The Music Industry Podcast
The Music Industry Podcast
How Artists Should Prepare Financially Before They Break | Top Music Industry Accountant Explains
Adam Stanley is a top music industry accountant from SLRV based in London.
You can check out more here:
https://www.srlv.co.uk/
Membership with the fan pages:
https://members.burstimo.com/
Welcome back to the Music Industry Podcast. Today we're joined by Adam Stanley. This is not Adam Stanley. He's from SRLV. I always get the name mixed up.
Speaker 2:It took about three intros to actually get that right. It was quite embarrassing.
Speaker 1:I know I felt for him and just literally saying the company he works for.
Speaker 2:Because you see the logo and you never say it out loud, or you never see like until you meet in person.
Speaker 1:You never need to say it out loud but yeah, he's from there and he's an accountant, so this episode is all about finances and the best way to set things up, when to get an accountant, how to make the big bucks, because I think there's this idea in the industry that musicians don't earn a lot and he's literally dealing with their accounts, seeing them buy houses, buy multiple cars, so there is a way to make money.
Speaker 2:If you need any further advice beyond this and further support, we do have a membership as well, which will stick a link down below, and we just recently uploaded a list of fan pages where they are fan pages of established artists, where you can reach out to them and get them to share your music. You'll probably have to offer them money, but this is one of the most unique ways of promoting an artist because you are directly going to fans of that established artist. Dealing with them is a little bit different compared to the influencers on the membership, because the influencers already have a price and they are already used to dealing with offers. These guys don't get brand deals. That's what makes it so special. You'll be the only like sponsored content ever on their profile.
Speaker 2:So don't be surprised if they don't give you a price, and sometimes they'll say I don't do things like that. If you really want to be on their story, just chuck some money at them. Chuck them an offer. It's the way to deal with these guys. There's not going to be a set price, but your campaign and your views and exposure for your track can be unbelievable through this. So I'll link it down below and you can start getting on that and getting shares from those guys and I hope you enjoyed the podcast and maybe you'll get the name right or the company welcome back to the music industry podcast.
Speaker 1:today we're joined by adam stanley from sl sr lv. I can't pronounce your company name, I'm not even going to redo this again that, no, okay, SRLV. So you've worked with some huge names across the time. I think the main thing we want to speak about today is the very basics of having an accountant and when to bring them on and a lot of our artists they are in the position where they might be looking to sign a major label deal at the moment. So bringing on that accountant and knowing who to hire, when to have them all the little things I think is really, really important. So I think the first question is as an accountant, what do they do for the artist?
Speaker 3:What do we do for the artist?
Speaker 3:I'm not trying to catch you out, no no, no, I know, principally and this sounds really boring and I hate it because it does make me sound boring and it kind of puts that that accountant stamp on me, which I don't. Yes, fundamentally that's what I've trained to be but a small business management that we do in the creative space because, yes, we're always looking retrospective at an individual, a band, an artist, a talent, at what they've done over the past year. But actually we're there on day one, hand-holding, guiding, setting up, like the old bowling boundaries, being like just think about this or set the foundations right. And so when you talk about when is it appropriate to engage, um, the very final point of engagement would be, before you sign a deal, right Of any magnitude because it's very difficult to unwind something that's already been signed, sealed and delivered effectively within that agreement will stipulate that the artist, the talent, whoever's signing the agreement, must have or should have assigned or engaged with a music industry specialist accountant, which is us. I find, especially with newer, emerging artists, it's much simpler for all parties concerned to get on at the ground level. There's never a silly question, never at all. What should I be doing? How can I do this? But having those conversations early doors so you can set those foundations in place.
Speaker 3:Good practices are priceless and so, if you are, I had a meeting this morning and it's an Ia and his, his son, is thinking of becoming an artist. He's very interested in it, he's getting a bit of traction. Um, he's not sure if he wants to be a recording artist or a producer, but he's, you know, he's got influence and he's. He asked me what should I do? I said, fundamentally, just make sure you've got this clear separation between you as a personal individual and you as your business day one. So, for any new artists who are committing, set up a bank account, set up a standalone bank account, and make sure that anything that you are earning from the trade goes through that bank account and anything you are paying for on the part of the business so Spotify, your mobile, your MacBook, purchase your guitars, your keys or whatever it is they all go through that dedicated bank account. It creates this really nice segregation between you as a person and an individual to you as your business, and it also makes HMRC's arguments far more challenging, because one of the things they like to get stuck on is did you incur that wholly and exclusively for the business? And, if you can go, look, this is my personal account. That's got my rent and whatever going through it, but these are all my business expenses. Already. You are way ahead of the rest of the curve.
Speaker 3:So I'm very happy to have, you know, non-committal advisory, little chinwags with artists just to know that they're in a good stead. And then you know, obviously, 12 months down the line, yes, they need to do a tax return, but again, being an individual, like a self-employed person, it's far easier to do that than having a limited company or an LRP a formal business entity around you, a limited company or an LRP a formal business entity around you. As I said, 12 months later, yeah, you're probably going to want to knock on the door and be like, can you do this for me? And sometimes we'll go yeah, of course, because it can be quite complex. And sometimes you're like, do you know what? We'll guide you in the right way. You can probably do it yourself. It's a cost benefit ultimately.
Speaker 1:So do you think in those early stages they should set up a limited company, or should they just be self-employed and it's?
Speaker 3:a separate bank account fundamentally comes down to risk, right, um? And whenever you have that formal corporate entity around you, whether a limited company, an lp by virtue of you creating that, there's cost implications and sometimes those costs far outweigh the benefits, right, yes, again, by virtue of those those entities, you are not then personally responsible or liable for any damages or claims that can be made against you because you then become that limited company. There's this, this veil around it, and so in this day and age of copyright claims, plagiarism and whatnot, sometimes having that security protection being there is very worthwhile and valuable. But at infancy stages, are you? Are you really going to take a risk of trying to release a track that has sampled Drake or whoever and expect not to be knocked on the door? Would you really take that risk? Also, broadly speaking, at that early emerging level, your income doesn't really quantify necessarily requiring that entity around you. There may be a point you alluded to earlier where you are about to sign a deal, and the reason I said speak to us before that happens is because that might be that turning point, because you might be an independent artist doing very well, releasing music through a distributor or whatever it may be, and then someone's picked up, a new TikTok picked up, or you know, a&r have caught you a gig, and they're like, yeah, I like this, let's see what this can happen. Meetings, meetings, meetings. And they're like no, we want to offer you something, whether it's a major or an EP deal or whatever. But the quantums can change dramatically and at that point there might be a more sensible approach and the sole trader scenario might not necessarily fit the mold.
Speaker 3:Yes, I say all this. There are ways to mitigate that risk anyway. Insurances, you know you'd be silly not to consider those. What kind of insurance? So combined liability insurance, on day one, if you're trading as a business, you should have that in place absolutely, and that will cover you for most things entirely. Um, so yeah, and they're relatively inexpensive.
Speaker 3:For sure, as a musician you want to do that. You can always bolt on equipment coverage as well. Broadly speaking, they're going to be covered under household insurance. But better practice to make sure you've got something dedicated to cover those business assets and the equipment you have. So yeah, there's ways we can mitigate those risks. But, as I said, the costs affiliated with that formal incorporation of some entity can be quite, can be quite frightening as well, like quite expensive, because you're going to have someone like us, a reputable firm, a hopefully reputable firm having to jump through those hoops. Make sure everything's true and fair and it goes on public record. You've got all these notes that you gotta worry about as well, and it's, it's not a cheap exercise, whereas the sole trader, you know you, you are personal liable, but it's at one tax turn to do which you can do yourselves individually, independently.
Speaker 1:That's why it's in a lot of the the deals. But you have to have an accountant because for the label it's less of a risk handing over this chunk of money to an artist if they've got someone that's there to financially lead them.
Speaker 3:So yeah, guide, yeah absolutely, and having the team around you is is of critical importance having people that you trust. I know that sounds silly and obviously you know by the time that you've gotten to that point of potentially signing a major deal, you're hoping you've got a decent manager who's leading you in the right direction. They've obviously done very well. Whether you've done very well, you must have a lawyer in place, otherwise you know you can't really be signing an agreement if you haven't had it verified and checked and made sure that it's in your best interest. Has some guidance, because there's going to be a set of obligations that that artist has got to fulfill in order to generate that income. Yes, they might get paid upon signature, but they've still got to fulfill. Whether it's an EP or 12 tracks of an album or X many songs on a composition. They need to be aware of those.
Speaker 2:Are there any kind of financial pitfalls you're seeing in artists? Obviously you see thousands of artists spendings. What are there any things where you're like, oh no, another artist that's spending too much on x, or like music videos, for example, or travel for meetings which could have been done on zoom, like anything like that.
Speaker 3:Creative decisions we have to be really wary of, right, because fundamentally I'm not a creative. I work in the creative industries but I'm not a creative person. I'm not going to tell an artist, oh, I should think about this or this, this, and so I'm not going to be able to ascertain where the value comes in. You know, jumping on that private jet because it looks great on a video or whatever it may be, it's an expensive video. Um, sometimes I find that there can be a little bit short-sightedness when it comes to the life like lifestyle choices. Fundamentally is that people see the numbers in a big deal and sometimes can forget that you know that one album, that income that they've, that they've got to, that's got to support them for, let's say, three years. And they sign the deal, they go. I'm amazing. I've now got, let's say, 150 K upon signature in my bank account. What am I going to do with it?
Speaker 3:And sometimes some people are really sensible. They're it. And sometimes some people are really sensible, they're like you know what? Let's keep it there because I know it's got to last me. I'm getting 150k now and something later on it's going to last me that three year, let's say classic album cycle I get before I get the next lot, some other people on the hand. They like cars, and cars are one of them. And again, you know electric vehicles are great investments. You know from a tax perspective at least. But I've seen a lot of people go through a lot of cars or go from one house to another or, as you said, just kind of get a little bit excited with writing trips. Let's frame it as that. You know they're going on suites for a week at a hotel when you're like just airbnb it, it's having a bit of commercial savviness. Um, because fundamentally your bank balance is going to decrease every single month. That that continues to go on for yeah, how does that work?
Speaker 1:if, uh, if a major gives you an advance of, say like 150k to do this album, whatever, there's got to be situations where these artists spend that so quick and they haven't made the album so they've broken their contract. How does that work?
Speaker 3:Well, the artist is obligated to fulfill that contract, and so, generally speaking, the contracts are structured in such a way from a cash flow perspective that you get X upon signature, x upon commencement of recording and X upon delivery. So they can, the labels can manage their risk financially by saying we're only going to give you 25 or 50% upfront, the rest of it comes in installments based upon you know those payment points. That's one way to mitigate it ultimately for them, because obviously they're going to be a little bit reluctant to go. I'm going to give you everything up front before you've given me anything I think it's a good idea and it is an investment right from the artist's perspective, where I feel like for them as well.
Speaker 1:like you said, it's just so exciting seeing that lump sum of money and we say a lot to artists because a lot of um, smaller artists in those really early stages where they haven't found their feet yet, will immediately start looking to go to A&Rs and I'm like you don't even know who you are as an artist yet, but because the advance feels like you're just getting given unlimited cash. It feels like such an easy thing to jump at. But from our experience we found waiting and negotiating finding that better deal is always always better.
Speaker 3:Also, you get that feast and famine kind of expression. You've got an independent artist who's worked so hard to get to where they are, probably on very little, you know, their income stream has been insignificant. And then they've got someone knocking on the door being like I'm willing to give you X.
Speaker 1:Yeah.
Speaker 3:And it's just like they've won the lottery and obviously there's this huge surge of pride and excitement and they're like, as you said, yes, I should sign this. No, no, no, no, no, wait, what else can we do? This is just the first number. That negotiation then comes into place and that's where having a decent lawyer will be like. Well, you know, that's just one label. Why don't we go to someone else and see what happens here?
Speaker 3:I'm guessing you work pretty closely with the, the lawyers, yeah, so, coming back to what I said earlier on at the intro about being business management, we are part of like that, that inner circle. You know there's a lot of trust that we have with our clients and we work seamlessly with the clients, the managers, the lawyers and, from our perspective, like the IFAs as well. You've all got to be reading off the same hymn sheet, but ultimately you're all there to nurture the talent and act in their best interests. But we can only guide them right. I have quite a few clients who always say what should I do? What should I do? I said I can't give you the answer. I can say you're at a crossroads. Option a, option b and option c would end up hypothetically, in these circumstances I can kind of guide you across the zebra crossing or those crossroads, but you need to open the door and step through it and so it is very hands-on. But it needs to be because it's their business fundamentally work on the risk then as well.
Speaker 1:So, for example, you've got an artist, they're wanting to play a tour of 20 dates and they've worked out it's going to cost this much playing all the musicians and the tour bus. Are you there working out the risk of like, okay, if, if you don't sell these out, this is the loss. Are you involved in that process?
Speaker 3:So from a financial, yes. From a production perspective, less so. I think it's what we were saying earlier, alex, about. Do I have input on those creative decisions? No, but I will let them know of the financial ramifications of making said creative decision, financial ramifications of making said creative decision. So we'll sit down with the tour manager and we'll go through the budgets or production manager, line by line, and go right, what have you got for the studio costs, rehearsal costs, musicians, travel, accommodation, x, y and z, whatever may be, and we'll go okay, but how much you, how much are you earning, or how much is the artist earning? Where are we expected to be? Bottom line and is this sensible? Is this reflective?
Speaker 3:Once we got to that point and I said that's very closely done between the tour manager or production manager who will know the nuts and bolts? I don't know how much a lighting rig is. You could point that and go that's five grand. I haven't got a clue. Sure, I'll take your word for it, but that's not where I'm supposed to know. Um, so you've got the tour manager, production manager, the artist manager and myself effectively going yeah, that budget looks sensible from my perspective. I won't do anything with that until I've had the artist. So, yeah, I'm also happy with it.
Speaker 3:I know that I'm going to earn 100k from these shows.
Speaker 3:I'm going to spend 80 per the budget if everything goes well, and so I'm going to clear 20. You go right, fine, amazing, and that's in a good circumstance. Risk there's things you can do immediately at that point, if the gigs have been confirmed insurance, contingency, cancellation insurance you can get something in place that says those shows have been confirmed or whatever. I want to take a policy out today to say that should something happen, a claimable event I can have a policy in place that will respond and ensure that I get paid either the full 100k that I was guaranteed or a percentage thereof, or an indemnity basis, which is the value of your costs. There are things you can do on day one or day one, once you know that you're at that budget and how you're expected to financially perform. Again, that comes with a cost, but it you know, as with any insurance policy, whether it's a home or motor, it's there as a fail safe there are any costs that artists don't think about, any frequent ones where every client you're like.
Speaker 2:Have you thought about this cost further down the line?
Speaker 3:when artists are performing overseas. The foreign tax elements for sure, a lot of people, and visas as well. I know that sounds silly, but, jeez, are they costly. Like US, everyone wants to break the US market, but, holy cow, what's a visa? Break the US market.
Speaker 2:But holy cow, what's a visa in the US for? An artist A lot yeah.
Speaker 3:Yeah, a lot.
Speaker 1:So they have to pay that just to be playing like two dates or even one date.
Speaker 3:Yeah, you can't as an artist and we'll conventions like South by are a bit of a an exception, Um. But if you are going to the U? S example, um, you can't perform there without having a visa, Otherwise you're going to get caught in immigration, either on the way or on the way out, Like what are you doing here? Or I just saw you done that. You shouldn't have done that, Um. And there comes a cost. Granted, you know you can apply for these visas and they last for three years. That means you've had this big capital outlay on day one, but it's going to last you three years. So you want to try and maximize that, Not to say you want to absolutely flood the US market with shows. But you know that it's there and it's going to last you, for the medium term at least.
Speaker 1:So we've spoken a bit about touring. There are so many areas that artists can earn from. This is why it must be so difficult for you as a job, in terms of just like an accountant for a business they're usually working with. They're selling a service or a specific product, and that's it where there are so many income streams. So touring's one, but another major one is royalty. Yes, surely that's quite messy.
Speaker 3:It can be. Yeah, royalties yes, surely that's quite messy. It can be. Yeah, it really can be. Um, especially if you've got different distributors, different deals, different bases, and that's just on the income, right. You then think about the knock-on effect of an independent artist, who may just be a recording artist. They need to engage with someone to the production side of it and they may be in an arrangement with the producer that's on a different basis to what they're receiving, and so they might be on a net receipts basis, let's say, or a distribution basis, but the producer might be on a PPD deal. You're like oh so there's this weird disparity between how one person receiving income is recognised against someone else who's still affiliated. Yes, fundamentally, it can get really really messy.
Speaker 1:Do you recommend artists trying to stay like? Is there ways for them to keep it pretty easy to do? Or is it just something where, over time, because so many different deals are signed, it is very difficult to make it simple?
Speaker 3:it depends what they're after. I would say, um, I say, early in the create your, your opportunities are slim anyway, because as a new artist, you're not going to have a major label coming to you being like I want to give you a traditional deal. They're gonna, you're gonna be likely to go to a distributor like tunecore or whoever may be and say look, can I just use your platform to get my music out there? In return for that, they're going to take a commission, they're going to take 10 off the top or 12, wherever I be, and you'll get 88 back. Thank you very much. Simple, um.
Speaker 3:The longer that goes on, the deals will invariably change and then it becomes a business decision under the guidance of your lawyer, accountant and your artist manager, as to what you feel is best for you.
Speaker 3:There's always a compromise right, if you've got, if you've got a big label bank behind you willing to give you a lot of cash, they want something in return.
Speaker 3:Right, are you willing to forego that and compromise that? Whereas if you're just on a distribution basis, you're going. Okay, I need you to promote and make my work available to the wider audiences on Spotify or Deezer or whatever, but relatively it's for a low cost, but then you are only getting that service. You're not going to get the A&R, you're not going to get the marketing, you're not going to get the promotion, you're not going to get the video contributions right or the tour support, and so that then becomes a decision for the artist. Like I know, I'm getting 90 of every pound that I've earned from the distributor before we start talking about other producers or contributors but that 90 I now need to keep hold of to think I need to use this, reinvest it in publicity, in promotion, artwork, physicals, whereas if you go to a traditional deal with a label, they're going to handle a lot of that for you, but you lose a big percentage.
Speaker 2:It's a compromise right. So, in terms of the label getting their money back, what's the big income streams for an established artist? Nowadays it's still kind of live playing live as the big one still live.
Speaker 3:Live, yes, but life is costly, especially cost like post cost of living crisis was post cost of living crisis. We're still going through right, everything you think about festivals and festivals are really good example because you see a lot of independent festivals who can no longer support themselves. They're just, they're falling by the wayside. That's because the cost of production has gone through the roof. It's multiplied. And so, yes, live income generally is phenomenal as an, as a, as an earner, also like bumps on seat eyes on artists. Thank you very much.
Speaker 3:No one can, you can never match that experience. When you, you hear something, you love, an artist, you listen to the records back to back, there's no greater feeling when you're in the room and you can see that creation happening. Then and there, that's that passion, that drive, that that excitement from a, from a consumer. And, yes, at the top end. You know the doer, the Coldplay, the Taylor Swift breaking all the records at Wembley and across the world. The money is massive. But we said at the front right before we started recording there's currently this big disparity between those. There's currently this big disparity between those early, smaller venues where the new acts are trying to play against, you know, the more established venues of the arena or theater levels and it's trying to bridge that gap.
Speaker 3:Um, but coming back, yes, from major label, you've obviously got your recording royalty income. Syncs are always great and obviously, again, by virtue of having a label with you, they're going to be pushing your work to you know commercials and brands, because they want to get it on a radio plug or on a tv commercial or actually in a tv show or a film and they're going to get paid for it and it's going to help their bottom line and it's going to accelerate your recruitment as well. You know, from we talk about live and a traditional deal typically wouldn't have included live. But you know, the last 10 at least years there's been this adoption of that 360 deal where a major label will go yeah, I'm willing to take x percent on the recording royalty income, sink and everything, but I also want a cut of everything else. I want to see how you're performing in the round and if you're performing well, financially for life.
Speaker 3:I want a cut of that Because I want to use that to leverage against my investment in you. I've given you X up front. I've given you another 100K to go on tour, support you in those smaller venues when you weren't making any money. I've covered it, so you broke even. I've pushed your video, I've pushed your artwork, I've let you go to the US. You couldn't have done that without paying for those visas, so you covered that and they want to return on their investment. They're a business, so it's a tricky, costly affair.
Speaker 2:I've been thinking that for a while. How you get 150k advance the amount of streams you need alone just from royalties? It can't work anymore At 0.0001,.
Speaker 3:right yeah, whatever that number is.
Speaker 2:Whatever that area with all those big buildings and offices to pay what we've got, sony there, universal there and you can't be in those buildings from Spotify streams. Most deals must have live in now.
Speaker 1:Brand deals are paying better than ever, though, as well, yeah, especially in music videos. Music video placement.
Speaker 3:I bet you see some big money coming in from that, but especially in this day and age, because the brand deals are instantaneously available to every consumer, because they're pushed on TikTok or Instagram or Facebook or any other platform. It's not pre-internet where it was like print in store or on the commercials. It's now there straight away. It's where that rise of influencers has happened, because brands see an opportunity to affiliate themselves with someone reputable and get engagement.
Speaker 1:You said it's opened a whole nother world or expanded that world dramatically so artists that you are seeing that are very financially stable, finances are looking good. Are you seeing that they just have that perfect level of um, the royalties are coming in nicely, they're touring. Quite often the brand is coming in. Is it a real mixture or are there some artists where it's like I know certain genres. They earn significantly more from royalties. They're on these lean back playlists so they're getting played constantly. Is it different for each genre? Is it different for different countries? Like, what are you seeing as these trends?
Speaker 3:It's definitely artist to artist dependent. Okay, you know you mentioned genre, genre. The same thing goes there. A lot of the financial circumstances are going to be driven upon their lifestyle choices. You know, we mentioned about when it's the right time to move from a basic sole trader to limited company, the costs that come with that. It's like, actually, if you're going to extract all that money from the, from a company you're making, you're making your life really difficult and you're you've got to see it as a career.
Speaker 3:And it sounds silly, but sometimes artists go I've done really well, amazing, I want to. I want to benefit from that and obviously you are going to benefit from it, but you need to benefit from sensibly. And obviously you are going to benefit from it, but you need to benefit from Sensibly over the longer term, because otherwise you may be in a position where you're getting your royalties in but then you're paying everything out because you've got your lavish lifestyle to live off and you've still got management to pay and legal professional to pay, and then you get to a point you're like, oh, I want to go on the road and how am I going to do this? Um, because you know I need to spend however much on a rehearsal space, that's just a rehearsal space. You've then got to think about all the personnel that you're going to want to have in that rehearsal space. You have session musicians, but there's like dancers as well. They're a cost. There's a day rate. The cost can start quite quickly multiplying. And if you haven't got that, let's say kitty to fund it, where else is it coming from? And so being sensible that sounds silly. Being sensible and making wise decisions or just planning for the future is is so worthwhile because it just gives you the the freedom ultimately to make those decisions rather than being impulsive.
Speaker 3:And yes, everyone wants to buy a house, absolutely. But sometimes it's like, well, just, I've seen it before where I've had a client who signed a recording deal and publishing deal done really, really well. I want to buy a house. Of course you do, because the business is flush. You've done really well, thank you very much.
Speaker 3:But she said are you sure you want to do this now? You've literally just moved into London from wherever you were, or you've moved out of London to wherever you've gone to. You're sure you want to buy in that place? You've only just moved there. You're sure that's quite an investment. Bricks and mortar, just rent, rent for a couple of years and then come back to us and just be a bit sensible for those couple of years and hopefully in that couple of years you have all that royalty income still coming through, if you're independent or whatever it may be, or you're repaying those advances You're recouping, and then we can go. Yeah, you know you like that area now it's a solid investment rather than it's, you know, not risky. But the last thing you want to do is put however much it is, let's be honest a deposit you're talking what? 60, 70k at least, probably into a property and then in three, four, five months' time even longer maybe be like you know what, maybe this area isn't right for me.
Speaker 3:I should have gone somewhere else.
Speaker 2:It must be difficult for artists to get mortgages. I don't know that side of it at all.
Speaker 1:It's not a normal income.
Speaker 3:No, it's not it's not stable at all.
Speaker 1:Three years.
Speaker 2:Three years accounts Accounts or something. Five years sometimes.
Speaker 3:Yeah, three years. So an SA 302 and a tax year overview. A tax year overview fundamental. But, as you said, they're going to want at least three years.
Speaker 3:And the difficulty, as you said, is how the income can fluctuate so dramatically, especially if you're, you know, a self-employed individual. One year you've got this advance and you've delivered, and blah, blah, blah, you've got a great income. The next year you're in that album cycle where you're promoting all your, your records or whatever may be. Or you're in the studio writing sessions and you've not really had a lot. You've gone from feast to famine and from a mortgage advisor they're like oh, that's, that's tricky, how do you explain that? And there are specialist providers, uh, and specialist advisors who can help manage that.
Speaker 3:There are also other ways. If you have the, the comfort of having that limited company, you could pay yourself a salary which kind of evens that out, and then you kind of come into that oh, you've got here's my three months pay slips that show x. But it needs to not just be for those three months, it needs to be substantially over a course of time. Um, there are other mechanisms as well. If you have that limited company, you're a director or whatever. If we take out the artists we think of managers, for instance they're in a very similar boat. You know, they may have that company and some lenders will go okay, yeah, we can see that your personal finances are actually taking out what you need to, but the company's sitting on this nice pot. They can take that into consideration. They can look at it and go right, that's your business, you wholly own it, you've got complete control over it. They can look at it and be like okay, well, what can we do here?
Speaker 2:But it's difficult. I suppose the issue for the lender as well, is like if it's an artist, are they always going to be bringing in this income? Are you a one-hit wonder, or are you going to be like Oasis or Arctic Monkeys, where you are just going to bring in money? How do they know? Is it worth the risk for them?
Speaker 3:So then you think you've got what's the typical contract duration, as in like a mortgage contract, right, two, three, five years. So you know, at the end of that term you've got to jump through those same hoops again. So I sit here now okay, right, I want to get that mortgage. I need to show you two, three years. There you go. Mortgage company's happy, I think right, here's your cash. Lovely, I've got a three-year term. At the end of three-year terms, I want to renegotiate, get a new rate, new deal. Same questions get asked how did the last two or three years go? And they're like oh, they've been better, yeah, yeah, or should they not? It's like shh, yeah, it's really challenging.
Speaker 1:I feel like we're just trying to help. I mean, I think there are so many parts of this as well that are also exciting, because you've come here and you've outlined all these different ways that artists can make money and the opportunities for touring, the opportunities for these advances, brand deals and everything. So I feel like we should try to leave this on a positive note.
Speaker 3:But actually, if you've got a major label looking after you or looking at you, what a great position to be in. You just need to make sure you've got the team around you that is acting in your best interest and you're being sensible, but otherwise fan bloody tastic. Well, done you right.
Speaker 1:You've got to compare it to the normal person that does a nine to five job that gets their salary say they're on 30 grand a year. They're never going to be in a position in their life where someone just goes here's 150 grand.
Speaker 3:So jump into a studio, pick up guitar or whatever it is, play the drums and then go out on stage, yeah, and tour the world like these. These artists have been to some of the most amazing countries, or you think some of the perks of where you're playing? You know you could be supporting whoever Biffy, clareau, muse, guns N' Roses whoever?
Speaker 3:clearly a rock lover, or you could be going and doing a corporate gig. You could be going to the F1 like what an opportunity. And you're working. Someone's paid for you to fly out to Abu Dhabi and play.
Speaker 2:I have an artist who did that at the moment F1. Played at the F1 Silverstone, wasn't?
Speaker 1:it yeah, yeah, living the dream.
Speaker 3:But I mean, what's an opportunity? Did you guys manage to go?
Speaker 1:No, but we went to a different.
Speaker 3:F1.
Speaker 2:We did Hungary F1 separately Nice.
Speaker 3:It's the artists that get to go most of the time, yeah, yeah yeah, they're the ones with all the followers and the reach you, the people who are working their nine to five jobs and I'm one of them fundamentally, and, yeah, I get a few perks, I get to go to these great gigs, these great venues, but the artist gets to tour the world and see sites and venues that other. It just doesn't happen and it sounds silly. I've got this nice idea from a personal family perspective to kind of like rent an rv in the us and go on like a little road trip. And I think and I don't want to glorify how brutal the touring lifestyle can be but the idea of being on a tour bus with a really close knit of friends, with your band you know you've lived, eat, eaten, breeds with each other and have just a really good time, yeah, and then in the evening you get to play on stage in front of however many thousand people to a stand innovation. You play your tracks and the the audience is singing those back to you. Can you imagine that rush of blood and how that? I can't. I can't imagine how that would feel because I can't play a note at all, but what a phenomenal career to have. So, yes, I may have been rather like you need to be sensible, but what an opportunity to be in. It's phenomenal.
Speaker 3:And so, even with having the label behind you, you're in a great advantage. That's not to say that having a distribution deal isn't a disadvantage, because you have control. You have control of your destiny. You can make the decisions creatively without having to report up the chain and go to an a and I'll be like oh, I've just, I've written this, do you like it? Yes or no? Or they come back to going. Do you know what? No, it's not. It's not what we had in mind. If you want to, it's up to. You can release whatever the hell you want.
Speaker 2:We're seeing that a lot now Distribution deals and label deals and it's kind of a bit mixed.
Speaker 1:Yeah, it's a bit of a blurred line, it really has.
Speaker 2:Yeah, I guess most people on distribution deals come to us anyway as a company, rather than the labels because the labels do a bit more in-house these days.
Speaker 3:But but that's where you got that invent of that kind of halfway house, where you've got that, those labeled services where, yes, they are providing a platform or they're they're getting your works out, but they're also willing to help contribute financially, but perhaps not give you the advances or the tour sport, but they are willing to go right, you know, we'll promote you in return for two percent or whatever it may be, or x per month. There's those halfway houses where you do retain control but you get the assistance because otherwise it can be really, really costly. Um, he said that's the invent of of those new, new deals. You moved away from the traditional to the 360, to the independent distribution deals, to the label services. It's there's a lot available, there's a lot out there and also, from an artist perspective, it's a great time to be an artist because the barriers to entry like just yeah, we say this so often.
Speaker 1:They don't exist you can make music in your bedroom and release it with five quid or even for free. There are distributors that do it for free. Now there are so many opportunities that were never before possible. And those tastemakers yes, they're there, but you don't need them for those initial hurdles at all.
Speaker 3:You're far less dependent, right? Yeah? Yeah, because, as you said, technological advances have been phenomenal how many tracks uploaded now to spotify?
Speaker 2:per day 20 000 a day, a day yeah, uh mental yeah, or just from artists in in their bedroom and like if you think how hard you'd have to work as an artist in the 1970s to get your CD into a store and actually have an opportunity To get something recorded would have been impossible Independently. Yeah, it's insane. And now you can pay what? $7?.
Speaker 3:Can you imagine knocking on a pressing house being like I've got this. Do you mind pushing this onto vinyl for?
Speaker 2:me Nah chug on, yeah, yeah Now, but that's the problem. So is it increased competition?
Speaker 1:yeah, yes, saturation of market, yeah, so now it's much harder to break, and I think yeah, but then the chances of those 120 000 tracks, think about how many of them are actually full tracks and then how many of them are good yeah, how many of those are targeted to kids as well yeah, like oh there'll be so many that are just there to get those streams and that instrumental music. So, like, if you're a pop artist, how many artists are you actually competing with every day? Probably a lot less than that 120,000.
Speaker 3:You talk about where we are and you think about the other offices around here and I coin like the Google YouTube space as a kind of comparable to Spotify, for example, and, again, a very saturated market. You've got to have that USP to stand out. But if you look at the top 15, 20 channels, a lot of them aren't going to be music-led, they're actually going to be entertainment-led and a lot of them are going to be child-focused because they're the ones that are consumed all the time. But from a music perspective, it's far easier to get your music out there. But there is a lot more competition and it does enable labels to be much more reactive. They can see things pick up because data is instantaneous. Data is instantaneous. When Weiss died, I'd had to wait for six months before I got a royalty statement that was in paper form and I had to flick through to see how well a track had performed, whereas now you can jump on Spotify and you can see oh, I've had however many plays today or what's my count, and data is so important.
Speaker 1:Your job must have been so hard. Your job's getting easier.
Speaker 3:It's great it is yeah, because everything's now being digital. Hard, it's like it's getting easier. It's great it is. Yeah, because everything's now being like digital. Yeah, I bet, um, you can manipulate it and that's why I really enjoy, enjoy the royalty things, because I'm a bit of a excel geek, for sure. Um, I just like playing around with things, like seeing the data and be like okay, you can quickly get it, the system, to cough out or churn out what you need it to, as long as you put the right inputs I was touching on AI now right Prompts, you put the right prompt in, you get the right prompt out. But what a time, because the listenership as well.
Speaker 2:People, when I say I work in music or whatever, they say, oh, like, who's the next huge artist? And I'm like actually, do you know? It's strange that Elton John is still headlining Grassley and Pearl Jam, etc. And the reason for that is because of the 120,000 tracks Everyone's listenership is spread across thousands of artists now, all in their own little bubble, all in their little niche.
Speaker 1:Now we're not getting the Led Zeppelins coming through the Bob Dylans. You can go to a party and someone will be like, oh, who are you working with? At the moment, I'll list artists that have like two and a half million monthly listeners, over a million followers on Instagram, and sometimes one person will be like, oh, yeah, I love them. Another person will be like, oh, who are they? And that's mental because that's such a huge listenership. But, like you said, there's just so much music now that an artist can have millions of monthly listeners and still loads of people won't know them do you think it's become harder for an artist to break?
Speaker 2:what do you define breaking? I suppose because that's changed, hasn't it? So breaking is like radio play back in the day, and now it's like a million streams, 10 million streams I think you've got more tools at your disposal, yeah yeah and it's easier to get heard.
Speaker 1:But the potential is there yeah, the potential is there, but then if you think about the, the charts, for example, you are seeing the same artists over and over and over again. So you can break but to, to be within those top 10, I think, is harder than ever yeah, and there's um, I'm gonna like lola young, for example obviously recently great success.
Speaker 3:I'm going to like Lola Young, for example obviously recently great success. I remember seeing her at a festival in 2018.
Speaker 1:Completely different branding and everything.
Speaker 3:Completely different branding and obviously at that point she's still managed by her father and obviously her career has taken that time to get there. And sometimes I feel, because there's this potential for instantaneous releases, there can sometimes be this inherent expectation for instantaneous success and I wonder whether there's been this, this shift towards oh, I've tried it, it hasn't gone well, I'm gonna pack it in rather than go no, this is, this is my career. I need to believe it.
Speaker 1:I should believe it, I should believe in myself and I will do what I can to get there we had someone from virgin music come on our podcast and they told us a stat and, to be honest, think about it now I don't really know how it was worked out, but the stat was that for an artist to break, they're releasing on average like 30, 31, 32, 32 songs, and obviously I don't know what defines break. But that is if you think about it from a singles perspective, because most artists are releasing singles in these early stages. That is a huge amount of music and I'd say a lot of artists. If we worked out the average on Spotify, like how many artists, how many tracks they released before they just stopped releasing again, it would probably be like six, like if that.
Speaker 3:I think, yeah, like releasing again.
Speaker 1:It'll probably be like six, like, if that I think, yeah, like you said, I'll get an ep, maybe a second. It's easy. It's easy to release the music now easier, so you expect to see those results quicker, which makes it probably very frustrating for the author 31 or 32.
Speaker 3:Yeah, it's really interesting, it's a lot of music these three albums.
Speaker 1:Yeah, it's a lot, it is a lot people don't really consume albums these days.
Speaker 2:It seems to be all just singles. But there are people saying they're making a comeback.
Speaker 1:Yeah.
Speaker 2:It seems to be singles these days.
Speaker 3:I like having that album up on my shelf, yeah.
Speaker 1:Like it's a vinyl.
Speaker 3:Yeah, if there's an album that I really like, I'll buy it in vinyl and I'll put it on my shelf.
Speaker 2:Really one that I really like. I'll buy it in vinyl and I'll put it on my shelf.
Speaker 3:It may be wrapped, yeah, but it's just like the tangible thing. Sense of ownership, yeah. But also. I grew up with cassettes, sonny Walkman, on my paper round, and then I moved to minidisc and CD and all that jazz Too young for this. It's like the TikToks is like how do you do the heart and pick up the phone? It's like the the tiktoks is like how'd you do the heart and the pick up the phone?
Speaker 2:it's like those generations yeah, you and I, we were on the same way though.
Speaker 3:Right, yeah, and it's. I still have that that one need to. When I like something, I will buy it. I won't download it like because streaming's taken over yeah the necessity to have something permanently is far less needed. So if something stands out for me, I will go out and buy the pressing. But then you know independent artists, you can't knock on a vinyl and be like, do you mind pressing this for me? I won't have any copies.
Speaker 1:Yeah, that's costly as hell, isn't it? Yeah?
Speaker 2:The South Korean industry, the music industry, is completely different. It's much more like that. They want to own it way more and they do like these big packs of like memorabilia and stuff, plus the vinyl and things like that from for the south korean artists, and they still like bundles, yeah, yeah, like bundles of just memorabilia, things like that, things that, um, you just associate with.
Speaker 1:There's just more artists in in western countries, so it's a lot more competitive. So people are less likely to buy something like that unless they're a massive super fan. And, like we've said before, there's so many artists. To make them a super fan is difficult. But I mean that's why social media comes into play, like building those connections and everything. But it's very difficult.
Speaker 3:You just mentioned it there. Durable, it's another revenue stream.
Speaker 1:Merchandise, yeah, yeah, merchandise yeah, we didn't even discuss that we didn't even touch merch yeah, and I bet merch is huge for some of these, some of these artists, yeah, if they're creative with it as well yeah you can have some lines of merch where it's not even something, where that someone knows the artist.
Speaker 3:They just like the, the clothing brand or whatever it is, yeah, which is great yeah, and instead, if you're going on the tour, what an opportunity to do so, because you've already got however many people coming through your gate, you've got your merch, dan. Thank you very much yeah, yeah.
Speaker 3:There's a little bit more revenue coming through to you. Thank you very much. Yes, again, you've got to have the merch on day one to be able to sell it. So there is again. You're going to have to part ways with a bit of cash to be able to have it there, but at the end of the day you're buying it for 30p and selling it for a pound yeah yeah, there's an opportunity, something we're doing with artists as well as reclassifying their youtube, but to be an artist account, have you?
Speaker 2:yeah, no, I'm not that. Uh, it's probably more maddie's area, this one, but it's just the or the idea of rolling out the channel.
Speaker 1:So basically, instead of it being content, they see you as a musician, so the royalties that you'd earn, so the AdSense, is significantly higher because they don't see it as a piece of content. They see it as a piece of music, and that's something that most artists don't even know is an option. But the earning potential is significantly higher than just putting it out as if it's content.
Speaker 3:So that's really interesting. So it's the default then on YouTube that when a video is published, it goes out as a general entertainment content.
Speaker 1:Yeah, yeah, rather than being a musical art. Yeah, yeah, and so you've got to do it on the back end, yeah, and also, I think what's very telling of YouTube as a platform is that they offer that Because, for example, Instagram TikTok for a piece of content. They're never going to pay you more as an artist or anything like that. Yeah, exactly. So I think it's a really cool thing that youtube do, and I think it's such a simple way for so what you're essentially doing is you're making your song that official video.
Speaker 2:so that video that was uploaded is the official track. So if somebody else was to make a lyric video out of your song or whatever, then this is the real one. So see ya, yeah, yeah, interesting.
Speaker 1:Yeah, we've waffled for so long A couple of minutes left. Yeah, I know, I thought, because we're talking about finances and stuff, we'd be like 20 minutes we wouldn't find it too interesting, but it's been a really interesting one. I'm glad. I feel like I've learned a lot. Yeah, good, yeah, that fly's been here. I know, I know at one point.
Speaker 2:It flew here and I tried not to move, so I just went like this. The issue is the camera won't pick it up either so it'll just be you in the big podcast going yeah people just like cross-eyed yeah cool.
Speaker 1:Do you want to end?
Speaker 2:it. Yeah, thanks very much for watching Subscribe if you're not already, drop a like if you found it useful. And also we'll drop the links below to SRLV for you to check out if you like. It's catchy, isn't?
Speaker 1:it.