The Music Business in 2017: The Impenetrable Power of Working It | John Kellogg | Berklee Onsite

Hello, Berklee online. Hello. We’ve been waiting on you. I’m John Kellogg, I’m the assistant
Chair of Music Business Management Department here at Berklee. And I want to welcome
you to Berklee Onsite. Are you having a pretty
good time so far? Good. Let’s see. Do I have so many of you from
so many different places? You know? I want to talk about, first about a
song made years ago, of a great R&B artist named Bobby Byrd. He recorded a song that was
penned by the great James Brown. And the title of that song was Saying
It And Doing It is Two Different Things. Saying it and doing it
is two different things. Now, I like that song. I like it so much that
I’m going to sample it. I’m going to remix it. I’m going to give it my own spin. And I say that having it and
making it are two different things. Having it and making it
are two different things. Do you know the word “it”
is often used to indicate someone had special talent or special
ability to connect with an audience, particularly in the
entertainment industry? There’s a lot of ministers, pastors,
and even motivational speakers, that can convincingly
state that everyone has it. Everyone has that
special something in them that nobody else has that they
should share with the world. But discovering your it is
a process that everybody has to undertake in their own unique way. My quest to discover
my it started when I did a concert when I was 11 or 12 years
old by a group called The Miracles. At that time, Smokey
Robinson was the lead singer. And I remember sitting in the
audience seeing the groups up there, great syncopated choreography,
ice suits, great harmonies, great soulful singing, the audience
going, wow, making people feel good. And I said to myself,
“I want to do that.” But it wasn’t until a
few years later, when I was in high school,
that I discovered my it. I was managing a group of
underclassmen, I was a junior. Four guys, vocal group. The name of the group was The Illusions. And they were trying to learn a song by
the internationally known Motown act, The Temptations. Wow. I remember seeing The Temptations at a
small club in my hometown of Cleveland, Ohio called Leo’s Casino. And usually when they would
appear, they had an opening act by the name The O’Jays. And at this time, the O’Jays
was just a reasonable act, they didn’t have any national
prominence or significance. And I knew that they
were internationally known because they lived
right around the corner from me in the inner
city of Cleveland, Ohio. As a matter of fact,
we used to go and sit on the steps of their uncle’s
house, where they were staying. And we’d hear them sing a capella,
they sounded just like a record. It was unbelievable. In the old days, they used to
perform with The Temptations and they used to build that show
as the battle of the groups, the O’Jays versus The Temptations. And always the O’Jays used to
battle them tooth and nail, almost to the point that I felt that if
the O’Jays didn’t make it in the music industry, I wasn’t even going to try
to get into because the industry had to be too crooked if a group with
that level of talent couldn’t make it. So The Illusions were trying to learn
the song I Could Never Love Another. The song has a great
opening lead that was sung by the lead singer of The
Temptations, David Ruffin, at the time. Now, David Ruffin has an
extremely unique talent. He has a five-octave range. And in the first verse of this song,
on one word, he flips up an octave. It was outstanding. So everybody in the room tried to
hit that like him, nobody could it. And it got to the point that I
eventually went up to the band, and I said, wait a minute. That’s not how you do you
This is how you do it. And I hit the mic. All of the guys stopped. They stepped back and
looked at each other. And then one of them stepped
up to me and said, John, we didn’t know you could sing like that. You can manage the band,
you’ve got to be in the group. So I felt, well, maybe I have
something that I can pursue. Maybe I have this it to connect
with an audience with my voice. But discovering your it doesn’t
mean that you are going to or may even want to make it. And if you decide that
you want to make it, you have to determine
what is making it to you. Well, I tell you what I
decided right at that time. Wow, if I had this it, I want
to make it, and making it to me is to perform in a
national recording group. That would really be making it. So I knew I had it. And that I wanted to make it. But what I didn’t know at that time
is that having it and making it are two different things. You know? I think that a lot of
these reality shows, talent competition, American
Idol, Voice, America’s Got Talent, kind of distort the meaning
of what it takes to make it. Many of these, great, many
talents get on that program, and think that once I get
on national TV in front of six or seven million people,
I’ve got it made, I’ve made it. I won’t have to work
another day in my life. All I have to do is play, you
know, my instrument or my voice, and I’ll have it made. Well there can’t be anything
further from the truth. What a lot of people don’t understand
is that it takes time to make it. And these contestants will
soon be very frustrated and find out that they had it, and
they had the opportunity to make it. And I say that if you
have it, you can make it. But not without the impenetrable
power of working it. And for the next few minutes, I want
to talk about the impenetrable power of working it. If you go on YouTube today,
put it in the search box, Carrie Underwood’s first audition,
television audition for American Idol. It will pull up a video clip,
an attractive young lady, very plainly dressed, here
down in a very simple style, singing a great song,
I Can’t Make You Up. She did a clearly phenomenal job. The judges could have
ride through to Hollywood. She went on to win that
season, that’s 2004. And after winning the competition, she
went on a 25 or 26 city tour of arenas. 15,000, 20,000 people with
all of the American Idol top 10 winners or contestants. 15,000 or 20,000 people. Now, after she finished that
tour, she had a decision to make. She could’ve decided to go back
to her home state of Oklahoma and maybe just sing at church
every weekend, do a couple of gigs. Or she could choose to be
an international superstar. And I started to see after
that American Idol tour that Carrie Underwood was working
anywhere and everywhere she could. She was working at state fairs in
front of 10,000 to 15,000 people. county fairs, three to
five thousand people. Even country music roll
houses, 500 to 1,000 people. She was working four
or five nights a week. You know that great author Malcolm
Gladwell in his book The Outliers says that you have to invest
15,000 hours to become a master in your field of pursuit. 15,000 hours to become a master in
your field, any field, of pursuit. You can also go onto
YouTube channel, and you can search for Carrie
Underwood’s performance on the very last American Idol
program, which happened last year. I urge you to do that
after this presentation and you’re going to see the difference. She performed immaculately
dressed, great production, style out of this world, all those
15,000 hours, all came to a head on this performance. You saw how she knew exactly
what to do, when to do it, how to touch an audience, like
she had learned on the road, the kind of moves to make to touch that
person in that 18,000-seat arena way in the back. She killed it. But more importantly, she was
introduced by Ryan Seacrest like this. Now we have an iconic singer
currently on a worldwide tour. Carrie Underwood had it,
she wanted to make it, but she couldn’t have done it without
the impenetrable power of working it. So how many people have taken my
Introduction to Music Business course? Anybody in here? Yeah, you have. OK. So I’ll be brief. You’ve heard this in the videos. Started with the
allusions in high school, went to college, worked
with two bands, The Decade, which was a dynamic group of five
singers and five band members. Most of whom did not want to
make it in the music industry, they were upper-class men. And after they graduated, both
me and my guitar player roommate put together a band
that wanted to make it in the music industry, The New Decade. And we worked and worked. We worked college campuses,
we worked parties, we worked nightclubs, eventually
getting to the point where we became a staple on the chitlin’ circuit. Chitlin’ circuit is a string
of nightclubs and theaters where black entertainers
play, and cut their teeth, so to speak, during that day and age. And when we were in
these various cities, there would be other
bands at other clubs. And when we had off nights
we’d go check them out. When they had off nights,
they’d come and check us out. We networked. Networking is a part of working it. We met managers and agents,
and other band members. So when I decided to move to New
York after a number of years, the first call I made
was to the leader of one of those groups, Larry
Blackmon of the group Cameo, who had just released their
first single, a disco song, about a year earlier, and
were finally at the point that they were recording an album. And on the same day I got to New
York, after working years and years, I was in the studio
recording with a group that had a national recording contract. And I will never forget the day that
the band was all together in a tight van and we were traveling to
Philadelphia to do a promotional gig. And we crossed the Ben Franklin Bridge
from New Jersey into Philadelphia, and the R&B station played
the current hit single. This was the first time we ever heard
the song when we were all together. And of course, the bus erupted. I remember once they said
wait into the second song after that, just kind of put
my head back on the seat, thought about the nine years it
took for me to get to that point. One of the best benefits you’re
getting by going to Berklee is to benefit of other Berklee
students and the late Berklee alumni. I remember going to a
concert, my first year here, the Heavy Rotation CD release party. Heavy Rotation is our student-run label. And they had an annual CD release party
where all of the artists on the CD performed live in the
Berklee Performance Center. And I went to the show that
year, unknowing what to expect. But I saw a– I met a young performer,
his name was Kevin Ross. And he was a songwriting major,
wrote up great R&B songs. Had a very unique
performing style, engaging. And after the show, I remember
seeing him in the lobby and I stopped him and I said, young man,
I think you’ve really got something, come and see me. And he came into my office
a couple of days later. And I said, you really got something,
you need to continue to work, I think you’re really gonna do it. And he said, Mr. Kellogg, yeah, I’m
going to do it, one of these days, I’m going to have a number one
record on the billboard charts. That was making it for Kevin Ross. I watched him as he finished his studies
here for the next year and a half. He continued to work, he
performed on television shows, he performed at clubs, even the famous
Paradise Rock Club, which is historic. And after he graduated,
he moved to Atlanta and started working with a very
established urban music producer. And he continued to write
and work with the producer, got a couple of placements, one on
the big urban artist, TI, rap artist. But he continued to work trying
to get that number one record. Graduated in 2008, it wasn’t
until 2014 that he got a contract and released his first
EP on Motown Records. Wow. That enabled him to open up for
tours for Maxwell and for Neil. He was getting experience in
front of a large audiences. Still no chart record. He even got a television
commercial, a Glade commercial. You might have seen it
during Christmas of 2014, a young man in a nice camel coat
singing a song about glade candles. Great national promotion for
him and exposure for him. Still no hit record. Then I was reading USA Today
last year in September. And each Friday they have music charts. And I was– I look at them every
Friday, and I was very surprised to open it up and see on the
adult urban contemporary charts, a record by Kevin Ross was number 10. Long Song Away. I was thrilled. I said, congratulations
to him and to Motown. I watched it over the
next several months, and it’s slowly moved up to top
10, to number eight, to number six. Then, when I was out in LA for the
Grammys just this past February, I noticed that it was
number four on the charts. And I went to see this
A&R person in Motown and congratulated him on a great job. They did won in the supporting category Kevin even admitted when he
was here a couple of years ago that it was a time
doing this process that he had to work at a fast food
restaurant just to make ends meet. Because he was that determined. And he had a person– I asked, and a person
said, you think this record is going to go to number one? He said, yeah, I think it will
be there in a couple of weeks. Now, to be frank with you,
I really didn’t believe it because Bruno Mars 24K Magic was
number one, and that’s a great record. I thought it would hold
on for a number of weeks. Well, it wasn’t two weeks afterward. But within three to five weeks
afterward, I went on the billboard site to the Hot Adult Urban
Contemporary Songs chart, Kevin Ross had his number one record. Kevin Ross had, he worked
it, and he made it. Sometimes you get to a point
that you will find that you might have it in more than one area. I read an article in
the Wall Street Journal last year that said that
the typical person a day would have six to seven
careers in their life time. Six to seven careers in your life time. So some of you, I’ve noticed in
students that I teach online, are in the military. What a great thing, serving our country. Many of you might have gone
into the military thinking, man, if I could just become sergeant. That’d be making it, to me. Right? And you might have achieved that goal. You might have worked in a warehouse
distribution center, started off as a stock person, but you
wanted that manager’s position. You worked at it and you got there. You achieved that goal. You can start at an accounting
firm as a public accountant, and eventually wanted to be a
certified public accountant. And you achieved that goal. But all the time in the back
of your mind you were thinking, wow, I sure would like to
make it in the music business. And that could be one of the reasons
why you enrolled here at Berklee Online. I’m sure many other people that you tell
that dream to might say, are you crazy? You finally made it to that position? Why in the world do you want
to do something different? I often get asked why
did you leave Cameo after working all those years
to get in that position? And I always tell people, you know? A funny thing happened to me while I
was making it with the group Cameo. I remember even when
I was with the group The New Decade working on the
road, I started reading articles about lawyers practicing a new type
of law called entertainment law. This is in the middle of the 70s. Brand new profession. And it kind of stuck in
my mind, particularly after I read an article with Dionne
Warwick, who was a big star in the 70s, said, you know? If I had to do it over
again, I’d go to law school. So even before I moved to
New York and work with Cameo, I applied to my hometown,
I’m from Cleveland, Ohio, Law School, Case Western Reserve. And after a couple of months of
being on the road with Cameo, I recognized that I would
never be able to fulfill both my creative or my financial
goals within that group. So when I got notice that I was admitted
to Case Western Reserve Law School, I immediately left New York
and went back to Cleveland to work in the steel mills a few
months before I started law school. That was tough. You know? I left the week that Cameo– we had played a number of small
auditoriums and college campuses, and small nightclubs. But the week I left, they were going to
open for Natalie Cole in the Superdome. Oh, my goodness. What a gig I missed, right? So I went back to Cleveland and it was
there, Case Western Reserve Law School, that I learned the three A’s. The three A’s. Affirm what you want to do,
affirm what you want to do. The first few weeks of law
school, all of the fresh– the first year students gathered in
the hallways and out on the quad. Inevitably, you get around to the
conversation of what kind of law you want to practice. Some people would say, well, I’m
going to be a corporate lawyer. Others would say, I want to
help people and the defenseless, I want to be a criminal defense lawyer. Or I’m going to be a divorce lawyer. John, what are you going to do? Well, I’m going to be
an entertainment lawyer. Mind you this is the 1970s, brand
new profession, in Cleveland, Ohio, not hardly an entertainment
center of the universe. So I can tell many of them walked away
saying, yeah, good luck with that, guy. You know? So not only did I affirm
throughout my law school career that I was going to be an
entertainment lawyer, in spite of some very strange looks. And I also took action,
that’s the second big in. Action, take action. I knew that to be an
effective entertainment lawyer I needed to
take his many business courses as possible because at this
time the field was so new it didn’t even have entertainment courses They
didn’t even have a copyright law course at that time. So I took some very difficult business
courses that a lot of students thought I was crazy to take. Why are you taking that course? I said, don’t worry about
it, I’ve got it covered. And I remember walking on
the campus after I graduated, and I was preparing for the BAR exam. And I saw a student who was a year
behind me saw me across the quads, and, John! He ran up to me. He said, John, John, are you still
wanting to be an entertainment lawyer? I said, yeah, that’s why I came here. He said, well, look, I
just met the lead singer of the O’Jays, Eddy Levert’s nephew. And Eddie is sending him to
Cleveland State University to become an accountant. And I think they might be
looking for a legal counterpart. Why don’t you– here’s
his number, contact him. Would that have happened if
I had not affirmed that I wanted to be an entertainment lawyer? I don’t know. As a result of that contact,
I met that young man, we’ve been the best
of friends, as well as business associates for over 35 years. And as a result of
that connection, I was able to represent my childhood idols,
Rock and Roll Hall of Fame inductees, the O’Jays, Gerald
LeVert, the late Gerald LeVert, one of the greatest R&B singers,
songwriters, and performers ever. And his supergroup, LSG. In other words, as a result of affirming
what I was going do, taking action, I was able to achieve my goal of
becoming an entertainment lawyer. There’s another Berklee alum
I want to tell you about, that went through the
same kind of process. His name is Nils Gums. Nils Gums wanted to come to Berklee. That was making it to him. To come to Berklee College of Music. And he did, he made it. Well, he got very interested
in the music business major, became a music business major. And while he was here, even though
he just wanted to come to Berklee, possibly to be a star musician,
he recognized, wait a minute, maybe I have it in another area, I
think I can advocate well for people, I think I could really
represent talent well. And after we graduated,
he moved to California. And he started
representing Berklee alums. The first alumn he
represented was Dawaun Parker. And he became a big producer with Dr.
Dres’ label, Aftermath and Interscope records. The next clan he picked up
were also Berklee alumns. A duo, Amy Heidemann and Nick Noonan,
collectively known as the group Karmin. Those of you who are studying
music business online, the great thing about Berklee
and the Berklee education process is that we really try to train
students to be innovative, and to be on the cutting-edge
of the music business. And that’s what Nils Gums did. He took those thoughts
and he really started to see the disruption that was
happening in the music industry, and how the internet was taking over,
and how this new YouTube channel partnership that was happening
at the turn of the last decade was very important
for promoting artists. So he worked with Karmin over two
years with the thought in mind. And Karmin had the thought in mind
that making it was a major label deal. And of course, Nils wanted to be a
major music manager, that was his goal. So he came up with a great
strategy, an innovative strategy. He told Karmin, look,
this is what I want you to do, I want you every week
to record a video cover of a top 10 hot 100 billboard song, every week. And they did that. And during the second year of doing
that, things started to catch on. And after a while, over
an eight-month period, they had accumulated 190 million views,
as well as 88,000 YouTube channel subscribers. Not only that, but Amy’s very
interesting interpretation of Busta Rhymes rap on the song
Look At Me Now by Chris Brown was so entertaining, that it
accumulated two or three million views in just a couple of days. So much so that Ellen
DeGeneres called and said, I want you on the show next week. And they did. And after that, there was a bidding
war between major labels to sign them. And they did sign them. Not only that, but shortly
after being signed, Karmin became the very
first group without an album to appear on Saturday Night Live. They had achieved their goal. They had it, they made it, but
not without the impenetrable power of working it. I also get asked many times,
well, John, why in the world did you leave a successful law practice
in the 90s, the golden age of recorded music, when album CDs were
selling in the millions, advances were in the
millions, why did you leave that to get involved in education? And I say, once again,
well, a funny thing happened to me while I was making
it as an entertainment lawyer. I started to see production
companies and producers who were driving the business of the 90s. Particularly in the hip
hop area and urban area. And I noticed that even some
of the most successful ones didn’t have a clue as to what
was going on with their contracts or their accounting statements. They didn’t know how the money was made. And I said, I’ve been given
the unique opportunity of acquiring this knowledge
by representing the clients I had the opportunity to represent. And I said, I’m going to put
together a series of workshops to try to train these young
production companies on it. So that’s exactly what I did. I put together a workshop called Take
Care of your Production Company’s Business. And I had a workshop in
my hometown of Cleveland, I also had one in Detroit, Michigan. And I invited a bankruptcy judge
from Detroit, federal court, who was noted because he
had terminated recording artists’ agreements in bankruptcy, and
he was one of the few attorneys who– not attorneys, but judges who
actually did that in bankruptcy court. His name was Ryan Reynolds Graves. And I’ll always remember
that when I introduced him for his hour-long session
doing this all-day workshop, I noticed that he was an adjunct
professor at Wayne State University Law School. And I’m telling you, as I sat there and
saw how for a whole hour he was able to just totally enthrall the audience
and hold our attention as he weaves stories of the bankruptcy
court, entertainment law, the lives of musicians, , and,
how this law affects everyone. And by the end of his
presentation, I felt just like I felt when I
went to the Miracles concert when I was 11 or 12 years old. I said, I want to do that. So I knew I had to
prepare for that, as well. I knew in order to teach at a college
level, you at least have to write. Writing a book is important. I’d written a number of
articles, so I ended up writing a book, Take Care
of the Music Business, the Legal and Business Aspects you Need
to Know to Grow in the Music Industry. I also started to accept any and
every speaking engagement I could. Workshops, panels, I went on a 26-city
book tour, speaking in bookstores. And then, finally, in 2002 I was
reading the Billboard Magazine, as I encourage all of you to
do, and I saw an ad that said, University of Colorado in Denver is
looking for an assistant professor of music business. Well, the first thing I
thought was, I didn’t even know that they had music business
programs on the undergraduate level, I was surprised. I thought that I would probably have
to teach copyright law, entertainment law at a law school. I thought it was the only
opportunity I had to teach. And the second thing I
thought was, Denver, Colorado? It’s not a music capital by any stretch
of the imagination at that time. I applied for the job and
I was accepted for the job. And from my very first day of teaching,
I would tell all of my students, as I’m going to tell you,
you are the future leaders of the entertainment industry. And remember how I said I thought it was
strange that they had a music business program in Denver, Colorado
because it wasn’t a music capital? Well, shortly after I
started teaching there, I had the opportunity to teach future
leaders of the entertainment industry. Isaac Slade, Ben Wysocki,
who are members and founders of the group The Fray, kind
of put Denver on the map. And over and over again,
I’ve seen the students from not only university
of Colorado at Denver, but as well as the students
here, Berklee, do the same thing. Four years later, I saw an ad in
Billboard, Berklee College of Music looking for an assistant chair of the
music business management department. And that’s why I’m here
before you today, folks. So no matter where you
are in your career, this might be your first
choice, you might just now be working on your
Professional Studies degree, this is your first action step toward
achieving your goal of making it in the music business. It could be your second or third career. I’ve had four. I’ve been a singer, I’ve
been an entertainment lawyer, I’ve been an author, I’ve
been chairman and professor, I don’t know how many
more I’ve got to go, but I’m going to keep on
striving as long as I can. But it’s important to recognize that
the Berklee system that you’re ran is going to put you in the
position to make it happen it was another student, Berklee
student, whose goal after he got here as a freshman was
to develop a YouTube channel. He wanted to be a YouTube star. His name was Charlie Puth. He started putting up quirky
videos every couple of days. And he finally did a video with Emily
Luthor, cover of Someone Like You. And he wanted to be a YouTube star. That video went viral. I remember being in my office on a– I believe it was a Tuesday, and
there was a knock at my door. A young lady walked in, it was Emily
Luthor, I didn’t know her at that time. She said, mister Kellogg, mister
Kellogg, I was told to see you. I said, OK, have a seat, what’s up? She said, my partner and I put together
a couple video of Someone Like You, and we put it online on the
YouTube channel on Sunday, and we entered into the Perez
Hilton Cover Contest the same day, and it’s got two million
views over a couple of days! I said, wow, Ellen’s going to call. She looked puzzled. She said, Ellen? Ellen who? I said, Ellen DeGeneres’s
is going to call you. She said, yeah, right. Thank you, mister Kellogg. I said, well, come back and
let me know how it works out. The very next day. [KNOCKING] Mister
Kellogg, mister Kellogg, you’re not going to believe this, we
won the Perez Hilton Cover Contest and Ellen called! Me I said, I told you she
was going to call you. Karmin did the same
thing a year earlier. They went on the show, eventually
got a contract with Ellen’s company, didn’t quite work out. But Charlie Puth was determined. He wanted to be a YouTube
star, he had made it, yet he decided he wanted
to do something else. He wanted to get his college degree,
he didn’t have to make that decision. And he said, I want to get
my degree in production. I want to be a great
producer and songwriter, too. So instead of leaving school, he stayed
in school for two or three more years. And eventually graduated. Second goal reached. Then he went to work in production. I believe he got a publishing
deal and continued to work. You know the end of the story. See You Again was the biggest
record of 2015 with Whiz Khalifa. So my point to you folks don’t
think that this is so far from you. It’s very close. Very, very close. Take it from a kid from the
inner city of Cleveland, Ohio. My god, certainly not a
recording capital of the world. You can do it. You can do it. But just remember, if you
have it, you can make it, but not without the impenetrable
power of working it. Thank you. Thank you, folks. So let’s talk about some of the
developments that are going on in 2017 in the music industry. Anybody have any questions? Comments? Yes? Affirm what you want
to do, take action– The third is achieve. Affirm, action, and achieve. Great. Anybody else? Yes? Tell us what are the three P’s, in
case they haven’t read your book, The three P’s. Powerful product, proper perspective,
and professional attitude. Powerful product, proper
perspective– and powerful product doesn’t have to be– when I say product,
it doesn’t just have to be a CD, it could be a great song, it
could be a live performance, you know, even if that’s
a service, still, you can look at it from a
product standpoint, as well. That’s very important for you to– it’s becoming so important
in today’s music industry. If you go to any arena show
today, powerful product isn’t just going to be
the songs, it isn’t just going to be the entertainers
coming out and singing. You know, like I said, I used to
go to clubs and see The Temptations and the O’Jays on the stage about
this size and about this high, with microphones and
the band in the back, and the choreography
and everything else had to be the entertainment that
really made you lock in. Today it’s completely
different, which gets us into talking about– thank you for
giving me this segue into what’s happening in 2017. You look at the arena
shows, think beyond. A lot of my students say they
want to start record labels and I tell them look I
think beyond it folks think about starting an
entertainment company. Because now, music is invariably paired
with video in some form or fashion. So when you go to a
major arena show now, you aren’t just going
to see the singers. You are going to see that great
art form choreography that was really made famous back in the R&B
days with groups like The Temptations. They are going to have
dancers, but you’re also going to have lighting
effects that are tremendous, you’re going to have some form of video. When I went to the Grammys
just this past time, you might have seen it on television,
Katy Perry’s performance was amazing. And I don’t know how she did it. I don’t know how she did
it, but there were times that she disappeared behind
what looked like a screen, but there was no screen there. It was one of the most fantastic
production jobs I’ve ever seen. And all of the major acts now
are trying to outdo each other by putting together not
just the music to entertain, but the entire production. It’s like a Broadway
play to some extent. So powerful product on the
live in is that great show proper perspective is understanding
where you are in the business and not losing yourself in the
business, as so many artists do. Well do I mean by that? And in my book, I talk
about artists think they get a million dollar advance,
a million dollar contract, they think that they are rich. When, if it’s a million
dollar contract, it could be for four albums, and each
album is $250,000 each, the advance. But out of that $250,000, they have
to pay all of the cost of recording. And then, what’s left over, Uncle Sam
comes in and takes a piece of that. So, many times, people get
a little bent out of shape. They really think they’re stars,
they have a lot of money to burn, and they don’t. So it’s important for you to understand
and have the proper perspective. And the last is professional attitude. Make sure you treat everybody the same. You meet the same people going
up that you’d be going down. That receptionist today, the person that
opened the door for you, that person in the mail room, could be
the head of the label one day. So treat everybody the same. The three P’s. Powerful product, proper perspective,
and professional attitude. Thank you from listening you
also have any questions for them all right let’s talk about
some of these issues. Wow. Here’s the thing that I’ve really
been noting that I think important. You remember how I was talking about
now it’s about entertainment companies and not just recorded music? That’s true in a number of different
areas, particularly in the video area. Those of you who are interested,
those of you who score films, want to do scores for
films, television shows. What an opportunity the
industry has provided now that the streaming services, Hulu,
Netflix, Amazon have come in. There are so many new content providers. So the film and TV companies
are going to be expanding, and are expanding to
a very great degree. The fees of actors and other
talents, even the writers, they just renegotiated
in a new contract. They are starting to go up. It’s going to create
a great opportunity. And you need to think broadly. Once again, think about the visual
aspect, as well as the recording aspect. And hopefully, that will have an
effect even on the music industry, as far as how much money
it is going to be made. So there’s great opportunities there. The growth of subscription
service apple Spotify. All of the various subscription
services are really growing. I just read an article
that it’s over 100 million. It just exceeded the
subscribers of Netflix. Here’s the disturbing thing to me. I remember a few years ago there was
one commentator in the music industry that says that when we
hit that 100 million mark, the whole game will change. And these tips of a penny
that creators are being paid will increase to the point that it’s
going to be phenomenal for them. And they predicted, this person
did, that it would happen in 2017. I didn’t think it would
get there that quickly. I wasn’t sure. But it has. We’re there. Has the revenue for
content creators increased? No. But there it– well, it
has, I shouldn’t say no. It certainly has. But there is still a way to go. And it’s important for
you to be involved. As I tell everyone,
join lobbying efforts like NARAS, the National Academy
of Recording Arts and Sciences. That’s the Grammy organization. Because they have lobbying efforts
to make sure that we insist in work, even if we have to
pass laws to make sure their creators are getting paid more. Now, I say they aren’t, but they are. Creators are being paid more. I have a client that is
in a niche market artist, and told me that he was paid
$60,000 from Sound Exchange. And this is why I know those of you
who take my course, I insist upon you, register in your recordings
with Sound Exchange. There is money for you. And any non-interactive streaming
that’s done, you are going to be paid. They’re just– and you’re going
to be paid on a monthly basis. So I see at least as far as the
interactive streaming and sound exchange, the royalties
are increasing currently. The landscape is starting to change
with these subscription services. Spotify is getting ready to have
not an initial public offering, they’re thinking about having a direct
listing on the New York Stock Exchange sometime this year. And they’ve entered into deals
with Warner Music Group, where– not Warner Music Group,
Universal Music Group, where the label will be able to
window the new artist albums, and only have them streamed
on the paid service for a period of time,
maybe a week or two. And I think that you are going to see a
difference, and we as creators of music have to make the difference,
as far as creators receiving a fair share of the revenue. The good news is that
this market is exploding. Spotify has over 50 million subscribers. I think they said that Apple
has over 20 million subscribers. How many people in here have
a paid music subscription? Pay yourself, good. So I think that the prospects
for the future are very bright. But not without you being
involved, each of us being involved to make sure
things are going to happen. Sales-to-streaming just
changed over this past year. The beginning of this year was
the first time many of the labels found that the streaming revenue
alone exceeded 50% of their revenue. Phenomenal growth. So it’s to the point now– now,
I’m not saying not to make CDs, because those of you who
have taken my course also know that I tell you to
get out there and work, perform live, sell your CDs
because you can make money at this point still doing that. It’s still a very important
part of the process. But streaming is starting
to grow significantly. And I think that that’s
an excellent thing. Now, here’s something that, as you
notice if you take in the introduction to music business course, one of
the current issues I talked about in the course is net neutrality. Unfortunately, since the new
administration has been in, it appears that net
neutrality, and what I mean by that is that’s where the
internet service providers have to allow all of the content
for whatever the price you pay to come through and be given
at a certain level and a certain amount of bandwidth. If they eliminate these
net neutrality laws, then they’re going to be able
to restrict certain content. It might be slower, which could kind
of discourage people from possibly looking at certain streams. And it’s really going to
put people in a position that, if you don’t have the money
to afford the broad bandwidth, it could be– this is the argument the
opponents of the current administration are making, it’s going to eliminate
some of the opportunities for people to have their products
and services exposed. So this is a big issue. And I also say that the
music business is made up of law, business
practices, and politics. And that’s why it’s important
for you to be active in politics because the politicians
can change the laws. And you can have an effect on that, and
that’s why it’s very important for us to become actively involved. What do you guys think
about 360 degree deals? Anybody? I feel like it benefits you
if you’re a bigger artist. How do you feel about them? I beg your pardon? I feel like it benefits people if you’re
a bigger artist in a sense because you got more money to go around. OK. He says he thinks it benefits
you if you are a bigger artist. 360 degree deals, of course,
are when record companies sign– it’s not just record companies, but
primarily record companies, that will sign an artist to a deal
where they don’t just participate in the revenue generated from their
sale and use of their recordings, but they also benefit
by way of participating in a percentage of your earnings
from live performance, sponsorships, endorsements, possibly publishing. And most labels are kind
of insisting upon that. And I haven’t been able
to get a read, I’ve been trying to get a read
on how successful this is for record companies. I have seen live performance
revenue breakout sheets and closing statements, where you see that the
artists that have to pay the percentage are paying a percentage of the net live
performance money to the record labels. So I know that they are making money. And here’s the good thing. And a lot of people rail on major
labels, I used to do it too. I used to rail against major labels
and say how crooked they were and how unfair their business
practices were, until I saw a marketing plan for one of my clients. And I saw the amount of
money that the record company was investing that wasn’t recoupable
from the artist’s royalties. And it’s billions of dollars. And it made me appreciate the
value of a major record label. Here’s the good thing. Major labels now are really starting to
focus on being very active in that 360 degree space. They’re going to have sponsorship in
endorsements, and promotional deals, and people that– some of the labels even
have management arms that assist in coordinating
things for live performance. So when there was a time
where labels were many times just passive participants and just
taking a percentage for just creating the hype about you, and not really
working to make endorsement movie deals happen for you on the other end. I understand the concept
of 360 degree deals. I mean, you have a company that’s saying
that, I’m taking you, unknown artist, and I’m going to invest in you and
use all of my resources to make you a huge star. Now, once you become that you star
you’re going to get calls to act, to be in toothpaste commercials, right? Samsung sponsorship deals,
would that have happened without this initial investment? Pretty good argument. So I think the good thing
is that the labels now are focusing on those 360 degree aspects. And I think it’s creating some
great opportunities for those of you who want to get jobs in
record labels, as well. Don’t think that major
record labels are going away. They’re going to be around. There’s only three, but
they’re going to be around. And lastly, before I open it up for
questions, is that I see a trend now. Some of you who took my
course know that there’s an interview by Richard Blackstone
who worked with BMG Rights Management, where they did deals
where they didn’t take any ownership interest in the recording, which is a
big issue with artists, and should be. But they primarily just provided
management of their rights. Well, a lot of companies are doing that
as we enter into the digital space. And of course, I’m sure many
of you saw Chance the Rapper last year, how he got a $500,000 payment
from Apple, just for a two-week window, I believe it was, for his
video to be seeing exclusively, his album to be streamed
exclusively on that service. You have companies now
that are just recognizing that when people come with
complete products, recordings that are ready to release,
they can still make money if they affiliate with a
number of various artists, placing those recordings
through digital services and taking a percentage rather
than an ownership interest. There’s a company called
Empire Distribution that did a great job with
that, with a couple of artists. One of whom was another Berklee alum. An artist named Major,
who had a major record. As a matter of fact, Kevin
Ross was battling with– one Berklee alum was battling
with another Berklee alum, Major, in the Top 10 on the Adult
Urban Contemporary charts. Major’s song and recording was
released through Empire Distribution, who initially just released
it digitally and placed it with all of the streaming services. And it went very well. Now, he was signed to
a production company, but that production company
owns that recording. And Empire is taking a percentage, I
don’t know if it’s 15%, 20%, or 25%. But I see and I think that you’re
going to have a number of artists. I just read yesterday
that Anderson Pack, I don’t know how many of you are
familiar with Anderson’s music. Tremendous artist. But he has that kind of
deal with Sony Red, which is the independent arm of Sony Music. And I’m seeing a lot of artists
that are moving in that direction. I think that’s a very positive sign. It’s always good for artists
to own their own recordings. Because you have to weigh,
you have to weigh it, don’t think that it’s terrible
to go with the interest. If you have a company who’s
going to put millions of dollars behind promoting you, and you want
to be an international music star, then it might be something that
you might want to consider.

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17 thoughts on “The Music Business in 2017: The Impenetrable Power of Working It | John Kellogg | Berklee Onsite

  1. 53:52 Now, I'm a bit ahead of the curve (Having researched the Music business since 2003) and specifically about "360 Deals" and there absolute Tidal Wave coming on in early 2010's but I'm glad he brings it up here because they ARE the Present!

  2. EXCELLENT Presentation John Kellogg, Esq. !! Always LOVE hearing the business from the Attorney's perspective and with John having been a member of Cameo, that gives you and unique perspective from the artist's side as well.

  3. It take time to “make it”

    YOU gotta know what “making it” means to YOU

    John, you are a lovely story teller 👏🏼👏🏼👏🏼

  4. Please fix the audio. Great content but it sounds like it's picking up the wrong mic or his mic isn't on or not picking up enough.

  5. It seems so surreal that you just talked, a year ago, about joining lobbying efforts by the Recording Academy in congress and just this year in October, the Orrin G. Hatch-Bob Goodlatte Music Modernization Act was signed into law by the President. I couldn't have been more excited to hear this. This law includes elements of the Fair Play Fair Pay Act which would immensely now improve how music mechanical licensing and royalties would be paid to content creators (songwriters & producers) by streaming media services. VICTORY!!!

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