Remake, Remodel: The Evolution Of The Record Label

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Beyond the financial: investment in nurturing talent
Brian Message believes that over-investment can crush acts’ creativity. He describes an
artist on his books that spent £150,000 making their first album, £25,000 on album two
and he estimates the next one will cost nearer £12,000 when it is finished. He says that
belief and trust in acts is of paramount importance – and in such circumstances,
investment can be kept tight.
The fact that this money is non-returnable in unsuccessful cases is important.
One label MD we spoke to commented, ‘Venture capital (as a source of investment) will
come after you and want that money back and shut you down if you don’t give it back.
Record companies don’t do that.’
But mainly the fact that it comes bundled with a set of skills and expertise from the
record label has probably resulted in labels continuing to be the dominant source of
finance.
For new acts, this is especially relevant, with Martin Mills commenting, ‘If you are
developing a new artist, I’m not sure if money is where you need to start. You need to
start with buzz and profile.’
Shabs Jobanputra says that it isn’t as simple as just funding a record. ‘It’s about how you
take it to market,’ he says. ‘It’s timing. It’s understanding. It’s nuance. Hundreds of tiny
decisions in a campaign that can lead to success or failure.’
Alison Wenham states, ‘Investment is not just about money. It’s belief, it’s infrastructure,
and it’s administering and promoting rights around the world.’
‘The power is where the money is’
Emma Banks.
The financial sector remains very reluctant to invest in the creative arts, preferring to
put their money into tools and services such as SoundCloud and Songkick. They will,
however, back creators and copyright holders with a proven track record and a clear
revenue history.
This means that, for investment in new talent and those creating new IP, the onus once
again falls on artist managers, publishers (to an extent) and a few fan-funded vehicles;
but the biggest backer of this new creative talent remains record companies.
One artist manager informed us that most investment models are not interested in new
acts so for a breaking artist they have to rely on a manager making that initial
investment and they will then take the act to a label to bring them to the next stage. The
City was not, they said, prepared to get dirt under their fingernails in this way.
For Emma Banks, the best approach is to invest, take a cut of ancillary income but not
necessarily insist that you as an investor are the best person to run the other areas of an
act’s career (such as merchandise).
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