Introduction
Throughout my life, I felt an extraordinary passion for music and the methods of creating unique melodies. I am fascinated by how the skillful and harmonious combination of individual tones with various means and instruments leads to the final result of a single and unique sound. As a person who was bonded to the music industry from a young age, brought to music school by my parents’ initiative, and continues to improve and immerse more in this field at every opportunity, I aspire to work as a Live Sound Engineer. In my professional activity, I strive to combine boundless creativity in all its manifestations and thoughtful business solutions to transform the audience’s perception of music.
This paper aims to present a proposal for investment in my journey as a Live Sound Engineer to realize my vision of transforming raw sounds into an immersive listening experience. The structure of this partnership proposal consists of an analysis of the modern music industry, including the dynamics of copyright and collection society and delving into the peculiarities of the live music sector. Thus, I am seeking an investment of 10,000 dollars to start working on a person-oriented project, namely my professional establishment as a prominent Live Sound Engineer. Ultimately, I aim to contribute my talent and skills to the overall enhancement of live performances.
State of the Music Industry
In recent years, the worldwide music industry has grown steadily. According to the International Federation of the Phonographic Industry (IFPI), the industry’s income increased by 2.2% in 2022, reaching $26.2 billion worldwide (IFPI, 2023, p. 11). This increase was driven mainly by the spike in streaming services, which accounted for 67% of global recorded music income (IFPI, 2023, p. 11). Moreover, streaming platforms such as Spotify and Apple Music have been instrumental in this expansion, with subscription-based models becoming the primary revenue stream (IFPI, 2023, p. 41-43). Over the last few years, annual growth rates have been consistently positive, reflecting a robust and resilient sector.
The field is also characterized by dynamism and constant growth, contributing to market coverage by leading parties. Major record labels such as Universal Music Group, Sony Music Entertainment, and Warner Music Group dominate the music industry (IFPI, 2023, p. 26). These companies represent a diverse range of artists and play an essential role in music’s global distribution and marketing.
Streaming, physical sales (CDs and vinyl), live performances (concerts and festivals), licensing for films and TV shows, and merchandise sales are all ways for the music industry to make money. This diverse revenue stream assists in mitigating risks associated with fluctuations in specific markets or platforms. Investing in the music industry is a good idea because of its consistent growth, global reach, and potential for innovation through technology and emerging markets. Thanks to the increasing adoption of streaming services and the ever-expanding global audience, the industry is well-positioned for continued success.
Copyright in the Music Industry
Copyright refers to exclusive rights awarded to the original work’s author or creator, including the right to copy, distribute, and adapt the work. Therefore, the goal is to protect the economic rights of creators and provide unhindered conditions for completing creative works. According to the Copyright, Designs, and Patents Act of 1988, copyright protection for sound recordings typically lasts 50 years from the end of the calendar year the recording is made (United Kingdom Intellectual Property Office, 1988, c. 1). However, the duration of protection may depend on the nature of work and other factors.
Furthermore, copyright issues are inextricably linked with moral rights, particularly in the music industry. Unlike economic rights, moral ones do not relate to production or distribution but to integrity, personal interest and the prohibition of any alteration of original works. Enshrined in the Copyright, Designs, and Patents Act 1988, they provide legal guidelines and frameworks for artists to protect their interests and reputation (United Kingdom Intellectual Property Office, 1988, c. 4). Approval of this kind and corresponding documentation are no less critical than economically related rights.
Collection Societies
Profiting from the creation and production of music is subject to specific principles and requires the involvement of various parties. Thus, the leading role in licensing and distribution is played by collection societies, which allocate royalties for copyrighted works. In the United Kingdom, they include, in particular, PRS for Music, PPL, and similar entities that operate in various areas, including streaming services, radio broadcasters, television, and live music (PPL PRS, 2022). The sound engineer has specific performance rights and may be entitled to producer royalties in this context.
Concerning the collection societies, PPL and PRS for Music are separate entities that work together. PRS for Music represents authors’ rights and operates within the boundaries of interactions between creators and users. Instead, PPL deals specifically with the licensing of record companies and artists in the UK (PPL PRS, 2022). Both collect royalties from Public Performance and Broadcast distribution regularly. Members include composers, record labels, and artists, and the price varies from £30 for PRS to free for PPL (PPL PRS, 2022). While these entities often collaborate and are referred to as one, they should be considered separate in different aspects of music-related rights.
Another collection society worth checking out is MCPS (Mechanical-Copyright Protection Society), which deals with the representation of mechanical rights of composers and music publishers. The essence of these rights lies in the formats and reproduction of music. MCPS collects royalties from digital downloads and distributes them quarterly or semi-annually. Membership as a writer costs £100, and as a music publishing company, £400 (PRS for Music, 2022). As a rule, MCPS members are composers, songwriters, and music publishers who may have different experiences and achievements.
Recorded Music Industry
Recorded music manifests in various formats that listeners choose for themselves, including vinyl, CDs, streaming, and downloads. While physical forms, such as vinyl and CDs, are taking a backseat today, thanks to collectors and connoisseurs, sales are present and bring in growing profits (Harrison, 2021, p. 171). Streaming is more common in modern realities and shows figures in consumption growth of 10% (Harrison, 2021, p. 63). Instead, digital downloads sold online, while exceeding the sales rates every year, pose a problem of illegal downloading (Harrison, 2021, p. 170).
The recorded music industry plays a vital role in societal culture and market dynamics, allowing significant consumption patterns and preferences to be tracked and providing listeners with the quality experience they need. Moreover, record labels, the conductors of an artist’s work to reach a broad audience, are key players in the music industry landscape. Their main functions are investing in artists and providing them with all the conditions and resources for presentation. While dealing with promotion and marketing issues, record labels take on a significant part of responsibility and affairs and operate as business partners for artists.
In the relationship between artists and labels, considerable attention is paid to royalty splits, which determine income. Furthermore, different record companies have diverse computations (Passman, 2019, p. 124). Major record labels and a “360-degree” deal offer the leading types of arrangements. The first scheme is quite simple and involves the label taking a significant share of the artist’s earnings in exchange for promotion. Instead, a “360-degree” deal is based on diversifying income for the label by engaging in different revenue streams (Passman, 2019, p. 9).
In addition to direct revenue from sales of CDs, vinyl records, and digital downloads, music labels also receive income from a percentage of concert tour gain. Moreover, the label also earns from sponsoring the artist and any of his TV placements. Considering the types of interaction, it is evident that artists earn thanks to concerts and all related profits, licensing deals, merchandise, and labels from a share of sales and revenues from tours.
Independent Sector
Sometimes, performers choose an independent development path, which poses challenges and demands for them. Bypassing the label’s record this way, they strive to provide their creativity directly to the audience. While this has advantages, including personal control over processes, it also significantly complicates the management of activities and takes up many resources. At the current stage of the music industry, a large number of musicians release their first records independently on online platforms, refusing the conservatism of major labels (Harrison, 2021, p. 63). The reason can be both unpreparedness and insecurity or, on the contrary, overconfidence in one’s capabilities.
Independents can experiment with different genres and marketing promotions without limits because no stated conditions burden them. However, one of the challenges they face is the inability to seriously compete with significant label budgets or international distribution networks (Harrison, 2021, p. 63). Operating and problem-solving within the music industry require experience, skills, and relations, leaving no room for creative flow. Thus, independently navigating the intricacies of licensing, promotion, releases, and collaborations, although it sounds solid, can be pretty exhausting.
Music distributors are popular among independent artists because they provide a platform to effectuate themselves as performers. Examples of such sites include TuneCore and TheOrchard, which will pass content on to digital retailers (Passman, 2019, p. 262). Additionally, composers and audio engineers are also individual parties in the musical field who play an essential role in creating a harmonious sound. As a rule, they receive payment through various arrangements established between the parties, which may include one-time fees or ongoing royalties.
Music Publishing
In the context of music publishing, the integral role of uniting songwriters and composers and the possibilities of providing their content to the general public is worth noting. Thus, music publishers’ function is licensing, collecting, and distributing royalties. In order to approve the relationship between a songwriter/composer and a music publisher, a publishing deal is signed, which is a type of agreement (Harrison, 2021, p. 108). Songwriters/Producers can also earn from royalties or advances. Instead, publishers receive revenue from licensing and can charge administration fees (Harrison, 2021, p. 107). In today’s industry, it is not complicated for publishers to find a songwriter/producer, as facilitated by extensive networks within the music industry, showcases, projects, contests, and online platforms.
As mentioned earlier, royalties are a significant means of payment in the music industry, including performance, mechanical, and synchronization types. Performance royalties are paid for music arrangement for listeners and mechanical royalties for reproduction (DBMA Ltd T/A Tutti). The essence of the synchronization royalties is the income from using pieces of work in visual media. The types of deals among publishers include administration, sub-publishing and the fully exclusive songwriting deal, while the administrative type will have around 10-15% of the gross income (Harrison, 2021, p. 129). Other types can adapt royalty rates according to the terms of the signed contracts. The main difference between them lies in the assigned role of the publisher.
The Live Industry
The live music field serves as an exciting experience for both performers and listeners, uniting them with sounds in an immersive way. The industry aims to give performers a platform to showcase their work offline, including concerts, festivals, and more minor auditions. Booking agents, promoters, music venues, and artist managers play a crucial role. Among the companies in the UK that take on these roles, it is worth noting the United Talent Agency (UTA) for selecting suitable personnel and exceptional music venues like The O2 in London (Hanley, 2023).
Booking agents earn from securing performance opportunities for artists and promoters from ticket sales, respectively. The industry is profitable with the vast sums spent on rental fees for music venues and the demand for skilled staff to organize events. The main stakeholders that have income from this industry are performers, promoters, labels, ticket companies, and sponsors.
Role of a Live Sound Engineer
In today’s music industry, a Live Sound Engineer is responsible for ensuring excellent sound quality, especially during mass concerts. Payment for this position depends on the specific conditions specified in the employment contract. It may include upfront fees, payment per event or hour/day of work, as well as additional equipment rental fees. Any person responsible for the event can offer cooperation to the sound engineer. Thus, this issue can be dealt with by both artists and organizers or representatives of venues.
Business Plan
In the course of my professional activity, I plan to earn a total annual income of $66,300. Thus, I guarantee the investor will receive the sponsored $10,000 with interest. For a better understanding, I offer an overview of the revenue projection based on earnings from Live Sound Engineering services, consultations, and workshops. I am convinced that diversified income will significantly contribute to stable earnings and professional development.
Table 1 – Revenue Strategy and Investor Repayment Plan Within Two Years.
My main goal is to offer sound engineering services at concerts and festivals. In addition, it is worth developing a stable relationship with the organizers of events in order to be aware of potential opportunities to make a statement about myself. An important aspect is establishing a competitive but reasonable rate per hour or event and adapting to the scale and requirements.
After securing my reputation in the relevant circles, the next step will be expanding my professional activities. Thus, I plan to hold workshops and practical seminars on live sound engineering, where it will be possible to share experiences and gain insights into the specifics of the work. I prefer to include more than just colleagues but also to present information in such a way that it would be helpful to event organizers, musicians and technical staff of the scene.
Moreover, when thinking about establishing exact rates for services, I tried to find a balance. Thus, the main challenge was to fix amounts that would be competitive within the market, being neither understated nor overstated. The rate should reflect the expertise and value of my work while being affordable and reasonable. Considering the factors and conditions described above, I decided to charge $50 per hour for work at events, $100 per participant at workshops, and $60 per consultation session. Consequently, such an arrangement of prices and services will allow me to develop comprehensively while remaining within the limits of my field.
Understanding the system of competitors and their positions in the market is vital to building one’s career. While comparing one’s talent and worth to others is not a good idea, a critical review of strengths and weaknesses from the perspective of one’s skills can provide benefits in market orientation. For me, the main rivals in live sound engineering are established firms with significant experience in the market. I would prefer this option if I were the client, provided the price is adequate.
Companies already have a scheme of relations with major venues and event organizers, so they have better-organized work. On the other hand, their disadvantages are slow adaptability to the latest trends and minimal personalization for needs. Using this, I aim to offer a cutting-edge approach to sound based on each client’s individualized vision and preferences.
Additionally, the niche of consulting services and workshops in sound engineering is only at the stage of development, which opens up several opportunities for me without significant competition. Despite the ease of entering this market, one should not underestimate the importance of potential challenges. Thus, the modern landscape of educational offerings in the era of digitization and inclusiveness presents an extraordinary diversity of possibilities. For a stable position in the market in this area, I need to understand the potential audience’s needs for my workshops. Presenting information in simple words, describing complex processes, and attracting ideas and creativity is essential. In this context, I strive to stand out from the competition by offering a breadth of choices and variations based on the basic principles of live sound engineering.
Given the above-described strengths and weaknesses of competitors and the sound engineering environment, it is worth outlining my strategic positioning in the market. As mentioned earlier, I aim for a personalized approach in my work, so I plan to offer tailored services with the possibility of adjusting to specific needs. In addition, in the current rapidity of trends, it is crucial to involve innovative technologies and methods to stand out from the providers of similar services that work according to traditional principles. Furthermore, in terms of workshops and consultations, I aim to maintain an educational focus with hands-on experience and a perspective for individual development.
Moreover, since online interaction is leading in today’s society, I aim to promote myself through a quality and thoughtful online presence. Thus, I will actively maintain accounts on social networks, following current trends and showing a balance between my personal life and professional career. In addition, I seek to attract experts to help create an official website that would allow potential clients to acquaint themselves with my activities, and it would be profitable for me to establish myself and conveniently operate agreements. It is also essential to build valuable offline connections by demonstrating professionalism, courtesy, and readiness for projects of various scales. I am convinced that positive rumors and sharing client experiences are no less effective promotion methods.
Speaking of spending the investment, I have an approximate plan to foster further professional growth financially. Additionally, I consider it necessary to cooperate with music trading bodies, in particular industry associations, in order to open up mentoring opportunities for myself in the future. Moreover, partnerships with educational organizations and the creation of further initiatives that can potentially attract investment will also be helpful for a professional career.
Table 2 – Financial Plan for Investment Allocation and Career Growth.
Conclusion
Throughout my life, I have felt an uncompromising passion for music and sincerely strive to embody different sounds using my practical skills. My determination to constantly improve and learn consistently results in new opportunities that I take full advantage of. In addition, I am convinced that my project is worth investing in, as it is focused on promoting creativity and inclusiveness. Finally, the educationally focused aspect of my career aims to promote the cultural outreach of sound among an aspiring younger generation.
Reference List
(2023) IFPI Global Music Report. rep. International Federation of the Phonographic Industry (IFPI). Web.
About PPL PRS (2022) PPL PRS. Web.
Copyright, Designs and Patents Act (United Kingdom Intellectual Property Office) 1988 (1988). Web.
DBMA Ltd T/A Tutti. Site built in partnership with SixBerries Ltd (no date) How do music royalties work in the UK? Tutti.space. Web.
Hanley, J. (2023) UTA’s Gary Howard: ‘2023 will be a busy year’, IQ Magazine. Web.
Harrison, A. (2021) Music: The business: The essential guide to the law and the deals. London: Virgin Books.
Join | PRS for Music (2022) PRS for Music. Web.
Passman, D.S. (2019) All you need to know about the music business: 10th edition. Simon & Schuster, Incorporated.
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