Master Class: Choose Your Own Adventure

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Like many things in the music industry that have collapsed, dissolved, emerged, and reinvented themselves, the record label is just that: a concept that can be both regarded as dated and dead, and re-birthed as innovative and collaborative. Nobody wants boxes of unsold CDs sitting in their closet or garage, collecting dust and motor oil—a situation many record label owners face now in the digital world. As a music business owner, you want your music heard, and you want to profit. Nowadays, you must look at your business as a media company, not a record label; you are producing music and entertainment beyond your recording.

Let's frame this in today's industry. Rather than depending on unit sales, the consumption of music today is largely cloud based, and income streams are tied to products, films, or personalities. Songs are discovered in commercials. (See Jon Stewart's February duel between the Black Keys and Vampire Weekend, about who sold out more with songs placed in commercials.) Bands are discovered in film and TV placements. (Thank you, Gray's Anatomy and CSI Miami.) Artists are not just the songs they sing, they are the interaction on their sites, the behind-the-scenes videos, and the apps they provide on mobiles. Music is then played and consumed on Pandora, YouTube, and other online spheres, and occasionally purchased on iTunes, Amazon, and your local record store. (Keep them alive!)

Therefore, both your business model and your entertainment content must be multi-dimensional, or your plans will be flattened by the stampede of hundreds of thousands of songs and content at consumers' fingertips.

For the purpose of this article, I'm going to assume that most readers of Electronic Musician are eager to refine their craft in production, artistry, and music business, more than taking the financial risk of marketing other people's art. Therefore, I'll focus on a business model for a media company dedicated to an artist releasing his or her own music. Of course, many business models are relevant to the media company framework, so take this as a jumping-off point for refining your goals. Build on your strengths, your inspiration, and your vision for the entity: Are you singularly interested in promoting and elevating a genre of music? Lots of opportunity here, particularly as you narrow the focus of the genre and constituencies served by the genre. Are you interested in promoting up-and-coming acts in a “scene” in your city? Be a tastemaker and network with clubs, artists, studios, and sponsors to create the scene.

Getting started might seem daunting, but divide your plan into topics, and within each topic, set up your goals, tasks, and timelines for completion. With a clear vision and completed recordings, within two weeks you can set up your business, marketing plan, and income streams, and identify partners for your company. Here are a few ways to think about topics to get you started.

Business 101
You'll need to set up a proper business entity. This includes, in short, setting up a business federal tax ID number (FEIN), getting a business checking account at your bank, and securing a business license and a seller's permit. If you have personal assets such as a house, consider setting up a sole-member LLC, which will keep your business and personal assets separate. Though this is easy to set up (I recommend for easy paperwork processing), there may be annual taxes based on the state your business is located. (In California, for example, it's $800.) Alternatively, start as a sole-proprietor, which just means you have an FEIN and are not using your social security number in business. Next steps thereafter would be setting up bookkeeping, accountant services, and procedures for billing, invoicing, and paying taxes. Because you'll be building up various types of entertainment content, I'll assume you are making more than just studio recordings. Get W-9s, work-for-hire contracts or collaboration agreements, and invoices from each person you hire—video producers, photographers, etc. Be prepared at the end of the year to distribute 1099s to any contractors who you paid more than $600.

Marketing 101
This is the fun part, and it will have far-reaching impact if you take the time at the start to establish a plan. Brainstorm and define the “brand” of your music: What kinds of images are associated with your songs? Which colors match your sounds? Which types of videos and artwork inspire you and you wish were on your YouTube page? Going through this exercise will prepare you to hire a website designer and logo/image designer who will help communicate just why people should check you out. In this process, identify commercial products, films, and television shows that are playing music like yours, or that would be a good fit for your material. These will be targets for your business plan. (If you're anti-commercials, be sure to check out the Flight of the Conchords episode where they write a song for Femident Toothpaste, made just for women. It was the only time they got paid.) Match content with your brand. If you're a banjo player, perhaps you want to make videos teaching how to buy the ultimate banjo, or how to play an ultimate banjo-picking anthem. People might be interested in this unique idea, and it's likely that there isn't much existing similar content. With your brand and music at the center of your marketing story, identify five ways you can expand your media, collateral materials, and experience for your fans and the world beyond as they consume your songs.

Income 101
After your bank account is set up, identify and list all of the income avenues in your business model. In general your list will include: CD sales, digital sales, merchandise, shows, sync placements, video hits, mobile apps, and bookings. Where else do you see yourself making money? Can the other media ideas you came up with in your marketing exercises generate income, or are they mostly promotional expenses? Think outside the box if you can, and aim to monetize. In addition, set up passive income streams online. Go to and register your recordings—you will be paid for your songs' plays online (similar to online radio, but here, performers get paid in addition to songwriters). Make sure all of your songs are registered with your performance rights organization (ASCAP, BMI, SESAC) and that you inquire about their “live” opportunities, where they pay you for performing your own songs live. Lastly, and this one's not passive income, set up a seller's page on, for the people who still buy CDs. If you haven't decided who will distribute your CDs, look into to set up a sales page on your website so you can manage all of the shipments from your house and personalize your offers and media packages.

Company 101
You cannot do this alone. Focus on building a multimedia team; let's call this your own personal A-Team. You need reliable, creative, smart and passionate folks who are relevant to today's commerce. Must-have team members include: attorney, accountant, video producer, music producer, social media manager, publicist, business development manager, website manager, photographer and graphic designer, booking manager, artist manager, writer, merchandise manager, bookkeeper, media creators (applications for Facebook, iPhone, etc.). In addition, of course, are the quality musicians, songwriters, and recording engineers who make this what it is—incredible music. It's unlikely that you can supply all of these people from your personal network, but this is another way you can engage your fans and your broader community to get involved in your project. Be a magnet! And know your limits: At first you may have to fill many of these roles as you forge your own path, but you really can't do everything alone, and you should not be afraid to spend money on individuals who will do things properly. Of course, the specialized positions should be hired out (don't be your own lawyer); others you can delineate but do yourself (inventory and bookkeeping).

Project Management 101
You've set the stage for your media company to make an impact; it's time to roll out your plans. Now, you need to know it all and be able to delegate.

You can't manage and assemble a successful team without knowing at least a little bit about doing everything yourself. People will quit, move on, etc., and you'll be stuck with half-built website pages and unfinished Pro Tools sessions. Do everything yourself at least once, and know how to talk shop, delegate, and project-manage each realm of the business. Read quality books about how to set up and maintain a successful business. I recommend Michael E. Gerber's The E-Myth, and a combination of books on music and unrelated businesses, so that you incorporate ideas beyond your comfort zone. One piece that I learned from Gerber's book was the importance of learning how to do everything so that you can efficiently and effectively manage (just like they teach you at McDonald's University). Even if you are working solely with contractors, identify all of the traditional jobs of your business as if you had a staff of 20. You can then assign names and roles for each job and have clear expectations defined. If you're doing it all solo, you'll see what you're up against, juggling roles of CEO/Marketing Director/Booking Assistant, and when certain roles (e.g., those bringing in the money) will need to take precedence.

Communications: Establish Proper Business Practices
It's not sexy, but it is so necessary. Lining up proper contracts, correspondence patterns, invoicing, bookkeeping, and follow-up—integrated into your calendar each week—will set you up for progress. It's not like anyone got into music to be the best contract writer, but at the same time, you need to get paid on time. Track your bookkeeping (receipts, mileage, etc.), and use Quickbooks and your online banking/credit card for proper reporting. Come April, you'll likely see a refund if your business is still building. Regardless, you''ll be in line for growth instead of regret. If you are starting to make deals with contractors such as distributors, video producers, aggregators, and mobile media developers, set aside a healthy sum of money for a music attorney. Don't download a contract off of the Internet and assume it will work for your situation. You need to understand what you are accountable for as business owner, and your contracts will define those rules.

Balance Creative and Business
I fall into this category, so I'll own up to it. When things are really happening for your business, you'll generate more correspondence, paperwork, and details that need to be attended to—and the creative part gets kicked back. But that is why you got into the business, so don't let it lie dormant for long. Not to sound hokey, but consider trying a vision board with a list of the creative assets you want to make—the songs and media you want to create and record—and put a timeline to it. Want to have professional videos? Put it on your list. Every week when you host your own staff meeting to check in on your progress, run through your list of creative goals as well as your Business 101 list. Schedule both events so you are accountable to your vision and not just your to-do list. Every week, take a step toward the loftiest of goals. Nothing happens overnight, but nothing happens without you putting time into it. Like a stone sculpture, chip away at it and invest in the process.

Problem Solving: When in Doubt, Google It
Having set up several businesses and advised others on it for the past several years, one thing I've learned is that when you don't know how to do something, and you can't ask someone, Google it. Seriously, I have trained numerous staff on this exact premise. For one business, I had the website up and running, and had great impressions and feedback on the design. But then I had to edit the site. How to do that without the website editor, at midnight when everyone was sleeping? I Googled “how to HTML images.” “How to FTP.” “How to Photoshop color replacement.” Because of this I can maintain my websites at a rudimentary level when in a pinch. Be willing to ask questions when you get stuck, use your network. When that doesn't work, take your inquiries and willingness to learn to that vast searchable list of resources created by generous experts. The same goes for feeling stuck on finding the right folks to join your team or develop additional media. Chances are someone has written about the companies, or they have their own marketing online.

Persistence and Vision Take You Anywhere. Don't Give Up
This road you have chosen is not simple, easy, or fast-tracked. Your persistence, ability to persevere after failures and re-imagine your future path, and collaborators will define your success. Many people are distracted by their fears, roadblocks, and hang-ups. If things get hard, find that one business leader who inspires you, read his or her story, or, if that person is a friend, call to find out how they keep going amid adversity. With your A-Team behind you, you're going to have a lot better luck than flying solo.

Forging your own path, building your own brand and products, and creating your own income stream from music is the only vibrant reality in the industry today. If major labels are taking tips from independents and media companies, re-hauling their staff and engaging their consumers in new ways, then media companies and entrepreneurs are trailblazing ways to do all of the above. So if you're inspired to trailblaze and forge ahead in music business, we're 100% behind you here at Electronic Musician.

Kaitlin McGaw runs Alphabet Rockers, a children's music group. Check out to learn more about her music, and to see real-world implementations of the ideas outlined here.