The Entrepreneurial Artist
Categories: Creativity | Entrepreneurialism | Leadership | Optimism
Posted by
Dean Zatkowsky
at
6:53 PM
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comments
by Dean Zatkowsky
In the April 12, 2009, issue of The Boston Globe, James Reed wrote that "a growing number of musicians are looking to fans, not record labels, to help fund their albums and tours."
I was already aware of this trend, because two of my favorite artists are in the vanguard. Fans funded Jill Sobule's new record, "California Years," while Amy Correia is currently soliciting support for a record she'll be recording this summer. Correia is using blogs, Facebook, Myspace, and email to communicate directly with her fans.
In the Globe, Reed compared the new trend to the old relationship between artist and patron, but I see a different, more entrepreneurial spin. After all, I was introduced to Correia when she opened a House of Blues concert for Amiee Mann, an artist who found her greatest success after giving up on the music business.
Mann founded her own label - SuperEgo Records - after she grew frustrated with jumping through the record industry's hoops. Taking ownership of the business side of things has allowed Mann and other artists to retain greater control over their work, one of the primary benefits of entrepreneurship.
But there are costs, of course. I'm sure many musicians find topics like budgeting, promotion and distribution intimidating or distracting, and these are just three of the numerous responsibilities that fall on the shoulders of the entrepreneurial artist.
Musicians seeking grass roots venture capital do seem to have one advantage over many new business ventures: they already have fans! But I wonder if that existing relationship brings new pressures to bear.
It seems to me that performing artists are always under pressure from fans to repeat themselves, and under pressure from critics to experiment. I asked Amy Correia if she thought the business model employed by her and Jill Sobule, to have fans help finance future projects, might influence her to deliver a more generic "product" for the fans, or if it might increase her confidence to be herself.
"Most of the pressure to perform or do well comes from me rather than from fans or record companies. I believe that people who like my music will like it if I like it, so I try to make music that I like. This business model of looking to fans for financial support will influence things on a practical level at least: It will influence whether I can afford to put strings and woodwinds on songs, for example. I feel more connected and accountable dealing directly with fans. When someone's writing you a check and buying something sight unseen, that's a leap of faith on their part. And I'm held accountable in a different way. That's a good thing for me."
Digital recording and guerrilla promotion make this sort of venture possible and profitable. With the overhead costs of a major label, an artist beloved by only a million or so people is nobody. Authors know the feeling, and appreciate the changes technology has brought. With low-cost self-publishing options like Amazon's BookSurge (where Paul and I published Two Billion Dollars in Nickels), one can generate profitable book sales with a fraction of the units required by a traditional publisher.
By reducing breakeven costs, musicians start making money after the first few hundred records. Theoretically, they still have the same shot at the big time, but now they can make a living in the mean time.
Perhaps individual artists will eventually attract investors, much as Hollywood once attracted hedge fund money. Instead of t-shirts or concert tickets, well-heeled fans might want a piece of the back-end profits for their up-front investment. But before long, such arrangements would resemble the industry that artists like Mann chose to escape.
I'm very encouraged by this entrepreneurial trend in music, because I like to see talented, hardworking people in control of their careers. It's not easy to ask for money, but way back in my corporate life, a coworker offered this seven word master class in fundraising: "If you don't ask, you don't get." Besides, it takes a lot of courage to strap on a guitar and sing in front of an audience. After that, asking for money should be a breeze.
Of course it's not that easy, but the benefits are worth it, according to Correia:
"It's a shot in the arm financially and a real boost to my confidence whenever someone wants to support my music. I appreciate the relationship I have with my fans. I'm feeling the immediacy and reality of it. It's amazing and encouraging. I'm interested in keeping my fans by delivering ‘the goods' and I hope that the music will create more opportunities for me to continue and find ‘my people' and grow something solid. It's a good time to roll up one's sleeves and get to work. I feel like my feet are on the ground and every penny I spend has to count. I'm taking care of business. And by doing that I can better take care of my music."
Responsible, frugal, hardworking, and engaged with customers. Sounds like an entrepreneur worthy of my investment. And my investment in Amy pays dividends every time I listen to her music.
Dean Zatkowsky is co-author of Two Billion Dollars in Nickels: Reflections on the Entrepreneurial Life, and The Entrepreneurial Investor: The Art, Science and Business of Value Investing.
Comments
Jana Gallus wrote on 04/26/09 9:24 PM
Oh, and I just found out something really interesting:
Madonna has also become more independent (now earning the lion's share of the money made with her music) because she left her lifelong record label Warner to get into a contract with concert promoter LiveNation.
For more detail, see:
http://www.guardian.co.uk/business/2007/oct/11/musicnews.digitalmedia
Takeo Kishi wrote on 04/27/09 12:10 AM
While this may be a new "trend" for mainstream artists, I think many artists have been doing this for years, at least since the 1970s. Call it vanguard or not, but many artists within the punk and hardcore scene have followed what is referred to as a DIY ethic in which they take pride in managing their own production, distribution, promotion, etc. I think the key difference is that it is not done in an entrepreneurial spirit. Possibly Correia operates this way because she views it as a profitable alternative, but most musicians that proscribe to the DIY ethic are doing it for ideological reasons. Even the bands and artists that become popular and could greatly profit from signing on to a big label or hawking merchandise decide instead to keep their costs down and remain unsigned. I don't think Madonna will ever fall into this category.
Megan Lopes Cunha wrote on 04/27/09 1:13 AM
If anything I think that an entrepreneurial trend in music business would aid creativity for the artist and also a connection with fans that would not occur under the management of a record label. As a college student and music enthusiast I understand the great power music can have in daily life, and the loyalty one often feels toward a musician. Students will be frugal about buying groceries, but spend the equivalent to a months rent to attend a music festival. With this in mind I think that entrepreneurial musicians could have a successful future if their garner close support from their fans. This trend will also be very interesting to follow especially with the rise in entrepreneurial activity in business.
Dean Zatkowsky wrote on 04/27/09 6:41 AM
Takeo, I agree that many artists have been doing this for a long time, but I don't want to give the impression that Amy is doing this because she feels it will be more profitable. She's doing it because DIY is becoming the ONLY tenable option for many artists, and I feel that's a good development.
She told me that she's had great experiences with record companies and "No one can do it alone, but the old model of giving away all the rights to recorded music 'in perpetuity throughout the universe' doesn't work for me."
Plus, while all artists have always been ultimately dependent on their fans for financial support, the "new" part of this trend is that artists are seeking the support up front, effectively turning consumers into investors. I think that's interesting, but it's got to be stressful for many artists.
Thanks, Z
Larry Prodehl wrote on 04/27/09 6:45 AM
I have a new love. Back to that later
Dispatch was a great band out of the East that never signed a label. Considered one of the best of the "Indies"
Neil Young refused to record an album, becuase the label was telling him what to write.
The word is on the streets, and I support this.
http://www.playingforchange.com/
Let's tell a story.
Ryan wrote on 03/10/10 6:39 AM
Great article! with the music industry dying it's great to see new artists trying to take a new approach. as we hear all the time a down market is one with lots of opportunity. i look forward to passing this on to my friends who are musicians trying to make it...along with millions of other people. i think the most important thing is to have a strong connection with the fans and what easier way than using the internet to blog, tweet, etc to connect with them
Jana Gallus wrote on 04/26/09 9:13 PM
This is a very interesting development that I had not yet heard of. But it makes sense! And I can imagine that in these days where youtube etc. make it harder to earn money with your CDs, this close relationship with fans you already HAVE is something very important (similarly, isn't most of the money a company spends for marketing targeting at KEEPING their customers instead of gaining new ones?).
Still, I also think it might be harder for musicians to "change track" and go into a completely new field of music. (Would Robbie Williams fans have helped him go into this 30 years style, or whatever it was?)
And what about newcomers?
So I think this model works very well for artists who really have established themselves, and maybe even a kind of a cult around their personality - making fans stick more to the person than to the music and thus allowing the artist to experiment freely.