Getting Started: Making Money w/ Music
How do you make money with music really that's at the center of the whole thing? It's the question that we get the most often for our book, the indie band survival guide and really it's a the heart of most things when I think about how to make money with music actually think how do I make money with most of the things that you would dio? I mean, really, whether you have a multi national oil company or just a taco stand it's the same formula, which is simply this what you make minus what she spent is what you keep now if you think about it aa lot of businesses failed by not making enough, but more than you would think failed by actually spending too much, they have income, oh, they spend too much, they actually don't have enough cash flow. So let's, talk about this let's talk about the kinds of things we can do here, what you make. These are the topics that we're going to cover here today things like selling your music, that's obvious, right licensing and royalties, which may not make h...
is much sense if you haven't done it before. This is the kind of thing where, okay, how do I get involved in that? We'll tell you how to do it step by step selling merchandise, live shows, sponsorships, advertising even your skills as a musician and of course one of the bigger topics that we've seen nowadays is the amount of money that you can make using crowdfunding platforms like kickstarter, indy, gogo we're going to have a step by step guide on how to do it based on very successful campaigns that have gone before we're going to walk you through it, but as we're going through this, we also want to talk about ways to minimize your spending if that makes sense. So how to get digital distribution zero dollars cd and dvd manufacturing zero dollars how to make merchandise for zero dollars there's a lot of options out there because of today's custom on demand world where you actually don't have to pay anything in order to actually be able to sell thanks to customers and fans it's very, very cool we'll talk about how to do that in the future. For now I want to cover basically in this course to maximize what you keep is what it's all about, and in order to do this you actually really need to think about the three parts of each business transaction. So what do I mean by that? Let's go through this the customer of course being the key one but the reason why we bring this up? Well, we'll get to in a minute the middleman in you let's start with the customer it's where the money is coming from right that's the obvious thing, but more importantly than anything else is the question you ask yourself is how you get more sales that tells you how you're going to market and what you're going to do in order to try and entice them to take part in that more often the next is the middleman, which is who was handling the transaction and how are you getting paid how my set up to receive basically what you're trying to do because most of these middlemen actually have different terms, they actually change how they do it and you actually have to make a good selection isto which middlemen, you're going to be doing business with it's pretty important and finally, you know this side we're only going to spend a few minutes on right now we're never going to come back to it, really? We might mention it at one other point, but here's the thing we're actually going to be giving you ways to make money with music, which means that they're going to be asking you to enter a tax I d this is truly going to affect what you make, and that means that you've got to ask yourself, how are you set up to receive money and these air three key points as it relates to this one is tax reasons, of course how you handle this and what your accountant tells you you khun dio actually can affect your income depending on where the money is coming into but also tax benefits like write offs if you do it the right way, your income should be offset by actually the expenses you're doing like that instrument you have you can actually write it off things like that and finally avoiding legal liability now what does that mean? It means that if you have all of your business activities under one business, they're actually at risk for if one part of the business let's say get sued they could get all of your business but if you separate them legally you can actually protect it like I said, I didn't want to go over this too much here I just want to set this up and leave it aside but I'd like you to think about this because as soon as you start following this plan you will be entering your tax idea in there and that is a tax I d that's actually doing business and it starts affecting all of these things does that make sense? Great so let's take an example based on the three parts that we're talking about the customer, the middleman in you the customers are the backers so how do you get more backing money? Will you actually try and get them to get either mohr donations or get ah higher donation from the ones that you already have and we're going to talk about how to do this the second one is the crowdfunding platforms like kickstarter pledge music and all of the others they have different terms they actually take different percentages out and most people don't take that into account you really need to think about that and we're going to cover the difference is we're actually going to tell you how each of their plans map out and which ones might be best based on what your goals are and then the third thing of course is what we just talked about which is the tax idea that you put in but before we begin I want to tackle just some very, very basic questions here basic questions like for example, who is this course for? Because we know that a lot of musicians come to this with aa lot of different experiences and ideas on how to do things you might have ah music, business that's just starting out or you might have one that's really advanced in particular we're building on what we've written in the indie band survival guy now while we could sit here and do ah music business one o one course in order to make money with music you actually have to have a music business to build it on don't panic because for all the things that we say that you should already have will actually refer to the parts of the indie band survival guide that tell you how to build it from scratch, but beyond that we'll also give you an idea about what you should be thinking about and where you can take it from there. The main thing is that you have music fan base and your web presence is already ready to go we're going to have a deep focus though on the money part of the business which is after you set it up now for this course we have a lot of experience teaching music business in chicago we do this very regularly one of the things that we notices before long people are taking notes you really want to have that handy because we have aa lot of links aa lot of services, a lot of information this is eighteen hours of content and each slide actually has things that you're going to probably want to take notes on we just recommend that you do that. The other thing is we left lots of space for you to ask questions, so feel free if you have questions for those of you online, if you have questions were happy to take it as we go because we'll probably might have a much harder time going backwards thirty slides to talk about a topic that we had covered before we're happy to take it as we go we I don't mind being interrupted and it's actually something we're very used to sort of classroom style and then of course there's so many links I think is it five pages stays in six pages of links that we have that come out of this course single space is it small fund very small fires six pages of links that come out of this course it's one of the things that you can get if you've signed up for it and in particular it's going to be something that's a very useful resource for you you if you get the course so let's talk about one of the bigger questions can you make your living off of music again? It's one of the bigger questions that we get more than just about any other and the answer is yes and, you know, there was an and I bet you thought there was a but right way could have said but I think we had but originally way did ok, we changed it too and because it's like the improv thing, right? Yes and so yes and all the people that we talked to who make their living off of music and this shouldn't surprise anybody all the people that we talked tio have multiple sources of income, not just one, and the interesting thing is none of them have the same sources of income we didn't see to music businesses that were even closely resembling each other, which is why throughout this course will be giving you so many different ways that you can do this because you need to choose the ones that matter to you. What we actually found was that most of them had two, three or four big ones and they were very deep and then they left out the others now that said, there are so many sources of income that we have here that are very easy there set it and forget it type of things that you may as well do them it's going to be great because you're going to be able to do it. In fact, for those of you online, you can actually just do it while we're talking about oh that's cool when you go to this web site and signed off that's actually the way we tend to do it with music business students in chicago will say bring your laptops we don't mind we'll help you do it now we can't detect support run we're on the air but feel free to ask us questions along the way and the hosts will feel free to be able to give us the questions as we go well treated just like another student in the classroom and it should work out really well now another question that we get fairly off this comes up a lot right? This is probably the central question because everybody focuses on things that you can basically download pirate or get off the internet it's very easy to d'oh how do you do that how do you make a living out of music if people can just find and take the thing that you worked a year on and spent goodness knows how much money of studio time and then you've mastered your album and then you've put it out and done all this hard work marketing it they're like hey that's great thanks here's where goes adams not bits I don't know if you've heard this term before but it's the key to how you do things today based on how the internet is set up it's ironic why is it ironic take a look at these these records and these other things here people used to buy them and yeah they sure like them is items toe own but what they really wanted was the music right that's what had the most value but ironically once you divorce it from a physical object people actually think that it has less value it's just something that goes on in their heads which means that you have to bring your music business not just your music your music business back to selling adams to the extent that you can and we're gonna be talking about that throughout that makes sense yeah ok so another question that you probably having at this point is your is your going forward? What type of skills do you need to get started making money with music? Right? It's probably a lot and in fact it is a lot there's quite a few things I mean, take a look at this list right here manager book or web designer graphic artist publicist it goes on tv film camera crew editor if you're going to do any kind of video work and let's face it it's very much worth it to do this because that's the thing that goes viral more than any other an attorney and accountant which comes in more quickly than you think a lot of what we do is musicians is actually impacted by the law surprisingly, I mean the second you decide to cover a song, how do you pay the person who's supposedly owed money for it hits music copyright right? Well, there's three options there's three d I y options based on this do it yourself find a friend or acquaintance to do it for you, right? Pay someone or a service to do it or any guess is this the last one he'll gases well, you've seen it, it doesn't get done and that happens a lot and that's okay it's actually something that haven't stuffs all the time we don't do all kinds of things you can't the list of things we don't do is focus on the ones that can make you the most money and in fact, as derek sievers says, the one who founded cd baby, we really like this quote, do it yourself doesn't mean do it all yourself I mean the key thing here being that it's not about oh, I have to have my name in every single slot in the liner notes I wrote, produced mastered did the marketing wrote all the copy? Did the pr remember this stuff? You don't have to list yourself next to every single name here on every single roll? The point isthe you really want to get people to help you do it? You have to network sometimes it's a dirty term people aren't used to doing it certainly everybody's sort of vaguely aware, you know, I really should be networking in this music business, but then that everybody knows how to do it. And actually that is one of the places where we want to start talking about how do you network just one final point on this? If you don't, you may not actually get enough stuff put together to actually make a business out of your music, so thinking about that here's how to network in just one step now we like to do this just for about for every topic that we have have a slide at the very beginning of many of our things that says here's everything about marketing and one step social media in one step this is networking in one stuff you actually as you run into people as you network as you meet people the first thought that you have is not and should not be what can this person do for me? I think you know where I'm going here it needs to be what can I do for them now? Why is that important? Why does that even work? Well, then you can ask them to pay you back and it really is human nature that they're actually very inclined to do that at that point. There's a great book that talks about this called influence the psychology of persuasion it's by robert c al dini and it's very much worth getting if you want a good business book. It's kind of like mind control for business so it gives you all these techniques like, oh, wait and we're gonna be talking about some of those techniques we actually have different parts of our presentation where we bring this in but it's part of marketing it's part of how you deal with people while considering this considering that if you find out what people need and solve their problems and then asked them to help you well, here's the best part you probably already have a huge network already within your arms reach that you can use it's likely the case considering this and this is another quote that we like quite a bit from derek sievers, and I remember when he had explain this on an interview when we were talking to him for one of the books he talked about the fact that you know how there's things that you really love to dio you know you're really excited about I don't just mean music, I mean, the other things you like maybe like web design, maybe you really enjoy that kind of thing there's probably a part of this music business that you hate, I would guess like the accounting, your bookkeeping or maybe you don't like doing graphic arts. I know I don't know if I'm going to get in trouble by saying this here creative life, I suck a graphic arts I really terrible at that I mean, I know what I like to see I know what I'm looking for, but I'm really not very good at doing it. I have a graphic artist that loves doing that stuff he studied it in college and I go to him all the time, but that said he doesn't like coding nearly as much well, I'm an I t guy I could code for twenty four hours straight, I'm thrilled so how does this work you put these things together you make it all work together so the key is to change your thinking on the people that you already know and and what is that that we mean by that? Well, first of all I'm gonna break it into three categories just to make it really easy for you and have you think differently about the people that you do meet first of all, you need skills and talents so for some of the people that you meet publicists, producers, graphic artist photographers people have skills you need it actually can help you succeed it what you're trying to dio so you meet somebody and I don't know this reminds me of that's right? That story of the girl in the apartment upstairs that was a party you were at right? Yeah that's a good example I think of um one of the things that you want to do is to make your challenges or your problems known to the people around you so that you can uncover the hidden skills and talents that they have and one of the things that we did for our second album which was a a christmas album of sorts was on holiday like you isn't one hundred eighty on holiday all songs like coed naked drug christmas shopping, smoking the missile smoking the mistletoe is that kind of stuff but one of the things that we did not have access to and we did not know how to do was thie uh the album art and we didn't have the access to software that actually could put it together and at one time at a party uh we just were talking to people that were at the party and it turned out that in the apartment that I was at the girl from upstairs actually uh it was a graphic artist and had all the programs that we would need and when she said hey, look, I can help you with that I can I can solve that problem basically plus I'm looking to get something on my resume something else that I can add to your portfolio exactly so just by making your, um, challenges known or your problems or what you're trying to solve known to those around you sometimes you can tease out these skills and she helped us put together the mobile which is great I look good it looks really good because she was able to put those mean usually when we do things is just very plain and she added those extra little elements that made the whole thing pop out and work out very well so that's one thing the skills and talents that you need here's another one you're looking for opportunities and publicity now the thing that all of these people have in common what we call our opportunity network is that they have an audience that you can reach right now that should be obvious and most people when they think audience that you can reach they think of media like oprah although I don't think she'd be interested in the indie bands final guy be nice if she did, I wouldn't mind going show, but that said they all have an audience now the interesting thing is we do think differently about this to the point where we try other things and like the cheap ass story is actually a really good example of it because it was a basically a website and game creation place, right? I think to tell this story it's we were we were definitely looking to broaden our audience and how do we get beyond chicago? So this is going back in time, so all right, two thousand was when we were our life shows we've done a number of years, our audience would start to move to the suburbs and have kids were like, you've got a grow our audience again, like what about this internet? This internet thing? There must be something there must be something there, so she's, we're always like creating songs just out of we're inspired by odd things and we're playing a game that was created by this game company called cheap ass games funny uh title for the for the company but that's their title and the dancers seven dollars and fifty cents well, they were there and they just give you like the board and some cards and the rules and they figure you can rage a monopoly deck for the tokens and the dice and the play money and whatever else you need and we should be clear it's not video games that that was a border for games but there is a card that said we're all these beer cans here last night and I looked at it I said okay that's a song and we went off like I think the next rehearsal and we actually wrote it and that's when we started connecting hang on how do we get if we wrote a song about this card that isn't the cheap ass came that they produced they have an audience and people have bought this game like what we should do is take that song and uh let's connect with the game company so we worked it out through email and everything and we actually contacted the game company uh they liked it it's a very poppy fun little song and they asked if they could posted on their web site now again, this is back in two thousand two two I think two thousand two or something like two thousand and two move into yeah and they were excited so they wanted to post it on their web well like we were amazed because what they did was they linked to we had the song hosted in our sight so we had all the statistics and we had all the analytic and they put it on their front page but they linked to it through their front page and like some like fifteen thousand downloads or something like one in just twenty one it was crazy and not only that but at that time if you searched on beer cans on google we were in the first ten results yeah now you would normally think of going after a website you wouldn't think they would have an audience but because these games were seven dollars and fifty cents and a lot of they had a lot of customers and they had the kind of ceo that they really showed up very high we actually reached so many people with this it was huge well then that got us into the snitch of gaming there's a whole gaming world and we'll talk about this and future lessons here but there's this whole gaming world and we were able to through this brainstorm and making this happen we actually became like the band that actually saying about gaming gaming but it was such a I mean the thing is from there we went on and I don't know if we have I don't think we have a story for it anyway so we're not cutting something off later but from there, we went on to work with a company called board game geek, which you might be like, ok, whatever its board games, they were getting half a million unique views a month, and we did a podcast theme song for them, right? And some other music for them. And this is the thing when you're looking to say, how can I help this person? It's not just about what you can do for them, it's, not just about money, it's, not just about any of these things. It's actually, very often we almost always started. Can we get them some music? Because we're very good at making music. We've released over five hundred songs, and we've got nineteen albums with the twentieth that should be out soon, I hope, and with this kind of thing with so much music of ill, I'll do us you'd be surprised at how often you solve people's problems and actually there's another part to this story, and we should continue its and again, this is this is like the niche that we went after, but the point is to think bigger for yourself and your music and what maybe you could target. So the song became very successful for chief s games, and then they actually contacted us and said, would you think of actually doing a full album? That we could sell on if you could do it about all of our games. So we wrote an album called the chief asked album, which is a great title for an album especially for our band yeah, this for and uh um and we actually were inspired by a lot of their games and we wrote songs for them they distributed the cd so at that time distribution was difficult two thousand three's when that album came out yeah, it was really baby I think was running it was c baby has been around since ninety seven yeah, but it was still a little difficult to do sales especially because people weren't aware of is aware of cd baby as a platform having a ready market to advertise to and that's part of the other part of the story one of the things of course you think of is doing the album art well, here's another opportunity for you we actually contacted one of the board game are creators and he happened to be a very well known artist and comic book artist. He had an enormous number of fans. His name is phil folio. Once we released this album, we wound up on a website that tracks all of the art that film mate yeah, he has avid fans who want to collect all the art that he makes and he did our album cover here's another one you see where the audience is the audience is not just in the media, the audiences and even justin websites even the artist who does your work can actually help promote everything and that's how it comes together so again last thought on that don't get lost in our story right and get lost in the gaming thing uh it's about thinking bigger uh trying to match your music to opportunities that are out there and again we're going to talk about that in many of these lessons oh sure way had a question from your transmitter and they want to clarify did you pay that girl from upstairs or was this just like a good exchange of ideas or is that something where you should pay someone for that actually it was a barter a partner that's basically what it was she said geez I will do this for you because I want this on my resume I want this is a part of my portfolio and esso it really worked out really well on that end but you could pay somebody good you could do that but this is about networking to try teo and we're trying to save you money so there was a follow up question to that from archie's asked how do you approach them when and asked them to do work for you and how can you let them know it's ok to say no arrange for comment station, because even I felt that when when I was listening, I was like, I'm the type of person who might be a little timid tio to make that initial congress a headlock thie interesting thing is, in that situation, we weren't going around saying, oh, you do, art, can you do this for us? It was at a party were like, we don't know anybody who has it was a yeah, you know, and we don't have this adobe illustrator, we don't have this program, we don't know anything about it, and we're trying to do an album she's like why I do that, and she volunteered so one of the key things, and we're going to get to in the later slide, but, I mean, this is a good time to bring it up is that you actually should take every problem that you have, especially because now you're a small business, you're musician and just talk about them. I'm serious, it works. I mean, with the size and there's there's, a lot of different ways. I mean, how many bounce ideas I've played? The trombone player? What about the like? That was just we were just talking about we don't have a trombone that's, right? I was talking in line ordering a burger we're waiting for a turn and before the festival was such a there's like he's what we need is a trombone for this song where during the record a song that we have the trumpets but we didn't have any trump boat and I was just talking out loud and the guy in front of me turns around and says, well, I played trombone and he was a student he was a student at northwestern questioning and um well there you go that's how you do it you go to your favorite fast food restaurant in you you just say what you you know, hey, I'm healthy there's a formula that is just like you never know where somebody could actually come out of the woodwork and and help you know in that case that wasn't somebody who was in our network right? That was actually a new uh well, I guess we were networking in some ways but like a lot of this is you will be surprised at how many people you know or maybe it was in your band or people your family, whatever they can have all these hidden skills and talents or know somebody who can get you in touch with a blogger or podcaster or what have you and the idea is just in the main point that randy's making here is that you just have to change your thinking about how you do that and that's, how you kind of discover opportunities and you should be nice to people, way said, offer them something absolutely conference and we were not just to be clear. We're not just saying go out their network and find somebody to free it is sometimes about compensating people. But then then again, it could also be about finding somebody who could do it keeper or somebody you could work with more closely, but our favorite situations or barter in our very favorite situations that's when we could barter music for services and stuff. Yeah, it tends to work out really well that way. Good. Great question. And anything else you answered as it came in. Your transistor followed with the original question was saying, basically, exactly what you are saying, that you need to find a creative solution to make every both parties happy. Perfect, except very well known. Well, then that's. Too weird on two out of three, right. So back to the slides. What we have here is that you also need business partners, right? We need people who basically want your music of music services and remember what these three categories air for as you meet people, it's the thing after you figure out how you can help them you know again we did start by saying we want to find out how we can help people there's a lot of people that we just helped out we never necessarily got anything for it but we're happy to give him somehow but we were repaid over and over and over again and so many cases a karma thing it is a kind of a thing and the way this kind of thing works is trying to connect to people that can help actually that's another good story the international pop overthrow so how we got um how we got connected to the person who ran this festival so international pop overthrow is a is a very cool uh festival that goes to city to city basically uh it was run but it's run by david bashing yeah david band it was perfect for our poppy music it's like that's the festival we should get into its very upbeat poppy and uh we struggled for I think a year to just trying to figure out how do we connect with this guy get in with him and all that kind of stuff all right get in the festival get right and it was it's very difficult and it can be difficult to actually try to make these opportunities happen for yourself but what do we do? We ended up we knew we knew somebody who was already playing in the festival and we asked hey do you know? You know, can we? Can you tell us, how did you get this it's like, oh, it's, run by david bash, I can introduce you, and actually she did. We met, we went to her show and we actually got to shake the guy's hand, got to meet him in person and told them they were available in case you're ever looking for anything, maybe next year. And then, sure enough, the next day I got col. I remember, I remember that always and like, hey, I just had a cancellation. Can you guys fill in? Would you guys play in our festival, which is perfect, absolutely ideal, because from there we were on stage, we have the international pop overthrow played that number of years since then, and, you know, it was a great thing to d'oh and again, this is just another category of people you could be looking for.