[Glen Ballard: Understanding Income Stream Opportunities]

I think it's very important for whatever business you're in, and it's certainly in the creative world, to understand how you get paid. Because most people, their passion for music is so strong that they would do it even if they didn't get paid. And a lot of times, you don't get paid. But clearly, as a sustainable long-term profession that you can really invest your life in, it's very important to just understand how it all works.

I mean, just the basic mechanics of how you get paid. Because you're essentially a royalty participant and to understand what that means is that you basically – you're getting a percentage of the profits. But understanding what the difference between what gross and net means is very important to understand. But we do really rely on a very arcane system of sort of tabulating one unit at a time how our music goes out into the world. I mean, it used to be relatively impossible to keep up with before there were things like Sound Scan and there was very easy to manipulate sales numbers. There's a great deal better and more quality information available now to record producers and artists. I do believe that the system is much more transparent then it's ever been.

And so it's relatively easy to find out how you get paid. You get paid every time a record gets sold and to understand what the difference between getting full statutory rate on a song if you happen to write it or if you'll be getting only 85 percent of it, which is somewhat typical in the business. That's something you need to know about because it will affect your bottom-line without question.

Being an entrepreneur now is absolutely essential. I think there's kind of a decentralized trend that I can see. I mean, we still have our big record companies who are somewhat in a moment of kind of reinventing themselves. But because of the Internet and the empowerment of ProTools and logic and the ability to create records in literally a closet, everybody's in the record business now.

So of course, if you want to be competitive on any level, you really have to understand how it all works. I mean, I never thought ten years ago that ring tones would be selling for two dollars and songs for one dollar. It's an interesting paradigm. I mean, it's 15 seconds of music for two dollars and it goes in your phone, and the full song is only a dollar. So it's trying to really understand where the income streams are, and with all the piracy that we've had on the Internet, there's still as many opportunities, and clearly, the next great record company I think is going to come from outside the system.

I mean, it's virtually assured and at a certain point, one of the big record companies will then want whatever that is, the energy of being independent. But as all great independent record companies know, or people who've had independent record companies, it starts with great music and it starts with really having a sense of what's good. And also being somewhat nimble and light on your feet and being able to move with the market. Bigger record companies don't have as good a time with that as – or as easy a time – as small ones, so I think innovation and entrepreneurial attitudes is absolutely essential if you wanna survive now and you have to be. You can't be naïve to win it all.

I think it's very difficult now to make music and get paid for it in the traditional way. The traditional model is not working so great. This is not to say that the sky is falling, but clearly the model is changing and there's going to be a visual aspect probably tied to music now more than ever, and I always encourage record producers to think about the visuals, too. Because when you're making a record at a certain point, some sense of what that's like visually is so needed for you to make an impression, and so even it's just having a camera rolling, it's documenting what goes on is probably a very good thing.

Some of the great records that I've been involved with, we didn't document it and I kick myself now because – in other words, I think I'm saying try and create value out of everything that you're doing. Making a record, or beyond that, really understanding how the whole thing is going to impact in the market place.