Rocking Your Music Business: Run Your Music Business at Home and on the Road

253 Pages·2008·8.25 MB·English

by  Simon Cann

Rocking Your
Music Business:
Run Your Music
Business at Home
and on the Road
Simon Cann
Course Technology PTR
A part of Cengage Learning
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1 2 3 4 5 6 7 11 10 09
Acknowledgments
I would like to thank everyone involved with the production of this book, especially Stacy
Hiquet and Mark Hughes, and all the good people at Course Technology.
Iwouldparticularly liketosingleoutforthanksOrren MertonandCathleenSmall:Orren,
for his vision and patience and for many conversations…many of which went nowhere (as
well as being the guy who gets me hired), and Cathleen, for steering the book through the
production process so smoothly and speedily, in addition to performing editing duties.
Thank you both.
iii
About the Author
SimonCannisawriterbasedinLondon.Heistheauthorofanumberofmusic-relatedand
business-related books.
His music-related books include How to Make a Noise, Cakewalk Synthesizers: From Presets to
PowerUser,BuildingaSuccessful21stCenturyMusicCareer,SampleThis!(withKlausP.Rausch),
and Project5 Power! His business-related books include the Made It In… series of books,
whichfeaturetheexperiencesofinternationalentrepreneurswhohavebuiltsuccessfulcom-
panies in the hottest business locations around the world.
You can read more about Simon at his website, simoncann.com, and check out his other
music-related books at his Noise Sculpture website, noisesculpture.com. Further informa-
tion about the Made It In… series of books can be found at madeitin.com.
iv
Contents
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x
Chapter 1
Your Music Business 1
Music Business History. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Reality Check: This Is How You Earn Money Today. . . . . . . . . . . . . . . . . . . . . 4
What Is Your Business?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
So WhatIs Your Business? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
But Why Do I Care about All of This Business? I Just Want to
Make Music! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
The Principles of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Business and Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Breakeven Point . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Cost and Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Increasing Your Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Increasing Your Top Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Decreasing Your Middle Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Infrastructure and Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Infrastructure: Stuff You Need. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Implementation: Making It Happen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
How to Set Up a Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Sole Trader (Sometimes Called Sole Proprietor). . . . . . . . . . . . . . . . . . . . . .27
Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Limited Liability Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
Corporation (with Limited Liability). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
Doing Business As . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Other Liability Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Location, Location, Location. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
v
vi RockingYourMusicBusiness:RunYourMusicBusinessatHomeandontheRoad
Chapter 2
Setting Up Your (Virtual) Office 33
When Physical Location Is Important . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Choosing the Right Tools—But First…. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Physical Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Electronic Storage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
The Written Word . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Sums. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Coordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
Choosing the Right Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
Hardware: What Tool Will You Use to Do Your Work? . . . . . . . . . . . . . . . . . .48
Desktop. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
Laptop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
Ultra Portable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
PDA/Cell Phone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
Internet Cafe´ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Cloud Computing: What Is It and Why Does It Matter?. . . . . . . . . . . . . . . . . . .53
Cloud Computing: What Is It?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Why Is This Different? Why Is This a Step Forward?. . . . . . . . . . . . . . . . . .55
To Synchronize or Not to Synchronize . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
Email and the Cloud. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Calendars and the Cloud. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
VoIP: Cloud Computing for Phones? . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
Who Offers These Sorts of Cloud Services?. . . . . . . . . . . . . . . . . . . . . . . . .71
Hardware Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80
Why Hasn’t Everyone Else Done This Already?. . . . . . . . . . . . . . . . . . . . . .80
Desktop Computing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81
What’s Good about Desktop Computing?. . . . . . . . . . . . . . . . . . . . . . . . . .82
What’s Bad about Desktop Computing? . . . . . . . . . . . . . . . . . . . . . . . . . . .82
Making the Choice between the Cloud and the Desktop. . . . . . . . . . . . . . . . . . .83
File Format . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
Which File Formats Should I Use? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85
Which File Formats Should I Avoid?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87
So How Do I Get Set Up?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87
Making the Choice between Cloud Providers. . . . . . . . . . . . . . . . . . . . . . . .88
Setting Up the Cloud Office: How’s It Done? . . . . . . . . . . . . . . . . . . . . . . .90
Contents vii
First Steps: Sign Up. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .91
Setting Up Easy URLs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .92
Setting Up Email . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96
Setting Up New Users. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96
What’s Next?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101
Chapter 3
Working with Other People 103
Band Partnership Agreement: Considerations. . . . . . . . . . . . . . . . . . . . . . . . . .105
When Do You Need a Band Agreement?. . . . . . . . . . . . . . . . . . . . . . . . . . 105
When Don’t You Need an Agreement?. . . . . . . . . . . . . . . . . . . . . . . . . . . 107
The Band Partnership Agreement in Detail . . . . . . . . . . . . . . . . . . . . . . . . 108
Band Partnership Agreement: Example Wording . . . . . . . . . . . . . . . . . . . . . . .114
Gigs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120
Example Gig Contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Working with Other Musicians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121
Live Performances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Recordings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123
Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Obligations and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Term of the Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Post-Term Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .127
Remote Workers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Hiring Individuals in Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Chapter 4
Running Your Business Online 133
Website. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135
Selling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Mailing List. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Embedded Calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
Syndicated Feeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Forums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
Contact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
Setting Up Your Website. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .162
viii RockingYourMusicBusiness:RunYourMusicBusinessatHomeandontheRoad
Getting a URL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
Finding the Right Host . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
Dedicated IP Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
Creating Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Bad Habits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
Getting onto Google. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175
Social Networking Sites. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .177
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .178
Local Advertising/Specifically Targeted Advertising . . . . . . . . . . . . . . . . . . 178
Online Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
Wider/National Advertising. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
Search Engine Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
Google AdWords . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
Go Do It Now. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
A Warning about Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
Chapter 5
Accounts, Records, and All Those Pieces of
Paper You Need to Keep 193
Why Do We Care about Accounts and Records? . . . . . . . . . . . . . . . . . . . . . . .193
Paper Trail, Audits, and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .195
Paper Trail and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
Audits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
Drawing Up Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .199
Elements in Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
Cash Flow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201
Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
Valuing Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
Accounting Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .204
Chapter 6
Government and Officialdom: You Ain’t Gonna
Fight the Law 205
Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .205
Personal Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
Social Charges (Including National Insurance Contributions) . . . . . . . . . . . 206
Corporate Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
Contents ix
Capital Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
Sales Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
Tax Avoidance and Tax Evasion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210
Vehicle Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210
Insurance and Public Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .210
Data Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .211
Criminal Records Bureau. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .212
Age, Gender, Disability, and Race Discrimination . . . . . . . . . . . . . . . . . . . . . .212
U.S. Copyright. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .212
Performing Rights/Mechanical Rights Organizations . . . . . . . . . . . . . . . . . . . .213
BMI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
American Society of Composers, Authors and Publishers . . . . . . . . . . . . . . 214
SESAC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
Harry Fox Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
MCPS-PRS Alliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
Society of Composers, Authors and Music Publishers of Canada. . . . . . . . . 214
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227