What Musicians Can Learn from Ray Kroc

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Do you know who Ray Kroc is? Do you know what McDonald is?

Ray Kroc is the business genius who bought the McDonalds franchise from the McDonalds brother and developed his empire from the systematic burger assembly line. Yet, they didn’t invent burgers so what is it about Ray Kroc and McDonald’s that made this burger joint so special? It was a simple system of duplication of business owners.

Once Ray Kroc owned the rights to McDonalds he began franchising other locations and training all the owners how It a while but once he was set up he created a system to serve the masses and he did. At first he was still in the small business category because he was having to go around training all the business owners in order for the training to be consistent. So, he created Hamburger University for new Franchise Owners to get consistent training independent of Kroc. Yet, once all the training was consistent and it started to go national, all the different meats and supplies had no consistency which hurt the brands equity. So, crafty Kroc partnered with Sysco to be the sole supplier for all McDonald’s products.  Today, McDonalds grew Sysco to massive proportions and McDonald’s has over 35,000 locations worldwide and the Kroc family now have Legacy money, money that will never go away, that will grow in perpetuity, and that is passed from generation to generation. Below is a chart which shows Kroc’s franchise model.

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So what can we learn from Ray Kroc as musicians? It is very simple. It doesn’t matter whether offering burgers or music Ray Kroc taught the world how to make a big business which can truly free you from your 9 to 5. It is our job in our music careers to utilize these big business concepts of systematization, duplication through business owners, partnerships with a larger supplier, and the value of consistent training. Systematization creates profitability and quick growth. Partnerships and duplication from mentoring others results in multiplication of your efforts. Many hands make easy work.

Understand that as a musician in the 21st Century you must where all hats and in reality you are trying to build a big business with over 500 employees from your music. Understand that the first people you are privately franchising your career to is your band members, producers, managers, and initial fans. These are the advocates that will help you build a network of people enjoying your music and your story. The more systematic way you can find to mentor these people in growing your organization the quicker the idea of your music can manifest into cash. Think of the biggest in the industry right now, Drake (singer who raps), Taylor Swift (Pop Singer with a hint of country), Lady Gaga (Lil Monster Revolution), and Iggy Azalea (Very Fancy); all of the largest artists and bands built an entire big business and brand around their music. They found a need they were satisfying with their story and then everything about their marketing, crew, product lines, all center around that concept and through duplication they created an organization that can run independently. Do you think Dr Dre wakes up in hot sweats wondering if the new Yelawolf song is going to hit numbers? NO! Dr Dre has duplicated himself through other artists, producers, business owners, and product lines so that he makes Legacy money, money that you make in your sleep, money that you can pass down to your kids, and money that can give you the freedom to just live out your dreams in music. Looking forward to feedback, Much love music fam! FREEDOM!

Coachella Grosses $47 Million and What it Means to Indie Music

Boxscore has now come out with the numbers on Coachella 2012. This year’s Coachella had over 47 million in gross revenue with over 158,000 in attendance over the two weekends. It was interesting when Coachella made the announcement last Summer that Coachella would become a two weekend same lineup event many people in the blogosphere argued that it was a crazy idea and that the second weekend would fall entirely flat since most people would come the first weekend. I saw that risk at the time but still thought it was a brilliant experiment. Yet now, with almost 81,000 in attendance week 1 and almost 78,000 in attendance week 2, that concept was entirely proven to be false and Coachella was immense success. More importantly, for the purposes of independent artists, it points to the new crucial importance festivals and live shows play in a successful music career.

At last week’s New Music Seminar in New York City Sean Parker(creator of Napster) and other music business professionals discussed what they referred to as the fall of the record business and the rise of the music business. They essentially explained how twenty years ago, labels produced physical albums that could sell millions of copies and provide huge revenues for their affiliated artists. Today we are seeing a rise in the music business as a whole; there is still revenue from standard mechanical royalties and physical sales, but there is also now revenue from a variety of music distribution sites, licensing in other media such as commercials and movies, and of course live entertainment revenue, all of which are now becoming more important than ever. Distribution sites like www.Studio120.org and licensing music are vital, but the live entertainment revenue is also growing very quickly. Finally, I would add that performances at colleges and especially festivals are the best to get noticed because it is a soft ticket which allows you to perform in front of so many people. When I say soft ticket it means people are not going to hear a specific band but they are just going to the event regardless of the lineup. So for instance, the Roger Waters tour or any other tour that people buy a concert ticket for a particular artist it is a hard ticket, but for all the music festivals like Bonnaroo and Ultra Music Festival  which sells tickets before the line-up is announced these are people buying a soft ticket because they do not know who is playing but they know that great music will be there. So getting festivals and college gigs which are soft tickets are crucial for exposure. After all, when else other than giant music festivals like Coachella are you able to be exposed to over 150,000 music-obsessed people in a week and a half. It’s a very powerful thing for indie artists.