Riches in niches: Inside the music industry

Music industry accounting

Accountants generally work during standard business hours, although odd hours and travel may be involved if a client lives and works in a different time zone, or if meetings must be planned around a difficult performance schedule. Networking and maintaining a reputation in the industry is vital for drawing in new clients. Fortunately for arts and entertainment accountants, the best networking might come from attending a concert, play, or movie release. It’s this, along with the opportunity to work closely with artists and arts-related organizations, that draws most to this field.

  • Although accounting firms have set business hours, that doesn’t mean a Music Business Accountant’s day ends at 5 pm.
  • Her academic background includes stints studying Accounting and Taxation at Howard and American Universities.
  • Taylor Swift is just one artist who famously removed her music from streaming sites because she claimed streaming services were hurting the industry.
  • His ideal job was at Bill Graham Presents, where Graham started his company as a concert promoter.

Nearly a billion listeners use free ad-supported services like YouTube or Spotify and Pandora’s free versions, generating only about half a billion dollars for industry. If things progress in the same manner that they have for the last 10 years, we are poised to see digital, especially streaming, dramatically eclipse physical revenues, while performance rights and synchronization income will grow slowly but steadily. Thomas Honeyman is a musician, music blogger, songwriter, and entrepreneur in Los Angeles, CA. A graduate of the University of Southern California, he studied cognitive science and music industry.

« No matter how small they think the deal is, we tell our artists not to sign a contract unless a lawyer looks at it and, if you can’t afford it, we’ll find you one that provides services pro bono, » said Catalano. « You can’t accept something that you don’t understand, and these record labels made it mysterious enough for only an accountant to understand. So let us have a look at the royalty rate, and it can save you a great deal of suffering. » A vocalist and guitarist for his own band, « The Fource, » Catalano also used to write songs for blues artists and « The Conan O’Brien Show. » His involvement in the music industry made him notice problematic trends. For example, most late-night talk shows’ music played after midnight because it cut the royalties in half, and Catalano said the job of an accountant is to solve these recurring « mysteries » on clients’ paychecks. With YouTube and TikTok being reluctant to pay royalties and less than a penny earned per stream, Catalano said many artists end up confused and disappointed.

The Art of Endorsement Deals

If you’re running an independent record label by yourself or in a small team, the likelihood is you’re taking on several different roles – acting as manager, agent, promoter and more. But you probably didn’t start your own label to act as its accountant, which is where we can help. Your agent’s commission is usually considered an allowable expense by HMRC, for example, as is the cost of hiring a musician to accompany you in performance. Hotel accommodation on tour is another that often gets overlooked, as are complimentary tickets to gigs for publicity purposes. Some want a music accountant to help lay the foundations of a successful business, such as reliable bookkeeping or the preparation of thorough management accounts. As more listeners have access to smartphones, tablets, and other devices for listening — and as the technology improves, becomes more desirable, and more widely available globally – streaming, it seems, will continue to be the way forward for the industry.

  • « No matter how small they think the deal is, we tell our artists not to sign a contract unless a lawyer looks at it and, if you can’t afford it, we’ll find you one that provides services pro bono, » said Catalano.
  • Fortunately, our tax planning service for musicians is designed to smooth the bumps between months and years, taking advantage of tax breaks for creatives to spread your tax bill.
  • We provide litigation support for the music industry, including expert witness services, reviews of recoupable expenses, penny letters, tour budgets, depreciation schedules, and tax planning.
  • Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes.
  • We speak on a variety of music industry topics including inventory management, retail store management, succession planning, and more.

Arts and entertainment accountants advise both individual artists and arts-related businesses on financial matters. Music Business Accountants advise and work with musicians and music industry companies on financial matters. While streaming has rattled traditional record sales, it still generates revenue through per-stream royalties. Although we’re talking fractions of pennies per stream, with the increased use of such services the revenue from streaming can at the very least displace lost payments from say, the decline of individual song downloads, as one study showed.

Certified Public Accountant – Music Industry

Advances in technology and the increasing use of it, allow you more access to us as your  music accountant, anytime, in your own way. You even have access to all of your important music business or personal tax documents in one place via your secure online storage. Growth Group can be the financial adviser for your music business and provide access to your music company finances via Xero all from our location in Maryland. The firm does tax prep and planning for artists like The Who, the Arctic Monkeys, Lizzo, Billie Eilish, Leon Bridges, Maggie Rogers and many others, but tax prep is only the beginning of their services.

Music industry accounting

« The state of Minnesota has a specific entertainer tax, while Wisconsin has on their own tax regulations for entertainers that are from out of state, » explained Johnson. « Some venues will collect sales tax for merchandise sales, others won’t. We face compliance issues constantly, and between income and sales taxes, it can quickly get complicated. » Outlets that owe royalties make it very complicated to track them, especially in rural areas, so no one can easily figure out what’s going on. Catalano said it gets even more difficult when an American has their music sold and streamed all over the world, as each government has its own rules about foreign royalties. Catalano said that working closely with influential artists is one of the most exciting sides of the profession, with clients such as Duran Estevez, the lead singer of 1990s hitmakers Max-A-Million. The night the star came to the firm to discuss his financial situation, Catalano said most of the staff stayed late to take pictures with him and see their idol up close, but things are not always this carefree at the firm.

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We also handle accounting for musicians in bands, helping them stay on top of the income from recording, performing and touring, and on top of their tax bills. As specialist accountants for musicians, Alchemy provides tax services and advice to individual musicians, whether they’re session singers, talented songwriters or instrumentalists for-hire. Course DescriptionA number of accounting standards are targeted at the entertainment industry, requiring businesses to follow specific rules for license agreements, the buildout of cable systems, film costs, music licensing, and more. Entertainment Industry Accounting covers these accounting requirements, along with related presentation and disclosure topics, with the intent of clarifying how specific transactions are to be handled.

There are a lot of musicians who are not taking advantage of the expenses they are incurring. If you are in a bracket where you pay 25 percent taxes, each expensed item you claim is the equivalent of purchasing that item at a 25 percent discount. With our extensive experience conducting licensing and royalties audits we are often asked to provide expert testimony involving disputes between our clients and their business partners.

Music industry accounting

Accountants may be self-employed, work for an accounting firm, or be employed by a music company or film or television studio. You may think it strange to differentiate music business accounting functions from other types of accounting. However, those accounting for music industry professionals have a unique job because their clients have unique positions. To partially resolve this issue, Congress designated SoundExchange, a nonprofit music rights management collective, as the only recognized organization allowed to collect and distribute digital performance royalties for sound recordings. As a result, composers and performers now receive payment for songs played on satellite and internet radio, but Catalano said it adds another layer of complexity for music accountants, who now need to make sure that artists have registered their work with SoundExchange.

Taking an accounting degree to the music industry

We can also help with accounting for royalty revenue, interpreting statements from record companies, publishers and distributors to ensure you’re getting paid your fair share and are paying the right amount of tax on your earnings. We work with the entertainers directly or with their agents, attorneys and personal managers. Our focus is on tax and accounting issues, recoupable expenses, tour budgeting, asset depreciation, contracts, program budgeting and much more. We speak on a variety of music industry topics including inventory management, retail store management, succession planning, and more.

Assessing the actual cost of track is greater than the bucks and cents accounting of the area that supplies the « Music Industry ». Music is a central, enjoyable part of normal life, and intrinsically isn’t conducive to valuation in slim financial terms. But even the accounting exercise of tallying sales and fees with the track enterprise isn’t straightforward. When it comes to responsibilities, The Music CPA partner Dave Johnson frequently uses his business valuation skills to evaluate the portfolios of major music producers, whose role offers them a significant percentage of the sales on every album. Growth Group works with sole proprietors, partnerships, limited liability companies (LLC) and corporations.

The Industry is described extensively to consist of the manufacturing and income of recorded track, track publishing, stay performances, using track in radio broadcasting, and musical contraptions and lessons. While the number one consciousness is at the samlelån influences of the music industry, it deserves noting that non-financial influences of the Industry, specifically as found out thru the proposed surveys and interviews, also are supplied. Miller Kaplan Music industry accounting draws upon decades of industry experience to help clients identify new revenue streams, maximize opportunities, and safeguard their creative and financial interests. Our business management services are top rated by The Hollywood Reporter, Billboard, and Variety. We serve the entertainment industry as a trusted and longtime resource for accounting, tax, audit, and business management services – supporting our clients’ interests anywhere in the world.

Advancement in this role comes through working with well-known artists or getting hired by a prestigious firm, which means higher wages and more famous clients. For some Accountants, advancement could also mean obtaining enough paying clients to strike out on their own and establish their own accounting firm. Growth Group’s team includes outstanding music accounting specialists who collectively bring over 15 years experience in entertainment and music accounting, and entrepreneur tax and bookkeeping in the US. When his clients head overseas on tour, Templeman leans on his Fisher School experience to make sure their international taxes are handled correctly. He has fond memories of taking an International Tax class with Dr. Gary McGill, currently the Director of the Fisher School of Accounting, during his time on campus. Fortunately, our tax planning service for musicians is designed to smooth the bumps between months and years, taking advantage of tax breaks for creatives to spread your tax bill.

We also have a team of experts, which includes Certified Fraud Examiners, that can prepare damage calculations, and assist with case assessment, case strategies, discovery, expert witness testimony, tax analysis, and fraud prevention, detection, and deterrence. « The most impactful change for music composers has been the streaming services, » said Catalano. In our new series, « Riches in Niches, » we’ll explore how these colorful niches indicate that concerns about commoditization and a narrow future for the profession may well be unfounded. His ideal job was at Bill Graham Presents, where Graham started his company as a concert promoter. When Templeman was in San Francisco interviewing with some of the Big Five accounting firms, he received a call from Bill Graham Presents asking if he’d like to interview for a staff accountant position at legendary San Francisco music venues The Fillmore and The Warfield. And if you’re an overseas music artist recording, touring or working in the UK, we can help you deal with HMRC’s foreign entertainers unit (FEU), providing all the paperwork and advice you need to have constructive discussions with the UK tax authorities.

How To Become a Music Business Accountant

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