Saturday, November 23, 2013


Perhaps the most commonly misunderstood part of launching a young artist's career is the notion that unless they are signed by a major record label, or any record label, they haven't arrived or aren't a professional artist. Strictly speaking, if they are being paid to perform or people are buying their music and merchandise, they are professional singers. The fact that so many adult professional singers go through tough financial times in their career doesn't negate they are professionals. Some just have the fortune to have their music selling and getting bookings.

So, back to the point of being signed.

As recent as 5-10 years ago, being signed by a record label usually meant that the tough road of financial investment was being eased by a business partner who saw a way to make money from the artist. However, nowadays, that isn't the same picture.

For the sake of simplifying the analogy, I'm going to speak of an artist like a start-up business. A record label is like a bank. Using this premise, consider the following.

A start-up business usually has a new brand in the market that is just being discovered. Their product/service is probably something that exists in some form, but unique enough to garner a base of customers to patronize them. Most new companies have some sort of financial budget to get started and most use that budget to create their product/service. Very few have a big enough marketing budget to promote themselves to grow rapidly. Very few have a lot of staff to manage the daily business effectively and therefore, they are limited in growth based on the owner's 24 hour a day schedule.  Now imagine that owner talks to a bank and presents their business plan to the bank in anticipation of a loan being given. Most banks who invest in businesses are leery about giving loans for small amounts because their portfolio of investments are usually needing to be bigger returns that a simple interest personal loan. So, for example, when I first started my marketing company, I went to a few banks to discuss loans and they reviewed my business plans and felt I wasn't aggressive enough with my vision to justify their investment. It was a shock that a $50-100k loan wasn't of interest to them. For me, it was a fortune, for them, it was small change. They are more interested in clients (borrowers) who want to borrow BIG money. Big money=Big returns.

Major labels are like that. They want an artist which has a Big need so they get a Big return. Now the analogy breaks down here a bit because all starting artists need a lot of money to move forward, but the point being that a major label needs to see a comprehensive and proven business model that already exists, not one that "could" exist with investment. This is where most artists and parents fail to understand big labels. Today, they aren't interested in investing in risk. Today they are interested in investing in well established businesses, that may not be national, but have a proven track record of customers and revenues, start up experience, etc. They are looking for small businesses to invest in.

So this is where the INDIE part comes in.

The INDIE artist is a small mom and pop business that has a regular customer base. They have established routines and methods they've developed to keep customers happy and possibly show consistent income.

Most artists I know, including Spencer, have yet to realize a profit from doing music. However, if you can do a live show, make a paycheck, sell some merchandise, sell some downloadable music, you're well on your way of becoming a potential artist for a big label.

What makes this black and white comparison confusing is the world of social media.

Enter the wrench in the machine.

Social media like Twitter and YouTube has made this world of small businesses (artists) seem different than it really is. A parent and young artist can get tripped up into believing if they have X number of followers, or X number of views on YouTube, this means they are a proven small business worthy of being signed by a major label. Essentially, they've proven they can garner attention of consumers, but honestly haven't proven they can "live" the lifestyle of an artist (on the road, giving media interviews, etc. See my earlier post THE CHECKLIST OF ROUTINE) They haven't proven they can "sell" their product for $$$. And reality is, labels are banks needing a return on their investment. If they don't see that artists can make money from the fans they have, then there really isn't a business there. It's just a hobby like playing a pick up game of ball at the local park.

Social media (a topic for another post) is why most young artists are even being recognized today. In the past, an artist never got attention unless they had a platform of a national TV show or were connected to some mechanism to perform live at a lot of venues in a geographic area. Talent scouts (called A&R's) from labels would discover young talent that way. A&R's used to review demo submissions and spend huge budgets to scour the industry for the next big thing.

Now, with social media and wide access to the internet, it is much easier to discover new talent. And because it is easier to discover, the rules of discerning those worthy of consideration also have become easier.

There is no shortage of supply of highly talented artists. This is a fact. Major labels are not suffering from finding highly talented artists. They are suffering from finding artists they can make a return on investment.

This is where INDIE versus SIGNED ARTISTS becomes so interesting.

The question is this. If a major record label only signs artists that they believe have proven ability to make money, then why not just stay independent and keep the money yourself?

Great observation. Short sided justification.

The fact still remains that major labels have the "networked relationships" with all the major retail outlets for music (online and offline) as well as the gatekeepers of major venues and radio. Frankly, major labels still have the highest influence with those necessary public platforms which are needed by artists to succeed.

So, while it's possible to make a nice small business out of being an INDIE artist, national prominence and discovery usually comes from a big label recognizing the "business value" of a successful INDIE.


Become a successful "business model" before assuming getting signed is viable. There are certainly lottery winners in the world of the music business where they shortcut the norm. But wisdom says to plan for the norm... which is a lot of hard work building a business that you hope will be strong enough for a big label to consider a worthwhile investment. Having an artist understand this work ethic and the time it may take is the best advice I could give. It may happen overnight, but it most likely won't. It most likely will happen after working long hours and investing a lot of resources into the business (INDIE ARTIST) before a major label will even consider talking to you.

No comments:

Post a Comment