How To Start A Profitable Music Business!

By: Gen Wright

One of the greatest issues anyone starting a music business needs to consider is the process of managing, planning, recording, promoting and distributing products. But above all these, one of the most important aspects of the business should focus on how to make money.

What is surprising to me as a music business consultant, is the wide spectrum of thinking that tends to permeate this industry. Some have an unrealistic, almost fantastical type of thinking that says "I will get signed and be a millionaire in 1 year", while the other extreme are those who do not even think of making money in the music business. No matter which side of the fence you stand on, you need to make money in order for you to fulfil your ambitions as an artist or label owner. We should always be working towards giving up our day jobs. This can only happen when greater emphases are placed on making enough money over a long period. The idea of a struggling artist should depart from us and be replaced with a robust entrepreneurial trait.

Unfortunately, studio time, promotion and distribution are not free. So what do you need to consider if you want to make money in the music business.

Income & Expenditure - Profit & Losses: The music industry is notorious for showing people how to spend their money but not how to make it. The news is awash (OK, there's been a few) with stories of major stars filing for bankruptcy. But how does that happen? Let's take an example of the cost of promotion.

From the start you need to realise that most promotion companies are in business to make money! So if you take your song to them for reviews in radio, blog or magazine, even though they know the track is going nowhere, they will still promote it!

The fact is it's not really their business to determine whether a product will sell or not, but with their wealth of experience they have a fair idea of what is commercially viable and should act responsibly. However, relatively few promotions companies will refuse to promote an average track/album.

Let's look at another example. If you took a poor quality album to the CD manufacturer and ordered 10,000 copies of it, you can guarantee that 9 out of 10 pressing plants will not refuse to manufacturer the CDs as long as you are paying for it. So the real issue is that if you want to make money in the music business you costs must always be lower than your potential sales and you are the one responsible for determining how many sales could be generate from each release after you determine if your product is commercially viable before you put the wheels in motion. In other words; 'Think before you spend!'

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