MUSIC INDUSTRY BLOG

Terry McBride’s Nettwerk Music Group, (home to Jamiroquai, Barenaked Ladies, and Sarah McLachlan), live music and media behemoth Mama Group Plc, and Brian Message’s ATC Management (manager of Radiohead, Faithless, and Kate Nash), combined forces to create Polyphonic, a new artist investment and development company embracing the 360-degree model, Music Week announced yesterday.  The company has committed more than $20m for its first year of operation, marking significant additional capital thereafter, to provide “an important funding option for artists” asserted Brian Message adding “ATC and Mama have co-invested in a number of new artists over the last three years and Polyphonic marks the next iteration of that business. Now, together with Nettwerk, we want to be working with a much bigger group of artists and managers and the capital we have available makes that achievable.”

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Further to my post about Nimbit on the 8th March, I had a chance to communicate with the company’s Co-Founder and CEO, Patrick Faucher, this week regarding my comments.  Here is his response:

Interesting observations.
You may have overlooked the fact that we offer the only fully integrated storefront delivery system that allows you to sell, bundle and fulfill both physical and digital goods.  Also, our download card system actually drives the fan to redeem the product directly in the artist’s storefront, which is key to creating repeat customers and cross-merchandising.  One thing I can say regarding Reverb, Tunecore, etc. is that we don’t see them competing with our core business, which is direct-to-fan commerce. The reason why artists tend to stay with us is because they make more money overall, it’s easier to manage their business, and more sustainable.

I encourage artists to take their career into their own hands, self-manage and self-promote.  I believe that this is a prerequisite in today’s music industry and taking greater control of your assets will ultimately yield greater results than relying solely on third parties.

Needless to say, I’m not the only one who thinks this way.  Technology has created a gateway to music fans and the entrance through it is cheaper and more accessible than ever before.  As such, there are services available, free and not-so-free, catering to every imaginable aspect of a musician’s career, founded upon the DIY paradigm.  From music-friendly analytics and publishing tools to online collaboration and direct-to-fan distribution solutions, there are countless specialized offerings out there gaming for a stake of the massive independent artist market.

Now, a new service has emerged with the aim to assist artists in personal organization and management.  A one-stop-shop for accounting, task management, scheduling, and almost every other administrative task associated with the music industry, Bandize hopes to help artists clean up their act.

Currently a by-invitation-only service, the company may be over reaching by expecting artists ? essentially a community suffering from attention deficit disorder ? to take to a CRM solution.  Most artists are not facing complex cash flows and a diverse and demanding clientbase to truly take advantage of Bandize’s full suite of organizational features, including “Asset Management” which is bordering on ludicrous.  Those that are can probably justify hiring an intern, assistant, accountant, or personal manager as a business expense, by my estimation.  I did, however, enjoy learning about the company’s one-click data syndication, a simple yet powerful feature which enables users to post just once for all of their online properties.  That makes perfect sense.  It saves time and ensures that marketing messages and general communications remain consistent.

The site looks good and I completely support artists who wish to get organized and disciplined.  I just don’t believe that they will.  It’s like cleaning your room or taking out the trash.  There’s always something better to do.

Motley Crue’s guitarist, Mick Mars, has struck a deal with the celebrity services division of Paid Inc., a new media company with a strong focus on online relationship and ecommerce solutions for celebrities, to build a brand new website at www.MickMars.tv  and host a range artist-to-fan relationship features to maximize Mars’ online presence.  In addition to offering Mar’s musical portfolio, the site will introduce  new and exclusive guitar clinics, educational resources, and personal performance tips and video demonstrations.  There will also be a strong focus on authentic Motley memorabilia and a new line of merchandise, all under the Paid Inc. celebrity brand management umbrella.

In the point of view of the booking agent, you – the artist – must be in place in your career that you can attract enough paying gig-goers to your show, do so frequently, and with consistent growth to justify the booking agent’s efforts in exchange for his 10% (sometimes 15%) cut.  Unfortunately, most developing artists, even those with a small but loyal following, are not attractive enough for the reputable booking agents to pursue.  Much like talent scouts, booking agents will sometimes take a chance on an act that they believe will develop successfully and provide a handsome financial return in the future, but this is a relationship that is both difficult to pursue and cultivate and its terms will be strongly in the favor of the booking agent.

If you’re not a savvy manager yourself, find an artist manager before looking for a booking agent.  Keeping in mind that your manager sees a cut of everything you do whereas the booking agent only sees a cut of your live performances, statistically, a manager should be easier to sign with because he is spreading his risk on all of your musical assets.  Your manager should already have music industry connections and a way in to discuss tour scheduling opportunities face to face with an established booking agent, rather than making cold calls yourself.  However, if this is not the case, at least the booking agent can see that you were talented enough to attract an artist manager in the first place and, therefore, worth attending your next show.

The multi-national booking and management agencies such as The Agency Group and William Morris Agency prefer to see that you have financial backing, usually in the form of a label contract.  This, if nothing else, ensures that the label can afford to finance your tour and even take a loss for the privilege of ‘breaking’ you.

Whatever the arrangement may be, everyone involved wants to make money.  As such, it’s your responsibility (or, better yet, your manager’s responsibility) to show that you are a great investment.

Typically, an artist manager receives 15% – 20% of the artist’s Gross income or 50% of the Net income.  I personally like the 50/50 model.  15% may not sound like a lot but keep in mind that the artist is responsible for expenses and if the artist is a four member band, you can guess who gets the biggest piece of the pie.  The artist manager is often the primary reason why the artist sees any money in the first place.  As such, a good artist manager deserves to be rewarded for his efforts, expertise, contacts and, above all, risk.  Besides, 15% – 20% of the gross is often the same as splitting everything down the middle.  In addition, the artist manager may negotiate a commission based on new deals he closed during the course of his relationship with the artist.  This is to protect his investment long after the contract has terminated and he and the artist have gone their separate ways.

A no-commission management deal, whereby the artist pays an artist manager or management firm a salary or ‘retainer’, is a relatively new contract model in the music industry.  The artist has the power to hire, fire and negotiate with his management.  The artist manager has a certain degree of ‘job security’ but can not reap the rewards of a huge commercial success.  No points.  No success fees.  Simple.  And the artist is in control.  This is similar to the way PR companies operate and charge for their services.

At the negotiation table, the terms of the deal, regardless of the type of payment model, should be in light of the degree of financial risk the artist manager is expected to undertake by the artist in the event that the artist can not pay upfront.  Considering that financial institutions define the terms of a loan by assessing the degree of financial risk, it is reasonable to expect an artist manager to be compensated based on similar projections.