PESOR MEDIA

ATTENTION TO ALL CREATIVES‼️

How Record Labels Work...

By Penuel The Black Pen
Written: 06 May 2020

Talent is never enough... TALENT IS NEVER ENOUGH!!!!

There's a high chance you can make better burgers than McDonalds... but can you build a better business?!

Many young kids can rap way better than L-Tido & sing better than Lira... but why aren't they bigger artists???

Most people don't understand the Music Business... emphasis on "BUSINESS"!!!

Let me tell you a FICTIONAL story...

I inherit R10mln from my late father's estate... I'm rich!

But what can I invest in? Shares? Forex? Small businesses? Unit trusts?

But wait! I'm passionate about music... so let me start a label!

So I take R1mln, hire office space for a year, brand it, set up social media pages, & hire 4 kids to help with admin. In the office, we set up a studio with state-of-the-art equipment, & coz I'm forward-thinking, I buy my own film equipment so we can record our own videos & cut costs... score!

I then go out & find 8 talented kids... 3 rappers, 2 house DJs, 2 AfroPop singers & a rockstar (forward-thinking!). I budget R1mln for each of them. The remaining R1mln is for my living costs for 2 years... til we rake money in!

Each artist's R1mln goes to the following:
- 2nd-hand Polo Vivo: R100,000
- Rent for a year: R100,000
- Producer Beats: R100,000
- Studio staff & instrumentals: R100,000
- Marketing Material: R100,000
- Payola (bribes to get music on air): R50,000
- Budget for 3 music videos: R150,000
- Groceries & Fuel: R100,000
- Artist Salary: R200,000

Out of the 8 artists, LUCKILY all 8 release an album in the first 2yrs. With the albums, we get gigs & the income looks as follows:

1. Rapper 1: R50,000
2. Rapper 2: R250,000
3. Rapper 3: R900,000
4. House DJ 1: R200,000
5. House DJ 2: R1,500,000
6. AfroPop Artist 1: R500,000
7. AfroPop Artist 2: R800,000
8. Rockstar: R3,000,000

Total Income: R7,2mln

The agreement with all artists was that they get 20% of all album sales & gigs... so R1,44mln goes to them & I keep the balance: R5,560,000.

The rockstar finds out that he made R3mln but only kept R200,000 (upfront budget) & R600,000 (20% of income)... that's R800,000 out of R3mln... they lose their s**t & rush to the papers!

They tell the papers that they get a measly R16,000 salary per month, that they were cheated into only 20% & because I'm a shark label owner... I kept the entire R2.4mln balance!

No mention of the free rent, car, groceries & fuel nor how much it cost to produce their album & take them to gigs.

I have R5,5mln in my pocket. In my head, I made a loss... coz I invested R8mln into those artists plus a further R1mln into the label... that's R9mln... a loss of R3,5mln.

A new cycle is coming & I still need to pay office/studio rent, staff, put money into the artists, payola, their new videos & all other promos.

Rockstar wants a better car, their own house, better outsourced videos, private studio time, a greater percentage cut of income... otherwise they walk!

The House DJ who made R1.5mln & the rapper who made R900k are also demanding the same... & don't give 2 s**ts about my expenses, my investment in them & the risks.

How many weak artists has Ambitiouz invested in? Or Mabala Noise? Or TS Records? Or YMCMB?

When you invest in 10 artists, you hope at least ONE will make enough money for all the other flops/losses... yet that one artist... that Zahara or Emtee or Drake will claim you're exploiting them & want more money... with zero regard for ur entire BUSINESS... the music BUSINESS.

Before attacking record label owners, let's try get an understanding of the entire label & how it's running it's affairs. Many labels run at a loss & close down... yet not 1 artist sheds a tear or helps to revive them.

If I have 10 artists & they make me R10k profit each per month... that's R100,000 per month. That's how I can afford a Porsche & nice house (on instalment)... yet 1 artist will tell you they only make R20,000 per month.

End.

Excited about this drop, IRANDI from 1426, K1 to 1630 & Last town Cc Irandi Ekse Spijo Makanvas Touchline_Punchline 🏁