Manage for Success: Keys to Success, Newsletter #93, January 2009


"Manage for Success" is a free monthly newsletter for record label executives who want to operate their companies efficiently and successfully. It's published by Keith Holzman of Solutions Unlimited, a management consultant, troubleshooter, and trusted advisor, and is based on his many years as a senior executive in the music industry.


Copyright 2009 by Keith Holzman, Solutions Unlimited. All rights reserved.


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Happy New Year to all "Manage for Success" readers. It's my sincere hope that 2009 will be a year of health, happiness, and prosperity for you and your record companies.


Although many labels have been struggling for the last few years, and although the U.S. and World economies are circling the bottom of the bowl, I remain a cockeyed optimist (apologies to Oscar Hammerstein II.)


As a result of making News Years calls to clients and associates during the first few days of this month, I've been both surprised and delighted to learn that many of them did respectable, and even profitable business in 2008 -- despite an industry-wide drop of about 14 percent in CD sales.


I asked one colleague what his label's key to "black ink" accomplishment was, and wasn't surprised to learn that it was in great part the result of what I've been preaching to my clients for the last ten years.


Here are some of the keys to their success.


First, they operate lean and mean, having just the staff needed to handle all the work. They operate in a business-like fashion, avoiding unnecessary expenditures and needless frills. They pay their suppliers on time, and as a result often get better prices and preferential treatment when necessary. In addition, they bird-dog their accounts receivable to ensure prompt payment for music sold.


They planned ahead and developed comprehensive operating budgets which they use like roadmaps, sticking close to their routes, but making thoughtful and reasonable detours when business conditions necessitate.


Many of these successful clients release music in niche genres with which they've been associated for some time. They work hard to maintain direct relationships with their customers and their artists' audiences. They also keep their A&R fresh, with a lean roster of talent, but adding one of two new and exciting artists each year.


They don't release too many titles in a year, but those they release are notable and worthy of purchase. They build and then maintain their catalogs, looking for that "long tail" business that can make the difference between red or black ink at the end of the year.


They also do everything in their power to maintain cordial artist relations, for without sincere associations with successful artists they wouldn't have a label. They also render honest royalty statements and pay their artists what's properly due.


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If you need advice on how to make your label successful, then let me help you as I've helped so many other firms "manage for success." Email me at <mailto:keith@holzmansolutions.com> so we can discuss how I can improve your business.


In addition, many approaches to success are detailed in my book "The Complete Guide To Starting A Record Company," Second Edition, which can be ordered as a downloadable eBook in PDF form, or as a printed, spiral-bound volume. Read the complete Table of Contents and download the Introduction at <http://www.recordcompanystartup.com/>.


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Successful businesses market their releases carefully, working off well-developed and comprehensive marketing plans. They spend only what's necessary to develop and promote their artists' careers, and avoid useless ego-massaging expenses, using their limited resources to derive maximum benefit.


They develop street teams where appropriate, but even more important, they also devote significant time to developing new ways to market their releases.


They see that their artists spend a significant time on the road, performing not only to existing constituencies, but working hard to acquire new fans all the time.


Thriving labels have sought out ancillary use of their catalogs and copyrights to gain supplemental income. They seek out music supervisors of TV shows and feature films, advertising agencies, etc. These people always need more music, so why shouldn't some of it be from your label? These licensing fees, although often not as large as in years past, can still be a significant source of additional revenue.


Savvy labels also protect their intellectual property, registering both recorded releases and written copyrights with the Register of Copyrights at the Library of Congress in Washington. They also take pains to protect their master recordings -- either as tapes or hard drives. These are another form of intellectual property, and as such are a label's birthright and should be properly stored in climate-controlled, secure environments. They represent a substantial capital investment and are particularly valuable should you ever decide to sell your business.


Smart labels have developed contingency plans for business operation in the event of a calamity such hurricane, earthquakes or some other form of catastrophe. You'd be amazed when such planning ahead has saved companies and their employees.


In sum, these successful labels generally avoid the "10 Common Mistakes Independent Labels Frequently Make." And if you'd like to emulate that success, email me and I'll be happy to send my White Paper of that title.


Until next month,

Keith Holzman -- Solutions Unlimited

Helping Record Labels Manage for Success.

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You may use or reprint the above article provided that you include complete copyright and attribution with a link to this web site. Please let me know when and where the material might appear. Most important, should you have a topic you'd like me to address in future newsletters, please email: mailto:keith@holzmansolutions.com


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Copyright 2009 by Keith Holzman, Solutions Unlimited. All rights reserved.