Financing Opportunities

There are many financing opportunities available for people who are looking to fund their business and today I looked at two organizations that offer financing for people who are starting a business but lack the funds to get it started. The first organization is called Opportunity Finance who finds and finance opportunities that are overlooked by most organizations that fund businesses. Opportunity Finance is a network of investors who are focused on creating opportunity for all and consists of CDFIs (Community Development Financial Institutions), banks, faith-based institutions, foundations, corporations, government agencies dedicated to helping low-income and disadvantage people to connect with the economic mainstream.

Weather funding energy efficiency of housing, businesses, and community facilities, community health services, Healthy Food Financing, or small business Financing, Community Development Financial Institutions provides workshops and training to community based lenders to help their communities succeed.

TheCorporation for Enterprise Development (CFED) is the second organization that offers to help low-income households achieve the American Dream and understand what it takes to succeed. CFED creates economic opportunity that alleviates poverty, that every family can have a prosperous future. CFED is focused on building pathways to financial security and in order to generate economic empowerment CFED focuses on businesses with five or fewer employees that face economic hardships that can be important partners in economic recovery and a major source of job creation. In order to obtain financing CFED provides a listing of funders that self-employed people can contact to apply for financing.

These two organizations are community based and do not provide capital to indivual business owners, but the will provide you with an organization in our area where funding is available for people who have an interest to building economic growth within their community by providing services to their communities. I see that there are advantages for community-based organizations for funding, but for entertainment companies it would be a disadvantage unless it has to do with being a not for profit organization.   

The value of Business Plans

In researching experts in the field of writing and reviewing Business Plans I came across Nicole Williams a bestselling author of “Girl on Top”,  “Your Guide to Turning Dating Rules into Career Success”, she is an expert on writing Business Plans for women who are career-minded and need advice on writing a Business Plan. She advises women on getting started. Nicole is the Connection Director at LinkedIn.

Nicole explains the reason you need a business plan and why it is important to have goals, and your business plan will let investors know what your business is about. She explains why it important to have a solid Executive Summary that lets investors know what the business is, why you created the business, is there a market for it and if there is opportunity for your business. This will capture the investor’s interest.  Another key component is finances and how much you will need to get the business started, and to think about quality not quantity. Nicole points out to embrace rejection and ask question to gauge what need to be changed in the business plan.

I also came across Tim Berry who is business plan expert whose been called the Obi-Wan Kenobe of business planning. Tim is “Founder and Chairman of Palo Alto Software, co-founder of Borland International, founder of bplans.com, and author of books and software, teacher of entrepreneurship, blogger, Stanford MBA, angel investor”. Tim is known as The Father of Business Planning and is the official Business Plan expert at Entrepreneur Magazine.

Tim explains that the key components investors look for in a plan is your business identity (how will you be different), what is your market (what are your customers wants and needs), your strategic focus. These three things are the heart of your business and plan and will keep you focus.

Considering the key components for my business plan I intend to follow Tim Berry’s suggestions about the heart of business and make sure to focus on how I will be different from my competitors, know what my customers want and need, and my strategic focus.

Bobby Owsinski's Big Picture Music Production Blog: The Producer's Vocal Recording Checklist

Bobby Owsinski's Big Picture Music Production Blog: The Producer's Vocal Recording Checklist: The Music Producer's Handbook

Revenue Streams For Music Creators

In this changing music landscape people who create need to learn about the multiple ways to capitalize on the talent, and what revenue streams are available for them to do so. Because if you want to earn an income from your music you need to treat it as a business, there are four types of royalties that you can earn from. There are Mechanical Royalties that the Copyright Act allows the owner of a copyright of a song the right to create copies of the song to be played on a mechanical device, and even though these devices have changed over the years the rights have not.

The Copyright Act allows for anyone to record the song, but must pay the owner of the song for the right to record it, and through the use of the song or composition there could be other artists who make records of one song and these recordings will yield royalties to the original copyright owner as Mechanical Royalties.

As a copyright owner of a composition you have the right to allow other artists to perform your song, and collect performance royalties for its use in their performance. The performance income from a copyright works is licensed through the performance rights organization (PRO) ASCAP, BMI, and SESAC that can include:

·      Any performance of a song or composition - live, recorded or broadcast in TV or Film;

·      Any live performance by any musician in a Bar or Club;

·      Any performance by any musician through a recording on physical media;

·      Performance through the playing of recorded music;

·      Any music performed over the internet (digital transmissions)

These organizations issue what is called a Blanket license to media outlets and music users for a fee that the composer and publisher will receive royalties for there is no payment to performance artist. A television show, commercial, or film can generates performance income from the license that is called Synchronization income, and it is paid for the use of background music, songs sung in a movie or over the credits, These licenses are negotiated on the needs of the buyer and seller.

Music Publishing and Distribution

As a musician getting placement of your music in TV and Film is easier than getting a record deal, the demand for music in film and TV is increasing in a $20 Billion industry. The best way to get paid for your passion is through licensing music to be placed in a Film and TV Show or commercial and there are places that will welcome your music for placement. Seeking out publishing and distribution deals are found by a little research on the Internet (Google) and checking out the many websites that offer music licensing. I have been working with a few sites that offer music licensing for a fee.

One site that offers a low yearly package is Reverbnation, they will promote your music on iTunes, Spotify, Amazon, and Rhapsody for a fee of $9.95 a year for a single or $19.95 for the first year and $49.95 each additional year on a Album, and the package includes the marketing tools, trending reports, and sales reporting to Nielsen SoundScan that will help you to promote your music. Your music will be place with over 20 music retailers from iTunes to Shazam. Their package includes Fan Management, Mobile, Album, and Website Promotion.

One of the main websites to offer Publishing Administration is TuneCore and they have a comprehensive package that includes collecting publishing royalties of which you keep 90%, registration of unlimited songs, an opportunity to make money from YouTube and the availability of your music to Film and TV all for a one time setup fee of $75 plus 10% commission on royalties (20% if they secure licensing placements pitched by their In-house Creative & Licensing team.

As I continue my journey to my Masters Degree and start my music production company I have a decision to make and through my research I have decided to go with TuneCore’s Publishing Administration package to promote my music and build my music catalog.

Industry Liabilities

As I continue my Masters Journey this month I will look at three recent legal controversies affecting the Music Production industry, I will look at each one and give my opinion on how this might impact my future music production company. In the music business there are many lawsuits brought because of infringement of copyrights to illegal music piracy, so there are many to choose from.

I’ll start by examining the formally Homeless music intern who brought a lawsuit against Warner Music reported in Newsweek Magazine. While living in a homeless shelter in the Bronx Kyle Grant took an internship with Warner Music Group (WMG) in 2012, with dreams of starting his own label he figured that working at Warner Music Group (WMG) would be the right place to learn the industry. As is the custom when working as an intern you have to keep the studio clean, run errands, and whatever is needed to keep the studio running smoothly before you will be given the opportunity to learn.

According to Fact Sheet #71of The Department of Labor The Fair Labor Standards Act that an unpaid internship should be for the benefit of the intern to be trained. So after having to come in earl and leave late he was about to lose his bed at the shelter and the thought of getting fired form the internship was very awkward for him. After working there for eight months he was indeed fired because he took to much time for lunch, and never received any compensation for his time at the job.

I know what that feels like when you want to learn the business and take a position as an intern and all you do is manual labor and you don’t learn anything. On top of that no one who becomes an intern should not be given the opportunity to be trained in their field of choice when they are not getting paid, this is wrong and most people who become interns learn that it is a cut throat business and the one who devotes all their time to the company is the one who after years of interning that will get the opportunities.

Next I will take a look at MusicPiracy and how it has made an impact on the music industry, according to an article in Forbs magazine last year there are different opinions on music piracy, some believe that it has help drive sales and others who believe that people who illegally download music are cheap and don’t want to spend the money to buy it legally. There were two reports that the article looked at on by the European Commission that stated “all signs point to piracy leading to a slight increase in sales” and the other by OfCom‘s report that based on attitudes people have about paying for music.

I believe that all the streaming services (iTunes, Spotify, Pandora, and Amazon) and their cost to the consumer they are actually ripping off the music creators, and it is obvious because of the lawsuits being filed by ASCAP and BMI to get Congress to provide fair pay to music creators who want to profit from their creations. It is unfair to music creators when people illegally download music from the Internet without paying for it. People have been sharing music for a very long time even before the Internet by making tape copies for their friends, so I know this will continue to happen, but if music creators would price their music where it affordable we can see our sales grow.

Lastly I will look at trademark cases involving two record labels with the same name, but each “served different niches in the music industry”.  One label used “sTRANGEmUSIC” as its mark and recorded music combining classical and electronic and secured the domain name  “strangemusic.com” in1998, while the other used “Strange Music” while producing Hip Hop and Rap and registered “strangemusicinc.com.” in 2003, because “strangemusicinc.com.” was more commercially successful “sTRANGEmUSIC” asked for an injunction, but the courts refused finding that  “strangemusicinc.com.” “Appearance in the marketplace is unlikely to confuse consumers.” Even though both sound the same their mark differed in “font, color and design.” “sTRANGEmUSIC” lost the case because the court did not find the defendants to be in violation of “sTRANGEmUSIC” mark.

This case makes it clear that in the music business you need to know what constitutes infringement and trademarks are hard to infringe on because of the different categories. I will make sure to do my research when I look to protect my brand so that I don’t get sued.