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MUC109 LEC 1. Overview of the Commercial Music Industry
1.
Music Business Essentials Overview: The
Commercial Music Industry © 2006 musicbizclasses.com
2.
MUSIC INDUSTRY SECTORS •
The Music Industry is not just the Record Label Business • The Music Industry is comprised of many vibrant “sectors”: sectors : Business Sector= economic category or area • These Sectors include: • Radio • Live Performance • P bli hi Publishing • Technology Development • Recorded Music © 2006 musicbizclasses.com
3.
MUSIC INDUSTRY REVENUE Source:
IFPI research report, 2006 © 2006 musicbizclasses.com
4.
INDUSTRY SECTORS KEY
FUNCTIONS: A. A Recorded Music • Product- New releases; Back catalog; Specialty Products/Private-Label; • Marketing and Promotions Promo Promotions- Events, Press, Sponsorships • Production Creative (Producers); Production- Technical (Engineers) • Distribution- Bricks and Mortar; Internet; Mobile • Licensing & Reproduction- Sound Recording Exploitation © 2006 musicbizclasses.com
5.
Revenue Sources Recorded Music- •
%Sales Revenue; wholesale and retail • % of some artist promotional and sponsorship p p p revenue • Creative and product fees • R Royalties and li lti d licensing f i fees (mechanical & performance) • Work for Hire fees © 2006 musicbizclasses.com
6.
INDUSTRY SECTORS KEY
FUNCTIONS: B. Music Publishing • Song Exploitation • Sub • Sheet music C. Live P f C Li Performance • Concerts- Tours, Performing Arts • Events- Festivals; Fundraisers; Corporate C © 2006 musicbizclasses.com
7.
Revenue Sources Music Publishing •
Sheet music--%retail sales music %retail • Royalties- Songs, Lyrics • Licensing fees & Sales fees for royalty g y y free collections Live P f Li Performance MusicM i • % of Ticket Sales • % of Door • Contract fees; salaries • % of Corporate sponsorships © 2006 musicbizclasses.com
8.
INDUSTRY SECTORS KEY
FUNCTIONS D. Music in Broadcast • Film- Soundtracks, Promos • TV- Music Videos, Soundtracks • Video Games- Soundtracks, Ambient • Advertising- Jingles Sonic Branding Advertising Jingles, • Radio- Internet; Digital; Analog • Corporate & Retail- Background Music Services; Videos © 2006 musicbizclasses.com
9.
Revenue Sources Music in
Broadcast • Advertising Revenue • Royalties • Marketing development fees • Work for hire fees • Monthly subscription fees © 2006 musicbizclasses.com
10.
INDUSTRY SECTORS KEY
FUNCTIONS E. Music Instrument & Equipment Sales •Manufacturing •Retail/Merchandising R t il/M h di i •Rental and Services F. Music Technology Products & Services •Software & Hardware- iPod, iTunes •Online services MySpace YouTube services- MySpace, G. Music Merchandise •Additional Products-t-shirts; posters H. H Music Education & Therapy •Client Services © 2006 musicbizclasses.com
11.
Revenue Sources Music Instrument
& Equipment Sales • Sales Revenue; wholesale a d retail Sa es e e ue; o esa e and e a • Rental Revenue Music Technology Products • Retail Sales Revenue • Advertising revenue • Subscription fees • Licensing fees © 2006 musicbizclasses.com
12.
Revenue Sources Music Merchandise •
Royalties • % of Manufacturing income Music Education & Therapy • Session fees • Consultation fees • S l i Salaries © 2006 musicbizclasses.com
13.
The Artist Ecosystem
PRODUCER BIZ MNGR Self-Licensing Artist Record Label Self-Distribution © 2006 musicbizclasses.com
14.
Key Industry Functions Key
Functions in the artist ecosystem can be divided into two main categories: g •Artist/Creative •Product/Marketing P d /M k i © 2006 musicbizclasses.com
15.
Artist-Centered Main focus=Creativity Who they
are- •Musicians •Performers •Songwriters/Composers •Producers Producers •Photographers/Videographers © 2006 musicbizclasses.com
16.
Product-centered Main focus=Marketing and
Sales Who they are- are •Record Labels •Managers- P M Personal, b i l business •Promoters – event, PR/Publicist •Producers •Distributors/Merchandisers •Publicists •Booking age ts oo g agents © 2006 musicbizclasses.com
17.
Key Take-Aways: The Commercial
Music Industry is much broader than the Recorded Music Industry (Record Labels) Labels). The Commercial Music Industry includes: Recorded Music Live Performance Music Publishing & Licensing Music Instrument and Equipment Sales Digital and Electronic Music Services Merchandising g Music Education and Therapy © 2006 musicbizclasses.com
18.
Key Take-Aways: • M
i I d t t Music Industry top revenue sectors (annually): t ( ll ) • Recorded Music=$20-25 Billion • Musical Instruments/ Equipment= $19-23 Billion • Live Music= $17-20 Billion Music $17 20 • The traditional record label business may be declining, but the overall industry is very vibrant • There are many, exciting opportunities for f creative, technical, b i ti t h i l business and d legal thinkers in the Music Industry © 2006 musicbizclasses.com
19.
For Educational Use
Only Please do not copy or distribute This slide presentation is p p part of the Music Business Essentials series. Contact C t t info@musicbizclasses.com for more information © 2006 musicbizclasses.com