While it’s no secret that Memphis has a wealth of musical talent, the wealth that those artists should be pocketing often remains unknown, even to them.
10, more than $65,000 in royalties has been distributed to local musicians, and the MMF wants to help others claim thousands of dollars in additional uncollected royalties.
One of the local organization’s primary missions is to educate artists about the business side of the music industry and to help them make money, said Pat Mitchell Worley, director of development and communications for the MMF.
“Digital has been a godsend for many independent artists because of increased exposure, but too many of them are missing out on royalties from that exposure,” Worley said.
“There’s so much more to being a musician than performing on stage. There are many pieces to put together and we’re here to help them do that.”
That’s why the MMF is stepping up efforts to encourage its members — as well as local artists who aren’t affiliated with the organization — to register with SoundExchange. There’s no cost to sign up, but the potential payoff could be significant.
“We believe what’s been claimed by Memphis artists so far is just the tip of the iceberg. There’s really no way of knowing how much in collected royalties is out there until artists register and collect their earnings,” Worley said. “There’s absolutely no cost for them and we’re firmly advocating that they sign up. We’ll even be glad to help them with the process if they need assistance.”
Memphis artists receiving royalties collected by SoundExchange include the 8Ball and MJG, Magic Kids, Preston Shannon, and Project Pat.
Established in 2003, SoundExchange is a nonprofit performance rights organization that collects royalties on behalf of sound recording copyright owners — typically record labels — and musical artists for digital performances.
Fourth-quarter distributions of royalties for 2011 were nearly $90 million, with year-end royalty payments exceeding $290 million. The organization has paid out more than $900 million in collected royalties since its inception and that figure is expected to keep growing.
Last year SoundExchange performed more than 80 database matches with partner organizations such as the MMF and registered more than 15,000 new artists, labels and rights holders.
And while many top-name musical artists are registered with SoundExchange, the group primarily helps independent artists. In fact, 90 percent of the royalty checks distributed by the organization are for under $5,000.
And the agency also benefits legacy acts and estates. For example, artists whose music was recorded decades ago — but is still being played on digital oldies stations — also may be entitled to uncollected royalties.
“It’s not just the superstars, but up-and-coming artists and some of them who are no longer performing or their heirs who stand to benefit from signing up with us,” said Marie Knowles, vice president of communications for SoundExchange.
“We understand that some artists have a sense of skepticism about this and think it’s too good to be true, but the fact is that it’s their money and they’re entitled to it. Our job is to help them get it.”
— James Dowd: (901) 529-2737
What: Nonprofit performance rights organization that collects statutory royalties from satellite radio such as SIRIUS XM, Internet radio, cable TV music channels and similar platforms for streaming sound recordings.
Cost: Free registration, but organization keeps back 6.7 percent of collected royalties to pay for operating and administrative costs.
April is Financial Literacy Month and your music business can’t grow without sound fnaicial planning. Here’s a blog dedicated to teaching musicians about money management.
from Music Money 101
1. The Time Value of Money
Despite recessions, deflation threats and falling house prices, a dollar today is worth more than a dollar tomorrow. This is really one of those big dilemmas in the world of finance because you have to make a choice between something of value (your cash) for another thing called time. You can’t have both at once. You either spend your money now or you save your money and spend it later. If you wait and spend it later you want your money to grow over time and be rewarded for not spending it right now. Otherwise, why bother waiting knowing that your dollars will buy you less over time. Can you see that time has value? How much value is better understood once you appreciate the power of exponential growth and how it applies to interest.
2. Compound Interest
Albert Einstein once said: “Compound interest is the greatest mathematical discovery of all time.” Yet, everyone seems to memorize his famous E=mc2 in favor of the good old compound interest formula. What was that formula again? Here it is: Pn = P0 (1+r)n
Where, Pn = Future Value, P0 = Present Value or Principal, r = interest rate (per year), n = time (in years) a.k.a. compounding periods
To really appreciate the power of compound interest let’s call it by its real name: Exponential interest. Exponential interest is based on an exponential function with the value for time being the exponent. For longer periods of time, the exponential increase of the interest amount becomes all the more clear when comparing it to a linear growth rate, the much more intuitive way of looking at increases over time.
This can have particularly devastating effects when underestimating the power of exponential interest for credit card and other debt. Understand the exponential function to get a sense of how the power of compound interest can make or break you.
3. The Rule of 72
The Rule of 72 is a simplified way to estimate how long an investment will take to double, given a fixed compound interest rate. Here’s how it works:
72 ÷ interest rate = # of years it takes to double your money
For instance, if you could earn 6% return on an investment each year, it would take approximately 12 years (72 ÷ 6 = 12) to double your money. If you are a guitar player, the number 72 should ring a bell. In case it doesn’t, please consider the Guitar Player’s Rule of 72.
4. Understand Credit, Debt and Leverage
Consumer credit, credit cards and various ways of financing have become an essential part of today’s economy. No industry has been untouched by the pervasive use of credit and the global economy would come to a standstill if credit were to dry up completely. During the financial crisis of 2008/2009 we saw a glimpse of what could happen when the well of instant credit dries up.
It is essential to understanding how interest and financing charges on your credit cards and loans work. But it is equally important to limit the amount of overall debt. Credit can be a tool just like a lever; it can multiply your purchasing power. The downside however, is also clear. If you use leverage to purchase depreciating assets like consumer goods and electronics, you may find that the amount of debt you took on can be overwhelming.
I use credit cards for their convenience and for some of the benefits they provide. In essence, credit cards give you about 20 days to use their money without any interest charges. The tricky part though, you should be prepared to pay back any outstanding balance in full when it’s due. That takes a lot of discipline. More often than not, you may only have a partial amount of the payment available and try to catch up making installments as you go. Credit card companies are banking on your inability to pay back the money they lend you. Be very careful when you purchase goods with a credit card. Only ever charge something to the card when you know that you can pay it back in full at the end of the month.
5. Plan Ahead, Budget and Live Within Your Means
Planning and budgeting are essential concepts when it comes to managing your personal finances. It’s all based on the notion of living within your means. As they say:
It’s Not What You Make, It’s What You Keep!
Making a ton of money does not mean that will remain financially successful. Just do a Google search for famous bankruptcies or bankrupt musicians. You will get a list of names that rivals any guest list at a red carpet Hollywood event. Their money problems were not primarily caused by an inability to make money. These artists all made plenty of it, often tens of millions each year. Yet, they spent more than they earned and therefore ended up in bankruptcy court.
Learning how to establish and keep reasonable budgets is the key to living within your means and to get financially ahead. Musicians and independent artists often have highly fluctuating incomes. They can make a ton of money for a few months only to experience a dry spell and earn substantially less during the following months. For instance, a musician may go on tour and earn quite well. When the tour ends, the regular payments end as well.
Who knows, that one project that wasn’t going to pay you until completion 4 months down the road could be the most important musical project of your career. But without having enough of a financial cushion, you will simply not be able to afford the project that might make you as an artist.
Taking care of your personal finances is not rocket science but it does require some work, lots of discipline and a healthy dose of common sense. Musicians know all about discipline and hard work. Nobody wakes up one day to become a great violin player or pianist. It takes years of practice. Similarly, it takes some practice and some time to learn how to manage your finances. Start saving early, spend wisely and always live within your means. Your financial success depends on it!
Join us this weekend for a workshop on merchandising and branding. We have put together a great panel of experienced branding professionals to discuss branding basics, graphic design, digital sales, tour merch needs and general image strategies that fit your sound. Feel free to bring your material for review and direct consultation. Their combined clients lists have included Atlantic Records, Epic Records, MTV Networks, Paramore, Toby Keith, and Lady Antebellum. Some conversation topics will include what branding is and how it relates to bands, how to use social media to maximize the power of the brand, and when to consider a marketing firm or graphic designer, to name a few.
Moderator Larry Robinson: Creating Lasting Perceptions in 1997, Larry has carved out a niche as a “Marketing Guru”, as noted in a national periodical, for his innovative work in the healthcare, spiritual and cause related marketing. Over the years, he has created segmented and integrated marketing programs for various government and corporate entities. He formerly worked for one of the largest children’s healthcare charities in the world, as their Director of Multicultural Marketing, and two of the world’s largest pharmaceutical companies in sales and marketing. Present and former clients are: Nike, Anheuser-Busch, National Basketball Association, Coty Fragrances, L’Oreal, SoftSheen-Carson, Motown Records, Merck, Ortho-McNeil Pharmaceutical, FootAction USA, Atlantic Records, Epic Records, St. Jude Children’s Research Hospital and Methodist Healthcare.
John Sylvester: As an Entrepreneur and small business advocate John has been fostering growth in people and their organizations across the country for over a decade. Skilled in strategic and organizational development, John has worked with some of the brightest minds in the Entertainment, Real Estate and Professional Service industries. In 2010 he Co-founded Sache Clothing and Design. A lifestyle fashion and design company born right here on South Main. John is a graduate of the University of Mississippi, holds an MBA from Mercer’s Stetson School of Business and Is a licensed affiliate Real Estate broker in Tennessee.
Bruce Fitzhugh: Bruce Fitzhugh started in the music business at the age of 18 when his metal band Living Sacrifice was signed to a recording contract in 1991. Since then he has toured the world and performed multiple duties and manager, booking agent, and product development. In 2003 Fitzhugh relocated to Nashville TN and started an ecommerce and merchandise company Zambooie.com. Since that time Zambooie has been absorbed into Music City Networks, also in Nashville TN. The combined company now handles website, ecommerce, fanclubs, digital strategy, branding and merchandise for a number of clients from Lady Antebellum and MTV Networks to Paramore and Underoath.
Joel Halpern: Joel Halpern is a native of Memphis who has lived in New York and Paris and has always had a passion for the entertainment business. He has held various creative jobs in advertising/branding agencies in NY and Memphis. As Marketing Director, he helped re-launch the Memphis based St.Blues Guitar Co. He has managed and worked with several bands, including Kuroma , MGMT and The Dynamites. While working with the marketing firm the Musebox in NY, he was responsible for several branding overhauls for bands and independent record labels. Currently Joel is Creative Director for ABC24/CW30 here in Memphis.
Young Jai sees dance as a integral part of his music. The hip hop artist has been a supporter and promoter of Memphis jookin’ for years. He has captured many of the acts with his camera and formed relationships with some of the city’s top dancers. Here in the River City, Jai has been a favorite when jookers to showcase their moves.
Young Jai is making his own moves in the rap game with his new album, Art Official, which dropped this week digitally with Island/Def Jam South. Young Jai first gained international notoriety through his DVD release and YouTube video, Memphis Jookin Vol. 1 which featured his raps over the best “jook” street dancers in Memphis. The compilation helped revive the jookin’ dance style while giving Jai a platform for his raps. He later released his mixtape, The Memphis Makeover on the heels of its success. Art Official marks Young Jai’s first album for digital distribution with Island/Def Jam South. The mixtape’s first single, “Aye Boo” is being promoted heavily nationally to club and radio dj’s by Hittmenn Dj’s as well as Core Dj’s.
Young Jai will host a CD release and jookin’ session at Club Elements on Tuesday March 20th.
Start your year off right with a fierce social media campaign! This article from Hypebot describes how to interpret the results of an artist’s social media progress. It is important that artists understand how their number of “Likes” and fans on networks like Facebook and Twitter are generating awareness within their social media community. Increasing one’s virtual fanbase should ultimately lead to greater brand recall. That is the most important factor for artists to consider when arranging their social media strategy. Read on to discover just how one’s virtual fanbase can be increased!
For the second time, Minglewood Hall will play host to Lucero’s Annual Holiday Show on December 22nd at 8 pm. Lucero has teamed up with the GRAMMY Foundation, MusiCare, and will be donating a portion of the proceeds from the show.
Released in October 2009, Lucero’s sixth studio album and major label debut, 1372 Overton Park, shows a turn towards the sound of Memphis soul that has long structured Lucero’s records. Beginning this fall, the band has toured in support of the new album with a traveling roadshow featuring Amy LaVere, called the Lucero Ramblin’ Roadshow & Memphis Revue.
Lucero chose to donate to MusiCare because it offers a safety net of support for music people in critical times of need. MusiCare covers a large span of financial, medical and personal emergencies, and each situation is treated with honesty and discretion. MusiCare focuses the resources and concentration of the music industry on human service issues that promptly influence the strength and wellbeing of the music community.
You can purchase tickets to Lucero’s 2nd Annual Holiday Show at www.minglewood.com.
You can also learn more about MusiCare at www.grammy.org/musicares.
An Artists Guide to 2012 Financial Preparation
2011 is wrapping up and those cold, slow winter months often end up being less full of gigs as everyone prepares for the holidays. “So how do I squeeze the most productivity out of December and prepare myself or my band for a big year in 2012,” you may ask? Well, we’ve put together a list to help you get organized and ready to tackle the year with a running start.
Tax Preparation – Though “taxes” may be among the most dreaded words in any language, there’s nothing worse than ignoring the tax man until he comes after you for big bucks (or at least more than you should have to pay). Here are a few things to get lined up to make tax season less painful.
1) Organize your receipts – There are a number of different ways you can reduce your tax liability. One is keeping close records of expenses that are “ordinary and necessary” for the production of income in your chosen business. Here are a few things to track: gas, hotel, food(you can write off 50%), van rental, gear related expenses(up to $100,000 per year), cell phone use dedicated to business
2) Keep track of your income sources – digital downloads, record sales, merch sales, performance money, licensing money.
3) Get Quickbooks software and use it! Make sure to separate business from personal expenses
4) Get band checking account and debit/credit card
5) Create a business entity – LLC, S-Corp, C-Corp, or Sole Proprietorship – contact the MRC if you need a basic explanation on these. LLC is usually the safest and best bet for touring bands.
6) Have Show reconciliation sheet from the club signed by the manager that also shows your merch sales for the night. Sometimes an auditor will check these and match with a W9
7) Work on a budget for 2012 based on your numbers from 2011
8) Collect info on your 1099 contractors you have paid over $600 to in a calendar year. They must be mailed by Jan 31st!
9) Designate someone to be in charge of the bands finances. Ideally, that person is a business manager and/or CPA. At the least, one of you should be able to manage the Quickbooks and then hire a CPA to handle taxes at the end of the year. If you keep good records, the cost should not be high. You can also consider paying your taxes quarterly.
10) Get a book for Christmas to read while sitting next to the fire, something like: “Confessions of a Record Producer” by Moses Avalon, “Tour Smart: Break the Band” by Martin Atkins or “Money Music and Success” by Jeff Brabec