Music Creator Roadmap - Part 5 - Understanding Music Industry Roles

Welcome to part 5 of the Music Creator Roadmap breakdown. If you have not read parts 1-4 be sure to check them out here. 

Now, let’s review the flow chart again so that we have a visual reference as we identify each industry role before starting to build the team:

You notice how all of the industry roles in the middle of the chart look like they are blocking the path to the other side where the money is?

That was intentional.

In reality, you need some people on your team to achieve a high level of success in the music industry. But before you can figure out exactly who that will be, you have to understand the function of each role.

So let’s dive in, starting from left to right on the roadmap:

The Booking Agent

The agent’s most important responsibility is to make sure you get paid the highest possible amount for appearing and performing in-person. They also help with routing tours to make your travel logistics as efficient as possible. Traditionally, the agent takes 10% of gross revenue from any and all opportunities they bring to you.

As we mentioned in Part 2 about the Touring Performer path, the only real gatekeeper left in the music industry is the booking agent. Be sure to review that post if you need to understand why that is.

Agents do occasionally take on developing artists who don’t have a big fanbase, but it is rare. It usually happens as part of a larger team, where the agent already knows the manager and they work well together.

The Show Promoter

Promoters are the ones taking the big risk by putting up money to book the artists and hoping to make money back through ticket sales.

At the indie level, the promoter is often the venue owner. They pay a booking fee directly to the artist or do a door split deal, and make their money back mostly from alcohol sales. These venue owners also work with independent show promoters who take the risk of paying the artist and keep the money from the ticket sales.

At the higher levels, promoters (like Live Nation or AEG for instance) often work exclusively with large venues and only deal directly with agents, not with artists. However, it is worth noting that Taylor Swift’s team apparently booked part of her Era’s Tour without a booking agent… WILD! To drive home my point about always thinking like an entrepreneur, here’s a quote:

Of course she is Taylor Swift, and as they say, “the exceptions are the exceptional”.

The Marketer

For the Creative Artist path, this is absolutely the most important team member that you can have.

Marketers are responsible for growing the brand and increasing demand for the artist. Traditionally, the marketing team was employed by the label. The marketing team would work with radio promoters and agents to time the rollout of new releases, and then the artist would tour to monetize the demand created by the marketing team. Now, it is very common for labels to outsource that role to independent agencies that specialize in music marketing.

What that means is that, if you have a big budget, you can leverage the same marketing teams used by labels, but without giving up ownership of the records.

I can’t stress this enough… after you are consistently making really strong records, the next thing you need is a marketer. That’s why, on the roadmap, all roads lead to marketing.

And marketing is expensive, so if you don’t have the budget, it is the number one skill set you can learn to grow your career and your team.

For the purposes of the roadmap, I also lump engagement into marketing. It is the job of marketing to convert casual listeners or followers into true fans that spend money with you!

The Publicist

Repeat after me → MARKETING BEFORE PUBLICITY

It is the publicist’s job to help you get publicity. I know that sounds like marketing. And it can be seen as a subset of marketing.

But one of the most common mistakes I see artists (and other businesses) make is that they spend a lot of money on publicity before they get their marketing systems firing on all cylinders. So let’s play this out and see why it is such a big mistake…

When a publicist gets you a feature in Rolling Stone, and that article gets a bunch of people to go check out your website or socials, what happens next?

For most people - nothing.

Unless you have your marketing optimized to capture data and/or retarget those people, then you wasted all that attention. You don’t have the mechanisms in place to turn that attention into business.

That is the job of the marketer!

Think of it like you are trying to build a roaring fire. The marketer builds the fire by properly placing the wood (the content) and lights the fire by generating traffic. Once the fire is lit and there is a good story to tell, the publicist comes in and throws fuel on the fire by getting others to talk about you and build the buzz. If it all works together, then the public feels like they are seeing and hearing about you everywhere… in their newsfeed, in the articles they read, on TV, etc.

So marketing and publicity go hand and hand. And it doesn’t do any good to throw fuel on a fire that isn’t even lit.

My advice is to have some money set aside for a press campaign. Don’t touch the money until you see that something is working really well on the marketing side. If you have real data that a song or campaign is doing well, then deploy the additional money to see if you can hit a tipping point. The same can be done with independent radio promotion. It is expensive, but it can totally be worth it if you know a song is already doing really well on streaming.

Keep money on the sidelines that you can spend quickly to harness momentum and capitalize on a strong campaign.

The Record Label

When the recorded music industry was first established, it was a massive undertaking to get the recorded music to the consumer. It required insanely expensive recording equipment, record pressing plants, delivery trucks, etc. So it did not make sense for artists to own their own master recordings or to be their own label. It was the label’s job to find remarkable artists, make outstanding records, and sell them to the public. The artist would then earn a royalty from those sales, usually about 7-10%.

Now, things have changed. It is getting easier and easier for artists to create high quality music, distribute it worldwide, and market it directly to their fans using the same marketing tools that labels use.

But, just because it was easier than it was, doesn’t mean it is easy.

It is extremely difficult for anyone to DIY all parts of the machine. Labels function as the artist’s team, especially as their marketing arm, orchestrating their releases. Labels have years or decades worth of relationships with other key players in the industry, and the major labels have the leverage of their other artists and back catalog to influence business outcomes.

Due to the fact that social media has become a quick and easy way to discover artists, labels no longer have to invest as much in artist development. It is often said that:

Sometimes labels will even sign a single song.

I am not an attorney, and recording contracts are complicated, but I do know that you want leverage going into the deal. Just like any other business that is taking a bet on a partnership, the labels want to make money. The more history and data you have showing that you are a good bet (like your social and streaming numbers), the more likelihood that you will find a good business partner and a fair deal.

Again, ALL ROADS LEAD TO MARKETING!

If you don’t have any data to back up the label’s investment, in other words you are an unproven artist, you will probably give up about 80% of the recorded music revenue to the label, and you will keep 20%. If you have a song that is already blowing up, you might be able to do a 50/50 deal on that song. It all just depends on the leverage you have. It is all negotiable.

Remember: a good deal is a good deal and a bad deal is a bad deal. 

You need to know what you are getting yourself into. A label can be a powerful and beneficial business partner if you get a good deal with good people who believe in your talent and are excited to work with you!

The Distributor

As we learned in the last section, the process of music distribution has changed drastically. It used to mean that the physical records showed up in the record store and were available for purchase on release day. Now most people think of distribution as ‘uploading their song’ to DistroKid or some other platform so that it shows up on Spotify, Apple, etc.

But if you tuned in for the last episode of the HOMIE Podcast with the legendary David Macias of the distribution and marketing company Thirty Tigers, you will know that there are now specialty distribution companies that have marketing teams or other resources that they can provide for artists.

Thirty Tigers provides major label results for artists and only keeps 25% of the money from the records. Watch the video for a breakdown of the business model from David Macias.

Differentiated models will continue to emerge that combine music distribution with artist services. I personally feel it is very important for artists to develop a relationship with a distributor who does more than just upload their music.

The distributor can be an ideal first person or company to have on your team, especially on the Creative Artist path.

Manager

One of the most common things that artists say is:

But most artists who say that are not actually overwhelmed with managerial tasks. They are overwhelmed with production, content creation, and marketing tasks. That’s not the manager’s job.

So what is the manager’s job?

Management is a multi-faceted role. The traditional way to think about it is that the manager puts together the rest of the artist’s team. When I took the artist management class at Belmont University, we were taught that building the team was the main goal. Put together a team, manage the communications between the team, handle challenges as they arise, and be a counselor for the artist.

That’s right, a manager is often a counselor.

The path of the traditional artist (the Touring Performer) is grueling, and fame is often a hard thing for artists to handle psychologically. The manager is usually the artist’s closest confidant, and ends up coaching the artist through their toughest times.

The manager makes their money on commission. They usually take 15%-20% of an artist’s gross earnings. It’s also worth noting that managers will often work with ‘business managers’ (I know that is confusing) to keep track of the artist’s financials. Business managers usually work on a smaller commission (5%) than an artist manager, or sometimes work on retainer.

A great artist manager typically also serves in the role of the overall business strategist and has strong connections that they can leverage within the music industry. You should focus on attracting the right artist manager, not just finding anyone who is willing to help you out.

The artist-manager relationship is often a lifelong partnership, similar to getting married. You wouldn’t just go around saying “I need a wife” or “I need a husband”, would you? Probably not. You would look for someone who you get along with and who you believe really cares about you.

The manager should care. They should always have your best interest in mind. The manager has a ‘fiduciary relationship’ with their client.

So do your best to identify potential managers that have done a great job for their other clients, or that show other signs of being very trustworthy.

If you need more tips on how to find the right teammate, be sure to read my post ‘From DIY to Dream Team’.

The Publisher and/or Sync Rep

To understand the role of the publisher, we need another music industry history lesson. When the music industry first began, it was all sheet music. There were no machines capable of playing recorded music. A composer would write out sheet music, and then a publisher would publish that sheet music, sell it to the people who wanted to learn how to play it, and give the composer a royalty.

There are two copyrights for every recorded song. There is one for the underlying composition (the song and lyrics), represented as a ‘Circle C’ copyright (©). And there is another copyright created with each recorded version of the song (the sound recording), represented by the ‘Circle P’ for ‘phonorecord’ (℗).

• The publisher represents and/or owns the ‘Circle C’ copyright and seeks to monetize the composition. Publishers typically keep 50% of the money they collect.

• The record label represents and/or owns the ‘Circle P’ copyright and seeks to monetize the sound recording.

As we know, a single song can be recorded in various ways by countless artists. Every time that happens, the composer (also known as the songwriter) gets paid for the use of their copyright. Theoretically, a payment is due every time the song is sold, performed, or streamed. You can also get paid for a specific use of a song, which is where sync comes in.

Sync is short for ‘synchronization license’, which means that your song was synced to a video. The amount you get paid depends on the specific use of the song (tv, film, ads, length, etc.) Sync reps specialize in getting paid for sync placements. They take a cut of the overall sync fee (usually 20%-50%), and the rest is split between the owners of the ‘Circle C’ and the ‘Circle P’. Publishing companies will often start sync-focused divisions to capitalize on this growing sector of the industry.

Publishers help songwriters make money and collect the money that is owed to them. They also nurture talented writers by providing them with writing space and a talented collaborative network.

Sounds pretty great right?

It definitely can be. In my experience, it seems that most publishers care deeply for their writers. But at the end of the day, it is a business. The publisher only has so much room on their roster, and they typically pay advances and/or monthly draws to their writers. So, if a writer is not bringing in any money with their songs, they will eventually lose their deal.

That is why you must be focused on building your own business and seeing the publisher as a partner not an employer.

The Entertainment Attorney

It is often said that attorneys have the most powerful role in the music industry. If they are well connected and working with high profile clients, then they have intimate knowledge of the inner workings of the industry that others don’t have.

They know which labels and publishing companies are looking for talent and what kind of talent they are looking for. They know what the deals look like and the terms that those companies are likely to offer an artist or writer. They often know about new business ventures before anyone else does.

Attorneys are the ultimate insiders of the music industry.

It makes sense that attorney services are expensive, and they are usually paid hourly and/or on retainer. But if they believe in the talent, they can also get paid through commission, taking a percentage of a deal that is negotiated. And of course the entertainment attorney is there to help you get the best deal possible and guide you through the legal maze of the music industry.

Attorneys can and should also be hired for simple things like band agreements, production agreements, management agreements, etc. The rule of thumb is this: if someone wants you to sign something and you don’t understand 100% of it and all of the implications of the agreement, seek advice from an attorney.

The P.R.O. Rep

The last industry role we’ll discuss is the PRO Rep. P.R.O. stands for ‘Performance Rights Organization’. If you write songs or compose music, you must be registered with a PRO.

PROs, such as BMI, ASCAP, and SESAC, (those are for the U.S. and each country has their own) collect ‘performance royalties’ on behalf of composers, songwriters and publishers. Without going too deep into royalties, performance royalties are collected when a song is performed or played publicly for an audience. Historically, those royalties were very hard to collect, which is why the PROs were set up and mandated by law.

People think of the PROs as big faceless corporations, and they mostly are, unless you are in a city where they have offices and activities. After moving to Nashville, I was surprised to meet creative reps from different PROs who play active roles in helping creators make money and develop their teams.

So if you are in a music industry city where the PROs operate, figure out who their local creative reps are and what kind of activities the PRO is involved in. They often host networking opportunities as well as showcases, writers rounds, and other live music events.

You made it to the end. Congratulations!

I know this was a long one, so kudos to you for digging in. There is a lot to unpack here, and the music industry is confusing for pretty much everyone. If you have any questions or need clarification, respond to this email and I will do my best to elaborate as necessary.

Tune in next time as we continue to break down the Music Creator Roadmap so that you can develop the ultimate growth strategy.

Keep building the dream team Homies!