The myth of lucky is now a childish story. It was very useful for the major companies of the music industry to sustain that fairy tale concept so the investments in this sector would be through them. Most people in general, including some people that work with music, don't see this industry as profitable as Tech and Startups because most strategies and companies in the music sector don't share their studies and projects. It's not seeing as a popular investors sector, because it lacks of popular information. So every success is covered by untangible adjectives instead of clear study and improvement. But as the music industry had to evolve and accept technology not only on the production area but the distribution too, the numbers started to show and they are so big that is impossible to buy the idea of " You just need to find the talent " or "Good music speaks for itself " when you see that major companies invest 4.5 billion of dollars in marketing and A&R per year, so 26% of their music revenues goes to this sector, also pointing the average investment in the marketing and promotional sector is US$200,000 to 700,000 for a single emerging artist. If it speaks for itself why they invest more in marketing and promotion than the US$150,000 to 500,000 that is the average investment in the music production of the same emerging artist. You don't often see people talking about that music companies are spending more on consumer insights to take more advantage of marketing platforms, that one of the keys of using streaming services is to have target in a more effective way individual groups of consumers... And just by knowing that "The major labels combined have around 7,500 artists on their rosters and tens of thousands more are signed to independent labels." - IFPI - and the total investment in average to an emerging artist is US$500,000 to 2.000,000, is very weird that this is not a headline. If this is the usual cost of one of the 7,500 artists and is spend 4.5 billion per year in this sector, how much should be the profits? How much should be profits over a song, over a hit, since US$150,000 to 500,000 is invested on an album of 8 to 14 songs but only 2 to 3 songs will be really considered to be a hit. How many incomes a single artist can make that worths this usual investment in new names per year? Is not enough saying that the opportunities for incomes over the artist are really huge from live to merchandising. It needs to be clear that independent record labels are now startups, and more than 54% of our revenues are digital, we are the art with technology, not only on the distribution but also in the performances. Remembering that a song can earn royalties for more than a lifetime and faster than most products of most of the other industries since the payout of streaming is every 3 months and a good strategy, might take a song to more than 1.000,000 plays in a month, on an emerging artist. This represents one of the incomes and how fast is profitable without considering performing rights, tours and many others.
I'm 25 years old, I'm an artist of EDM, singer, songwriter, producer, writer, and columnist, I own a record label in the USA and one in Italy, and I've studied the music market for the last 5 years, my experience varied from independent to major record labels, from South America, Europe, and US market. I'm an insider, but many of these numbers are free knowledge, I'm just saying that things evolve and this is a Tech and Startup business, the strategy is successful, but some crazy ones wants more. I'm not afraid to reveal what is there, because entrepreneurs like myself want more.
The Kraken Music