Investment in the music business
by J.P. Kallio
I am not in a position to invest into another artists, (not yet anyway) heck I have hard enough time to keep my own solo career a float. But I have enough knowledge to know what I would consider a good investment in the music business. And this knowledge is something all up and coming musicians should learn from. This might sound like some hard facts, but you need to understand what makes you as a musician worth investing in todays music business.
Most of us musicians hope to be “discovered,” but just like in any other business, we need to make sure we are worth discovering. You see emotions rarely are successful guide in business investments. I would not invest in a band purely based on their music. It would simply mean too much work and too much of a risk. What I would be looking for is an artist who’s music is great, live show is spectacular, they have an existing fanbase, who they engage with actively and the artist have the knowledge to make it on their own. You see my help (and the hypothetical investment) would be a push to help them on the way, not to build something from a scratch.
Don’t try to get an investor to finance your debut album. Show them you can do it your self, and do it on a clever budget. To show them you are able to do this by yourself, and offer them a product (your self produced debut album) will make you instantly worth investing in. If you really cannot afford the cost of your album, by successfully using crowd sourcing you also show them that you have a fanbase that believes in you. You see no one should invest in you, until you are worth investing in. And if they do, it would end in tears.
Unfortunately, and I seriously mean unfortunately there are people in the business who are willing to throw money around. This could be because they are emotionally invested ( they like the music, but have no idea how the business actually work) or an inexperienced record label making a silly bet. Either way you will end up wasting other people’s money and end up never seeing a penny from your music (investors expect to get their money back before you get paid.)
The other dark side of the business used to be when the major labels would sign a band, finance an album, but then had no faith in it selling, and decided not to release the album, or release it without any promotion. This left the band in a limbo. Tight to a contract they could not get out of. The major labels ended many bands careers this way. Often you wonder if in some cases they were just buying out competition.
These days the major label investment has dried up. But there are private investment in the music business. There are people who made their money in abundance, and now want to be part of the “glamorous” world of music. But the same rules apply as in any other business investment. As an artist you should not accept investment, unless you know how to make return on that investment. Investors do not only throw money in the pot, they are also advisors, and often can make or a break a stat-up. The investor should not invest unless they have faith in the artist and how they run their business.
So stop looking for that short cut. Work hard to make your self an artist worth investing in. Learn the music business, the current music business environment. And stop banking on a dream that is based on how things used to be.