The business aspect of the music business

What is called the music business today is not the business of producing music. At some point it became the business of selling CDs in plastic cases, and that business will soon be over. But that’s not bad news for music, and it’s certainly not bad news for musicians. Indeed, with all the ways to reach an audience, there have never been more opportunities for artists.

What is music?


First, a definition of terms. What is it we’re talking about here? What exactly is being bought and sold? In the past, music was something you heard and experienced, Nana Kwame Ampadu, Teacher and his band etc it was as much a social event as a purely musical one. Before recording technology existed, you could not separate music from its social context because what ever these legends talk about in their music those days reflects the realities of the society then. Music was an experience, intimately married to your life. You could pay to hear music, do we still do that? Or we listen for free.


Technology changed all that in the 20th century.

Music or its recorded artifact, at least became a product, a thing that could be bought, sold, traded, and replayed endlessly in any context. This upended the economics of music, but our human instincts remained intact.


We’ll always want to use music as part of our social fabric: to congregate at concerts and in bars, even if the sound sucks; we Bluetooth music to our friends sometimes burn them unto CD’s so we can play them in our cars but we all pretend as if we don’t know that, by doing that we killing the business aspect of the music.


What do record companies do?


Or, more precisely, what did they do?


•    Fund recording sessions


•    Manufacture product


•    Distribute product

•    Market product


•    Loan and advance money for expenses (tours, videos, hair and makeup)


•    Advise and guide artist on their careers and recordings


•    Handle the accounting

This was the system that evolved over the past century to market the product, which is to say the container vinyl, tape, or disc that carried the music. (Calling the product music is like selling a shopping cart and calling it groceries.) But many things have changed in the past decade that reduces the value of these services to artists.

For example:


Recording costs have declined to almost zero. Artist used to need the labels to bankroll their recordings. Most simply didn’t have the GHC 15,000 (minimum) necessary to rent a professional studio and pay an engineer and a producer. For many artists maybe even most this is no longer the case. Now albums can be made a relatively cheaper rate than it used to be. Artists no longer have to go to Bodo Staiger in Germany to get quality job done as its readily available here at a less cheaper cost.

Manufacturing and distribution costs are approaching zero. There used to be a break-even point below which it was impractical to distribute a recording. With LPs and CDs, there were base manufacturing costs, printing costs, shipping, and so on. It paid in fact, it was essential to sell in volume, because that’s how many of those costs got amortized. No more: Digital distribution is pretty much free.

It’s cheaper per unit to distribute a million copies than a hundred through the latest technology by say ITUNES or locally through Kwame Faakye’s Zongo Junction. Its funny how most or artists cannot see through this beautiful avenue to increase sales, and still relying on those greedy unreliable traditional distributors how I wish we develop new distributing methods to kick them out of the game.


Touring is not just promotion. Live performances used to be seen as essentially a way to publicize a new release a means to an end, not an end in itself. Artist would go into debt in order to tour, anticipating that they’d recover their losses later through increased record sales. This, to be blunt, is all wrong. It’s backward. Performing is a thing in itself, a distinct skill, different from making recordings.

And for those who can do it, it’s a way to make a living you most of our artists trying the nationwide tour idea, fine concept you need to be that guy who can hold your audience spell bound as long as you perform to sustain the rest of your tour. Most of our artists are awful in this area except Obuor, Samini and a few.

So with all these changes, what happens to the labels? Some will survive oh yes most of them will survive because they don’t even exist in the real sense you find them in the booth of the label owners cars or most times on their laptops where you see them looking for the next internet cafe to print an event contract for show a promoter pathetic. In the teal sense they don’t want to run record labels, they see the music industry as a place to wash their ill gotten wealth when they succeed they finally tell us that they making loses so they backing off, interesting and funny how this school of thought is gradually unfolding.

So where do artist fit into this changing landscape? We find new options, new models.

The six possibilities


It’s used to be one, now there are six: Six possible music distribution models, ranging from one in which the artist is pretty much hands-off to one where the artist does nearly everything. Not surprisingly, the more involved the artist is, the more he or she can often make per unit sold because the average artists thinks so much about his personal investment he will not want to see it go waste. These models are certainly not for everyone but that’s the point. Now there’s choice.

1. At one end of the scale is the 360, or equity, deal, where every aspect of the artist’s career is handled by producers, promoters, marketing people, and managers. The idea is that you can achieve wide saturation and sales, boosted by a hardworking machine that stands to benefit from everything you do.

The artist becomes a brand, owned and operated by the label, and in theory this gives the company a long-term perspective and interest in nurturing that artist’s career .Brand SAMINI being the face of MTN, industry players are becoming restless as thy ponder how long the SAMINI


MTN marriage is going to last because of his new belief and his current looks as most Ghanaians are not really comfortable with this Rasta business.

It always good to see our artists endorsing  products like we see OBOUR do for Onetouch and Kasapreko and Obrafour do for Tigo and Coke. These endorsements in most cases are financially rewarding and normally take care of the artists during the lean season. Question is who takes care of the business aspect of the business on behalf our artists?

2. Next is what I’ll call the Standard Distribution Deal. This is what most accomplished artist live on when they don’t do production anymore. The record company bankrolls the recording and handles the manufacturing, distribution, press, and promotion. The artist gets a royalty percentage after all those other costs are repaid. The label, in this scenario, owns the copyright to the recording Forever.

There’s another catch with this kind of arrangement: The typical pop star often lives in debt to their record company and a host of other entities, and if they hit a dry spell they can go broke. Michael Jackson, MC Hammer, TLC the danger of debt and overextension is an old story.

Obviously, the cost of these services, along with the record company’s overhead, accounts for a big part of CD prices. You, the buyer, are paying for all those trucks, those CD plants, those warehouses, and all that plastic. Theoretically, as many of these costs go away, they should no longer be charged to the consumer or the artist.

Sure, many of the services traditionally provided by record labels under the standard deal are now being farmed out. Press and publicity, digital marketing, graphic design — all are often handled by smaller, independent firms. But he who pays the piper calls the tune. If the record company pays the subcontractors, then the record company ultimately decides who or what has priority. If they “don’t hear a single,” they can tell you your record isn’t coming out.

So what happens when online sales eliminate many of these expenses? Look at Itunes:  10 GHC for a “CD” download reflects the cost savings of digital distribution, which seems fair at first. It’s certainly better for consumers. But after Apple takes its 30 percent, the royalty percentage is applied and the artist surprise! is no better of.

3. The license deal is similar to the standard deal, except in this case the artist retains the copyrights and ownership of the master recording. The right to exploit that property is granted to a label for a limited period of time — usually seven years. After that, the rights to license to TV shows, commercials, and the like revert to the artist. If an artist earns twice as much in licensing as he does now then, this model is worth looking at. It allows for a little more creative freedom, since you get less interference from the guys in the big suits. The flip side is that because the label doesn’t own the master, it may invest less in making the release a success.

4. Then there’s the profit sharing deal. The artist and the label put the same amount of money on the table for production. The label gets its fees for professional services rendered, the artists gets his portion and still retain ownership of the master for future copy right gains.

5. In the manufacturing and distributing deal, the artist does everything except, well, manufacture and distributes the product that is the typical Ghanaian scenario.

Often the companies that do these kinds of deals also offer other services, like marketing. But given the numbers, they don’t stand to make as much, so their incentive here is limited. Big record labels traditionally don’t make M&D deals. In this scenario, the artist gets absolute creative control, but it’s a bigger gamble. Akon does this, and it works really well for her. “A lot of artist don’t realize how much more money they could make by retaining ownership and licensing directly.

6. Finally, at the far end of the scale, is the self distributing model where the music is self-produced, self-written, self-played, and self-marketed. CDs are sold at gigs and through what see on the streets of Accra the float concept. Within the limits of what he can afford, the artists have complete creative control. In practice, especially for emerging artists, that can mean freedom without resources — a pretty abstract sort of independence. For those who plan to take their material on the road and play it live, the financial constraints cut even deeper. Backup singers and band, massive video screens and sets, and weird high tech lights don’t come cheap.

At this end of the spectrum, the artist stands to receive the largest percentage of income from sales per unit sales of anything. A larger percentage of fewer sales, most likely, but not always. Artists doing it for themselves can actually make more money than the massive pop star, even though the sales numbers may seem minuscule by comparison.

Freedom versus pragmatism.

These models are not absolute. They can morph and evolve. Many who take the cash up front will never know that long-range thinking might have been wiser. Mega pop artists will still need that mighty push and marketing effort for a new release that only traditional record companies can provide. For others, what we now call a record label could be replaced by a small company that funnels income and invoices from the various entities and keeps the accounts in order.

A consortium of midlevel artists could make this model work. MUSIGA if well managed could be one, i such example.


I would personally advise artists to hold on to their publishing rights (well, as much of them as they can). Publishing royalties are how you get paid if someone covers, samples, or licenses your song for a movie or commercial. This, for a songwriter, its your pension plan.

No single model will work for everyone. There’s room for all of us. Some artists are the Coke and Pepsi of music, while others are the fine wine or the funky home-brewed Brukutu Samini style. And that’s fine. I like ASEM’s “Give Me Blow “and Tupac’s Me Against The World.”

Sometimes a corporate soft drink is what you want just not at the expense of the other thing. In the recent past, it often seemed like all or nothing, but maybe now we won’t be forced to choose.


Ultimately, all these scenarios have to satisfy the same human urges: What do we need music to do? How do we visit the land in our head and the place in our heart that music takes us to? Can I get a round-trip ticket