UNDERSTANDING FINANCE IN THE MUSIC BUSINESS

Finance in the Music business covers both investments and return on said investments. 

This means that it comprises the money that goes into the making, publishing and promotion of a song. It also includes the royalties that accrue from the distribution and performance of a song. 

All of these require thorough management through legal contracts between publishing companies, artists, record labels and concert promoters(we can refer to these persons as stakeholders). An in-house lawyer is often given the role of contract drafting, usually for the benefit of their client. This is why it is fundamental for every artist/stakeholder to have a lawyer who can comb through the legalese(legal jargon) provided for in such contracts. 

 

Understanding business principles and money management is very necessary as a person who earns a living in the music industry. Knowing when to invest, how, when and who to sell to and how to network ensures smooth sailing as far as the music business is concerned. Revenue streams such as royalties, concert ticket sales, merch sales do not usually belong to one person as each stakeholder's involvement entitles them to a predetermined percentage. 

Thus, spending recklessly once you come into cash is not the way to go. Music money finishes as fast as it comes in. The goal is to double one’s income via educated means.

 

Earlier this year, Universal Music Group announced a majority investment in Mavin Global, a record label founded by Donjazzy-a Nigerian music business pioneer. Like other UMG businesses, Mavin will maintain autonomy over its strategy and future talent development. As part of the agreement, founder and CEO Don Jazzy and COO Tega Oghenejobo will continue leading the company – offering UMG the opportunity to partner with experienced and proven music executives..The aim of this  partnership is to accelerate Mavin’s strategic advancement and create more opportunities to break more talent globally, expand the reach of its existing roster and continue building its business into a super-serving, pan-African entertainment company. 

In 2015,  Beyoncé was offered $6 (£4.65) million to perform for a corporate Uber event in Las Vegas. Instead of accepting the money upfront, Queen Bey asked for payment in equity  and now that $6 million has turned into as much as $300 (£232.4) million.  

Also for  her Coachella performance in 2018 her pay was roughly $4 million , but she also fetched herself  a $60 million Netflix deal, which included Homecoming, a documentary of that very performance.

 

In the instances mentioned above, we can see real life examples of business minded creatives. The objective has to go beyond becoming famous as the standard goal should be to follow the money trail.