Rising Artists Studios

Rising Artists Studios

VH1's Behind the Music Presents: The sound of Accounting

What AC / DC, Busta Rhymes, Justin Timberlake, and all Philadilphia Orchestra have in common? Each has important record company contracts, each incurs costs and revenues from touring, record sales, and sales of goods, and everyone has to deal with state and federal tax regulation. However, the rules do not apply to celebrities, but also to "weekend musician. "Weekend" are tagged as the musicians who are signed with an independent label. By analyzing different costs, income sources, and revenue sources that musicians and record companies accumulate, the need for accountants in the music industry can be clearly identified and assessed.

First, it is noted that substantial differences exist between major record companies and record companies private property registration (independent labels). When artists sign contracts with major record companies, recording the commitments include six to eight albums. Major record companies like Sony, Warner Brothers, Columbia and Universal, spend millions on tour, recording, and production of an artist. That said, seems as if the performer is living the dream, which may well be the case. However, the royalty of the artists are given after the recording costs, back pay in advance, and other expenses are taken into account. According to music industry lawyer Dan Engel, royalties are based on formulas often complex for the company, leading to detections audit of 10% -40% underpay royalties. This is just one of the reasons that many artists are signing with the rise of independent labels, calling for a greater number of independent label accountants.

Today, writing and recording music with professional sound and does not require a lease of $ 50,000 for a studio in Los Angeles. Technology moves very fast, allowing the computer software personal, such as Pro Tools or Tracktion, to generate millions of identical music recordings dollars. Home studios are more efficient and accessible, leaving the musicians easily promote and sell their music, if not signing with an independent label. Whatever the size of the record company, accounting help the tour and recording life of a musician without problems.

There are three types of common costs to each of the music industry, major or independent, should be considered. First are the costs of recording. These usually range from studio rental costs, engineering fees, fees from producers, aside musician fees and the cost of a publishing license. Below are the costs of duplication. Although the costs of duplication are mainly in monitoring the number of CDs manufactured, cost of works of art, graphic design and photo sessions and to register. It is also important to recognize the costs of loading music to the Internet, known as virtual distribution costs (iTunes, mp3, cdbaby). Last but not least, are the costs of promotion. Poster costs, program fees for radio and Web ads play a role in promotional spending. As a side note, the music industry often accounts deal with companies label a commission from the sale of a CD or download purchasable instead of charging for recording, duplication, or costs promotion.

An integral part of the accounts of musicians includes the costs of touring and giving concerts. Touring is basically a beating heart work of a musician. It is therefore essential that the music industry accounting accounting focus on tour. Some cost factors, as all activity on road (bus and truck miles), must be estimated through expense receipts. When working with tour accounting is important to maintain regular correspondence with tourism managers and booking agents and to ensure proper "way" cash management by monitoring revenue performance and the performance or "concert" deposits.

Income is recognized by music industry accounts of a number of sources. First, the income (for the artist (s)) and income (the label) is explained by the sale of music. The source may be a distribution warehouse or through the Internet. Other sources of income include "sync" offers. Through the "synchronization" deals, income and the income is received, because the music was used television, video games or movies. Finally, the income and revenue is also accounted for through ticket sales, merchandise sales, and annotations.

If a major record company or an independent company, all counters of the music industry involved in similar tasks. Accounting costs, revenues, and incomes in the world of a musician is fascinating because the various sources of cash flows. Publications, recordings, and tours are bread and butter of a musician's way of life. It is for the music industry accountants, better known as "sound meter," to organize the cash flows and participate in regular correspondence with heads of travel agencies and booking to ensure accurate accounting of costs, revenues, and income. No matter what form of entertainment (music, movies, sports, etc.), the counters are always needed to help show stay on the road.

About the Author

West Chester University Student

destinationrisingsun, Open Art Studio, Mt. Tremper, NY

 

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