The Reggae Month secretariat inarguably understands the financial sustainability challenges that some entertainment practitioners face. Hence, the Reggae Open University discussion topic ‘Investment Systems for Long-Term Financial Stability’ was on point,
Panellists included industry professionals and also a member of the financial services sector. Namely, they were Robert Livingston, CEO of Big Yard Music; Lydia Rose, General Manager of JACAP; Rezworth Berchenson, CEO of VM Wealth Management & Investment and Sarah Hall, Entertainment & Intellectual Property Legal Counsel.
Investment Systems To Sustain the Industry
Jamaica Association of Composers, Authors and Publishers (JACAP) members are composers, lyricists and music publishers. Lydia Rose shared, “members should not look at the work or the song right now as a cash cow, but look at it as your pension”. She further shared that one sure way writers can earn and be sustainable is registering their songs. This ensures that the members receive royalty fees each time their music plays.
Challenges In Collecting Royalties for Investment
Ms Rose stressed the importance of practitioners learning the industry’s business and joining a Collective Management Organization (CMO). JACAP is an intermediary that collects license fees from music users and distributes the money as royalties to writers and publishers of music. JACAP has reciprocal agreements with its overseas affiliates and, through these agreements, represent millions of music creators. A CMO collects and transmits collected royalties to the CMO’s in respective countries and pays the royalty fee to its members. Additional wisdom from Ms Rose is that the artist must invest themself in the industry. They do this by learning about the industry pitfalls, while divesting the other business responsibilities to experts, such as a manager, lawyer, and accountant.
Options on Investing Royalties
Regardless of the stakeholder’s revenue source, the first steps to financial planning and investment must begin with a proper conversation. The conversation with a financial institution will involve several questions. According to Rez Berchenson, you may be questioned on, “How much do you earn? What is your risk profile, your objectives for the medium to long term? What is your risk tolerance level?” But the artist has to start, from as low as making a $1,000 investment and gradually increasing over time. The artist has many options available to choose an appropriate investment model based on the initial conversion. Rez highlighted that the entertainment sector is a lucrative industry for financial institutions. “Increasingly, industry players have been listing their companies on the Jamaica Stock Exchange to raise capital, as one means to grow their business locally and internationally.”, stated Mr Berchenson.
Legal Global Advice for Entertainment Professionals
“Royalties are there to be collected worldwide, wherever your music is played, publicly performed, distributed, reproduced, etc,” said Sarah. “Under Jamaica copyright law, your copyright in your creative work lasts for 95 years after your death. This will ensure that your legacy through royalties will continue to your heirs for the next four generations.” Sarah reiterated the importance of registering their work while surrounding themselves with professionals to help them organize and invest in building an enterprise. Copyrighting their work allows entertainment professionals to continue earning money while they sleep.
Do Entertainers Have Problems Signing Documents?
Unhesitantly, Sarah responded affirmatively, “There has been a history of exploitation of artists by some people who may know more than they do and also have bigger wallets.” Given this history, she doesn’t find it surprising that some artists are reluctant to sign 20 pages of legal documents. A starting step to overcoming some of these hurdles is engaging a lawyer with experience in the entertainment industry. Additionally, she reiterated an earlier statement that the entertainment professional must gain a ‘baseline understanding of the business personally.’ Essentially, this will position them the do what Sarah calls a ‘gut fact-check’ with their advisors.
Intellectual Property Is Bankable
Sarah shared some information about a pilot program underway by the Jamaica Intellectual Property Office (JIPO), the Bank of Jamaica and other stakeholders. They are “trying to educate local financial institutions how to evaluate the intellectual property, and how to collateralize it to monetize the IP”. In effect, this would allow the earning from intellectual property as collateral against a loan amount. In essence, if there is a default on a loan, the bank could cease your intellectual property.
Rez shared that financial institutions are looking to use IP to assess the financial risk of entertainment professionals. Rez stated that “This method is being used, and [he does] see the upside of it, based on what is present in the marketplace.”
Mistakes That Artists Make
Big Yard CEO Robert Livingstonson shared some mistakes that artists make, “choosing the wrong song, the wrong target market and where they are going.” The artist often has not decided what level they want to take their song or project. Robert said, “If you don’t know how to hustle your way through this industry, it’s very hard, as you can’t claim for unemployment.” Both managers and artists make many mistakes; however, the first action should be to plan to include the target market and how to get there. He highlighted that only a few artists from Jamaica receive huge investments, namely Shaggy, Sean Paul, Bob Maley, and others. Conversely, when some receive investments in their music, they invest in a lifestyle more than their career.
Altogether there was great value for the entertainment practitioners and other relevant stakeholders from this Reggae Month endorsed event.