“Musicians are poor, there’s no getting around that. Freelance musicians have to tie together a lot of different things to make a living, and don’t have a lot of support from their teams. There are successful musicians — but the vast majority of people aren’t that.”
– Jean Cook (Future of Music Coalition, July 31, 2012)
As I conclude my summer internship here in New York City, I feel that it is important that I share a part of my experience with all aspiring artists. Sitting in my cubical at this medium size accounting firm, gold and platinum plaques fill the hallways of the music department. Some of the plaques belong to recognizable names of hip-hop, rock, R&B, and everything in between; at the same time, some of the plaques may have you questioning who the artists are and how did they manage to sell 500,000 to a million copies of their album. To me, this symbolizes how the music industry has completely changed over the years and how technology has clearly transformed everything. As we know, records aren’t selling like they used to and artists are often left struggling and searching for royalties in order to survive. Ironically, Cassidy said it best, and he’s probably one of these people,
“Royalty checks come, like, once in a blue moon”
– Cassidy (“I’m A Hustla“)
This summer, I have seen first hand some of hip-hop’s legendary DJs and rap groups, who many of you would kill to meet and have your music heard by, reach serious financial difficulties. These difficulties stem from many things: poor business management in the past, buying unnecessary items (the hip-hop stigma), and not paying taxes. If there is one thing that I’ve learned this summer it is that Uncle Sam and the IRS want, and will get the money they are owed. Right, Young Buck & Beanie Sigel? Bottom line, whether you are an artist with a big budget or you’re an artist with a smaller budget, but has consistent touring and strong merchandise sales, please hire a good business manager/accountant. Their services will take off a lot of your financial stresses.
By this point in the blog I would hope that you would be asking the question, “How do I make sure that I don’t reach that point?” Simple – Branding and Touring. Let’s start with branding.
Many of today’s top artists are getting bored with just rapping. Swizz Beatz, for example, designs cars, paints, and is an executive at Reebok, Pharrell has about 6 clothing lines, a book coming out, and a new multimedia company called I Am Other, Lil’ Wayne decided to hop on a skateboard, and Snoop Dogg decided to change his name to Snoop Lion in order to become a reincarnated Bob Marley. Additionally, we’ve seen Diddy take over the alcohol industry with Ciroc and of course, Dr. Dre is the staple of headphones. All of these guys have found ways to stretch their money and image, yet still remain household names and attract different demographics. A recent Huffington Post article suggested,
“According to industry experts, the only way to make money in the music business is to turn an artist into a brand — then do everything in your power to maximize that brand’s value. Songs make an artist famous in the first place, and allow the artist to define his or her brand.”
– Joe Satran (Huffington Post, July 31, 2012)
That statement alone clearly exemplifies the importance of giving and earning respect within the music industry. Major corporations aren’t going to endorse artists who have weak followings, a poor image, or a criminal record – as we’ve seen with T.I. and his loss of Chevrolet and Axe sponsorships.
A recent survey conducted concluded that musicians made an average of about $34,000 off their music in America, before deducting expenses from touring and recording. Trust me, after doing payroll tax and completing tax forms 940 and 941 all summer, I have learned that there are many people that need to get paid on behalf of the work they’ve done for you if you want to have a legitimate entity. Just because the overall average of revenue earned in America is low, doesn’t mean that affects every artist. Take legendary band The Who for example, they are about to embark on a 37 city tour in 2012/2013 on a $20 million dollar budget! Unfortunately, not every artist can successfully do that. The days of having one hit record + million albums sold + tour = longevity are far gone; in today’s market, you may only remain relevant for 6 – 8 months with that formula. That’s why the new formula is consistent music + strong/loyal fan base + continuous touring + merchandise sales = success. Ultimately, it’s up to you and your team on how you want to approach your career.
There you have it readers, and in the words of a fellow South Floridian, “Always pay your taxes, never pay these hoes” – Rick Ross (“MMG The World Is Yours”). I hope that my insight will lead you on a path of great fortune and fame; just don’t forget to give me the 10% I’m entitled to for teaching you a thing or two! Until next time…