Clarifying the economic lines between music and politics.

Lavatory Records

When it comes to discussing socio-political issues, artists in general are usually the most expressive compared to most other professions. This includes musical artists, novelists and fiction writers, painters and sculptors etc. In the last music economy article we spoke about how economic recessions affect the music industry. The article described how politicians utilise the services of musicians when campaigning for elections. As frame of reference and to quote from that article, “In the USA – we have seen artists like Pusha T and Jay Z openly endorsing Hillary Clinton during the presidential elections of 2016. During the time when these prominent artists had tours, they would endorse Mrs Clinton on their social platforms, make special mentions of their favoured candidate during their stage performances and even disparaging the rival candidate. In the context of South Africa, the ruling ANC (African National Congress) party would hold national rallies at stadiums around the country and have a procured list of artists to perform there!”

The paragraph cited above has proven to be a point of contestation and caused some mixed opinions from some of our readers. Some felt that musicians endorsing a politician is one thing, however when an artist performs at an event (such as a presidential inauguration) that is another matter altogether as it’s “just another opportunity”. Much as an opportunity to perform should always be explored, this is where an artist must also be aware and weigh up if this form of exposure is worth any form of reputational damage. It is important to note that there is a difference between performing at political and state functions. For example, performing at a political (pep) rally is different to performing at a presidential inauguration. It is very important to differentiate between the two separate structures in order to evaluate the offers that come the artist’s way.

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Profit Margins in the music business: How much should an artist give away and retain in this present music economy?

Lavatory RecordsIn the current paradigm music artists find themselves in the position of being wholly independent, which leads to many of them thinking they would be entitled to keep all of their earnings! Unfortunately, it doesn’t quite work like that, as “independent” doesn’t necessarily mean that an artist did everything by themselves – it’s actually quite the opposite! The more successful artists are the ones who actually know who to keep in their circle that make valuable contributions towards their careers.  Through various forms of revenue such as royalties, commercial deals, album sales etc, an artist would somewhere down the line have to pay people who are imperative to their success. This ties in with subject we have covered in our value-chain analysis article. The music economics series this time around discusses how special people are compensated for their efforts.

The splitting of the revenue comes in the form of management fees, agent commission, distributors duty & fees etc. All these forms of revenue split vary and depend on how the artist’s bargaining power is determined. The final fee or cut (in percentage form) from the point of view of the product or service (music album or stage performance)  an artist has to sell, goes a number of ways to cover expenses and then to determine how the profits are split. The moment the conversation comes to profit splitting, there are a number of dated principles that are still presently applied that need to be understood first before deciding to part with 10%, 20% or 30% and so on…

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