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The message is – new business models apply to new bands too

By | Published on Tuesday 20 January 2009

It’s easy(ish) for established artists to shun the traditional record label relationship in this here modern age, we all know that. The costs of producing and distributing music are down, especially if you go the digital-only route on the singles, and maybe even the album too.

Major artists can secure prime positioning on download stores much easier than they ever could have got front-of-store racking on the high street without a major label’s influence and cheque book, and they have the email addresses of millions of fans reducing the need for expensive advertising campaigns.

Where production, manufacture and marketing budgets are required, and the band aren’t willing to fund it themselves, there’ll probably be a brand or venture capitalist willing to write a cheque. Easy. Ish.

Partner an established artist with a good manager, and maybe hire to services of an Absolute label-style services agency, and you’re sorted. No need for a tedious record company to get involved – except, perhaps, as a distributor of their physical product.

But what about new bands? They don’t have the fanbase or the influence. They may need someone to bankroll some development work to get their sound ready for release.

And while brands and money types sometimes claim to be into supporting new music, they only really write sizeable cheques for bands with a track record and an existing audience. However good the artist, however good the manager, you need a record company’s money and marketing support at this level, no?

Well, no, according to Brian Message, who, as a partner in UK management firm Courtyard helps oversee the careers of established bands like Radiohead and Faithless, more recent success stories like Kate Nash, and some newer talent too.

The newly appointed chair of the UK’s Music Managers’ Forum, he delivered the keynote management speech at MIDEM in Cannes yesterday, and while he spent a little time retelling the “Radiohead, aren’t they doing well without those bastards EMI” story, he told the label-exec heavy audience that newer artists could go it alone too.

On Radiohead and their much acclaimed pay-what-you-want digital release of last album ‘In Rainbows’, Message called the venture an example of “artist empowerment”, adding: “The band wanted some control, they wanted to go direct to the fans”.

Although the band and their management have never officially revealed what the average price paid for the album was, Message said the promotion was a success, though admitted that the band’s main revenue earner at the moment is live activity, meaning the album give-away was possibly more successful as a marketing tool than a cash cow.

He told the conference: “A lot of it [revenue] comes from live and Radiohead’s live business has gone up hugely [recently}”. As an example, he said 60,000 fans came to see the band play in San Francisco on the back of the hype around ‘In Rainbows’ – previously they’d pulled in 25,000 in that market.

But, Message argues, not only big bands like Radiohead can shun traditional label relationships, though for newer bands to retain more control of their careers and copyrights they’ll require management willing to take more responsibility and more risk.

According to Billboard, Message told MIDEM: “It has been a quite dramatic period of change. [The management business model] has migrated from easy 20% commissions and having to put up no investment, to having to put up quite a lot of investment. It definitely makes the pips squeak a little bit in terms of taking that risk”.

That means companies like Courtyard investing its own money, or persuading venture capitalists to put forward some cash, into new unproven talent. They or their VCs get a cut of revenues in return for their capital, but don’t take ownership of any copyrights. But will VCs really invest in unproven bands?

Message says yes – “Despite the economic woes, there is a lot of VC money waiting to come into the music business. If you get it right, the returns for an artist as a business can be huge”.

That’s not to say labels are completely redundant. Message manages Rifles and Kate Nash, both major label signed artists. Though when labels get involved, Message says, innovative deals should be struck to suit each artist. Rifles, for example, have a business partner relationship with Warner Music rather than a traditional recording contract.

Of course, some label execs might argue there’s not really any such thing as a “traditional recording contract” and that such artist partnership deals have existed for years. And they’d probably be right.

But I think it is fair to say managers are playing an increasingly interesting role in the deals they do for their artists – new and established – both by doing deals with companies outside the traditional music business, and more innovative deals with the traditional players. Which makes insights from the likes of Message interesting to hear.