Monday, August 10, 2009

Accounting for Musicians

If you're an accountant with a CPA, perhaps you'd think you would be mired in bland office work counting the same beans over and over again. Perhaps you'd expect a life of tax returns or quarterly reports. Perhaps you'd think that the music business is as far away from accounting as you could get. You're a professional. And part of being a professional is: be skeptical first, ask questions later.

For a moment, consider the possibility that there are plenty of corporations in the music business that need well educated professionals including software programmers, lawyers, and accountants.

So, how do you turn a CPA into a CMA (Country Music Award)? Actually, I have no idea. But Terry London turned his CPA into a CFO, and eventually that CPA into a CEO. And in the process he found himself closely involved with some of country music's most legendary businesses.

I met Terry London at his office in Addison, TX.

Before We Called it Private Equity

As the former CEO of the mega-successful Gaylord Entertainment company, Terry London happens to know a whole lot about the business side of content creation and distribution.

Terry London started working for the Oklahoma Publishing Company in 1978. It was a privately held company owned by the Gaylord family that acquired a variety of businesses. Essentially, it was a media focused private equity firm. In 1991, the company spun off several of its holdings to create the now publicly traded Gaylord Entertainment where London became the CEO.

London is now the president of London Broadcasting, a company that owns and operates media properties (e.g. TV stations) in Texas. London Broadcasting also has it's own production company, 41 Entertainment that produces TV shows, commercials, and more.

What does all this have to do with music?

How does an accountant get involved in the music business you ask? Surely, the average CEO must be too worried about "business stuff" to even notice the music, right?


"Music is essential to everything we do in content creation. Music brings emotion, it brings life. At 41 Entertainment, we're creative storytellers using words, pictures, and music," says London.

Hmm. Doesn't sound like a stuffy accountant talking, does it?

London knows all about content creation. He was there at Gaylord to see the company blossom with several important acquisitions in the 1980s. They acquired Acuff-Rose publishing, WSM-AM, the Grand Ole Opry, Orpyland, Ryman Auditorium, and The Nashville Network (TNN), to name a few. And he was there to learn about what made media businesses successful.

London was at Gaylord when the company acquired the syndicated show, Hee Haw, when Kenny Chesney was a writer at Acuff-Rose still aspiring for a record deal, and when Alan Jackson worked in the mail room at TNN.

A Home for Country Music on a New Set of "Airwaves"

London shared a story about a critical and, perhaps, overlooked crossroads for country music. In 1983, the Gaylord business had just acquired a fledgling cable TV station called TNN. TNN uncovered an untapped television market.

Referring to New York advertising firms, London grinned as he told me, "they didn't think you could sell country music to the rest of the world." Before TNN, there was the Grand Ole Opry radio show and an occasional TV special. That was about it.

"It was really the first time that, on a regular nightly basis, country music acts were showcased on television around the country," says London. Up until TNN, no other TV station regularly broadcast the Grand Ole Opry. No other TV station provided a two hour talk show that hosted country artists on a nightly basis.

"This was a time when country music grew from roughly 8 or 9 percent of all music sold to about 16 or 17 percent at its peak," said London. Perhaps, because there was an influential platform to promote it.

TNN is now Spike and it is no longer a property of Gaylord Entertainment. And Spike doesn't carry the same content as TNN anymore.

Since I'm a songwriter, I couldn't help but ask about his experience with the famous Acuff-Rose publishing (which owned one of the most impressive song catalogs in the music publishing business including Hank Williams and Roy Orbison songs) and what his thoughts were on songwriting as a business today.

Tougher Times

"It's an evolving business. I call my friends over there today and it's tough. But we still need great content, great music. But it just gets harder and harder how you make money at it. I don't think anybody's quite got it figured out. But my judgment is, long term, ultimately great songs are going to succeed."

London went on to say that there's no substitute for working hard at songwriting. "You've got to write a thousand songs. You've just got to keep writing." He should know. He rubbed shoulders with some very successful songwriters including Skip Ewing, Dean Dillon, and Casey Beathard.

At Gaylord, London learned about the operational aspects of Acuff-Rose. "We had about a 40 thousand title catalog. We did extremely well with it," said London referring to how their writers worked hard and how their song pluggers promoted their titles. "You try to create an environment where people win. Treat people right and try to give people the best opportunity to succeed."

I caught myself day dreaming about what I might have done with London's authority at Acuff-Rose. What would it have been like to have Skip, Dean, and Casey call me boss?

The Pen is Mightier than the Sword, 2.0

Actually, in London's case, the spreadsheet is mightier than the axe, er guitar. But think about it for a minute. London was not a guitar hero or a smooth cowboy crooner. Through an entirely different avenue, he was an accountant smack dab in the middle of the music business.

So what is London's spreadsheet aimed at today?

In a Lone Star State of Mind

London Broadcasting is buying small to mid-sized TV stations in Texas. For example, they own the NBC affiliate down in Waco and a CBS affiliate in Tyler. And as I mentioned, they also have a production company called 41 Entertainment which produces a variety of content including commercials and community-centered programming.

London says there's a need for community-centered programming. Most of it is local news, sports, and weather. But the switch from analog to digital broadcasting offers new possibilities for content. Each station can now fit 3 digital channels in the same bandwidth as the old analog channel. The network affiliate goes on one of those three, and on the other two, they can put up anything they want: hunting and fishing shows, local sports shows, and London hinted, perhaps, local country music showcases.

"Everybody thinks they're going to make their fortune by selling to the whole world. All you have to do is focus on Texas." Texas is a big enough state to find success.

London emphasized that his business was focused solely on the Texas market. "This is the 15th largest economy in the world." Texas produces a large percentage of country music talent and a significant amount of country music is purchased in Texas.

And anything that breaks out to the national scene is, as London put it, "just gravy."

Food for Thought

We've all got different skills for business. Some people are content creators. Some are content distributors. Some are outstanding business people, like Terry London. No matter what you're best at, there are plenty of opportunities out there waiting to be discovered. And what I took away from my conversation with Terry London, is that some of the best opportunities are just below your nose in your home town.

Thursday, July 2, 2009

Buying in to Selling Out

When I was 16 years old, I was in a hard core punk band called the Suburban Delinquents. We were anti-establishment. We hated hair bands. We couldn't speak the latest pop star's name without rolling our eyes.

We were obsessed with a concept called "selling out." It was a legitimate reason to start hating a band. A band "sold out" when they were topping the Billboard charts or if they were all over MTV. Bands "sold out" when they started making good money. As far as we were concerned, they had become corporate puppets. And then we would curse their names. After all, we were idealists. We felt like business interests had tainted something that was artistic and pure.

Speaking of business interests, our band made less than $500 in a three-year period. We never sold out. And no one ever saw us for the musical geniuses we actually were. With songs like "Slut Puppy from Hell" and "Skool Bored" (with the 'r' spelled backwards in a really nifty graphic), the listening public must have been asleep at the wheel to have missed us.

I see this same fear of selling out in many songwriters today. One talented songwriter told me, "I won't compromise my artistic integrity and sell out." Fine. But what's the alternative? Getting a day job to pay your bills so you can sing songs at a nightclub that only a few people want to buy? Now that I'm a little wiser, I just don't buy in to this "selling out" argument. Here's why...

When I left Suburban Delinquents, I wanted to make a living with music. But that's not what I did.

Instead, I went to college. I got an engineering degree. Then I got a master's degree. Then I got a nice, safe, salaried job at a Fortune 500 company just like Mom and Dad wanted. They were so proud. And I was proud that they were proud.

But it wasn't until I'd spent eight years in a cubicle before I'd realized that I had sold out. I wasn't passionate about engineering. I wasn't excited about my work. And because of that, I had become a "corporate puppet."

So, when my wife started working, and with her all important blessing, I took advantage of an opportunity to reconnect with a career in music. I'm about two years into this career change and I couldn't be happier. I work long hours, but I'm energized at the end of the day. I wake up every morning excited about the possibilities of a new day.

And this time around, I'm not buying into the whole "selling out" thing.


The Music Business

This blog will focus on the business side of making music. The word, business, is in the phrase "music business" because somebody is making or losing money. It also means that someone is creating music. Yes, music is art. Yes, music is a reflection of our inner-most feelings and convictions. But if you want to sell it, then it has to connect with others. The more people you connect with, the more money you can make.

In subsequent posts, I will focus on people who make money with music. This may include commercial radio, film or TV content, performance, venue ownership, and whatever else I can uncover. I hope to point out new possibilities and opportunities and to encourage the entrepreneurial spirit in you, dear reader.

Since I live in the Dallas metroplex, I will generally focus on local entrepreneurs who are in some way making music make money for them.

So stay tuned for the next post.