Tip Jar - By: John M. Mendola
So here you are: you’ve pressed your CDs, sent them out to record labels, distributors, radio stations, etc. –– and still no response! What is going on? You go online and take notice of the 100,000-plus bands out there and you find yourself in an over-saturated market. You recall at your last gig that a young Japanese exchange student commented on how great your band is and how popular you could be in Asia. You then start noticing an increase in online downloads and e-mails from Germany. You say to yourself, could this be the answer? Do we have a better shot of getting exposure abroad? How does the overseas market work? Well, let’s dig in and take a look at some commonly asked questions about international record licensing.
*What is a License Deal?
A license deal means that a label in a specific country or region is seeking artists who have finished product (i.e., a mastered and packaged CD) to release in their region. Licensing is like leasing a car. A record label will lease your master recording or a given time in a specific region. The label will then provide pressing, distribution and promotions.
*What does this mean for the artists? Licensing gives the artists freedom to control their masters by always having ownership, yet giving a label the rights to press, distribute and promote for a set period of time.
*What does it pay? Each deal is independent of itself, yet some industry guidelines are as follows: industry standards are to pay the first pressing as an advance, with royalties being between 18-22 percent of PPD (published price to the dealer, which is a fancy name for wholesale). For instance, a deal in Germany might have an initial pressing of 5,000 units at a wholesale price of 5.90 Euro, which at 20 percent would pay the artists about $1.75 cents per unit sold (+ mechanicals on the publishing). However, in many cases in today’s market, labels could offer a promotion guarantee instead of an advance, due to the high costs of marketing.
*Is there a recoup for marketing $$$?
Unlike a record deal, with a license deal a band is not required to pay back any marketing money spent by the label. In a sense, the label is committed to the financial burden of the release and the label takes the risk of promotional costs.
*Can an artist get multiple deals?
Yes, the beauty of licensing is you can have Sony pick you up in Japan, while Universal signs you for GAS (Germany, Austria and Switzerland) and perhaps a label signs you for Taiwan, etc.
*Why international?
It seems that although it is still hard to get deals abroad, foreign licensing is a lot easier than trying to get a deal in the U.S. One of the main reasons is that the regions are smaller and a label does not have to spend $500,000 in promotions. For instance, to market a release in the GAS region, a marketing campaign of $100,000 could put a band in a position of selling 20,000 to 40,000 units. Keep in mind that in Germany there are only three radio stations to focus on, and if you have success in Germany it will flow over to Austria and Switzerland. Also, with strong sales you can then make an impact in other European countries and regions. The same thing goes for the Asian countries. You have smaller regions, whereas it costs less marketing money to promote sales and make an impact.
*How about touring?
Yes, we all want the tour, yet before the tour happens, the labels invest in the release and promotion of a single. Usually within the first six weeks of a campaign, the label will know by the consumers’ response whether or not the band has made enough of an impact to justify a tour.We have, however, also seen situations where a label has had a promotional tour coincide with the release of the single. This is sometimes more of a PR thing, where the band does some in-store promotions, radio and TV interviews, and perhaps a showcase for radio programmers, magazine editors, etc.
*Where do I start?
First, do some research on your genre of music and find out what countries have a demand for your sound. Next, there are a few international industry trade shows, such as Midem France and Pop Komm Germany, that host a large number of international labels worldwide. These venues give you the opportunity to reach out to the foreign markets. Also, you might want to check out some of the music directories and find a company that specializes in international record licensing and the international markets.
TIP JAR
By John M. Mendola
John M. Mendola has been specializing in the international music market since 1992. In the early 90’s Mendola was a concert promoter in Asia and set up stadium shows in India, Hong Kong, Macau and Korea. In late 1994 he became involved in the record business. Since then he has secured many license deals and has licensed product in 27 countries worldwide, as well as having success with radio, distribution and promotion campaigns in America. Mendola has authored a book, Getting That Record Deal, which gives information on what he calls the “Back Door Approach” and covers the areas of inter -national licensing, touring, radio campaigns, and alternative distribution. The book provides insight on how he has secured deals for bands in foreign lands. With offices in Los Angeles, Hong Kong and China, John and his staff offers services in music marketing, shopping product to the international market and promotional tours of Asia and Europe. For more information, visit
www.johnnyrock.com or e-mail jrock@johnnyrock.com
50
A license deal means that a label in a specific country or region is seeking artists who have finished product (i.e., a mastered and packaged CD) to release in their region. Licensing is like leasing a car. A record label will lease your master recording or a given time in a specific region. The label will then provide pressing, distribution and promotions.
*What does this mean for the artists? Licensing gives the artists freedom to control their masters by always having ownership, yet giving a label the rights to press, distribute and promote for a set period of time.
*What does it pay? Each deal is independent of itself, yet some industry guidelines are as follows: industry standards are to pay the first pressing as an advance, with royalties being between 18-22 percent of PPD (published price to the dealer, which is a fancy name for wholesale). For instance, a deal in Germany might have an initial pressing of 5,000 units at a wholesale price of 5.90 Euro, which at 20 percent would pay the artists about $1.75 cents per unit sold (+ mechanicals on the publishing). However, in many cases in today’s market, labels could offer a promotion guarantee instead of an advance, due to the high costs of marketing.
*Is there a recoup for marketing $$$?
Unlike a record deal, with a license deal a band is not required to pay back any marketing money spent by the label. In a sense, the label is committed to the financial burden of the release and the label takes the risk of promotional costs.
*Can an artist get multiple deals?
Yes, the beauty of licensing is you can have Sony pick you up in Japan, while Universal signs you for GAS (Germany, Austria and Switzerland) and perhaps a label signs you for Taiwan, etc.
*Why international?
It seems that although it is still hard to get deals abroad, foreign licensing is a lot easier than trying to get a deal in the U.S. One of the main reasons is that the regions are smaller and a label does not have to spend $500,000 in promotions. For instance, to market a release in the GAS region, a marketing campaign of $100,000 could put a band in a position of selling 20,000 to 40,000 units. Keep in mind that in Germany there are only three radio stations to focus on, and if you have success in Germany it will flow over to Austria and Switzerland. Also, with strong sales you can then make an impact in other European countries and regions. The same thing goes for the Asian countries. You have smaller regions, whereas it costs less marketing money to promote sales and make an impact.
*How about touring?
Yes, we all want the tour, yet before the tour happens, the labels invest in the release and promotion of a single. Usually within the first six weeks of a campaign, the label will know by the consumers’ response whether or not the band has made enough of an impact to justify a tour.We have, however, also seen situations where a label has had a promotional tour coincide with the release of the single. This is sometimes more of a PR thing, where the band does some in-store promotions, radio and TV interviews, and perhaps a showcase for radio programmers, magazine editors, etc.
*Where do I start?
First, do some research on your genre of music and find out what countries have a demand for your sound. Next, there are a few international industry trade shows, such as Midem France and Pop Komm Germany, that host a large number of international labels worldwide. These venues give you the opportunity to reach out to the foreign markets. Also, you might want to check out some of the music directories and find a company that specializes in international record licensing and the international markets.
TIP JAR
By John M. Mendola
John M. Mendola has been specializing in the international music market since 1992. In the early 90’s Mendola was a concert promoter in Asia and set up stadium shows in India, Hong Kong, Macau and Korea. In late 1994 he became involved in the record business. Since then he has secured many license deals and has licensed product in 27 countries worldwide, as well as having success with radio, distribution and promotion campaigns in America. Mendola has authored a book, Getting That Record Deal, which gives information on what he calls the “Back Door Approach” and covers the areas of inter -national licensing, touring, radio campaigns, and alternative distribution. The book provides insight on how he has secured deals for bands in foreign lands. With offices in Los Angeles, Hong Kong and China, John and his staff offers services in music marketing, shopping product to the international market and promotional tours of Asia and Europe. For more information, visit
www.johnnyrock.com or e-mail jrock@johnnyrock.com
50