steven100

My music lawyer friend in his post on our site http://www.totalinvestor.co.uk/a/blogs/show/433 has as asked how one can make money out of music these days? Any thoughts? Record Labels The recent news that HMV the largest and only remaining record shop chain in the U.K. is soon to close one of its flagship Oxford Street branches speaks volumes about the state of the music industry and how income sources have changed. As a result record labels from small to large have had to drastically alter their marketing strategies. No longer are established artists guaranteed to sell millions or even thousands of their back catalogues. Likewise new and emerging artists do not expect to become successful or make money from record sales. So where does this leave the record labels? The primary role of record labels used to be simple: invest in promoting an artist and sit back and watch the sales come in. This method has proved less and less effective in the last 10 years. Slowly each and every label is now looking at alternative income streams particularly through online sales and live/merchandising revenue. To be successful in these areas it is NOT just about having investment-it is about knowing how to invest. As the Internet is a constantly changing medium this has meant that labels have to find cutting edge methods of promoting online. Such promotion needs constant monitoring, which is why online marketing and promotion has become a bigger industry than the previous “safe” area of physical promotion. For any potential investor this means they need to know where their money is going and how it will be used. The methods can literally vary from artist to artist based on numerous factors. To make matters even more complicated for an investor, labels are now offering what is known as 360 deals whereby they offer recording, management and publishing services. It does of course make business sense to keep everything under one umbrella and increase your revenue streams. However I have seen labels that are simply jumping on the bandwagon because they think they have to offer this type of deal. It means that some are ill prepared for the pitfalls that each role may bring. So this brings me to conclude that innovation is the keyword here-for both the labels and investors. All involved parties need to be on the same wavelength as they are likely to endure a rocky road to success. My next blog will focus on the artist or the band and look at how investment from non-industry sources can still work.