Record or Distribution Deals
How songs are sold in the music industry changes weekly. It's a high-risk, hi-reward business for a lucky few artists. How do you "monetize" your music? For an excellent introduction into "music business affairs" and contracts, please read Musicians and the Law in Canada by Paul Sanderson, LL.B. (Carswell Publishing).
Exceptions are rare, but major and indie labels in Canada rarely "advance" money for recording, touring or promotion to develop an emerging artist. For those arists new to the game, the 3 or 4 major labels are essentially "distributers" of digital and retail product, with 80% of their "distributed by" product from outside of Canada.
Even indie labels pefer artists with a finished product (CD) of original songs, a proven record of radio airplay and live performances, a website, a video on Youtube...are you the real deal? Most of all, they want the opportunity to see a live performance. Can you connect with the audience? After all, the real money is still in live touring. But how do you get to that level?
Step One is get a hit on radio or the Internet.
Step Two is a professionally produced CD of original songs, say $10-30,000. Consider that your "business card" when shopping for a record deal. Even without a distribution deal, that's how you monetize your music by selling CD's at live gigs! Maybe you don't need a major label to do that?
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Step Three is obtaining a distribution deal for physical format (CD) and digital sales. Recording a CD in the studio is one thing, then there's artwork, bar codes, ISRC codes and details that make it commercially acceptable for retail sales. Artists need management advice to prepare the product for potential distribution deals. Labels prefer retail-ready product.
Step Four is more radio promotion, publicity, and marketing. And who pays for that? Music Solutions Inc can provide radio promotion, market research, advice on distribution contracts and a variety of consultant services.
The Alternative. Rather than follow the traditional path of distribution deals, if you have a new way to monetize your music, perhaps MSI can help you. Recording one tune at a time for radio airplay is another option. It's a lot cheaper than recording an entire CD.
After 60,000 auditions on Canadian Idol, how many have become stars? The best way to achieve international stardom is to spend 10,000 hours honing your skills, says Malcolm Gladwell, author of The Tipping Point.
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How to Monetize Your Music?
With illegal downloading, some critics say music is free. Although global sales are down and CD sales are declining at 10% per year, 77% of Canadians purchased at least one CD in 2008. And 60% of Canadians listen to music from radio or CD's. One-third of all music listened to is by Canuks, 60% of Canadians attend live performances.
For a talented few, there is money to made. Music sales in Canada in 2008 were 78.5 million units (including 40.5M digital tracks) plus $40M in royalties from SOCAN. Canada is 3% of the global market and 8% of the USA market. Global sales in 2008 fell 8% to $18.42B.
As Keith Urban said while accepting the 2009 People's Choice Award, "I don't care if you download my music illegally, just keep coming to see me live." His concerts average $1M gross.
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