Building Your Artist’s

Brand as a Business

Dina LaPolt, Attorney, LaPolt Law, P.C. (USA)

Table of Contents

1. Building Your Artist’s Brand as a Business

2. The Artist’s Executive Team

3. Understanding the Basics: Intellectual Property and

Corporate Formalities

4. Brand Building

5. Technology and Social Media Tools

6. Net Effect of Brand Building on the Music Industry

7. Litigation Hotspots

8. About the Author

It’s an obvious statement, but a brand cannot exist without customers. Artists must ensure thatwhat they present to the world is of the highest quality attainable at that time if they expect toattract any early adopters. Too often, artists prematurely present their vision or message touninterested business people and audiences due to a lack of analysis as to who their fans mightactually be and the best way to approach them. It is unproductive for the “artist brand” toanticipate their target demographic is the entire world. The artist must give their own brand therespect it deserves if they ever expect anyone else to. Fans are the lifeline of the “artist’s brand”because without them the brand dies.

This topic can be addressed by discussing the members of an artist’s “core” executive team, usingintellectual property and corporate entities to protect the artist’s brand, various ways of buildingthe artist’s brand, the power of technology and social media, the effects these changes are havingon the music industry and some areas ripe for litigation.

1. Building Your Artist’s Brand as a Business

Behind almost every great artist has been a great team (and sometimes a not-so-great team…)taking care of and nurturing the artist’s business. When you think of an artist’s business team, youprobably think of managers, booking agents, business managers, attorneys, publicists and perhapsa few others. The titles of CEO, CFO, and General Counsel would seem foreign in this list, howeverthe analogy is uncanny.

The Manager as “CEO”

The manager can be seen as the CEO of the artist business. Managers are, according toWhitesmith Entertainment’s Emily White, the “captain of the team, the leader of the pack, theguidance counselor, an honest confidant and coach, a team builder, a power networker, andbusiness developer.” These are all responsibilities that generally sit with the CEO of a majorcompany. Both must keep the big picture goals in mind and continuously search for additionalavenues to exploit and monetize their brand.

The Business Manager as “CFO”

The business manager – the CFO here – is not only in charge of collecting monies and royalties andmaking income projections, but is also responsible for maintaining multiple corporations or othercorporate entities, putting together complex tour budgets, overseeing general risk managementand insurance issues, handling tax planning (both national and international) and supervising andoverseeing royalty audits. Shane Glass, partner at the Glass Jacobson Group, LLP, emphasizes theimportance of being “aware of the numerous types of earnings available to an artist and themethods of collecting such earnings…

2. The Artist’s Executive Team

Accordingly, a harmonization of complex responsibilities is required of today’s business managers in their complex roles of chief financial officer, financial controller, tax advisor and auditor for the artist’s enterprise.” Finding a CFO for your brand who can competently navigate all of these areas is critical for success.

The Attorney as “General Counsel”

The duties of the entertainment attorney are becoming ever-broader. Instead ofspending the majority of their days negotiating and re-negotiating record deals (whichstill happens), they are doing a myriad of other entertainment-specific agreements suchas those relating to television, endorsement, and other brand-specific deals. All whilethey are keeping an eye on and overseeing a stable of other specialized attorneys whomay be engaged from time to time to render services on other artist matters such aslitigation, real estate, estate planning, corporate, trademark and others. In addition,entertainment attorneys must also wade through new legal territory in connection withall the new types of distribution models and revenue streams that come with new legaland practical considerations in the music business that didn’t exist even a few years ago.

The Agent as “Vice President of Business Development”

The role of the agent has also evolved far beyond his or her original role in the musicindustry. Traditionally, a music agent’s job was to find performance engagements forartists. Now, agents not only bring tours to the table, but they are fundamental increating opportunities in sponsorships, endorsements, film, television, fashion and othernon-traditional music artist income streams.

It is imperative that both the artist’s intellectual property and personal assets beprotected. It is also important to understand all branches of intellectual property rights,not just elementary copyright law. Part of being a successful brand is making good use ofall of your assets.

An emerging significant revenue stream is sponsorship and endorsements, which exploitan artist’s name and likeness rights and, sometimes, their copyrights and trademarks.What used to be seen as “selling out” is now seen as acceptable, if not necessary, to funda career in the music industry. Brazilian music attorney Marcelo Goyanes notes that, inaddition to the financial benefits of endorsements, “those arrangements must also beseen as innovative ways to promote the artist’s music for different types of consumersand otherwise unthinkable or unreachable markets.”

Different artists call for different business entities. Acts just starting out are generally defacto sole proprietorships or partnerships. As an artist gets more successful anddevelops more assets to protect, he or she should consider forming various corporateentities. The artist’s business structure should not only protect against third parties, butshould also – especially in the case of bands – protect against other members of the act.Band member agreements (or, in the words of United Kingdom attorney Julian Turton,“commercial prenups”) may be uncomfortable to discuss when everything is going well,but become incredibly important when a member leaves the band or when the band’srelationship becomes tense.

3. Understanding the Basics: Intellectual Property and Corporate Formalities

What is right for one artist may not be right for another. An artist’s target audience andany potential partners’ audiences should be closely analyzed before launching anycampaigns. Who precisely is this artist’s target audience? Can that be expanded? Whatdo these people like? Where do they spend their free time and extra money? These arecritical questions to ask when developing the artist brand. Or, in other words, GilesFitzgerald of FRUKT Communications says “artists need to think like marketers ratherthan musicians.” It is a big change to make for some, but a necessary one.

After artists have an idea of who their fans are, they must decide how best to reachthem. As discussed above, sponsorships and endorsements can net not only money andfree products for an artist, but can also keep that artist in the public eye. Further, thereare lifestyle-specific stores that marketers can target. Acts like the Black Veil Brideswould be right at home at Hot Topic while the more mellow Zee Avi meshes well with theStarbucks crowd. Start thinking like your fans and ensure that your brand is everywherethey are.

Geographic considerations are also important. Different markets operate differently.Electronic music does much better in many parts of Europe than it does in the UnitedStates. Perhaps it would be more beneficial for such an artist to fly to Europe and tourthere rather than traverse the U.S. multiple times. Asian markets tend to focus ondomestic artists rather than international ones. French radio has a quota for French-language songs. If your fans are in France or Quebec, it is a good idea to have themrecord at least one song in the language. In India, the most popular way to consumemusic is via mobile telephony. Where are your fans and how do you reach them?

4. Brand Building

Advances in technology and new social media tools are revolutionizing the way weconsume, produce, distribute and discover music. There are more ways than ever toexpose an artist’s art and music to billions of people, but making it equally as difficult torise above all the noise. Now that almost everyone has access to social media tools andGarage Band or ProTools to make a record, how do you ensure that your brand gets intothe hands of your target audience?

Music today is consumed in more ways than ever. It is also more omnipresent than ever.People often wake up to the radio, listen to their iPod on the subway to work, bring uptheir new Spotify playlist in the office, DJ with their friends on Turntable.fm during theirlunch break and play Guitar Hero when they get home in the evening. Artists should notfear this new technology; in fact, they should embrace it. How awesome is it that peoplecan see what albums their friends are listening to via Facebook? Word of mouth iscritical in spreading your brand’s message. New technologies and social networks makethis easier on a daily basis.

5. Technology and Social Media Tools

The importance of these social networking sites also means that artists must make timeto interact with their fans. A quick tweet from the road or the recording studio (evenbetter if it has a picture attached!) gives fans a look into the world of their heroes.Facebook allows for the quick spread of important press or ticketing links. Sites likeUstream.tv enable artists to reward fans with video chats or to stream their concerts live.In a similar vein, alternative artist Florence + the Machine just sold tickets to an onlinestream of their album release show. For £3.99, fans could watch the show in highdefinition in real-time and follow along with a show program, a “signed” setlist andFlorence Welch’s performance notes.

There are also downsides to the new advents in technology. Beyond the piracy problem,there are also privacy issues with social media data. Clashes between Facebook and itsusers over such changes happen on a regular basis. Recently, there was a backlashagainst Twitpic’s when the company began licensing users’ photos to stock photolicensing agency WENN.

Antiquated copyright laws need revision and the old school way of thinking needsreform. Two examples are the advent of cloud computing and new business modelsbetween the artist and the record label.

Entertainment is quickly moving from the user’s CD player or hard drive into “the Cloud.”First with the Amazon Cloud Player and Netflix and now with iCloud, consumers canlisten to their music library, view their photos and watch their movies at their computer,TV, mobile phone or tablet. Eventually, there may be a Cloud accessible by everyone, notjust smaller, personal clouds. This also challenges our current views of copyright law.Should there be separate payments for content on different platforms? How will rightsholders be adequately compensated in this new age? Copyright law has always beenslow to evolve, but these changes will hopefully speed up the process.

Very recently, some record labels have experimented with a “joint venture” with theirartists. In these cases, the artist and label form a company together and share in allprofits (and losses). Tom Silverman of Tommy Boy Records says the joint venture“borrows from the venture capital model in which the investor puts up high risk capitalfor a potential very high return on her investment. She expects to have one big hit in tenshots.” In this model, one major act will pay for everyone else. The joint venture givesrecord labels incentive to do what is actually best for the brand, which might be releasingsingles or EPs rather than full-length records, because they get 50% of all monies earnedfrom every revenue stream. The record label here is investing in the artist brand itself,not simply an album.

6. Net Effect of Brand Building on the Music Industry

Advents in technology also lead to an advent in litigation. In some territories and stateswithin the United States, it is crime to impersonate a celebrity on Facebook, Twitter orother social media sites. There has also been a boom in so-called “twibel” suits, or libelsuits brought on by allegedly defamatory tweets. Almost everyone has heard of theinfamous defamation suit brought by Dawn Simorangkir against Hole front-womanCourtney Love. Though eventually settled out of court for over $400,000, the casedemonstrated just how dangerous tweets can be. Expanding artist teams can lead tobreach of fiduciary duties and the duty of loyalty that various representatives of theartist’s executive team have to the artist. Lawyers have an ethical duty to their clients,but what happens when one manager, agent or record label is feeding that lawyer mostof his or her clients? Who is the duty to then? Managers are the least-regulated (andusually not regulated at all) member of the artist’s team, but they are also generally theone who is most involved and closest to the artist. Finally, jurisdictional issues can be aproblem. The world is an ever-smaller place and many disputes are fought over stateand country lines. A victory in one jurisdiction does not mean that it can always beenforced against the losing party. Pick your legal battles wisely, and the location youbring suit just as wisely.

7. Litigation Hotspots

About the author

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Dina LaPolt is an entertainment attorney in Los Angeles, California at LaPolt Law, P.C.LaPolt Law, P.C. is a boutique transactional entertainment law firm that specializes in representing clients in themusic, film, television, merchandising and book publishing industries. The firm's clientele include prominentrecording artists, songwriters, producers, music publishers, managers, independent record companies, radiopersonalities, merchandise and apparel companies, film production companies, directors, writers, authors, andactors. In addition to practicing law, Dina teaches "Legal and Practical Aspects of the Music Business” in theEntertainment Studies Department at UCLA Extension.

LaPolt is editing the upcoming book from the International Association of Entertainment Lawyers (IAEL) entitledBuilding Your Artist’s Brand as a Business. The book expands further upon the concepts discussed in this whitepaper in addition to analyzing the various changes in the music business and how we need to adapt to them inorder to maintain stability and long-term success. The publication will first be made available at MIDEM 2012.

For more information on LaPolt or her law firm please log onto www.LaPoltLaw.com.