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In this column last month, we discussed the importance
of having great music that will sell outside of your circle of friends,
choosing the single based on reaction from local DJs and retailers, owning
only two or three markets at first in which to release and work your
record, and timing as the most important element in the success of your
project (after good music that is). When your project is pressed up it
should have a bar code (UPC Codes can be ordered through
937.435.3870--this takes a minute, so call months in advance) so it can be
recognized for SoundScan. This is the "fingerprint" that tells you how
many records have been sold at retail stores who use the SoundScan bar
code scanning system, which SoundScan, Inc claims to be 85% of the stores
selling urban music (I disagree, I find a tremendous amount of independent
retailers to be without SoundScan). Most of the better distribution deals
through larger/major labels have been given to labels who have been able
to prove through SoundScan that they've sold 60,000 units and more. Master
P sold 75,000 units on his own prior to Priority picking him up, Do Or Die
sold 60,000 singles-- SoundScan-- before the Rap-A-Lot deal, Cash Money
sold between 25,000 and 125,000 on nine releases before their
groundbreaking deal with Universal, and DJ DMD sold 66,000 before Elektra
scooped him up (all substantiated by SoundScan). Bar codes and pressing up
units costs money which leads to the topic of this column: financing.
Unless you are independently wealthy or a, uh, street entrepreneur, you
need to have a plan that covers your expenses. So let's focus on getting
that plan together to get the paper.
The most effective thing to do is to make a list of all the stuff you need
to put out your record from studio costs to artist advances (pay your
fucking artists), pressing costs, mastering costs, artwork, phone calls,
one sheets, posters, flats, postcards, promotional tours, t-shirts,
stickers (if necessary), shipping, etc. Go through the steps mentally of
what you'll have to do to press up and promote your record in the target
area you've chosen. Find out if you need to hit someone off with some loot
to work radio (college radio, underground, and mix show), or to hire
someone to be in charge of retail--from putting your record in the stores
to collecting the money after it sells (the hard part). Do you have a
street team or should you hire one? A seasoned professional in most areas
will cost you $500 to $1,500 depending on how big each market is--and be
careful, I've seen many, many people pay street teams who have done
nothing and then blamed it on the record. The plus to hiring a
professional street team is that you are using their juice, connections,
and experience to accomplish your goals. If money is a problem, you can do
it yourself, but I find the extra juice is worth that little bit of loot.
My personal choice for street teams is Jellow from Ch'rewd Marketing (www.chrewd.com)
in Chicago, who has street teams in most markets around the country (or at
least 30 cities/towns). Jellow is a no bullshit guy and be prepared to pay
up front. I trust him, he has never let me down or made me look bad to
anyone I've ever referred.
After you've made a list of everything you need, price it out. Call around
to different places to get price quotes and ask how long it takes. For
example, if you're pressing CDs and cassettes
call a bunch of places for prices, like DiscMakers, Rainbo, Pen + Pixel,
Promotion Express, Music Connection, Universal Duplicating, etc. There are
a bunch of pressing plants who
advertise in Billboard magazine in the classified section. Make sure you
ask how long it will take and ask how long reorders take too (11 days is a
realistic number). Might as well ask them how the prices change for
reorders. The price should drop a bit as your quantity increases.
I asked a few smaller labels how much they pay to press a CD and got a
variety of different answers ranging from 80 cents per CD (Wow!!) to $1.50
per CD. Cassettes also had a varied range: from 65 cents a unit
(incredibly good!) to $1.00 a cassette. Those who offer vinyl for mix
shows quoted me prices of $1.00 to $1.25 per record. Bear in mind that
length of music changes the cassette price, amount of colors in the
artwork affects all prices, amount of pages in the liner notes affects
prices, etc. When I asked these same smaller labels how many pieces they
ordered to begin with, most CDs were around 5,000 units (depending on the
size of the markets), vinyl was about 500 (that may be a minimum order
amount for pressing), and cassettes were between 1,000 to 2,500 depending
on the markets and type of music. Music in Houston moves CDs 3 or 4 to 1
over cassettes; in NY CDs outsell cassettes only 2 to 1. Keep in mind the
amount of time your reorders will take and order accordingly. Make certain
you have enough money to repress, as it takes awhile for the stores to pay
you unless you have a runaway hit, in which case you can eventually get
the stores to pay for the product up front. When CWAL released Do Or Die's
Po Pimp, it blew up so fast and hard that stores were paying up front and
reordering weekly (they moved about 60,000 singles between February and
July just in Chicago). Once demand has developed the entire balance
shifts--the label gains leverage. With leverage you're controlling shit!
After you've figured out how much money it's going to cost you to put out
your record, now comes the fun part. Make certain you figure in your own
cost of living; in case you don't have a 9 to 5 to support you, you"ll
need to eat while you're working your record. At least until retail starts
paying. If you've enlisted the help of a distributor like Southwest and/or
Select O Hits, you might just get paid every 30 or 60 days after the first
120 days. This is the place where I see most small labels fail. They can't
afford to repress until they get paid for what they've already delivered,
but they won't get paid for what they delivered until they deliver the new
shipment. If you get hemmed up here, it could kill your project. Rather
than lose out here, don't start something you can't finish. The more
demand there is for your product the more power you have to set favorable
terms when you come to a regional distributor. In a perfect world, you set
the terms and they come to you. You control this by selling units. The
more risk a distributor takes with your product, the less favorable the
deal will be for you. By proving your record can sell, you are reducing
their risk before they get involved. This is why you'd want to go directly
to retail as opposed to signing up a distributor from the beginning. If
you do go with a regional distributor, when figuring out how much money
they owe you, take "reserves" into consideration. When you ship to a
distributor they hold back some of your money for product that the stores
may return in the future. Reserves are usually held 18 months and are 20%
to 25% of your loot.
If you need to raise capital from investors, that's a little trickier.
There are a few places to turn for help. I have found the SBA (Small
Business Administration) very helpful in terms of networking and finding
information. To actually get investors to believe in you and support you,
you must have a tight business plan outlining what you plan to do and why
someone should invest in you. There are two places that can help you set
up your business and get you information regarding investors, business
plans, and tax structures: the SBA (www.sba.gov or 800-827-5722) and SCORE
(www.score.org), which is Service Corps of retired Executives--they are
volunteer retired executives who are happy to help up and coming companies
through business counseling. For writing a business plan (something every
company should have whether raising capital or not), there are many books
that are helpful. I like the Palo Alto computer software program called
Business Plan Pro which leads you step by step as you plug in the key
information. Other sites that I've heard about (but never been to) on the
web are: American Express Small Business Exchange (www.americanexpress.com/smallbusiness);
Get Smart (www.getsmart.com) which is geared to financing your business;
and Association For Independent Music (www.afim.org) which is a trade
organization for independent record labels (the convention every May is
amazing for information and meeting regional and smaller distributors!!).
If you don't have access to the internet at the crib, you can hit any
Kinko's (it normally costs $12 an hour and $1.50 per page to print out
what you want to keep) or a local library (may be free in your area) to
access the web.
This series will continue in every issue of Murder Dog and will contain
information on pressing, street teams, distribution, foreign licensing,
overseas distribution, artist development, flow of product, retail and
radio, artist imaging and more. Each issue will also answer two specific
questions sent in by our readers. Although questions can not be answered
individually, they should be directed to Rap Coalition at 111 East 14th
Street, #339, New York, NY 10003. And remember, if you don't own your own
shit, you're just a sharecropper.
Q. How do I do specific research on which markets to target with my
project?
A. One of the helpful attributes of SoundScan is that it breaks sales
figures into the top 100 markets for rap music sales, so if you want to
find out how many records Goodie Mob has sold in Chicago, Atlanta, or
Flint Michigan and you have a friend who works for a record label that
subscribes to SoundScan or if you have good game, you can get relatively
accurate numbers. This will tell you what artists, who have a similar
sound to your project, are selling and what their top markets are (or at
least a similar audience--for example, someone who buys Outkast might also
buy Goodie Mob, so to determine where to sell a Goodie Mob album you might
look at SoundScan numbers for Outkast, at least until your project begins
to break in key markets and then you chase those markets). Provided your
own market is realistic for the type of music you are putting out, it is
important to own your own hometown market. It is important to add a couple
of markets close enough to work from home, unless you can afford to spend
time on the road in each market. With Crooked Lettaz we started in
Jackson, MS (where the group is from), owned that market, and then
expanded into Louisiana and Alabama.
Q. How do I find out what radio stations are playing my record and how do
I get SoundScan to count my record sales?
A. I call this "fingerprinting." For radio, you submit your record (in all
song versions) to BDS on cassette or CD, and they count the number of the
reporting stations who spin your record. The record must spin for at least
two minutes in the version that's fingerprinted, so if it's slowed down or
sped up or mixed with another song, it won't count. Radio promotion
departments at larger record labels subscribe to BDS and are able to pull
up results daily of their records' BDS. So when DJ DMD's 25 Lighters was
getting 350 spins at mix shows throughout the South, Elektra Records was
able to pull up the stations and exact figures of how much play it got at
each reporting station. For example, we were able to see an exact physical
number of how many times The Box (KBXX) in Houston, KKDA in Dallas, and
WBLX in Mobile played the song each week without physically being in each
marketplace. To get your songs "fingerprinted," send a note listing the
names of each song (A side and B side of RADIO singles), the name of your
record label, and the type of music that it is, with the copy of the songs
you want "fingerprinted" to Broadcast Data Systems; 8100 NW 101st Terrace;
Kansas City, MO 64153. It's free to get listed and counted, but you must
be a subscriber to access the results.
To be tracked at retail, you send a copy in each format you are selling
(each must have its own separate bar code): vinyl, CD, and cassette, to
SoundScan and they fingerprint the bar code on the packaging. It's free to
get listed and counted, but you have to be a subscriber to access the
results. Every Wednesday, SoundScan updates their sales figures and those
sales determine the ranking of the Billboard charts (sometimes they add
radio play to determine the ranking of certain lists like the Hot R&B
chart). The easiest way to be counted at SoundScan stores is to call
SoundScan at 914.328.9100 and ask for a TITLE ADDITION SHEET and then fax
your commercial CD, Cassette, and vinyl bar code on their special form to
914.328.0234 (this is the fax number only).
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