The ART of the Business Plan: A Creative Perspective

First let me say that for an artist, the process of writing a business plan is torture.  It is a fairly structured process that does not leave much room for creativity, cool graphics or an allowance for flair in its prose.  It is essentially the roadmap for building the entrepreneur’s business and while the process can be useful because it can help you identify flaws in planning or other areas of opportunity, the guidance provided by Carl Schramm helps keep things in perspective.  In an article Carl Schramm – Straight Talk on Entrepreneurship, which was featured in Steinvox.com, his perspective on business plans is that business plan creation itself is somewhat useless because the formalized plan is rarely the actual path the business will take and that by the time the plan is written, it is likely already outdated.  His advice is to not expend energy on writing the plan, get out and start building the business.  He says that the overall major points can be captured on one page and for a creative business that is constantly changing; his advice helps me remember to be fluid and not rigidly focus on the plan as the only measure of success.  This echoes the advice given by Chuck Blakeman, in his article How:  the worst, most asked planning question, that while its great to plan, things happen in life outside of our control and can throw a wrench in even the best plan.  This advice really drives the point to plan for now, not spend too much time on the future, but how the plan can help strategically build the business in the now. Carl also stated during his investing activity and experiences, he has never actually reviewed a business plan, but is usually interested in the person behind the business.

This begged the question for me is if Carl Schramm is right and investors and clients are more interested in the people behind the business than the plan, what attributes should be focused on developing?  According to an article in TheNextWomen.com, which featured an interview with Dale Murray, the Angel Investor of the Year 2011.  In the article The Difference a Dale Makes:  Charlotte Hogg Meets Angel Investor Ms. Murray, we learn first that in addition to being an extremely successful investor, public speaker, mentor and advisor in the universe of entrepreneurial activities, she is also “charismatic, charming” and is said to have secured her first significant contract due to her personal attributes, being a great person to work with.  She does not wander away from or betray her intuition when making business decisions and finds a way to operate from a place of authenticity, which helps others do the same when working with her.    These qualities must continue to draw business partners to her as she continues to be successful, so rather than focusing primarily on the plan, this is a reminder to constantly develop oneself from a professional perspective, while building the business.  This is a reminder for me specifically that as the owner, I am the business. 

This brings me to the last point of consideration in this development process is now to think about the business itself.  Not the picture in the plan, but what will the business really do, what do I want it to accomplish, how do I want to operate?  The advice from Carlos Slim, one of the world’s richest individuals and Mexico’s famous business, is to keep it clear and simple.  In an interview in Second & Park, the article Business Advice from Carlos Slim he advises to be creative, work hard and focus continuously on improvements and building the business.  He also sites flexibility as a strong capability for success, which resonates with me based on the advice discussed earlier.  Based on this advice I will further simplify my business model and focus more on developing services that will enhance the client experience, bringing more value to the market.  This is the area that from my perspective should be of most interest to a potential investor so that the understand why the market needs this business model and how it can be successful.  

These are just my thoughts, but I'd love to hear yours.  How are you coming along with your business plan, do you think you will use it?  Let me know.  In the meantime, here's to creatively mind your business.

Managing the ART of Free Music

Recently, T-Pain released his free mix-tape Stoic, with 22 tracks of new music for his fans with features from artists such as Pitbull, Travie McCoy and others, which represents a strong return to the music scene for him.  What makes this return most notable, is that it comes by the way of a free mix-tape, which can be listened to in full on sites like HipHopDX or downloaded, for free from sites such as Livemixtapes.com.

Back in August, the topic of how digital media is impacting the music industry was covered in my post Music and the Digital Movement, and the discussion around how artists revenue is affected by utilizing digital distribution in favor of cd or album sales.  In follow up to this, the release of free music by well-known artists such as T-Pain brings the new movement into greater focus and causes us to examine how the artist can be benefit from this activity.  Obviously, there is no front-end revenue to be made, so why do it?

This topic was also covered one of my favorite sites, Music Think Tank, where the article Why You Should Give Your Music Away for Free, describes how the advent of digital music is devastating legacy and traditional record labels.  It explores services such as Spotify, my personal favorite, which provide an “all you can consume” for one subscription price model.  Not only does it allow users to access all of their favorite music and create playlists, which can actually consist of entire albums, they can also share their activity on Facebook with friends and share music.  Obviously, users are not going to continue to purchase individual CDs when they can gain unlimited access to music via this type of service.  For consumers this creates a winning solution, especially for proclaimed music lovers and for independent artists, it’s much easier to get music placed on these services.  The downside would be the payout is much less than the artist would make through pay-per services such as iTunes or Amazon, but this again confirms why artists must seek to be diverse in their revenue streams and not rely solely on music sales.  As we’ve also discussed, live performances and the merchandising that corresponds should not be underestimated in terms of relevant income. 

As the digital music landscape continues to progress and evolve, it will be increasingly more important for artists to re-think the traditional way of doing business and operate a bit outside of the box.  In a time when most consumers get their music either through subscription service or through pirated sources, why not just let the fans have the music they love for free.  Also, it can provide the artist an opportunity to test the market and see how their music is performing from a consumer perspective and utilize this knowledge to guide their future projects. 

Giving away music for free, while not profitable up front, can certainly provide artists greater insight into the tastes of their fans and overall consumers and help them make more strategic decisions for music products they plan to charge for. 

These are just my thoughts and I’m anxious to hear yours.  Until then, do you and creatively mind your business.

The ART of Protecting Your Brand

Several days ago, Nelly’s tour bus was delayed in Texas by a search for drugs by local officials.  While this report alone is disturbing because we really don’t believe the hype, but also because we have to question if everything is as the media reports it.  Once the story is told, whether it is right or wrong, how does the story impact the artists’ reputation?

Source:  www.growmap.com

According to an article at LATimes.com, there have been a number of well-known artists like Fiona Apple, Snoop Dogg and Willie Nelson, who have experienced similar issues in Sierra Blanca, Texas. Ironically, according to The Hollywood Reporter, this specific area is so heavily monitored because the goal is to prevent illegal aliens from crossing the boarder near El Paso. While Nelly was not arrested, the investigation revealed that someone close to him confessed to bringing the drugs onto the tour bus and sadly it was someone who Nelly later reported as someone who had been working on his team for a long time.  He indicated on Twitter that while he was sad about the outcome and the impact on this person’s life, that he was also extremely upset that someone close to him would cause him harm and jeopardize their safety.  It is understandable that this incident and the resulting negative press would be a cause for concern by the artist who up to this point, has not had a career troubled with legal issues.

Reading the reports of this reminded me of the important lessons we keep learning about building and protecting our brand.  First, by making sure we have the best product we can offer fans and supporters of our artistic endeavors, then securing good management and consulting so that we make good business decisions as it relates to our creative offerings.  Also important is our social media and marketing and making sure that we have control over the images and marketing that make it out into the universe.  Last, we have to examine a place that hits closer to home, as in Nelly’s situation.  As artists, it can be difficult as we make the transition from seedling artist, to developing even a local buzz, to analyze those closest to us.  Especially, if we elect to hire friends or family members to provide support to us in any professional capacity, we have to be certain that they can be a public extension of us without negative impact. 

As artists sometimes we might find it hard to make sure that the team we surround ourselves with is comprised of individuals we can trust and have our best interests at heart and are not trying to further their own careers with no concern for how we will be impacted.  It is imperative that we make sure to protect our brand, at all costs because it really is the outward representation of our most beautiful, creative, artistic selves.  And that is worth guarding with our lives. 

Those are my thoughts and I’d love to hear yours.  Until then, do you and creatively mind your business.

The ART of Merch – Merchandising in the Digital Age

Last week I was one of the fortunate who had an opportunity to be present for one of the eight highly anticipated and well publicized Jay-Z concerts at the new Barclays Center.  First, let me say the moment was truly historic and magical for everyone in attendance to know that we were in the middle of a once-in-a lifetime experience.  Of course, Jay Z has performed before and will perform again, but not like this.  So how would concertgoers commemorate the occasion and freeze this wonderful moment in time?  By purchasing as much merchandise as possible from the Barclay center merchandise store.  It was highly recommended that we make our purchases prior to the beginning of the show because waiting until after would result in extremely long lines and ultimately the worst fate of all, going home empty-handed.  It was interesting to me that for such a wonderfully architected, state of the art building, concertgoers were still expected to stand in line to secure the much-desired commemorative items marking this significant event.

Source:  www.merchdoneright.com

In this advanced digital age, why hasn’t the merchandise industry kept up?  If fans are able to obtain music and video content of their favorite artists from digital sources, we have to wonder why the merchandising segment has not advanced offerings and availability.  An article that I read recently regarding Modernizing the Merchandise Madness on Hybebot, suggests that artists expand merchandise distribution to include digital elements, which could not only improve fan experience, but also increase earning potential.  In the case of the Jay Z concert, imagine the possibility of being able to place an order using an iPhone or Android or other device available at the seats.  Additionally the article suggests that rather than taking the merchandise home from the venue, it could be delivered later to the concertgoers’ home.  In my case, that would have been ideal, because I don’t live in NY, so I had to travel home to Atlanta with my newly obtained swag.  There is also the possibility of packaging something tangible with a digital item as an option, which would help revolutionize the way the business currently views and handles merchandise. 

The article directs readers’ attention to a new company called Merluv.com that proposes that it can revolutionize the way artists distribute merchandise to their fans through the use of music streaming services, sites and applications.  With so much revenue to be gained in the merchandising market, it is one that cannot be neglected by artists, since it can make a significant difference in what an artist makes financially and how they reach out and make that connection with their fans.  When we have those special moments of connection with our favorite artists, we want a way to hold that moment in time.  It’s important to make sure its done in a way that makes the best of that moment.

These are just my thoughts, but I would really love to hear yours.  Until then do you and creatively mind your business.

Entertainment Law Podcast Review

A common issue for artists of all disciplines and their management is to understand the laws around protection of their work.  Often, within the industry, in order to make money early in their career, artists may sign away the rights to their work.  From an awareness perspective, this is eye-opening both for the artist and managers to make sure that we do not forget to read through all contracts and agreements and really understand these laws before signing or agreeing to anything.  Above all, it is a reminder that in these matters, securing a legal resource can serve as a great protection.

Amazingly, prior to 1972 there had not been copyright protection for sound recordings or related work.  Then in 1976 a copyright act revision was made to include a termination right allowing original content owners, songwriters or authors to reclaim the copyright on their work, even though they previously granted exclusive rights to publishers and major music labels.   Under this revision, these individuals can file a reversion on ownership 35 years after the original copyright as long as the notice is filed within 2 years before the end of the 35-year deadline.  This enlightening information was covered extremely well on the Lawyer2Lawyer podcast under the topic of The New Legal Battle over Song Rights and hosted by J. Craig Williams and Robert Ambrogi.

The reason why this topic is so important now is that based on the 35-year window would apply to any records coming out in 1978 and every year after that, meaning that fairly significant recordings are soon coming up for consideration. 

From the perspective of major labels, catalog sales are a major revenue source and accounts for a large number of their sales.  There is a lot of music out there that provides the labels pure profit, specifically if the sales occur posthumously.  In situations where the label advanced the artist a great deal of money during their career, there is no recoup for the artist or their estate on this music.  Whenever a purchase is made, the label is able to collect all the profits on that sale.  So the impact of the artist or their estate being able to reclaim ownership on their music, this could cut revenues to the labels considerably.  This legislation was after all, not put in place to protect the labels, but to protect the authors.  It demonstrated advanced thinking on the behalf of congress that understood the plight of a new artist who will likely be held to a fairly strenuous contract by the labels and created a way out down the road.

There are so many considerations for artists who desire to reclaim their work in this digital age because distribution can now be done online with little or no overhead costs.  While some labels can still provide marketing and distribution on their catalogs with an improved payoff to the artist or author, in many cases digital distribution will create a perfect storm form for artists who decide to reclaim their catalog or work.

Another area of consideration around copyright law also brings the subject of blogs into analysis.  From the same podcast, Lawyer 2 Lawyer, the topic of The Legal Issues of Blogs, Fair Use and Attribution, which is a very sensitive subject because often we consider blogs to be a safe place to express our opinions, thoughts and business positioning within the digital business place.  However, there are now some legal and ethical obligations that bloggers and authors may not be aware of.  Unfortunately because of the lack of clear definitions provided through the Fair Use laws, often bloggers don’t actually properly reference the sources of their information. While it’s often not done intentionally, there is an ethical obligation to give credit to the originator of the information and it is difficult to police on the Internet, but this activity contributes to the lack of credibility amongst bloggers and dilutes the quality of the content.  While there are no laws in place that govern this activity on the Internet, it is up to each blogger to be more responsible in how they handle information.  This is an important element for my business because part of my overall business plan is to feature content that will provide guidance to unsigned and independent artists to help guide their career, so I will need to make sure that always reference my sources properly and give credit where it’s due.

Lastly, in the podcast review the Lawyer2 Lawyer hosts take on the subject of Entertainment Law & the Challenges of Celebrity.  This is of particular importance for me to make sure that I educate the artists that I manage in terms of the development of their brand and image.  In recent years, we have seen a number of cases where artists and celebrities appear in the news for the issues they are experiencing in their personal lives.  In some cases, we have witnessed them battle addictions, broken marriages and the resulting decline in their popularity.  It is incredibly important for artists to understand that in this new, very visible position, they must be well aware of the legal ramifications of their actions because it can cost them, literally. 

Listening to these blogs have provided a great deal of insight for me in areas that I was not well educated it, but has definitely enlightened me into things I need to be aware of for myself and the artists I manage.

It serves as a great reminder that we should all be creatively minding our business…