How to be a Player in the Game of the Recording Industry Tip 01/10/2014 $$Budget$$
Budget, Budget, Budget!
You probably hear that a lot in the game.
Usually it is in the context of you asking for services provided by someone else and the instant reply is “do you have a budget?” now depending on how you reply, that could go one of two ways…
Either the asker is seeing how much money they can get out of you (normal) OR
The asker is seeing if you have planned that far ahead (industry insiders).
It happens a LOT in booking in dealing with artist taking dates. The first reply I usually get is “what’s the budget”.
I hate that!
If I come to you with a client and I am asking about booking, just give me the standard rate. But instead the default is, what is the budget. So I usually low ball for a couple negotiating moments just to get to what you should have stated in the first place “well, he normally get $$$”.
Where a lot of people make a mistake in this game is when stating the budget, you may be overpaying for services. Do your research first. Call around, make inquiries to see what others are charging. See what the normal rate is. If it only cost $350 for a service and you tell them that your budget is $500, OF COURSE they are going to say it cost $499, you just gave them the game and UOENO.
But in relation to artist specifically with their careers, you have to have some sort of budget. You can not make the mistake of thinking that just because you have some sort of talent you will make it. This game doesn’t work like that.
When you have a budget it really gives you a guideline or outline of what you need to shoot for. Most times the budget comes AFTER the planning phase but let’s say that, for the sake of argument, you do not have a budget yet…
Where do you start?
Below is something real basic and it is the typical budget for you to begin working on your next project. And by project I mean something that will offer some sort of return on your investment to sell to consumers.
This is taken for granted that you have built a catalog of music and you are now ready to compile a project for sale via digital distribution or verified terrestrial locations close to you.
Fell free to use this as your guideline:
- EIN Federal Registration: Free apply hereàhttp://www.irs.gov/Businesses/Small-Businesses-%26-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online
- Think of a business name for your label and for your publishing company (must be separate) This has to be LLC to protect your personal assets. Business license registration is $100 each (Georgia search and file here àhttps://cgov.sos.state.ga.us/Account.aspx/LogOn?ReturnUrl=%2f
- You will use the above 2 registration to open a bank account in the name of the businesses to separate all funds from personal
- Library of Congress Compilation filing fee for ENTIRE PROJECT. This will save time and money if you have all of the projects typed and ready to go under the name of the album/project. Submit them all at once in order to save $$. The filing fee is $35 per filing or $65 for a compilation. Everything is done online now (much easier) file here àhttp://www.copyright.gov/eco/notice.html
- I am guessing you need a website: $1,200 total budget
- Graphic design fee for a logo for label and publishing and artist @ $150 each = $450
- Photoshoot for the web images and promotional purposes: $300
- Graphic design fee for CD Cover (front, back, and cd face): $50
- Graphic design fee for 3 digital CD covers (front/inlay) $50 ea x 3=$150
- Viral video budget (very simple, just for promo purposes at $200 ea x 3=$600
- Official video budget for 3 singles ($750 ea x 3=$1250
- Pay to play budget for videos on viral sights like RapHD, WorldStar and HipHopDX=$5000
- Genre related publicist for promotional purposes @ $200/wk
- Pay to post budget for bloggers and other submissions: $2,000
- Pay to play budget for open mics, showcases, online radio stations and opening for headliners at concerts: $4000
- Mixing and mastering of EVERY song that is going to be for sale (estimated 12 songs on the album, at $250 per song to master x 12=$3,000
- Creation of a DJ Service Pack for each single to include Original version, Instrumental, A cappella and Radio edit to give to the DJs (digitally only), You will need subscriptions to the record pools and possible download cards for in-person visits and network with someone who has a large email list for DJs. The typical price for this type of service and/or encompass all of the above is $5,000 to cover all bases (I have a list of providers and their rates upon request)
- Tunecore fees for digital release (this include ringtone, single, and album credits: $596.80
- Once you joint Tunecore, you will be added to iHearRadio but you still need to be included on the New Music Server for other Radio Stations to access. Not sure of the current rates, I would estimate it around $500
- 5000 flyers and 25 posters for promotional purposes: $175
- Graphic design fee for 10 separate designs for tshirt and other merchandise at $20 ea design x 10=$200
- Price of promotional merchandise to get printed to give away at shows @ $6.00 per tshirt x 30/month = $180 (these are all FREE)
- Price of promotional merchandise to get printed to SELL at shows @ $6.00 per tshirt x 30/month = $180 (sell for $10 at the shows, $4.00 profit per shirt to reinvest back into the project)
The above is just to get started in the first MONTH of really going in full force into the industry. Of course some of these can be bartered, short cuts can be created and/or other partners can be leveraged to achieve these task BUT make no mistake, some sort of budget has to be created.
I did NOT add up all of the above because depending on the genre and type of music, some of the items above will not relate.
At almost every step of the way, you will certainly have to PAY. The goal is to play for it in order for you to completely grasp the entire picture. If you let your finances get out of hand, you will LOSE!
If you go into this without a budget, you will not even get out of the starting block.
But if you focus, strategize and look at this from a business perspective of you being the brand and how you can maximize your investments, you stand some sort of chance of recouping your investment.
This is just a small portion of what is expected.
I hope this didn’t scare some of you off but at least you know what holes you are about to step in.