5 Things You Should Know About Your Band
I have a number of bands as clients and to me it is always striking when I sit down for that initial consultation and realize the extent to which a band's members or founders are really in the dark regarding some of the most basic concepts behind forming a successful group. I think this is because all band members are artists, or at least, one would hope, musicians, so the majority of them are going to look at a band in a completely different light than say, an attorney like myself. Instead of focusing on some of the more practical issues, the dynamics of the entity as a whole and the more business-like aspects of a group, musicians are more likely to focus on producing the music, social dynamics between the band members and other more “artistic” concerns. With that in mind, the following five concepts are usually the ones that I end up having to address first with my clients before getting on to the issues they originally thought were the most important to address.
1: Your Band is a Business This point cannot be stressed enough, and you will see that it is present and apparent throughout every point after. If you are planning on doing anything more than playing in the garage, whether you are releasing your own album, trying to get a record deal or just playing cover gigs down at the local bar, your band is a business, and you should run it like one. Just like Richard Branson would never start a new company without structuring it properly, signing agreements with the appropriate partners and providing a plan for how things are going to operate, your band should also be formed with the same level of care. Either your band or a separate holding company should be in the form of a recognized business entity, with either written agreements between all of the members or owners, or a written operating agreement binding everyone who is part of that entity.
You might think that you are simply making music with a group of best friends with whom you would never have a major disagreement, but if things actually worked out that way there would be no such thing as VH1's Behind The Music. There is a long and sad history of the best of friends, spouses, even parents and offspring funding the litigation industry over less compelling ventures, partnerships and relationships. By treating your band as a business and operating it accordingly, everyone's rights, expectations and duties are spelled out from the beginning, leading to a lot less conflict and ambiguity when that inevitable disagreement or falling-out finally occurs.
2: Your Band's Identity is Property You might think that “intellectual property portfolios” are for companies involved in high-tech or billion-dollar merger deals, but every entertainment company, including bands, rely on an IP portfolio of their own. Have you just created a band? Did you come up with a name, or was it a collaborative effort? How about a logo, or maybe the unique lettering that your band's new name will be written in on all those t-shirts and posters you will be selling on your next world tour? These things are worth money; maybe not a lot of money at first, but they are worth something and they have the potential to be worth even more, the more successful your band becomes. Names, lettering, artwork and the other things that represent your band are a form of intellectual property called “trademarks” and, like any business, you need to make sure they are correctly used and protected.
Any band that wants to identify itself should look into registering various aspects of its identity as trademarks. In addition, there should be business agreements in place that dictates how the property can be used by individual members. For example, if the bassist leaves and starts a new band, can he call it the same name or use the same logo? There is likely to be an argument about that if terms were not spelled out at the beginning. On the flip-side, what if everyone leaves for greener pastures except the bassist? That is likely to be a different situation, and it has happened in the past where you get three different groups of former band-mates suing each other over who gets to use the original name.
3: Your Music is Also Property Individual songs are usually associated with two separate pieces of intellectual property, both protected under copyright law (there are also various other ways a band can go after someone using its songs, but I will skip these). These two pieces are usually known as composition rights and performance rights. Composition rights originally belong to whomever wrote the song, while performance rights originally belong to whomever recorded the song. Another way to think of it: if I copy MP3s of the latest Red Hot Chili Peppers album and start giving those MP3s away, selling them, whatever, I am violating both composition rights (probably owned by the songwriter) and performance rights (probably owned by the entire band) of those songs. However, if I get together with my own band and simply record all my own covers of the songs in the album and release them under my own name, I am only (likely) violating the composition rights of the songs, not that it makes things any easier for me.
Keeping this in mind, bands need to decide beforehand how composition and performance rights, and revenue derived from those rights, will be distributed. You can probably already see that you run into many of the same questions as in the last point, including: if the band breaks up or some members leave, who gets to continue performing the songs? Will funds from recordings continue to flow to ex-members of the band that were in those performances and, if so, will they flow for a time period or indefinitely?
4: Everything Should be Written Down Going back, once again, to the concept that your band is a business, just like any “legitimate” would never put its money on the line with a verbal agreement, nor should your band. My answer to the oft asked question, “should I get a contract for that,” is always yes. If money, services, promises, or anything else is to exchange hands, you must get it in writing. If you are playing a gig and the club owner has promised you some money, or food, or drinks, or a percentage of the door or whatever, get it in writing, and make sure it is signed. This goes for any business and any individual engaging in any type of business, not just for bands. And, contrary to popular belief, the writing does not have to be complicated and full of “attorney words;” it can be just a few words, in fact, as long as it conveys what is to be done by whom, and it's signed. Of course, if you are entering into a more complex agreement, it goes without saying that it should be in writing, and you should also have it drafted or looked over by your own attorney.
5: Protect and Use Your Assets Whether you're talking about money, instruments, or some of the “intangibles” mentioned above, you want to protect your band's assets from the get go, and not wait until it is too late. It should be clear exactly who owns what, who benefits from what portions of what property, and everything in between. A lot of this is making agreements with everyone, as described above. Any time you are selling something, be it music, posters or tickets you want to already have agreed what it's worth and where the funds are going. Whenever you create something, a song, lyrics, a riff or even a crowd, you have already agreed beforehand who benefits from that and how. You also want to familiarize yourself, or hire someone who is familiar, with processes and techniques for protecting your intellectual property, not only in the United States, but in other countries in which your music has found exposure. If your band is accumulating other assets like real estate for studios, gig equipment, or other property, you should make sure that property is also owned by the right entity, perhaps protected from other aspects of the business or even just written off properly so the band can enjoy a break on its taxes.
Additionally, just like every other business, you (or someone you hire for the task) should constantly be on the lookout for ways to put your assets to work. Many bands make more money on licensing fees for songs and compositions than they do on sales to listeners. Your band should be utilizing social technology to the greatest extent possible in order to add to its brand recognition and to provide additional protection for its intellectual property portfolio.
I think the big takeaway here is that, if you are really starting a band and not just a jam session, you, your manager or whomever is good for the job must approach it the right way off the bat, not like it is simply a group of friends playing some music together. I often have clients who ask me about what they need to do to get copyright protection for a number of songs they have written, when they haven't even figured out amongst themselves who will own or benefit from these copyrights and what will happen if members go their separate ways. Even if the band only meets a very modest amount of success, paying attention to the business aspects in the beginning will go a long, long way in avoiding disputes and frustration down the road.
