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Six business models for musicians |
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Practicing musician, David Byrne founder of Talking Heads outlines six business models for performers in the light of falling CD sales.
- The equity deal where every aspect of the artist's career is handled by producers, promoters, marketing people, and managers. Examples include Pussycat Dolls, Korn, and Robbie Williams.
- Standard distribution deal: This was the dominant approach. The record company bankrolls the recording and handles the manufacturing, distribution, press, and promotion. The artist gets a royalty percentage (about 10%) after all other costs are repaid. The label owns the copyright to the recording. Forever.
- The license deal is similar to the standard deal, except the artist retains the copyrights and ownership of the master recording.
- Profit-sharing deal: where artist gets a minimal advance from the label but shares the profits from day one and retains ownership of the master.
- Manufacturing and distribution deal where artist does everything except, manufacture and distribute the product. The artist gets absolute creative control, but takes on more risk.
- Self-distribution model, where the music is self-produced, self-written, self-played, and self-marketed. CDs are sold at concerts and through a Web site. Promotion is a MySpace page. The band buys or leases a server to handle download sales and retains creative control.
Byrne seems to favour the last model, noting that with self-distribution, the artist stands to receive the largest percentage of income from sales per unit — sales of anything. “Artists doing it for themselves can make more money than the massive pop star, even though the sales numbers may seem minuscule in comparison.”
He cautions no single model will work for everyone. |
