Dave Kusek is Vice President at Berklee College of Music responsible for managing the online music school, Berkleemusic.com. Kusek was a co-developer of the revolutionary Musical Instrument Digital Interface (MIDI), co-inventor of the first electronic drums at Synare, and founder of Passport Designs, the first music software company. In 2005 he co-authored the book "The Future of Music: Manifesto for the Digital Music Revolution.
Kusek also runs a consulting business Digital Cowboys providing advice and services to Nokia, Pepsi, AOL, BMG, EMI, A&M Records, Boston Acoustics, Roland, Yamaha, Intel, IBM, Island Music, Nettwerk, Ovation Guitars and others.
Kusek has written for or been featured in Forbes, Billboard, New York Times, Wired, Boston Globe, Christian Science Monitor, Associated Press, MTV, CNBC and Financial Times. He is a frequent speaker at MacWorld, Comdex, NAMM, AES, IEBA and has appeared on NBC-TV, the Nightly Business Report, NPR, and the BBC.
As we have seen, there are many different ways to make money in music today. In the past few years, much has been said and written about the 360 degree deal, where an artist/writer enters into a business partnership with a company and gives the company lots of rights to recordings, songs, merchandise, and touring, usually in exchange for a larger advance.
My advice to you is to make a 360 degree deal with yourself and find ways to generate revenue from your writing, performing, brand, activities, and interests that suit you and what you stand for. DO NOT license these rights away to any one company, even if it waives a huge advance in your face. You do not want to be dependent on any one entity for your livelihood, other than yourself. If you make the 360 degree deal with yourself, you can then selectively find the right partner to help you exploit the various revenue streams that you have by focusing on each stream individually to maximize its potential.
The other reason to make a 360 deal with yourself is that you want to integrate the marketing and promotional efforts across all revenue streams. The artist/writer and their manager should coordinate the marketing efforts to maximize revenue and to gain the broadest possible exposure from advertising, publicity, public relations, direct marketing, interactive marketing, etc.
Here is some excerpts from an interview I did with Rick Goetz from musiciancoaching.com
“I think it’s critical that you have your own website and drive traffic to your own website in any way imaginable, and that you set up ways to do business transactions on your websites. That can be collecting names, cell phone numbers, Twitter follows, selling product, building dialogue, communication, selling tickets and merch. That’s essential.
At Music Power Network and Berkleemusic we teach a lot of people DIY basics. Get your act together, get a website together, have a business partner that is going to help you create a strategy and deal with promotion and distribution and touring and publishing and your finances and the business aspects of your career so you can focus as much time as possible on creating art and getting better and practicing and becoming a better artist. I think that’s essential. Lots and lots of people I’ve seen – musicians, artists – have thought, “I’ll get online and Facebook and YouTube and get a bunch of friends and spend all my time blogging and tweeting.” But if they’re not working on your music, most of the time that other stuff doesn’t matter at all. If you’re not really great, nobody is really going to care.
It’s such a fine balance to strike between perfecting your art and being unique and different and having something to say and getting the word out. That’s the conundrum. We often counsel people that you have to have a business partner. At Berkleemusic we teach entrepreneurship, artist management, how to start your own business, how to run a business, how to market direct and use social media to market, what copyright law is all about, what contracts are all about, how to tour, how to make money, the realities of the different levels of touring and how you can get paid and use that to be a driver of your career.
It’s a huge ambition that we have here at Berklee to try and help create a healthy music industry going forward. If there isn’t a healthy music industry, none of us have jobs, none of our students have jobs and the whole thing goes down the toilet. We have to help people be free thinkers, entrepreneurs, to break the rules.
When we started the berkleemusic online school ten years ago there was no iPod, YouTube, Myspace, Facebook or Apple iTunes store. That all happened in the last ten years. So if you think about what’s going to happen in the next ten years, it’s going to be completely different and almost impossible to predict what’s going to happen. People that want to be in the industry have to be willing to accept that it’s going to constantly change for the foreseeable future. There is nothing you can be sure of, and the things that work today probably are not going to work tomorrow.
God willing, some kid is going to create the next big thing in music like Sean Fanning did with Napster or a new format or a new kind of virtual experience that is as good as a concert. Something like that is going to happen, and who knows what it is going to be? It’s hard to predict.”
Last week host of Networking Musician Radio, David Vignola interviewed me about Music Power Network and the Future of Music. Here is the audio interview along with a link to David’s site. Great resource for indie artists.
Music Power Network provides a wide variety of music business education, tools, interviews and lots of resources for the D.I.Y. musician. The site also offers an equal wealth of information / education for producers, managers or publishers.
“The best way to predict the future is to invent it.” This is a great quote from Alan Kay, one of the creative geniuses behind the laptop computer and the mouse. Musician can apply this thinking to their own careers by planning for success in a dedicated and systematic way.
I came across this great guest post by Kevin English on Creative Deconstruction that talks about the “Lower Class Musician” and suggestions for how to lift yourself out of that class into a middle or upper class status through controlling your overhead, aligning your expectations, creating a plan, getting a good and current education and diversifying your product offering. These are all things that I have blogged about in great detail in the past and agree with completely.
Here in an excerpt from Kevin’s post:
“Learn to structure yourself like any other startup and formulate a strategy on paper that will sustain you for three to five years. You’ll soon find out that overspending on manufacturing, marketing, promotion and distribution is very difficult to recoup.
Adjust Your Expectations
For some of us, music is a hobby and that is okay. However, if you plan on feeding your children by touring the Chitlin’ circuit, that’s another thing entirely. When I realized that writing songs for Columbia Records and recording demos with The Fugees wasn’t going to sustain me forever, I had to adjust my expectations. These gigs were few and far in between and often times didn’t pay half as much as you would expect them to.
I studied profitable ideas, people, and businesses to find a common denominator. I learned that nine out of ten successful startups had a business plan. Not just any old plan, but one that was standard across all industries. Financial planning, marketing, and the management of people and products/services cannot be done on the fly. If all you want is for people to hear your music that is fine. But again, you can’t necessarily expect to make a decent living.
Accelerate Your Learning
Hundreds of books have been written on the subject of business plans, yet no one in the music business seems to think they need one — until, of course, they run out of cash. I spent years in my local SBA in Newark, NJ looking at sample plans, meeting with retired CEOs of successful companies, and learning how basic businesses operate.
If you do the same you’ll realize that most startups have more similarities than you’d expect. However, it is important to point out that no two plans are alike. You will still need to write a plan specifically based around your music-related products and services. My first plan was a disaster. I asked my uncle for $75K with a promise to return 20% of the loan over the next five years. He had a good laugh over that one, but at least he knew I was serious about my dreams.”
For a toolset that offers exactly what Kevin is talking about look here.
In the face of insurmountable odds I feel a competition is in order.
Here’s a pretty telling graph – Recorded music sales over time since 1999. This is the truth.
If you are trying to make money selling recordings, or producing them you are selling into a market that is auguring into the earth. If you are a pure-play label – either cash out soon and go home before it’s really too late, or start writing a new business plan. It is time for you to start over.
If you really want to do 360 deals, then get the capacity, personnel and expertise to actually produce results or you are toast. Todays nimble entrepreneurs and emerging music service environment is going to eat your lunch. Specialization is in, generalization is out.
If you are a record producer or engineer, create other products to produce. Broaden your horizons. What are you going to be a producer of? What “insanely great” product can you create?
If you think you can survive in the recorded music business, find something else to sell. Simple as that. There is no recovery from this decline. Sure songwriters and publishers can still make money licensing for film, TV and new media (like ring tones), but the engine that has driven the music business for the past 60 years has run out of steam.
Recorded music as a propellant into prosperity is no longer viable.
Accept this fact, move on and adapt. Use this as a jumping off point. Reinvent yourself or your business.
This has been my mantra for the past 6 or 7 years. If this RIAA graph above is not evidence enough, then I don’t know what is. If you think being signed by a “record label” is your ticket to ride, then nice to have known you. Enough already. I can’t believe how many people still want this. American Idol?
And if you are the RIAA, and think trying to preserve recorded music as a “business” is a sound investment, I would advise you look for another job, and soon. Gaming Soundscan to count T-Shirts as a way of propping up the numbers and thinking everything is ok is self deception. Look around you.
This is the truth people. Recorded music sales are going to end as a viable business driver ’cause it is just not working anymore and is an outmoded concept of what music was all about. “Digital” tracks are not going to cut it as they have been conceived thus far because it is just the same thing in a different form. Fixing music in time makes no more sense. Music is more fluid than ever. Subscription revenue and streaming licenses are not going to support anyone when they are optional. We need something new, something bold.
We have to dig deep here. This is a time to be honest with ourselves. What is your music career all about anyway? How are you going to survive? What are your goals and your dreams? How do you define success? You can’t eat passion and you can’t spend perseverance. What is your business plan? What is your marketing plan? We need some new ideas. What are you going to do?
It is too easy to say that a 360 model is the way to go. 360 for who? You or the “label”? What do you really need? Who is actually going to provide the services required? What does the team look like? Where is the value, talent and capital going to come from? Who is going to back your vision?
Think you have it figured out?
I am going to put together a team of people to search for the best new music business plans for musicians, songwriters and producers. In the coming weeks we will put this competition together and announce it officially at SXSW or sooner. Details will be forthcoming on how to enter, who the judges are and what the prizes will be. I promise you it will be worthwhile and interesting.
The music industry is being reinvented before our very eyes. Learn how it is developing from today’s entrepreneurs including Ian Rogers from TopSpin, Steve Schnur from EA, and Derek Sivers and how you can capitalize on the changing opportunities.
MPN is my latest project and an online service for music business people and music and artist managers creating the future of the industry. MPN provides online music business lessons, exclusive video interviews and advice, career and business planning tools and thousands of specially selected resources designed to help you achieve success in this ever changing industry. MPN gives you the tools, expertise and guidance to help you get organized and take your music career to the next level. Learn from industry experts, set your goals and realize your vision.
Learn from Grammy award winning producers like David Kershenbaum and Phil Ramone and leading publishers, A&R reps and music supervisors on the secrets of being a successful musician, producer or songwriter.
MPN is my latest project and an online service for songwriters, music producers and independent music publishers. MPN provides online music business lessons, exclusive video interviews and advice, career and business planning tools and thousands of specially selected resources designed to help you develop yourself as a successful industry professional. MPN gives you the tools, expertise and guidance to help you get organized and take your music career to the next level. Learn from industry experts, set your goals and realize your vision.
Here are some ideas that you can use as a musician, band or artist from Music Power Network from artists Kelly Cha, Jill Sobule and J the S. There are a lot more videos like this on the site.
MPN is my latest project and an online service for independent musicians and bands. MPN provides online music business lessons, exclusive video interviews and advice, career and business planning tools and thousands of specially selected resources designed to help you achieve success as a self-sustaining artist in an ever changing industry. MPN gives you the tools, expertise and guidance to help you get organized and take your music career to the next level. Learn from industry experts, set your goals and realize your vision.
Musicians of the future need to know the reality of the business today and seek the tools of tomorrow that will enable them to participate and prosper in the creative industries and carve out a niche and an audience that can sustain them. These are the underpinnings of the Music Power Network and what we hope to accomplish by helping to guide musicians, songwriters, managers, producers and business people seeking careers in the music industry.
Music Power Network is a new online information service that I started for independent musicians, songwriters, producers, artist managers, and people starting new music companies. It is a framework with which you can plan your future in the music industry. MPN provides online lessons, exclusive video interviews and advice, career and business planning tools and thousands of hand-picked resources designed to help you achieve success in the new music industry.
Here is an sampling of some of the in-depth video interviews I did over the past year with industry luminaries including Terry McBride, Derek Sivers, Mike King, Phil Ramone, Kelly Cha and many others leading the way. More interviews are being collected and added as I seek out the people who are helping to transform the music business and light the way into the future of music.
As a result of publishing The Future of Music, many people have asked me to help them with their careers. MPN is the system that I developed to help people get organized and make money in the new music industry. With MPN you can learn from industry experts, set your goals and realize your vision.
The successful artists and writers of the future will start independent and stay independent. They will create businesses around themselves to suit their ambitions, personality, and style. They will connect directly with their fans and control their own destiny. MPN can show you how to do it. Make a 360 degree deal with yourself and find ways to generate revenue from your writing, performing, brand, name, activities, and interests that suit you and what you stand for.
Join MPN and get immediate access to:
• Online music lessons that will help you understand the new music industry.
• Exclusive video interviews with industry experts on the latest strategies.
• Custom business planning tools to help organize and guide your career.
• Thousands of hand picked career and market resources to help you build your team.
Here’s what people are saying:
Terry McBride / Nettwerk CEO – “Dave Kusek has an amazing grasp of where today’s music business resides, where its been and where its going. He has a unique ability with factual analysis to cut through the hype and buzz and give us all a clear picture of what is actually taking place in today’s environment.”
Corey Smith / Artist – “It is safe to say that the “Future of Music” was very much the catalyst we needed to quantify our intentions instead of it being assumptions and guess work. I thought hey, this is possible. And that, alone, made a huge difference. It’s amazing what you can do once you realize that something is possible.”
Milan Kovacev / MPN Member – “MPN’s services are remarkably well suited for 21st century independent artists. As a songwriter, producer, artist, and music publisher I wear different hats every day and that requires a clear focus and goal-oriented approach to my music business endeavors. MPN’s online course, video interviews, resources and practical tools for building a business plan helped me move fearlessly and confidently in this new dawn of the music industry.”
Debbie Cavalier/ MPN Member – “MPN is the best resource for independent musicians who want to take their career to the next level. My goal for “Debbie and Friends” is to connect musically with as many families as possible via national tours, while maximizing my catalog’s potential through music publishing, licensing, distribution, merchandise, and music teaching opportunities. MPN has all of the resources I need to help me achieve my goals. It’s exactly what I have been looking for.”
Fernando Grecco / MPN Member- “Music business today is not for beginners. It is an open field where there are lots of opportunities for artists and professionals, but where there are very few right answers. MPN is the best way to go from beginner to pro in this brave new world of possibilities. Designed by Dave Kusek, who foresaw this new scenario more than 5 years ago, in his book about the Future of Music, MPN was key for me to choose and develop the 360 degree label business model for Borandá. MPN helps turn inspiration into action for serious people who want to thrive in this new reality, regardless if you are a musician or a entrepreneur.”
Debra Latimer / MPN Member – “Terry Mcbride is a genius. He articulated some of the most dynamic and innovative concepts pertaining to the music industry that I have ever heard. This video has opened my mind to new models of thinking about producing and distributing music. Just a wonderful and insightful video.”
We posted last December about Corey Smith, a clever artist who is blazing a new trail through the music business using entirely new ways of thinking. Corey’s whole business model is based on giving away lots of music for free and building relationships with his fans. He does it primarily through touring and developing seriously close relationship with his fans. And it was this giving away of the music that was Corey Smith’s tour support. They didn’t have any label support, but grew their fan base. Because once people heard Corey’s music, they had to see him live. Which they did. In 2007, Corey Smith grossed $1.7 million. Last year Corey’s gross $4 million. Free music built the base.
Corey Smith made headlines when his independent music career slowly grew into a multi-million dollar business, selling out large venues normally reserved for those with chart topping hits. Corey toured diligently and worked hard to make honest connections with his audience. As his fan base grew, he stayed focused on building that connection and being intentional with his business decisions.
Get past the street-tough imagery and braggadocio, and 50 Cent is actually one of the most well-run, well-conceived business entities in music. And like Jay-Z, he also one of the most wealthy.
Spawned by Dr. Dre and Eminem and one the highest-selling rappers of all time, 50 Cent is actually less a rapper, and more a company. In fact, he is one of the most highly-successful examples of a 360-degree artist today, and a template for future artist business models.
In an earlier era, artists would shy away from advertising and sponsorship deals. A tie-in with a major company was usually viewed as a sellout, and often resulted in a major credibility hit. That has changed dramatically, though rappers were never haunted by that sellout demon.
Instead, the opposite is true – rappers are often unabashed capitalist warriors beating the system, and rapping about their exploits. And 50 Cent – who famously survived nine gunshots at close range – recently entered a monetary stratosphere that few enjoy.
Sure, 50 is a mega-platinum seller, and a staple of popular culture. But the rapper, and those orchestrating his career, are mostly focused on pursuing revenues through any channel, instead of simply maximizing record sales. And the moneymaking possibilities are only limited by the creativity of the entrepreneurs involved.
In fact, during the past twelve months, 50 Cent netted $150 million, according to a Forbes estimate. A major percentage of that payout came from an interesting deal with VitaminWater owner Glaceau, purchased by Coca-Cola for $4.1 billion. 50, as part of a broader sponsorship deal, cashed Glaceau shares for an estimated $100 million after taxes.
That adds to an existing stable of other business divisions, including a G-Unit clothing line, a boutique recording label, and even a stab into gaming. “The financials of the music business have changed to the point that we have to find ways to make money in other places,” 50 Cent brand manager Barry Williams recently told Forbes. “I didn’t think six years ago when we started trying to sell music that we’d be selling VitaminWater and shoes and clothes. Now we’re moving into other directions, and four or five years from now, it’s exciting to think about us looking at natural resources and raw materials and other businesses.”
The natural resources discussion could potentially produce a 50-branded series of platinum jewels. The rapper is now entertaining a deal with South African mining billionaire Patrice Motsepe, another creative exploitation of the 50 Cent image that goes way beyond a simple album release.
Of course, 50 Cent is unique entrepreneur and performer, and an extreme example of success. And every successful, 360-degree artist forges a unique business model, one that plays into the strengths of the artist and considers the target audience carefully. But in the modern music industry, the ultra-successful artist is one that successfully exploits a broad portfolio of revenue generators, and approaches the situation like a diversified business. That is the reality of the modern music industry, one that demands just as much business ingenuity as artist creativity.
As we have seen, there are many different ways to make money in music today. In the past few years, much has been said and written about the 360 degree deal, where an artist/writer enters into a business partnership with a company and gives the company lots of rights to recordings, songs, merchandise, and touring, usually in exchange for a larger advance.
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