An actual record label business plan you can use to create your own, submit to investors, and develop a real world, realistic plan of action and success for your record label! (Click on "read more" to read "The Record Label of the Future.") (146 pages; 8 x 10 ISBN: 978-1450592260)Read More Order ebook now
YOU CAN'T RAISE MONEY FOR YOUR RECORD LABEL (OR ANY BUSINESS for that matter) WITHOUT A THOROUGH, COMPREHENSIVE AND WELL-THOUGHT-OUT BUSINESS PLAN!
•Every investor will request it.
•Every bank will demand it.
•Every partner will expect it.
•Even some employees will ask to see it.
That's right. Every business consultant, advisor, coach and loan officer will tell you: "every serious business needs a business plan."
People pay THOUSANDS of dollars for this information. Using this as your template, your business plan will impress your partners, inspire confidence in investors, and thoroughly impress bank loan officers with its attention to detail.
•A complete and comprehensive business plan
•Financial Projections (Income Statement, Cash Flow, Balance Sheet)
•*Marketing strategies based on current industry trends (very important!)
•Operation strategies for the new paradigm
•Sales Strategy for physical and Digital formats
•Comprehensive business outline,
•Current demographic information for target marketing
*(We research industry data and make financial projections based on the current real life trends. In other words, the data in our business plans is based on current reality!)
THE RECORD LABEL OF THE FUTURE
& The Rules of the Pie for Surviving a Changing Paradigm
Where is the music industry heading? How will independent labels survive and thrive in the new paradigm? Is the age of the major label coming to a close? Does an artist even need a traditional label, or even an independent label for that matter anymore? If you are involved in the recording, manufacture, distribution and sale of recorded music, the answers to these questions, and your responses are vital to your continued survival in some shape or form.
Luckily, these are exactly some of the questions that I will attempt to answer in this brief article. And while I don't intend to offer any earth shattering revelations that you couldn't arrive at on your own, I do hope that if you are an artist, producer or owner of an independent record label that some of the thoughts herein encourage you to make a few pro-active decisions, and take a few definite actions rather than a wait-and-see approach. The race is still always to he who can endure. Your ability to foresee and prepare for the coming changes, as well as the end result of current changes may make the difference between business success and failure. But how can you know what's ahead? You'll need to predict the future.
HOW TO PREDICT THE FUTURE
It's a basic law of this dynamic, ever-changing universe that there's no such thing as something "staying the same." Things are either expanding or contracting, increasing or decreasing, getting better or getting worse. Even the metal or hard plastic computer or sheet of paper on which you are reading these words, as solid and as stable as they appear are all slowly decaying and deteriorating. Come back in a few dozen years, and you'll see the effects of decay over time. If you know this, then you can look at everything from business phenomena to romantic relationships a little bit differently, and can perform what some might consider fortune-telling simply by asking, "where is this heading?"
Every business, every situation, every relationship is either getting better or getting worse, growing or shrinking, going up or heading downhill. Therefore, as long as you can honestly assess what you observe or experience over a given time frame, you can "predict" where something is heading and take any evasive or remedial actions as necessary. There are even specific formulas(1) you can use to reverse or stabilize a declining trend, improve a flat trend, improve a rising trend, or greatly improve an already stellar trend for any observable statistic like "sales" for instance.
Now having said that, let's examine some observable facts and trends within the music industry that you can use to predict the future, or at least prepare and position yourself for success regardless of what specifically happens.
FACTS, TRENDS AND OBSERVATIONS
FTO #1: Sales of CDs are DOWN
FTO #2: Digital downloads are UP
FTO #3: There's a new generation of children who view music not as a vinyl disc, or a CD, but as words on an MP3 player's LCD/LED screen accessible through headphones and earpieces.
FTO #4. The purchasing experience has changed from browsing the aisles of a retail store to downloading from computers or cell phones.
FTO #5: Technology is making it easier for artists to market, release, market and distribute themselves, and even earn a decent living doing so.
Whether fact, trend or observation, these "demonstrables" indicate a new reality is upon us. What it means for the artist, producer and independent record label of the future is this...
THE MUSIC INDUSTRY HAS ALREADY CHANGED!
"Of 30 thousand CD titles that were released, only 400 titles sold more than 100 thousand units, and 25 thousand titles sold fewer than 1,000 CDs. The big recording companies lose money 98.7% of the time."(2)
"In a recent Parks Associates study of 4,000 Internet users in the US, 56% of respondents listen to Internet radio on their PCs and 56% download music files."
"The 37-year-old artist recently moved from Los Angeles to North Carolina, where he plans to raise his family on the "decent living" Internet sales generate. Since August, he's sold about 5,000 records over CD Baby. He earned $10 for each album, generating the same amount of money he earned from his first record contract." [Sources: itfacts.biz, IFPI, Nielsen, InStat, RIAA, Parks Associates, CDbaby Talkback...]
As I said, there are thousands of statistics you can find. And the exact figures are less important than the trends they indicate. Our goal, here, is to focus on trends. And what we can deduce from these and other facts, trends and observations, is that today, the Music Industry is not what it used to be, and as trends continue, will never be the same again, and in fact, will be different tomorrow.
We as forward-thinking entrepreneurs hoping to capitalize on the value of music must change with the flow. Therefore, the questions we ask must inherently be different.
The key question that pro-active thinkers ask is not "what's going to happen?" but "what am I going to do given in light this trend, and in response to this continuing?" There are always responses you can make to any situation despite what prevailing wisdom says, and regardless of what others do.
What is it that we are responding to? What is it that we are actually witnessing? I propose to you that it is nothing less than....(drum roll, please)..the deconstruction of the major label system!
THE DECONSTRUCTION OF THE MAJOR LABEL SYSTEM
and to repeat in terms of traditional label/retailer functions
• Selling can now take place at the artist/label level
• Promotion is now, to a greater degree than before, more effectively done by the public.
• A&R (finding new artists) takes place in the public domain with word of mouth demand driving the artist's exposure
• Distribution can occur digitally without need for warehouses
HOW INDEPENDENT LABELS WILL BE AFFECTED BY THIS NEW PARADIGM
First of all, the number of independent "labels" will continue to increase. However, it's important to note that in this new paradigm, the word "label" doesn't quite mean the same thing anymore.
Indeed, thanks to services like Discmakers, and CDBaby, and the relative ease with which an artist can start selling her music, the artist herself is essentially already her own label from the day she records her first track in a professional recording studio or basement.
The artist in this new age has the potential to be a label whether or not he realizes it, accepts it or acts on it. With a computer, a cd-burner, and access to the internet, every artist has the beginnings of a viable indie label. (and in fact, to be accurate, because of ease of web access via cafes and libraries, you don't even need your own computer, or your own cd-burner). So the number of self-released, self-distributing artist/labels will rise. Consequently, there will be less of a need for traditional independent labels.
If that weren't bad enough, independent labels will be affected in another significant way. As digital downloads, and ostensibly, illegal downloads increase, the share of the pie that indies are sharing will seem to be decrease.
LABELS THEN AND NOW
In the past, the artist needed a major record label for the deep pockets and contacts necessary to
• find the artist (A&R)
• provide an advance
• finance the music production
• finance big budget videos
• get the music played on radio
• get the music in the stores
• get the video played on television and cable
• promote the music
• pay the artist royalties
Indies were seen as a place that artists could start their careers all the while positioning themselves to garner the attention of a major label scout who would rescue them for indie-label obscurity and buy out their contract or in a win-win for everyone, sign a distribution or marketing deal with the indie label.
It's still the dream of many struggling artists, even though statistically the percentage of artists who actually live that dream and get signed to the million-dollar major label contract is woefully small.
If everyone on the lower end is playing on the same level field (i.e. a basement band with a CDBaby "deal" now being roughly equivalent to and able to achieve the same success as if it were signed to an indie label "deal"), it would appear that the gap between "majors with money" and "indies/artists with heart" is widening.
Some would argue that this seeming disparity will make it harder for indie labels to compete with majors. I believe otherwise.
But before I share with you the basis of my belief, and a philosophy for dealing with the situation, I'll say that whatever strategy you ultimately implement must be executed on two fronts simultaneously: the consumer front, and the artist front.
In other words, as an independent label, not only must you make the music you sell accessible to the consumer in new and innovative ways, you must also make your label attractive to the independent artist.
As an independent label, you will of course be using all your creativity and skills to provide what's expected of a any label whether large or small
• artist advances if possible
• funding for manufacturing
• funding for video production
• marketing/promotion strategies
• promotion expertise
• press release writing and dissemination
• contacts for getting airplay and video play
• marketing to a wider audience
And while you as a label will provide these basics, I believe that profitability in the new era requires additional strategies, and a few radical new ideas.
• Perhaps, as a thought, the record label of the future may focus additionally on - coordination of the artist's career using the new technology available
WHAT THE ARTIST REALLY WANTS
I'll quote you from a new book entitled The Spirit's Business Plan:
[begin quote] "There are only two important questions that everyone asks every day of their lives:
1. Why am I here?
2. How will I survive? These are not mutually exclusive questions. They are actually one in the same. The challenge of the business plan of the spirit is to tie one's spiritual esoteric search for life's meaning and purpose to the practical economic viability, survival and prosperity that life on this plane necessitates. The earth is moving into a new reality. Those who are here on the planet at this time have responsibilities that no generation prior had to be quite as concerned with. In addition, this generation has opportunities which no previous generation had access to. It must encourage those on the earth at this time to live by a new set of values." [end quote]
Perhaps there is a truth here that people are more ready for than we are being led to believe. Perhaps the record label of the future must position itself to be a catalyst for the development of these new value in order to ease the earth's transition into this new paradigm.
2. Payment Related to want #1, there is the more earthly desire for attention and money. Beyond the search for purpose, the artist wants to focus on making music, become known for their creativity, while being afforded a comfortable lifestyle based on the financial reward for their creations. They want to get paid. There is a basic human need, (or perhaps a little more pronounced than most) for attention, recognition, exposure, acclaim and approval.
3. Protection Few artists may admit it, but it's my experience that the creative soul that inhabits the artist personality shuns the responsibility and structure of self guidance in favor of the bliss and freedom of creative pursuits. In some ways, artists like to be shepherded, guided and protected by those offering the structure that they realize is necessary in this world, but for which they have no inclination to set up for themselves. As artists, they naturally wired to see the world differently than non-artists. That's what makes them artists. (It's also why many artists end up being taken advantage of in this game).
Given these 3 basic needs for Purpose, Payment and Protection the question is what can YOU, as the independent label of the future, offer the artist that she cannot get by doing things herself or with a major label? What and how can you offer something that speaks to these needs in a way that labels cannot match. The game will always go to the more creative.
Sorry, I'm not giving you specific answers here. But the things YOU can come up with given YOUR unique purpose, passion and talents are ten times more creative and effective than any I could come up with on your behalf. Besides, I'd much rather pique your interest, spark your creativity, and be a catalyst for the brainstorming session you will conduct in search of solutions than give you any of my answers as "the answer." The truth is, the answer does not yet exist. The landscape is still too fresh.
THE RECORD LABEL OF THE FUTURE
As independent record labels adapt themselves based, perhaps on these questions and many others, the nature of what differentiates a true "indie label of the future" from a self-released, self-distributed artist venture and the gap between them, will have to change and widen. In other words, if you want to really offer something of value to the indie artist, you have to offer something that majors and money cannot buy. The key, I believe, lies in offering a uniquely different experience based on a value system and lifestyle that the industry as a whole is too far removed from to see growing at the roots level.
As trends continue, CD sales decline, digital media expands, the record label of the future must adapt. To help you philosophically with how you need to think in order to weather these changes, and with the underlying assumption that we want to keep everyone living in the manner to which they've grown accustomed, I offer you....
RULES OF THE PIE
Rule of the Pie #1:
"As your slice of the pie decreases, bake a bigger pie."
This applies to going global in marketing efforts. If the trend locally is limiting the amount of money you can make, then expand nationally and internationally. Bake a bigger pie.
But of course, it isn't always possible to bake a bigger pie, which brings us to
The Rule of the Pie #2
"If the pie is getting irreversibly smaller, bake more pies." This applies to facilitating success for more artists. If you have to sell digital downloads for $1 to make them attractive to consumers, then do what itunes does, and sell the products of more artists so you can profit on volume.
The Rule of the Pie #3
"If the pie is no longer tasty, bake a different pie."
If the music industry as a stand-alone source of revenue is declining, then expand to gaming for example. Sell what people are buying and where they are buying. Incorporate music into the products that people are purchasing in huge numbers and generate your income there.
The rules of the pie are by no means the only way that creative entrepreneurs can adapt to the changing pie scene. In fact, I predict that a whole new set of rules will be developed. Who knows, some creative label owner may come with
rule of the pie #4: "screw the pie, feed them cake," or
rule of the pie #5: "make money teaching them how to bake pies & sell them baking tins"
rule of the pie #6: "change the game: add a different desert to the menu"
MY TOP SECRET PREDICTION:
SUMMARY IN REAL TERMS
So here's where we are. The music industry is changing. While there will always be a segment of the population (albeit a shrinking one) which will want high quality music on CDs with jewel cases, pretty packaging, liner notes, created by artists who themselves desire the status of an association with a major label, the growing majority of consumers and artists will be adapting to the new paradigm of digital downloads and self-distribution.
You're mission, therefore, as a record label of the future, if you've read between the lines of this short article, is to
• embrace the new trends and technologies
•offer the intangible
• enable the self-distributed artist trend in such a way as to make the prospect of being signed by your label a more desirable options
• expand to global, underserved markets
• form relationships and synergies in booming industries, and
• add your own list of creative responses here, rather than waiting-to-see
Now, what this will all look like when all is said and done, no one can perhaps predict with any degree of specificity. But one thing is clear. Change is upon us. It is inevitable.
You must be the enablers not the enemies of the new era; facilitators not foes of the future. It is only in this way that you will survive the shake-up and shake-out that will occur as the change--inevitable as it is--comes upon the music industry.
You and your record label of the future, if it is to live, must live and exist in the now.
[For more detailed strategies for becoming a record label of the future, check out the Hip Hop Record Label Business Plan available at www.hiphopbusinessplan.com]
Walt Goodridge is the author of several books including Change the Game: How to Launch, Grow and Really Make Money with Your Independent Hip Hop Record Label. He is also founder of over 2 dozen business sites including hiphopentrepreneur.com
*notes: (1) Click here for my article on how to respond to steady or declining sales, visit
(2)from information in The Future of music by D. Kusak
If your business idea is one that requires some capital (money) to launch or grow, then any investor or bank will request to see your business plan. The purpose of any good business plan, therefore, is to communicate the capabilities and talents of the principals (that's you and other owner/partners), and the soundness of the strategies you will implement in order to 1. grow the business, 2. achieve profitability, 3. repay any loans, and 4.reward any investors.
However, there's a more important reason for you to write a business plan. Even if you are not seeking investors or a loan, (and for those of you who know my philosophy, know that I maintain that you don't need MONEY to start a business, and that what you need instead is VALUE), the process of thinking through and composing your business plan helps you to declare your intention to yourself and the universe, focus on and commit to a specific outcome, verbalize and write down your goals, harness your innate creativity, activate the power of your subconscious mind, mobilize your Higher Self, and change your vibrational state, and the frequency of your thoughts to one of hope and the possibility of a desired future, thereby bringing to you, by the Law of Attraction, the people, events and circumstances which will work in concert on seen and unseen levels of reality to manifest your dream.
For that reason, even if you are already in business and making money, writing a business plan can help you. In addition, since market conditions are constantly changing, writing a plan (especially the marketing and financials sections) can help you get a firmer handle on what you are and can and should be doing to grow your business, where your money is actually going every month, and how to monitor and reduce expenses and operating costs.
Additionally, a good business informs sales personnel, suppliers, and others about your operations and goals and, in-effect serves as an operations manual for your employees.
A business plan is not a one-time-only endeavor. As it serves as guide, as well as gauge, many entrepreneurs tweak their business plans on a monthly, even weekly basis.
Since this plan contains market, demographic and economic data for Hip Hop as an overall industry, the information and even the financials are applicable in a broad way. Along with the Hip Hop Financials Calculator™, it can be used as the basis for just about ANY Hip Hop Business!
While every business plan format can be different, they all must include certain necessary information that banks and investors require, and that you need to master your company, your business and your industry....which brings us to a VERY IMPORTANT reason you need a business plan... to get a handle on, and market effectively in the NEW music industry!
My name is Walt Goodridge. I started the Hip Hop Entrepreneur Company to give Hip Hop entrepreneurs the information and step-by-step guidelines to follow to turn their dreams into reality. It's as simple as that. As I said in the quote above, "HipHopBiz.com provides the information people like you have been using since 1992 to release their own music." Check out our top sellers below, then read how these unique products can help you! h2>What are the main benefits?
If you take the information I'm offering, and put it to use, a few unique things will start to happen. People will start to realize you're SERIOUS about living your dream. You'll have an actual product as well as a business as evidence of your talent and commitment. Imagine if an established label notices what you're doing and leaves a message on your voicemail with an offer... and you refuse it because you're doing much better than signing a record deal could ever create! You'll walk proud knowing that you didn't need fat cat record label executives to make your dream come true You'll be a role model others can look up to and follow. (But, be careful what you wish for! YOU might just become the one that others start coming to with their hands out!)
The #1 reason a lot of talented rappers and producers will never get signed is simply because they're waiting for someone to do it for them. They've fallen into the entitlement trap, and believe that someone with connections and money needs to give them a handout in order for them to be successful. That's simply not true. It wasn't true years ago when I first wrote the first edition of Change the Game, and it's not true now years later with the updated version which includes internet marketing and promotion.
When I started my label many years ago, it was because I knew I wanted to live a different life. I was the label owner, and my friends and partners were the rappers and producers, but we all felt the same way. We didn't want to live the rest of our lives knowing that our talent would go unheard, unappreciated and unrewarded. We didn't want to end up in nowhere jobs for the rest of our lives. We didn't want to look back and have others laugh at us and our unfulfilled dreams. We didn't want to get left behind.
It can be frustrating when labels don't return your calls. It can be frustrating watching others with less talent get put on, and feeling like no one wants to help a newcomer to the industry. You're not alone.
When my partners and I were doing our record label thing, we were on a mission. Whenever something needed to get done, we did it with a sense of purpose and urgency. I don't think we ever said this out loud, but we knew time was running out. In this industry, at some point, unless you make the right moves and move in the right direction, your age will make you a "wannabe rapper" who missed the seat on the train that someone else took!
Whether you order Change the Game, This Game of Hip Hop Artist Management, or The Hip Hop Business Plan, you'll be taking an important step on the way to earning respect from your peers as they see you moving forward. You'll compliments and praise, and people may even be coming to YOU to have you produce or collaborate with them! You're only limited by what you can imagine.
I'm going to tell you another little secret that people may think is a little politically incorrect to say out loud, and it's this. Some authors don't really share your experience. As much as other authors may want to help you, there is a difference between managing rap artists and creating a hip hop label compared to doing the same for a rock label. Yes, some of the business basics are the same, but the day to day operations required for success in Hip Hop are different from Rock. Plain and simple. That's just the reality of life in America and the world. I talk about that in a preview of This Game of Hip Hop Artist Management (Why Managing Rap Artists Is Different in the Music Industy") that you'll find on the next page, when you click "enter" at the end of this introduction.
If you're running into roadblocks getting noticed, this site and its unique products is for you. If you want to know how to start your own label and release your own music, this site is for you. If you want to get your talent out into the marketplace, this site can help you.
Of course, this site and its products ISN'T for everybody. Puffy doesn't need this site. 50 Cent doesn't need this site. And, if you're already parlayed your hip hop passion into profit, if you've already had a record sell and earn enough money to give you an independent stream of income, then YOU don't need this site either. Otherwise, if you're NOT Puffy or 50-Cent, it may be worth looking a little further.
I said before that information is key. However, you need different information than what may be available out there at this moment. The reason why you need different information is because the world is changing. If you're following the news, you can see that the RIAA is cracking down on file sharing. You'll see that CD sales are down. You'll see that Facebook, Twitter and the concept of social networking has taken hold all over the world. What you should recognize from all of this is something that the major labels already know, the landscape has changed, and you need to have a different strategy for music industry success. I'll suggest you read another preview from Change the Game entitled "The Record Label of the Future" which is also available in full form, at www.hiphopbusinessplan.com
I'll tell you what a mentor of mine used to say to me when I used those words. He would say, "You can't afford NOT to purchase this!" In other words, if the only thing standing in the way of your potential success is a $49 or a $69 investment, you can't afford to let that alone stop you from making the effort. How will you feel years from now if you tell people that you HAD the chance, but you let the cost of some valuable information stand in your way?
Imagine this. Imagine that you order and download or receive the hardcopy of the HipHopBusiness Plan, Change the Game or This Game of Hip Hop Artist Management. (Downloading an ebook is an easy process. If you can receive emails and click on a link in the email, you can download an ebook!) You start to take it one step at a time. You start to put the pieces together. You start to make the right moves. You set up your website and launch your company. You start to open up the lines of communication directly with the buying public and the industry. You start to get known. People respond to you, your label, your music in positive ways, they keep demanding more of what you're selling, and you keep giving them what they want! Your network of fans increases worldwide, people purchase and download your music! You parlay that success and expand into other business ventures and create an empire that lifts you out of your old life and into the one you've always dreamed about!
Imagine that you reach 50 years old, and you're still dreaming of being a rapper! Everyone you know has found their niche and has moved forward in life and made their mark. Even if they're no longer rapping, they used it as the first step and a launching pad to bigger and better things.
The choice is yours. I'll stop talking now and let you make that choice!