Valuing IP in a Church Setting

If you are just joining us, we started by identifying just exactly what church musicians and worship leaders actually do…create IP. Yesterday we explored how IP can be valued in the marketplace…including a description of the 1000 true fan economic model. Today: how do we value IP in a church setting?

We could use the 1000 fan model, of course. Here are a couple of possible ways to do that:

quantity sold of worship leader/choir/orchestra CDs/DVDs/Books

This is fairly self evident, and, like the boutique winery model, uses a product based upon IP as the determinant. Here’s how this model works.

You make a recording of your music, or your worship team, or your choir, or a compilation album including all your musical ensembles and/or soloists, or a book, or DVD

You count how many you sell

Of course it is not quite that simple, but you get the idea. If you make 1000 recordings, and sell them all at an average price of $10, the IP created by the chief musician/worship leader for that project can be valued at $10,000 gross, and, depending upon the amount of royalties, production costs, marketing, etc., perhaps considerably less at net value.

attendance/membership/giving of the church at which you serve

This is much more subtle, and subject to some interpretation, but go with me for a moment. Suppose a church has a membership of 1000, a weekly attendance of 500, and a weekly average giving figure of $10,000.

The simplest way to value the IP is to look at the budget. If the music/worship budget, in the above scenario, is 10% of the church’s global budget, the musician/worship leader’s IP is worth $52,000, less whatever value the rest of those engaged in the program contribute.

Ah, but here’s the problem. Would the rest of those engaged in the program produce the same value of IP without the leader?

In the secular marketplace that question is not typically asked. There, the equation is: How much does a company gross/net/return to its stockholders? The CEO produces that value, and thus is compensated on that value. This leads to the often referenced problem of “Wall Street Salaries.” What the public may consider excessive can make complete sense to a company board of directors, due to the value of what the CEO (or any other employee) brings to the company bottom line, and comparing it with what they might have to spend to replace that person with someone of equal value to the company.

Here’s the problem, from the church musician/worship leader’s perspective, with applying the secular model: the church’s de facto CEO is the pastor. You can make a case that the church musician/worship leader is the “President of the Creative Division,” or that they are the “key employee,” but two realities remain: the person at the top of any organization gets the credit (and the blame), and, even more importantly, in any disagreement between the pastor and a musician/worship leader, the pastor always wins.

Next time: Where else does the musician add IP? Does it matter?