First Solo CD by CHARLIE X
First Solo CD by CHARLIE X
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The Xman
©
2004 CharlieX |
The Music Business These are my observations of the music business. I put them here because I used to teach music to young people and they seemed to ask me a lot of questions like "Why do you teach?" and " I heard you on the radio last week, so how rich are u?" I hope this clears up some confusion! As always, I appreciate feedback from U. Here is how it basically works. There are two ends to the music biz spectrum. They are the "product" end and the "service" end. I personally have spent many years on the service end and I really don't consider it to actually be part of the general music biz. Most folks in the service end are really in a different biz than music. For example: If your main job is to service weddings week after week, then you are really in the wedding biz, not the music biz. If your job is holding down a gig at a restaurant or bar, then you are in the bar or restaurant support business, not the music biz. You get to be in the music biz when you get to the "product” end. This is when you have a product for sale on the shelf (or on the net!) that contains YOUR music. When someone pulls out their wallet FOR THE SOLE PURPOSE of hearing your music, a transaction takes place. (Again, that means they didn’t get a free dinner or beer, but came there specifically to hear YOUR music). You then receive your share of the proceeds from the SALE of the music product and before you can say "Giddy Up" you are in the Music Biz! So, in a nutshell, if the bulk of your income is not from CD sales, song royalties or the leasing of publishing rights, then you are really in or are supporting some 'other' biz and are probably NOT in the music business. In the rare event that a club is staying in business 'JUST BECAUSE" you are playing there every week, this may also put u in show biz. A lot of young and not so young musicians have asked me why some famous musicians who play "all the time" don’t seem to be too well off. They see big name stars on tour or on MTV and get the (false) impression that these folks are highly paid for these appearances. In fact, it is usually just the opposite. These well known acts actually PAY money for advertising their products on MTV or by playing concerts. It’s just like car companies that advertise during your favorite TV show. They pay to have their products shown in the hope that someone may get off their couch and go and BUY that product. When someone goes out and BUYS the product, that is when the artist (or car company) receives money, not when u see them on TV. Concerts were the same as commercials for many years but not so much anymore. Traditionally, concert promotion was an expense on the artist’s income statement just like the advertising expense of MTV (or in the case of 1950s "Payola" when record companies illegally paid off radio stations to play/promote certain products). In the 60s and 70s bands would strive to break even between gate receipts and road expenses. They gambled that after 3 or 4 months on the road they can sell enough tickets to cover the HUGE expenses of the lighting contractors, hall rent, HUGE insurance/liability costs (which skyrocketed after 1978 when 12 people were trampled to death at a Cincinnati WHO concert), sound reinforcement contractor, road crews, hotel and travel coordinator and the list never ends. The record company puts up the front money for all of this, then would deduct it (and add a healthy margin for themselves) from record sales and merchandising. If the company did not recoup all of the touring expenses from the bands record sales, then the band would be liable for the difference (PLUS interest on the debt) to be paid out of future product sales. That is why after a big "sold out' tour of a band at the end of its cycle (I site any one of the many "farewell" tours of the WHO) you would often see a "Greatest Hits" album afterward. That was the record company’s attempt to recoup their losses. For those not old enough to remember the Beatles, the FIRST thing they did once their sales were established, was to quit touring and save the promo expense. Same with the Stones until 1969, when the biz started to change again and they needed to go "door to door" and sell the product. SO, to sum up, bands would tour essentially for free. They hoped that when 25,000 people saw them jump around for 2 hrs, maybe blow something up on the stage, smash some expensive guitars, or in the case of Alice Cooper, put his head in a guillotine, that they would be impressed enough by all of that to go out the next day and BUY THE ALBUM. This changed in the mid 80s as a result of Michael Jackson’s Victory Tour. In his case, the people ALREADY had the album. Folks, we are talking 30 MILLION UNITS PLUS in sales BEFORE THE PROMO TOUR! Jackson then decided to do a stadium tour and announced the ticket price. It would be $30 PER ticket (the norm at the time was $10 to $15 for someone REALLY big). Also, you could only buy a ticket through the mail. There were NO onsite sales. Of course, every show (that’s every seat in the stadium plus the folding chairs that totally covered the playing field) was sold. CHA-CHING!! BADA BING! He made money on tour! He became the first star to make a profit on his advertising. Today a $30 seat is a bargain. In 2002, McCartney charged up to $200 to see him sing his oldies. He had some obscure product on the market, but only hinted at promoting it. Instead, he was touring for profit as well as reminding his audience of his "back catalog" by playing the songs he has a stake in. Same deal with the Rolling Stones 40 licks tour. These bands no longer have any viable NEW product to sell, but they can still maintain huge a cash flow by repackaging their older line.
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