who helps oversee all of your social media platforms, website, and digital marketing. They help you with your internet content and bring attention to you via the internet for a flat monthly fee.

10. Every new artist or group starts unsigned. The act will build a buzz but choose to stay independent, or a record label will court them and sign them to a record deal.

An independent artist pays for their own recording, marketing, and promotions, and is responsible for finding a distributor to release their music to Digital Service Providers (DSPs) such as Spotify, Apple Music, Amazon Music, TIDAL, Deezer, Audiomack, and YouTube. The distributor collects an artist’s payments from the DSPs and pays them after keeping a small share, which is usually eight to 20 percent.

The artist almost always retains ownership of their master recordings and their publishing, unless there is an investor in the mix financing the release, at which point they would also receive a small share. If the artist or group chooses to sign a deal with a record label, there needs to be an understanding of how that deal will work. A record label offers advances, recording, marketing, promotion, distribution, and access to major-label-controlled playlists and radio, all in exchange for a larger share of the artist’s income and ownership of their masters. The artist must pay back the bulk of the money spent on building their career from their share of the profits, and their share is usually 12 to 18 percent. This repayment, called recoupment, comes solely from the artist’s share of the income, not from all income.

11. If you’re going to sign to a record label, be sure to have an entertainment attorney look over the recording agreement and negotiate it for you.

Aside from the fact that contracts are written in a language that only lawyers can understand, it’s not always what’s in a contract that can hurt you; it’s what’s left out. Depending on how much leverage you have when negotiating your deal, you’d ideally like to get a release date stated in the contract. It could be nine months from signing, a year from signing—it’s up to you, but make sure you get a date where you can leave the deal (with your music) if the label doesn’t put your music out commercially.

Try to get a marketing dollar commitment in writing and an outline of where and how the label will spend these funds. It’s not always easy to get this type of promise, but if they want you badly enough, they will do it. And if another label is interested too, all the better. Bidding wars force the value of the deal upwards. Your goal in negotiating a contract is to get as much money and perks as possible for as short a duration of time as possible. A label’s goal is to keep you as long as possible for as little as possible. Remember, you don’t get what you deserve, you get what you negotiate!

Wendy Day is an entrepreneur, author, and artist career builder with nearly three decades of experience in the music industry. As Founder of Rap Coalition, she has helped pull countless hip-hop artists out of unfair deals while educating them on the music industry. Day also runs the for-profit music consulting company PowerMoves, music incubator Artist-Centric, and is the author of the book How to Get a Record Deal: The Knowledge to Succeed, which was updated and re-published in March 2016 with audiobook narration from Slick Rick. She will launch a new music business education website in 2020. Throughout the 1990s, Day made her name by brokering several landmark deals in hip-hop: Master P and No Limit Records’ 85/15 distribution deal with Priority Records, Twista’s 50/50 joint venture with Atlantic Records, and Cash Money Records’ $30 million deal with Universal Music Group. She also was instrumental in securing Eminem’s first contract with Aftermath/Interscope, David Banner’s multi-million dollar deal with Universal Records, and a few other leveraged deals. Day has played a role in the careers of Lil Wayne, B.G., Juvenile, Hot Boys, C-Murder, Fiend, Do or Die, Boosie, Webbie, Lil Donald, Ras Kass, Trouble, Young Buck, and many others. Her clients have collectively sold over 1 billion sound recordings thanks to her guidance.

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