Being a music producer entails building your music economy

As often mentioned here on Lavatory Records, the music industry is in a state of a “breakdown” – in order to rebuild. We regularly get approached by young musicians who ask how they can build their careers and make a living from their passion. It is a rather difficult question as there’s no actual blue print laid out for everyone to follow

Being a musician or working within the performing arts is a profession that has its own sets of challenges. Compared to other ‘formal’ professions like being an accountant, music has no clearly defined path of advancement, where you would know for sure that in about 7 years you’d be worth and making a certain amount of income marking your set value. 

In this era, the days of musicians being employees within the corporate structure of a record label are virtually gone. What happened was that you signed a contract and received an advance from the label in order to step into the studio. Then as the artist you would make the rest of your pay on a schedule of gigs and album proceeds as determined by the A&R (Artist & Repertoire) and/or Management. Today this model could only be said to be effective for a minority of artists who made their name before the digital age. For the present day artist, not only are you unlikely to be ‘employable’ anymore but would have to be an entrepreneur. One can never emphasise the fact of being able to make sound decisions on investment and grasping the dynamics of economics in order to move forward and build.

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Courtesy of Scott Belsky

Understanding economics from a micro-perspective (small scale and in-house) will help you to understand your production lines. Production in this case means your music as your trade-able commodity. Think of the musical composition setting as a factory with machines at works. You setup your studio, which produces the great musical recordings that you intend to generate your income from. Mostly what’s assumed in this present day of age, your money will be made through performances in the form of royalties from public broadcasting and proceeds from concerts/gigs. In this day in age of “free music”, direct sales from albums is considered secondary income, which can also be categorised with  merchandising, branding (licensing, advertising and endorsements). With income, you would then encounter and have to offset expenses – it is unavoidable!

Lavatory Records

A direct expense where your studio hardware (microphones, computer monitors etc) would be a fixed once-off fee, it is necessary to have this in order to generate your revenue. Same goes with musical instruments and portable sound systems (in the case of a DJ). This equipment would be deemed as the infrastructure you would need to setup your music economy. Just like the government would build roads in order to ensure its citizens can get to work and make business trips (for entrepreneurs, to make provision for taxes to be collected from the total generated income of their national citizens’ commercial activities). Infrastructure is key to establishing economies and technological development goes hand in hand with it, in order to facilitate more efficiency. Musical hardware will have physical upgrade options and compatibility to certain software, in order to create the best music. Without this investment and going through the necessary to maintain your “machinery of works”, your production will be halted. This is the first principle of economics that would deem a music creator/composer to earn the title of music  producer.

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The M1 Highway in Johannesburg, South Africa. The busyness is indicative of the economic activity and transporting demand within the country. 

A musician is essentially a producer because of their creative input, which through production lines of process becomes their output, in the form of musical works (musical sheets, instrumental, lyrics and performance etc). The next phase for the musical producer, is to create a demand for their output as a product or service. Where there’s a demand (audience who love music), the musical producer must then supply his produce/product to meet the demand. In the entertainment context, the space where music falls under, you have heard the phrase “content is king”.

To paraphrase Paul Heyman from the professional wrestling business and former owner of ECW (Extreme Championship Wrestling) when asked on the failings and closure of ECW in an interview he did with Daily Wrestle. He stated that in order to be successful in entertainment you need three things. Those three things are content, distribution and finance. Paul Heyman also further went on to say that of those three things you need, when you start off with content and distribution, you can then get finance.

Most musicians in these trying times, complain about not having finance. To put Paul Heymans principle within the musical context, if you can make a great music album (content) and get it to your fans via the internet through audio stores (distribution). You would then get paid from it through direct sales proceeds, adsense payments on YouTube, and royalties (finance). For a live performer it would work the same way – your live song sets would be your content, your show venues would your point of distribution, then the ticket sales would be your finance.

Once you have finance, it is a must that you create that content by reinvesting in your production lines. You also need to have some financial reserves to ensure you can pay for your distribution lines to cover the logistics of getting your content to your audience. Not only as an artist should you become an entrepreneur, but also embrace being a musical economist as much as being as being a “musical producer”.

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