What Potentially Profitable Marketing Lessons Can Savvy Entrepreneurs Learn From The Music Industry?

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What Potentially Profitable Marketing Lessons Can Savvy Entrepreneurs Learn From The Music Industry?

So what type of music do you enjoy listening to the most? Really?

And while there is a very good chance that practically all the eyeballs,that ultimately come across this particular post, your different tastes in music, are as varied as there are individual tax codes, correct?

And here’s the other thing, while you (no doubt),probably have your favorite types of music, ( to be sure.)

It may not be readily apparent to you, the music industry, can (and does) serve as an incredible house of unbelievable marketing knowledge.

Unfortunately, the students that eventually learn these (extremely) painful marketing lessons, probably didn’t initially realize, (and or appreciate) school was in!

That is, until the extremely painful, (bank account) draining lessons were eventually learned! So this post will try and cover, some incredibly powerful marketing lessons, all serious, profit seeking entrepreneurs, definitely need to learn!(But not necessarily having to experience it first hand!)

So What Potentially Profitable Marketing Lessons Can And Should Extremely Savvy Entrepreneurs Learn From The Music Industry?

One of the universal occurrences, within the music industry, (that just seems to happen over and over again),especially with the up and coming younger artist, (who clearly) are initially coming into a multi billion dollar industry, and they typically have little or no real (previous) business experience, knowledge, skills and or sophistication whatsoever!

And (sadly), typically neither do any of the other people, they are currently surrounded by, (and that includes) well meaning friends, family members and hangers on etc.

You add all of those semi negatives up, and you’re basically talking about a green as grass newbie, probably about to be eaten alive! And that’s one of the better case scenarios!

Case in point:(typically) here’s how this all too typical occurrence initially plays out, (especially) among the younger, far less sophisticated artist, (almost) irregardless of the type of music they’re into!

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The new (and extremely excited), promising young artist, is given a rather large certified check, (typically deposited into) a recently created account, specifically for them!Oh how nice of the music industry execs.  😀

And although it’s not explicitly spelled out for them, in lay person’s terms A-Z. This money (or advance) as it’s often affectionately referred to as, is given and expected to be used for, at least, the following four major purposes.

1.) Major purpose # one: First and foremost, to complete recording an entire album /CD project, first & foremost!

2.) Major purpose # two: Next, hire any & all the necessary top end producers, writers and schedule the paid studio time, in order to see the “project” as they are often to referred to as, gets completed on time!

(Important note: Mind you, the record execs are placing all of this major responsibility, on the shoulders of a teenager, and or an extremely naive young person, barely in their twenties!)

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3.) Major purpose # three: Out of this initial “advance”, they are also expected to pay for, any and all of, (both) their and, any and all entourage members they deem necessary, their temporary living and daily traveling, and lodging expenses as well!

Meaning; while the CD is being produced, band members, cousins, girl or boy friends, spouses, relatives, hangers on, all have to be fed, housed and transported to and from the recording studio each and every day!

Plus, at the end of the day, every body needs something to eat, and somewhere (semi comfy) to sleep! All of these ongoing expenses, come out of, (you guessed it!),the initial “advance!”

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4.) Major purpose # four: And on top of all that, the production cost to shoot (any and all) the glitzy over the top videos, (no matter) how exotic, or on what fancy location, those expenses, along with all of the brand new specialty producers, directors and extremely attractive models etc!

Those additional ongoing cost come out of the “advance” as well! Plus, (if there’s ) any “advance” money left after all of this! Any and all glitzy, four star hotel “CD promotional” media event cost, are all deducted from this initial “pot of gold” as well!

It’s right about this time, that the once, wide eyed, green as grass newbie (aspiring) artist, starts to really begin to mature! Only,(typically) they aren’t emotionally or financially prepared to do so, just yet!

It’s right about here, (they discover) two more major( potentially devastating) reality bombshells, for the very first time! (A.) The big bad IRS comes gunning for them,the following year, because they owe some major taxes on all of that “previously” undeclared personal income!Say what?

(Yea, it turns out that “advance” money is undeclared personal income!) Hello!

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And if you’re guessing, 99.5% of the time, they don’t have one red cent left, in order to pay their hefty new income tax bill! Nor were they even properly informed, they would be required to do so!You are correct-da-mundo!

(B.) Now the (oh so experienced) record execs, drops the other shoe! And this is when, the green as grass (aspiring) newbie artist, finally fully comes to appreciate the term “advance!”

Because now, they discover, (much to) their shock and dismay,once the final “CD” project is finally complete, and approved to be massed marketed!(It’s about freaking time! 😀 )

Guess what? Before the (nearly) destitute artist, ever receives a nickel in song royalties, the record company, (vaults) to the head of the line, and they “recapture” every single penny of the initial “advance” money they put up first!

(Ask -many an aspiring- young, broke up and coming hip hop artist, the devastating financial cost, of having to learn that extremely painful lesson the hard way!)

Then and only then do they and the artist begin their revenue split arrangement!Huh? Nod your head cadets, it’s true! Hey, but cheer up! At least they don’t charge the artist, high end interest rates, while the “advance” money is outstanding!

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Now let’s talk about what happens, “when” (sadly) those initial record/CD sales, don’t even produce enough front end revenue, to at least cover the record companies “advance!”NASA we have a problem!

In that case, as soon as the ink dries on the concert tour contracts! You guessed it!Once again, the record label vaults to the head of the line, and they collect their remaining unpaid balance, of their “advance” money first, before they and the artist return to their standard industry splits!Say what?

Okay! Enough with the doom & gloom already! Let’s say the aspiring young artist, somehow manages to survive their very first “CD” project!And even though it was tough, they barely managed to pay the IRS and and stay off of the front page of the major “tabloids” by doing so!

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And now, going into their second album, and “advancement” arrangement, the term “back end” has finally sunk in, and they are in a much better financial and emotional state of mind, to know what to expect!(And more importantly, “how to” effectively deal with it!)

So what if they base the vast majority of their future income, on reaping all the gravy on the back end! This way, they don’t have any more “sticker shock” moments, like they did the very first time around!

When they clearly had no clue whatsoever, how anything actually worked!In the interest of space, part two will reveal the “how to” nitty gritty of their strategies! But for now, are you starting (really) appreciate, some of the potentially profitable marketing lessons, extremely savvy entrepreneurs, can and definitely should learn, from the music industry? Say yes! Now as is customary during this part of our show.

Please share your extremely valuable comments (in the comments section below) that you can apply to your business, product or service in the next 30 days or less!

As always, if you got any value out of this post, please Google Plus or tweet this.Thanks!

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