An Artist’s Net Worth Part 1: Accounting for Assets as an Artist

by Global Brand Appeal (GBA)

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An Artist’s Net Worth

Part 1: Accounting for Assets as an Artist

By: Anthony Villiotti

 
dollarkeyIf you remember back to last week’s post on the economics of the music industry, we concluded with the fact that in order to be successful in the industry, you must run your music career as a business.  (See article: The Economics of the Music Industry: 5 Guiding Principles).  That means you must keep up with appropriate bookkeeping, be conscious of legal issues, and of course, keep a record of your current position.  Call it your, ‘balance sheet.’

A balance sheet reveals what you have in assets and what you have in liabilities. Official and technical balance sheets have another section called ‘owners equity,’ but for the personal use, we omit that section.  We use this sheet to compare what you own (assets) to what you owe (liabilities), and the importance of each account. Most importantly, you can calculate net worth as an artist by subtracting the amount you have in liabilities from the amount you have in assets.

In this article, we’re going to talk ‘assets.’  I’m sure you all are familiar with what an asset is, right?  You probably know it as something that’s good and beneficial – almost there!  An asset is something that generates income by itself or can be sold; either way it adds value to you as an artist.  For instance, as an upcoming artist, your equipment (i.e. CD’s, prepaid studio time, etc.) – is an asset.  Your equipment helps you generate income by playing an instrumental role (pun intended) in creating/building your product.  However, not all assets are “physical.”  There are things called ‘intangible assets,’ meaning that they provide some sort of value, but they can’t be sold.  As a recording artist, your biggest asset – tangible or intangible – is your brand…which is broadly defined as “a kind or variety of something distinguished by some distinctive characteristic.”

For example, Rihanna runs her brand as being a bad girl with no regrets, as evidenced by her instagram handle, “badgalriri” or her infamous tweet regarding her behavior at Coachella.  Now, think about why Rihanna is so successful. Is it because she is a musical mastermind and a lyrical genius?  Not necessarily.  But people love her brand as being a tough chick that takes control, which leads to people looking up to her and following her.  Rihanna’s brand is her biggest asset, not her equipment.

There are other intangible assets that artists must account for in determining their net worth.  Lyrical assets are one of them.  Bob Dylan’s songwriting skills were a valuable asset to him, whereas his voice was not so valuable of an asset.  Speaking of, some artists have a great count of vocal assets, such as Mariah Carey or Beyoncé.  If you think about it, these assets do provide the artist with additional income (the ability to charge higher prices and create more demand), but they can’t be traded in the marketplace.  You can’t sell intangible assets; neither Mariah nor Beyoncé can sell their vocal cords on eBay.

Next time you’re evaluating your current position of value, do not just resort to your wallet or online bank accounts; instead, take the time to analyze what you have going for you as an asset that you can build on and turn into an advantageous feature.

Global Brand Appeal (GBA)



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2 Comments

  1. 15 February 13, 12:41pm

    [...] back to your artist balance sheet, (See article: An Artist’s Net Worth – Part 1: Accounting for Assets as an Artist), you’ll quickly remember that your brand is your biggest and most important asset, meaning that [...]

  2. 08 February 13, 12:21am

    [...] week, it’s very important to have an accurate picture of your worth as an artist (See article: An Artist’s Net Worth – Part 1: Accounting for Assets as an Artist).  Now that you know what you own (assets), it’s time to figure out what you owe, or what’s [...]

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