The update of V11’s website has inspired us to review some articles written over the past year and evaluate their relevance today.   This post was originally published in March 2008, just after SXSW’s music conference.

Recording costs have never been lower for musicians.  Still, a few thousand dollars will be difficult to handle for just about anyone, especially in these times.  Some musicians have tried Fundable.com, where they ask fans to make donations for recording and touring efforts in exchange for free merchandise and perhaps a guaranteed local show or private show.

Just a thought, but has the potential to make money from recorded music diminished so much so that nothing like what was presented in this article could even be considered at this point?

Original post:

There was a lot of talk at 2008’s South by Southwest Music Conference in Austin about how music label agreements were now being called “Branding Agreements” – the basic idea being that the physical distribution aspect of what a music label did in the past is no longer as necessary because of digital distribution, so their role is now being repackaged as a branding and marketing machine.

This is a completely sensible adjustment, and it is reasonable to assume those labels have the talent and ability to brand and market as well or better than anyone else. Unfortunately, the labels have not fully adjusted their demands for rights from artists to properly account for the fact that branding and marketing support is not as valuable as the ability to coordinate physical distribution of CDs. Thus, many artists are forced to seek other avenues of support from the marketplace.

William Stenner’s request for  an investor on music blog Evolvor.com reveals the true need for emerging artists before they can worry about marketing and branding is capital.

“What I’m looking for is an investor. That way I don’t have to sign with a record label. My offer is 50/50 the investor’s name will go on the copyrights that way for the lifetime of the song payment will always come in some way shape or form. Maybe I’m getting ahead of myself but a recording deal is such a rip off. I don’t want an exec mentioning my name at a lunch and then charging it to me or taking it out of my royalties just because my name was mentioned in a “Business Luncheon”. I would need someone to pay to get my album recorded. It runs me about $600.00 per song, I need to get 10 songs recorded, I already have 3. So thats about 6 grand. Then I’ll need to get them printed and pressed which would be an additional $2500.00.”

So this model proposed by William provides for 50% of the rights in his music in exchange for funding of about $8500. I would imagine it assumes he (via the internet and other means) or another entity (perhaps out of William’s 50% share) will assist with marketing.  Under this Production Funding Model, the percentage given up by the artist(s) would be directly related to his, her or their bargaining power and/or perceived talent level at the time, so it could be 30% of rights, 50%, or anything the parties agree to. This would be similar to a venture capital investment model where a venture capitalist purchases a certain percentage of a company based on the perceived value of the company at the time, and that money is then used to create the product and market it.

I think there is potential for a scenario like this. After all, there are three areas of music that support a musician’s success: distribution, production and marketing (these three pillars are sometimes referred to as “the Tripod”).

A label previously performed all three aspects of the Tripod and technically provided funding for them as well. However, distribution can now mostly be handled online (See TuneCore, among others). And marketing can be performed by the artist or a public relations (PR) agency, or both. This still leaves production, and thus, William’s plea represents this unfulfilled need in the marketplace for some musicians.

Perhaps the next step will be groups formed for the sole purpose of providing investment in musicians as if they were entrepreneurs, with the money used by the artist to hire others to help with production, branding and marketing.   As with everything else in the music industry, time will tell…

Wow! Thanks for narrowing it down! And thanks for adding a link to my
website. It is a risky investment for investors but if a song gets
licensed for a commercial or major motion picture it could have huge
repercussions, especially if a movie turns out to be a classic. Some songs
can also flop. I guess it all just depends on the marketing strategy. I
believe 50 % is a fair charge because most artists only make a very small
percentage of profits obtained by the major recording industry. Im just
too poor to record anymore and I am crying out for someone to believe in
me as much as I believe in myself.

Have a great day!.

-William