hollywood billionaire

Chapter 39 The Eye of the Ocean
"There is actually nothing special about this song. The whole production was done with Logic's own sound and sample packs, no other plug-ins, and no special sounds... It was originally written for my band, The Slightlys."

"No." Bi Li shrank her shoulders with a smirk, "It was written to a certain 'Eye of the Ocean'."

"No, Billy..." Phineas looked at his sister helplessly, "It was written for the band. But when I sang it myself, I always felt that the taste was wrong, so I asked Billy to try it. Unexpectedly, it happened to be very fit."

"He came to my room with a guitar and taught me to sing this song." Billy pointed to her head, "It ended up lingering in my head for weeks, and I thought, 'this The song has to be sung by me'."

"So, we recorded it in our bedroom and uploaded it to SoundCloud on November 11 last year, but we didn't expect it to become popular overnight." Phineas added.

"24.6 plays." Bi Li couldn't wait to pick up the conversation, "Who would have thought of that?"

"What about business?" Han Yi asked with a smile, "After it became popular on SoundCloud, what kind of commercial operations did you do for "Ocean Eyes"?"

"We still want to gain sound volume on a platform that can settle streaming media royalties, so after the song has a certain amount of traffic, I have talked with Spotify and Apple Music. In the end, Apple Music introduced us to an A&R platform company. Platoon, signed an agreement with Billy."

"What exactly is the agreement?" Hearing what Phineas said, Han Yi's smile became a little sluggish.

Could it be that someone got ahead of him?
"They guaranteed to sign Billy to a major record label within three years."

"In exchange for..."

"In exchange for 15% of Bili's performing arts income within three years."

"Is there a sunset clause?"

"Yes." Phineas looked at Han Yi with a bit of surprise in his eyes. He originally thought that the rich man recommended by Yuzhen was just a financial backer who aspired to join the music industry. There is a considerable degree of understanding of the industry itself.

"Ten years after the agreement ends, they are entitled to 10% of Bili's income."

"No wonder Platoon was acquired by Apple." Han Yi nodded and muttered to himself.

A so-called A&R company like Platoon is neither an artist management company nor a record label. The full name of A&R is Artists&Repertoire. Translated from Chinese, it can be called Artists and Production Department, or Artists and Works Department.As the name suggests, the job of A&R is to develop and train singers' abilities, and assist artists in preparing their works, so that they have a higher probability of success in the commercial market.

A&R is the core department of the record company. The daily life of the record company that people see in film and television works, such as collecting songs, signing contracts, training, and recording, is the scope of A&R's work.It can be said that more than 85% of the artist and music-related business of the record company is carried out by this department.

A platform company specializing in A&R, like Platoon, has become a popular way to start a music business in recent years.Traditional record companies sign 1+6 standard contracts with musicians, that is, 1 album + 6 album renewal options.There are a total of 7 albums, and at least one musician can be bound for nearly ten years. However, to create seven albums effectively and promote a singer from music to superstar, the financial and human resources consumed are quite amazing.

According to Pareto's law, in any industry, the ratio of winners to losers is 10, and in the music industry, this ratio can reach a shocking 90%:100%.Of the 10 artists signed by the record company, only 10 can make them recover their costs, and in these 1 breakeven cases, only [-] can actually make money.

In the era of physical records, the circulation of information and the update speed of fashion are relatively slow. It takes more than ten years to start from scratch, and it is still profitable to manage an artist brand with heart.But in the era of streaming media, especially in the past few years when mobile networks and big data have begun to change the logic of music business, the attributes and preferences of record companies have also changed, from production as the core to marketing as the core.

Whether it is Universal, Sony or Warner, their record companies prefer to sign musicians who already have mature works and existing traffic.Promoting this kind of artist does not need to spend energy in the most difficult initial period, and the probability of commercial success is much higher.

In other words, everyone wants to do work from 1 to 100, not from 0 to 1.

In such a market environment, pure A&R companies that specialize in packaging newcomers have emerged as the times require. They will sign a large number of musicians who are still in their infancy, provide advice on the direction of their works, and play a role in referrals to industry resources.

This kind of company does not sign a release contract with an artist, does not sign a record contract, and does not even need a management contract.The agreement they reached with newcomers is very simple and clear-I will help you find a suitable development path and a favorite next home, and in return, you need to distribute the benefits to me in the follow-up career.

You don't need to invest too much money, what you are fighting for is the tiny probability that a crow will turn into a phoenix.

This type of agreement, commonly known in the music industry as…

"I understand the artist development agreement." Han Yi pondered for a few seconds, then asked, "What specific aspects of the income need to be shared with them?"

"It's mainly the income from recording works, and the royalties we get from dubbing our music works into recording works." Phineas recalled the details of the agreement, "and... all other commercial income during the three-year contract period They all need to be shared, such as endorsement or sponsorship. If it is negotiated within the contract period, but the income is not received after the agreement expires, it also needs to be shared with them at a rate of 15%. "

"That is to say, after three years, except for the income generated by the master tape copyright and music copyright, other income will not be shared with Platoon, right?"

"Is such that."

"That's not bad. It seems that you have noticed a lot of details, Phineas." Han Yi gave Phineas an approving look. Generally speaking, this kind of artist development agreement will require musicians to carry out commercial sharing in the whole field , Whether it is recording works, music creation, performances, endorsements, or even film and television income, income distribution is required.

However, the agreement between Billy and Platoon has obviously been revised carefully, deliberately excluding the income from performances and other parts from the sunset clause.

If it is not excluded, Billie Eilish recorded a gross profit of 1800 million US dollars on his first world tour alone. Apple even spent 2019 million US dollars to buy the channel distribution rights of Billie Eilish's documentary in 2500. Guess the Platoon gang has What kind of success?

"I'm just studying hard." Phineas spread his hands, "There are still many things that I feel I haven't done well."

"So, you're Billy's manager now, right?"

"Yes, he is the best manager in the world." Billy ruffled Phineas's short brown hair with her hands, seemingly carelessly naughty, but in fact, anyone could observe her trust and dependence on her brother .

"Then, manager, we... have a cooperation that we want to discuss with you." Han Yi swung his right hand back and forth between himself and Zhao Youzhen, "We hope to be your manager, A&R, record company, distribution company, And the show manager, to be the biggest help for you to be on the Coachella Music Festival, to be the backstage supporter of every stop of your world tour, and to be the object of your gratitude on the Grammy podium."

"Attention, I'm talking about you guys." Han Yi pointed to Billie Eilish, then to Phineas, "Billie Eilish, and FINNEAS."

"Just like I mentioned to you..." Zhao Youzhen interrupted the topic at the right time, and she put the news from Billboard magazine in front of the two of them, "Yi's company has just acquired 40% of the shares of United Artists Management Company .”

"That is to say, as long as you are willing..."

Zhao Youzhen embraced Bili, showing a very convincing and touching smile.

"Whether it's Demi Lovato, Florence + The Machine, or Paramore. Any artist in any genre, you can instantly be the opening act on their tour."

Speaking of this, Zhao Youzhen couldn't help turning her eyes towards Han Yi. The reason why she was so eager to cooperate with Han Yi and introduced her most promising artist was because she valued Han Yi's upcoming enjoyment in the performance market. The right to speak.

For the fledgling newcomers, being able to go on a world tour with long-established stars in the industry, regardless of the exposure and attention that comes with it, and the promotional posters they get alone, are enough to make them dominate the competition with their peers. It's the first opportunity.

At this time, Han Yi was also watching Zhao Youzhen with an inexplicable smile.

Of course, there was no derogatory meaning in this smile, Zhao Youzhen's words and expressions were excellent enough.

What he was feeling was just the ruthlessness of time.

In 2016, Demi Lovato could be used to seduce Billie Eilish.

"We can put you on any stage, not just Coachella. Good Morning America, even Jimmy Fallon." Han Yi added a footnote to Zhao Youzhen's beautiful vision, "The sky is the limit."

"So, if we sign up..."

The future that Han Yi and Zhao Youzhen point to is bright, but Phineas, who has been traveling around Los Angeles for himself and his sister's music career from a very early age, has heard too many similar promises.

What he cares most about is the actual numbers.

"It will be a 360 agreement, right?"

A traditional record deal covers only a single aspect of an artist's career.And if a contract includes both recording and music copyright distribution, then this kind of agreement is usually called a 180 agreement, because it includes all the rights and interests involved in recording music.If the performance part is added, the contract will be upgraded to 270 degrees.

As for the 360 ​​agreement, it is easier to understand that any rights and income related to performing arts are within the scope of the agreement.Artists allow the company to obtain revenue sharing in all areas such as streaming media playback, live performances, peripheral sales, music licensing, and commercial endorsements. In exchange, the company also needs to provide financial and professional resource support. Provide comprehensive assistance in marketing.

As early as 2002, Robbie Williams and EMI reached a cooperation similar to the 360 ​​agreement.The two parties set up a joint venture company, Robbie will move all performing arts activities to the new company, and EMI will inject 1.57 million US dollars in exchange for Robbie-Williams' commercial revenue share in all fields.

Robbie Williams can get 100% of physical record revenue, 28.75% of non-record revenue, and 0% of online music revenue.In exchange, EMI will receive 71.43% of non-record revenue and 100% of online music revenue.

At first, the entire music industry laughed loudly at EMI's stupidity, but it turned out that they won the big gamble.

In the six months of the first half of 2003 alone, the joint venture recorded a gross profit of 3500 million pounds. According to the exchange rate at the time, it was a full 6868 million U.S. dollars, and Robbie Williams could probably get 50 million pounds. %, while EMI can pocket the other 50%, that is to say, it took only half a year for EMI to recover 21.9% of the investment.

You know, this was 2003, when even iTunes was still in development.Robbie Williams, who has signed a six-album long-term contract, with the gradual decline of physical records, the proportion of future share will only become smaller and smaller.

Robbie Williams' success has inspired a slew of superstars to sign deals in the same way, most notably Madonna's manager Guy O'Shealey's stunning deal with live entertainment giant LiveNation in 2007.

$1750 million signing bonus, $6000 million up front for three albums, $5000 million in cash and stock for exclusive rights to hold Madonna's world tour and use of her likeness and name.Note that even after paying 5000 million US dollars, 90% of the concert income and 50% of the portrait and name royalties belong to Madonna.

This kind of agreement solves many inherent difficulties encountered by artists in the development process. In the traditional music industry framework, artists need to communicate with record companies, music distribution companies, performing arts brokerage companies, performance companies, marketing companies, public relations companies, etc. at the same time. More than a dozen different partners are collaborating at the same time, each stakeholder has their own considerations, and it is extremely difficult to form a consensus and join forces. The emergence of a new form of 360 agreement has reduced the number of artists' partners from a dozen to one, greatly improving the efficiency of communication and work, and allowing artists to better realize their personal career planning.

For the companies that signed the 360 ​​agreement, the advantages are also obvious. They will now be able to fully enjoy all the performing arts revenue share of an artist, which will allow the company to invest resources for the artist to build with more confidence, without worrying about their own Whether the hard work will help other idle partners.

In addition, as mentioned before, being able to fully own the artistic assets of a superstar will also greatly improve the company's valuation and financing capabilities in the capital market.

Imagine if UTA is not only Angelina Jolie's acting agent, but also owns her portrait rights, name rights, and derivative product sales rights, then Parkway Capital and Han Yi can still buy it at a price of 1.9 million U.S. dollars 40% stake?

As a result, the 360 ​​agreement quickly became a new trend that everyone in the music circle in the 21st century talked about.Not only superstars are signing this kind of contract, after Jeff Hansen signed the first newcomer 360 agreement for Paramore with Atlantic Records, mainstream record companies have also begun to fully embrace this kind of all-round sharing agreement.Today, the 360 ​​agreement has become a standard contract in the music industry.

"Yes, it's the 360 ​​agreement, but it's not just the 360 ​​agreement."

Han Yi explained seriously.

"The 360 ​​agreement that the major record companies handed over to you for review is actually a traditional record agreement, with some other income distribution clauses added. In other words, they will still only give you a pitiful 15% in terms of record royalties. % or 20%, but in the field of performances and endorsements, they want to get another 30%. It must be emphasized that the record company will not do any work for you in these areas for the 30%, they will let you pay for it yourself Go all out and beg people to book gigs and then take another 30% out of your already depleted wallet."

"And what we want to do is to treat you as superstars, Billy and Phineas. We hope to create a joint venture company with you, jointly manage and jointly own, all performing arts, whether it is copyright distribution Whether it is a live performance, it will be performed under the framework of this joint venture company."

"To put it simply, we hope that not only us, but Miss Zhao and I. You, too, can become the real helmsmen of your own career."

Is it really so alluring?
of course not.

A joint venture company is just another way to deeply bind musicians, making them feel that they really own a company instead of just signing an artist agreement. This difference in mentality can help them stabilize for a long time develop on the same platform.The share that Han Yi was going to give them was not much better than that of mainstream record companies.

"In the joint venture, you will get 25% of the record royalties, which is the same level as Jay-Z and Beyonce. In terms of other commercial income, we only need 35%. Most importantly, we will not let you in the professional Fighting alone in any field and stage of your career, we will establish an artist management company, a record company, a copyright distribution company, a live performance company, and even UTA, which I just bought, will join the ranks of promoting your development Come on. Each of the companies I mentioned will have a stake in our joint venture to guarantee their full commitment."

Zhao Youzhen lowered his eyes, as if he wanted to cover up the smile on the corner of his mouth.Han Yi really has a clear understanding of the music industry, and his marketing concepts are also perfect.

Many people think that the record industry is in decline, and music sales can no longer make much money, but in fact, with the rapid development of streaming media platforms in recent years, the influx of financial capital and the continuous increase in online royalty rates, the record industry has gradually Return to the prosperous state of the past, even worse than that.

Take Billie Eilish's global hit "Bad Guy" as an example. On the Apple Music platform alone, it can earn tens of millions of dollars in revenue.From 2019 to 2022, Billy's streaming revenue exceeds $8000 million.You know, the actual music production cost of Bi Li's album is less than 1% of this figure.

In other words, even if MV shooting and music marketing expenses are added together, from the perspective of streaming media revenue alone, music sales in the new era are also a lucrative business.It is even more exaggerated than the so-called golden age of the recording industry with physical sales of 3000 to [-] million.

It turns out that selling records requires record companies to pay a large amount in advance to press CDs and send them to record stores around the world through a complex logistics and transportation system.Once the sales forecast is inaccurate, a large amount of inventory will be generated, and the record store will return it after two years, and you will need to pay for it to be transported to the Nevada desert for landfill.

What is the actual sales cost that the current record company needs to pay?
Is there a mouse wear fee for clicking the "Publish" button?

In the conditions proposed by Han Yi, 75% of the music revenue share is almost all net profit after deducting labor costs and taxes, and 35% of other commercial income is the icing on the cake. Music career activities do not need to be paid for by him.

In addition, each of its affiliated companies holds a certain percentage of shares in the joint venture company, which not only enables all business sectors to enjoy the commercial value of Bili’s future growth spurt, but also allows the valuation formula of each company in the future financing link more clarity.

The joint venture company can be raised once, and each holding company can be raised separately, one asset, multiple financings.

If you eat more than one fish, all the fish bones will be pulled out and boiled to make rice.

No matter how you look at it, it is a more beneficial operation for Han Yi, and he can speak so freshly and refinedly.

"Sounds very attractive, Mr. Han. If possible, could you please send us a copy of the agreement by email? Bi Li and I can read it carefully and consider it seriously."

Phineas's social skills may not be as sophisticated as Han Yi's, but his degree of caution is definitely the same.Otherwise, he and Bi Li should have signed a hard-earned contract with no fairness at all.

"To be honest, Yoo Jin, Mr. Han, we are currently in contact with some record companies, so it may be necessary...I don't want to be presumptuous, but we have to make some comparisons."

"Of course, comparison is a good thing. What I don't like the most is the kind of person who signs a contract with enthusiasm, and then spends years getting emotional and making news, trying to break free." Han Yi had long expected Feeney The reaction of Yass, "We will send you a cooperation agreement afterward. In fact, I hope that the longer you think about it, the better. The more cautious the decision, the more lasting it will be."

Speaking of this, Han Yi took a sip of Coke, deliberately leaving a gap for conversation.Han Yi opened his mouth slowly again when the cold sweet liquid wrapped in air bubbles entered his stomach.

"We can carry out the comprehensive agreement slowly, but I think that the promotion of music itself cannot be stopped for a moment."

The main goal of today's conversation is ready to emerge.

"The establishment of cooperation requires mutual trust, and true trust can only be generated in cooperation."

"Therefore, my suggestion is that we can sign a music distribution agreement and a record agreement for the song "Ocean Eyes", and let us handle the copyright management, channel distribution and music marketing, and don't waste the life of every excellent work Expect."

"To express our sincerity..."

"In this single agreement, we are willing to pay an advance payment of one hundred thousand dollars."

　Sorry, as I said before, I don’t want to present a career line that has no sense of reality and professionalism at all. I also hope that reading my book can not only show you the story, but also give you a deep understanding of the industry after reading it. If you fully understand it, it should be regarded as a free music industry course!

　　Let me emphasize again, I did not copy the so-called Baidu or Google, I coded it word by word based on the knowledge I learned and industry experience, entertainment novels can also have technical knowledge output
　　
　
(End of this chapter)