You are The Business that Pays
What if I told you that every single time you get residual cheques from your registered Performing Rights Society (PRS, ASCAP, BMI, SOCAN, etc.) you're not just earning, you're experiencing that your music is an asset? Even more, if you squirrel away those quarterly earnings, no matter how small, you can leverage the equity in that savings to your advantage.
What if I told you that your catalog of music or projects are also capital assets? That is, an investment that holds value over time and is used to build your business? What if I told you that's the reason why Russell bought Ciara her masters, and Rihanna's net worth went up the second she acquired hers? It's the reason why Taylor Swift recently had a break down because she doesn't own the rights to her own Masters and although she continues to earn from her residuals, the real value of her empire now rests in the hands of someone that bought her catalog.
Many of us fail as artists because we do bad business. Our sheets don't balance and it's because we're genuinely (or willfully) ignorant of our the value of opportunitiesor even our raw talent.
We sometimes forget to balance our income as artists. We don't spend time soliciting capital and even when that capital is invested we don't account for our earnings, pay ourselves a salary and REINVEST to keep our businesses financially viable. Money makes making music easier. Trust me.
During the early stages of my music career, I was signed to BuffBoo Records and Frontline Productions. I wrote the content, produced the stage show, and maintained an image. BuffBoo created and promoted the music to DJ Pools and Frontline Productions did the Public Relations and branding for my music persona.
If you're starting off with just talent as your contribution, your talent and its value is your capital investment.
We invested THOUSANDS in talent and turned that into our first 3-way split performance fee of $1000.00. Your talent has a value. For every service you provide in a collective, a monetary value should be attached and those contributions balanced between all partners.
I took my 3rd of the profits and invested in the
. We shot and marketed it, and after my second paid show, We sent it to Tempo who played it. I didn't take those earnings and pay myself, I reinvested it in the product.
When I was signed in 2008 as a BTC Brand Ambassador, I had a contract that automatically set my asset column up a few thousand dollars. With that investment, I was able to plan and promote one project well. The value of the contract gave me access to visibility in terms of brand placement and preferred placements at concerts and tv shows. I was essentially the voice of many of their commercials, making my sound and face recognizable for years to come. What I'm saying is the value of what I was being given access to was double the amount of my contract, hence, the asset column of my balance sheet could have reflected double of what I earned by cheque. Relationships with corporate entities have value. Negotiate in your best interest but be aware of what you are being provided as well.
Access to a client's resources is an asset with value. I could in no way pay out of pocket for the promotional visibility that they gave me during the early years of my career. (Did you know that each big billboard is valued at over $1500 each? A well placed 1/2 page newspaper ad can cost up to $3,000). Also, by way of contract, I earned a sure amount of money for performances at their events as opposed to being unsure of whether I'd get on stage or be performing for free as a way to promote. Take advantage of the value offered through ambassadorship relationships. They have a substantial monetary value.
To this day, the respect I have in the Caribbean Music community is attributed to BTC putting me in a position to be seen on their stages during the foundational part of my career. Also, thank you BTC, for signing me as your first secular female Ambassador for The Bahamas.
I took the money from that contract and had
produced, shot a music video and hosted my first video release party, called "Party in Paradise". This took my liabilities over the moon in the balance sheet, but two years later, while I hadn't earned anything near what we spent on the event back, I had better value in the eyes of promoters, and corporate Bahamas who hired me for a number of loosely related events afterward. Some liabilities EARN you profits. Choose them wisely.
My point is, in the creative fields we need to understand that we have to identify our capital (money or resources to begin and maintain our business), reinvest profits (money we earn from the products we make), keep an eye on our liabilities (expenses, especially those that do not bring a return) and BALANCE them all. We don't keep an active eye on how our resources are allocated and when we need to make cuts or take a calculated risk on what to invest in and what type of return we expect, i.e. cash, an ambassadorship, better market presence, or promotional material with an expectation of earning in 2 to 3 year period.
Here's my suggestion, get a good financial planner and sit with an accountant so that you can keep an eye on your finances. Treat your art like a business and every business is aware of it's value and what it takes to make it run efficiently and effectively.