"New Business Models and Trends in Digital Distribution"

Now that I have accomplished my goal of finishing my Master’s of Science Degree from Full Sail University, I can say that I am equipped with the knowledge that I need to succeed in the music entertainment business.  Some of the new and current trends are the new online technologies in which the Internet is inescapable. I plan to use digital distribution streams to market the music that my artists produce on behalf of my company. There are many music websites where music is distributed digitally but iTunes and E Music are right down the path that I’m going. Record labels these days aren’t giving artist royalties through digital distribution. However new business models in digital distribution makes it easier for artists, comedians, authors or similar professionals to get their work into the public sphere of interest very easily with minimum business expenses. This helps to lower the prices for the artist and helps them gain increased profits for the music that they distribute. All forms of media including games, films, books, and music software are now in digital form. Digital distribution has opened the online databases which creates new jobs and business models.

The new digital distribution business models makes a way for artist to access the same distribution channels as record labels, without all of the extra manufacturing costs. Recent innovations with current Internet labels has created new business models that offer digital distribution services to unsigned or independent artists directly existing online. Digital Rights Management (DRM) is the new current solution to the new flaws of digital media. This allows all distributors to protect their content from  unauthorized redistribution. Digital Asset Management (DAM), Digital Rights Management (DRM) and Digital Content Delivery (DCD) are all new business models that opens the door to the future of digital distribution. These new digital distribution business models and innovations has allowed artists and other entertainment business professionals to upgrade into the world of digital distribution.

 For more reference the link below has very informative content that is useful for someone who wants to know more information about the digital distribution and how it is changing the music industry.

DigitalRightsDirector. 2011. Advanced digital rights management. Retrieved September 26, 2011 from http://www.digitalrightsdirector.com/digital_content_delivery_and_distribution.html


 

Expert Views on Business Plans Part (2)

In the second week of my Business Plan Development course, we were required to describe how we intend to incorporate what we have learned from our own research on experts profiled in the previous blog post. After reviewing the history of several experts, I noticed that every part of a business plan is very important; but how you apply the business plan components is of more importance. Potential investors will read my business plan, so it has to be compelling and it has to show the specifics to how my business works. I made a lot of changes to my business plan, however the first specific change that I made to my business plan included reconsidering my company’s analysis. According to the bpexpertsview blog (2011) “The Company Analysis gives a general idea as to what the company is about. It describes how the company is organized, what products and services it offers/will offer, and it goes into further detail on the company's unique qualifications in serving its target markets,” (Lavinsky). The company analysis is also the foundation for every company and it should be clear and concise within a business plan to potential investors who are funding the business.

Within the company analysis, I changed some of services that I will provide to my potential customers. Instead of limiting my company to just event planning and artist management services, I incorporated tour management services as a part of my company’s analysis. Including tour management services as an addition to my company analysis helped my company be more unique and qualified in serving its target market. Adding tour management services for my artists also helps my company to differentiate from other entertainment companies, which creates a competitive advantage for my business. The second component of my business plan that I revised was the Executive Summary. I consider the Executive Summary to be the most important to an investor, because it is the first thing that an investor will read. According to bpexpertsview blog (2011)“The Executive Summary must communicate to the prospective investor the size and scope of the market opportunity, the venture's business and profitability model, and how the resources/skills/strategic positioning of the Company's management team make it uniquely qualified to execute the plan” (Lavinsky, 2010).

The income statement in the financial section of my business plan is just as important to an investor that reads my business plan because the funds requested have be to be realistic, or a potential investor will think they are wasting their time and money. According to Mark Bass, MBA, “The income statement measures the revenues generated by your business against the costs required to generate them.” The ability to consistently generate more revenue than expense (profit) is the ultimate indicator of your company’s viability (Business Plan, 2010).

After reviewing more research from the bpexpertblog and other viral video sources, I noticed that I didn’t go in depth about the scope of my markets opportunity. That could limit the chances of an investor’s interest in my business plan, and it can also limit my company's target market. Moreover, it can limit my chances of getting funds for my business. The industry analysis section of my business plan is important to consider because it will constantly change due to intense competition in the field of entertainment business. I will do research on a consistent basis to be aware of new industry trends such as new technology that can bring new business models and new target demographics. After doing extensive research, I am convinced that every component of my business plan must be solid so an investor will consider possibly investing in it.


Resources

(2010). Business Plan- Income Statement and Investors Interpretation. Retrieved August 27, 2011 from, http://www.youtube.com/watch?v=KHkOxFb8Pbo

(2011). Retrieved August 27, 2011 from, http://bpexpertviews.blogspot.com/

(2011). What Angel Investors Look for in a Company. Retrieved August 27, 2011 from, http://ezinearticles.com/?What-Angel-Investors-Look-For-in-a-Company&id=2395656





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“Expert Views on the Value of Business Plans”

In the first week of my Business Plan Development course, we were required to select two experts from the world of business plan development. After reviewing the background and history of several experts in the field of business, my first choice was Dallas Mavericks 2011 NBA Champion owner and Chairmen of HDNet and HDTV. Mark Cuban is also founder of bplans.com. 

(AskMen.com)

Mark Cuban was born on July 31, 1958, in Pittsburg, Pennsylvania. He grew up in a working class environment, which caused him to learn the business world at a young age. He attended Indiana University business school, and was later banned for taking graduate-level classes as a freshman. However, Cuban was allowed to keep his credits, but was dissuaded from getting his MBA after receiving a bachelor’s degree (www.askmen.com).  Mark Cuban is a billionaire with a net worth of over 2.5 billion. Since the age of 12, Mark Cuban was influenced by the working-class city he grew up in. As a young entrepreneur he decided to sell garbage bags door to door in order to purchase a new pair of shoes. According to the bpexpertsview blog (2011) some of the key components to look for in a business plan is if there is an actual need for the product or service, and is there an actual market for the specified product or service. 

These components are considered to be of key importance because if your products market is not open for competition, then you can limit your company’s growth and your business plan will fail before you really get started as a company. The business model must also have room for potential growth, and that will ultimately determine what your company can bargain with.  Furthermore, your business plan has to generate customers who are interested in your product or service to develop company growth and expansion. It is important that you know these factors when presenting your business plan to a potential investor. The investor will know if he or she will be able to make a profit after the business plan’s financial assumptions are reviewed and are accurate.

Featured Video: Dave Lavinsky talks about Kidprenuers

My second choice was business plan expert Dave Lavinsky, founder of Growthink and president of Growthink Publishing as my business plan experts. Lavinsky is the Co-Founder of Growthink, Inc. Growthink, Inc is a national business plan writing company that helps thousands of entrepreneurs and business owners to start, and grow their businesses. His net worth is over 1 billion and Dave obtained his MBA form UCLA, and a Bachelor’s from the University of Virginia (bpexpertviews, 2011). Dave is also a successful entrepreneur who has developed more than 100 business plans (bpexpertviews, 2011). According to David Lavinsky, “In order to consider investing, angle investors must believe that the company has great potential to achieve a liquidity event, and one that enables them to earn a significant return on their investment (Angel Investors, 2011). 

According to Lavinsky and bpexpertviews blog (2011), “Every aspect of the business plan including Executive Summary, Company Analysis, Industry Analysis, Marketing Plan and Operations/Designs and Development Plans, Management Team and the Financial Plan must be understood in order to make sure that your business is worthy of being funded. It is crucial that these specific key elements are carefully considered when preparing a business plan. Dave stated that yout unique qualification for success is the most important component investors want to see. "Personal qualifications and ideas such as a great marketing campaign must be included so investors know they can believe in you personally. This helps build confidence in the success of the investment (bpexpertviews, 2011)." While doing in depth research, I found this video by David Lavinsky called, "Kidprenuers"to be very informative anyone who wants to start teaching their children the basics of business. 

Here are the links below for future references.

Resources

(2011). Dave Lavinsky Biography. Retrieved August 6,2011 from, http://www.growthink.com/team/dave-lavinsky

(2011). Retrieved August 7, 2011 from, http://bpexpertviews.blogspot.com/

(2011). Mark Cuban Biography. Biography.Retrieved August 7, 2011 from,http://www.woopidoo.com/biography/mark-cuban/index.htm

(2011). Mark Cuban Photo. Retrieved August 7, 2011 from, http://www.askmen.com/celebs/men/business_politics_60/60_mark_cuban.html

(2011). Kidprenuers Review by David Lavinsky. Retrieved August 7, 2011 from http://www.youtube.com/watch?v=UbPjyHgASlo

(2011). What Angel Investors Look for in a Company. Retrieved August 7, 2011 from, http://ezinearticles.com/?What-Angel-Investors-Look-For-in-a-Company&id=2395656

Entertainment Interview Q & A's

Question:

1) Why is having legal counsel important for entertainment companies?

Answer: Legal counsel is important to have to protect you and your company from legal obligations and liabilities. If you are going to be signing contracts of any kind, you should have an attorney on-call to analyze them to protect you and your company’s interest.

Question:

2) What are some of the most typical situations that you have dealt with involving songwriters, artist and producers who find themselves under legal scrutiny?

Answer: The most typical situations that I see happen all the time is where an artist or producer enters into agreement without counsel. Artists in particular tend to sign an agreement based on trust or a poor lack of judgment of what the contract entails.

Question:

3) What is the most important thing to consider when analyzing a contract?

Answer: Every aspect of the contract is important, however identifying what is NOT listed in the contract is the best way to analyze it. It is important to have legal counsel to analyzer the contract.

Question:

4) What role does an entertainment lawyer play between a manager and an artist?

Answer: An entertainment attorney makes the procedural decisions such as; analyzing contracts, explaining legal implications that concern the artist’s manager and artist. Furthermore, an entertainment attorney makes the executive decisions, represents a company, and helps artist/mangers to further their careers.
For more reference you can request any questions and I will blog the answers. Please email me any request and I will be happy to follow up with you.  Email: nicolev.mcfadden@gmail.com

Industry Liabilities

In the world of music entertainment, industry liabilities have become more common in the music industry. Copyright infringement and intellectual property cases are among the most common in the music industry of today.  There have been recent multimillion-dollar copyright infringement cases among the most accomplished artists and companies of today’s music era.

Vincent Peters v. Kanye West

The 2010 copyright infringement case between hip-hop rapper Kanye West and Vincent Peters was the talk of the music industry. Kanye West was being sued by Vincent Peters, better know as “Vince P,” who states that Kanye West stole parts of the song “Stronger” that debuted as a hit single on West’s 2007 “Graduation” album. Vincent stated that he gave the copy to one of Kanye West’s associates by the name, John Monopoly and the copy was later given to West. The facts of the case include that the song “Stronger” was believed by Peters to be significantly identical to his previously written lyrics. In my opinion, I don’t think that Vince Peters should’ve released the music to Kanye West associate unless he had Kanye sign a pre-existing contract that gives him the permission to use the lyrics upon contacting Peters for permission.

In my opinion, Peter would’ve had a better cause upon having legal contracts to prove that the song was placed in Kanye West possession. I also think that Peters should have took legal action in 2007 when he heard the song on the radio or when album “Graduation” was released. Peters waited three years after the song was released, and later filed a suit in 2010. I believe it would've defiantly helped Peters case if he ‘d taken legal action against West in 2007. Peters should've copyrighted his lyrics and he would have proof that parts of Kanye's song lyrics belonged to him. However, Kanye West won the case because the judge didn’t believe that the songs were substantially similar enough to hold Kanye responsible for illegal copyright infringement of Peters lyrical content. The Illinois judge dismissed the copyright infringement case in favor of Kanye West. For further reference of the case please follow the link posted below.

http://www.hiphopissues.com/2011/03/07/kanye-west-wins-in-copyright-infringement-case/

Glen E. Friedman v. Thierry Guetta

 In June of 2011 copyright case between Glen E. Friedman vs. Thierry Guetta, Guetta was accused of reproducing, displaying and creating Friedman’s previous photograph of the hip-hop music group Run-DMC. Guetta sold the original photograph to other people as his own product. The previous photograph was supposedly modified and reproduced by Guetta. Guetta stated that he obtained a copy of the photo from the Internet, and it did not have copyright notice on it that would identify the photo as Friedman’s. Guetta furthermore stated that he did not copy the copyrightable elements of the photo and it was fair use of the photo in his case (Glen E. Friedman vs. Thierry Guetta, 2011). However, Friedman did have his work copyrighted which means it was protected from someone who tries to duplicate his work. Pictures on the lower left is the duplicated version that Guetta produced, which is identical to the original photo above.

The court ruled in favor of Friedman because the duplicated photo was substantially identical to the published photo protected by Friedman. In my opinion, I agree with the courts for holding Guetta responsible for duplicating, recreating and selling Friedmans work. Guetta will have to pay the damages he caused himself for duplicating someone else’s photography as his own work. The amount that he will have to pay is undetermined, due to the case just reaching the damaging phase. For more information about this case, please follow the link below.

http://www.photoattorney.com/?p=2536

Google YouTube v. Viacom

In the copyright infringement case between YouTube vs. Viacom, the company Viacom uploaded online content to YouTube in an attempt to make money. Viacom used YouTube as a promotional tool with out the permission of YouTube. YouTube alleged that Viacom uploaded the online content that consisted of ads next to videos including copyrighted material to their website secretly. Google who owns YouTube, knew about the YouTube infringement scheme and knowingly made money off of it, as well as took a part in it. Due to the fact that YouTube is a website based on pirated content, Google and YouTube are liable under the legal precedent set by MGM Studios v. Grokster for copyright infringement (YouTube v. Viacom, 2011).

The infringement allegations against Google and YouTube are alleging that they pay back the money they made secretly. In my opinion, I think that YouTube should be held responsible for committing copyright infringement by using Viacom's website for ad sales and illegal promotion. Furthermore, they should be held criminally responsible for the illegal acts that they committed, and for not getting permission for the terms of their own use. If Viacom was aware of the content being on there website, and the appropriate monetary revenue was paid to them before the act was committed, there wouldn’t be any allegations against YouTube. In the final court proceedings Google and YouTube wins because they had no intentions to bail out a struggling business. For more information you can follow the link below.

http://thenextweb.com/us/2010/06/23/youtube-beats-viacom-in-massive-copyright-infringement-case/

Music Publishing 101

Music publishers are responsible for these basic areas:

ü  Song Registration (ASCAP, BMI, or PRS)

ü  Licensing

ü  Royalty Collection

ü  Creative Services

ASCAP (www.ascap.com) who is incorporated with BMI (www.bmi.com) are American performing rights societies, while Performing Right Society (www.prs.co.uk) is the equivalent in the U.K (United Kingdom).

The services include:

·      Monitoring

·      Collecting

·      Paying our performance royalties to publisher and songwriters

 

Whenever a song is played on the radio or TV the networks pay millions of dollars each year to ASCAP, BMI, and PRS for a “blanket license, which allows the to broadcast any song they wish as many times as they like. Once a publisher registers your music, the performing rights societies will pay out the performance royalties directly to the publisher and songwriters. A publisher can also help a songwriter choose to affiliate and register work within a society in the U.S or U.K to look out for your best interest.

Performing Rights/Royalties

The societies will pay equal shares of the performance royalties they receive to the songwriter and publisher. A songwriter has several types of royalties that they can potentially earn. A songwriter can get royalties when a song is included on another artist’s album that is commercially released in retail stores or made available online for downloading. These are called “mechanical royalties.”

Mechanical Royalties are given during the second phase of publishing, which is licensing. The procedures are different in the U.S and U.K. In the United States before mechanical royalties can’t be paid out unless your song is licensed to the record label you are reaching out to. Thereafter the publisher issues a license to the record label, which allows the song to be included and sold on a particular album.  The record company will pay out royalties according to how many copies of the album are sold. In the U.K, the record label which releases the albums in the U.K does not pay the publisher directly as they do in the U.S. Instead the record company label pays the (MCPS), Mechanical Copyright Protection Society (www.mcps.co.uk), they can collect mechanical income from sales in the U.K.

(HFA)  The Harry Fox Agency is also an organization that deals with the licensing and collection of mechanical royalties. For a commission, the HFA can collect mechanical royalties via record sales throughout the world.  The HFA is an optional service as publishers have the ability to collect mechanical royalties without the aid of HFA. New Technology and licensing of revenue streams such as ringtones- songwriters must have a publisher issue a separate license for ringtone use. USA publishers will issue a license to a phone carriers like Verizon and Sprint, for example. Income is 10 cents for 100 percent of the copyright in both the U.S and the U.K.

I hope this blog is informative and helpful for all. The website link is posted below for further rerference.

http://www.soundonsound.com/sos/dec05/articles/allaboutpublishing.htm

Information relevant to publishing and distribution in today's music industry

The music industry has faced challenges because of the way it is structured today. Music publishing is one the of many challenges that lyricist and songwriters face due to the fact that they are not educated about the importance of having a music publisher to represent their work.

As a recording artist and songwriter, I have found that publishing your lyrics and music is very essential to your success in the music industry. I found http://www.soundonsound.com to be a very informative website because the website gives good information about the importance of having a music publisher in relation to establishing successful career.  I am conducting a website review written by Scott Rubin, a music publisher who works with a songwriters, composes music and /or lyrics just as a book publisher does with an author.

Scott Rubin gives a comprehensive overview about how to find a publisher, the importance of having a music publisher, and the overall description of a music publisher. Scott stated, “If you want to make money in the music industry rather you are a songwriter, composer or lyricist, the obvious answer is to find a music publisher.” Due to the fact that people have a poor understanding of publishing, it becomes quite a daunting task to get a solid understanding of the field of music publishing. Scott Rubin brings some clarity to the complexities of music publishing.

Some of the key points Scott provided included what to do before you start to look for a publisher. In order to hire a publisher to represent your lyrics and/or music you first have to understand the three basic types of publishers.

1)   Administrative Publisher – An administrator is an individual or small company who provides a service for a small commission to the songwriter by handling all aspects of the registration, licensing, and collection. Administrators do not normally pay advances and usually don’t offer any creative services.

2)   Independent Publisher- Independent publishers offer the same administrative services however they provide creative services and offer competitive advances to songwriters. The client’s lists of both an administrative and independent publisher is normally made up of mid-level artist and talented songwriters.

3)   Major Publisher-Major publishers such as Universal Music, Warner Bros, Sony, BMG and EMI pay millions of dollars in advancements to songwriters and artists in order to maintain their market share. The clients that major publisher’s represent include big name stars like Jay-Z and Eminem. I hope the contents of this posts was helpful. For more information the websites link is posted below.

http://www.soundonsound.com/sos/dec05/articles/allaboutpublishing.htm