Is there a place for Entrepreneurs in music today?

The music industry has changed radically over the last decade or so.  Starting with the rise of Napster, then moving to iTunes, YouTube, LastFM and Spotify, a revolution has taken place.  Far more people listen to free content than ever before – and by that I mean content that they’ve elected to consume, not that which they’ve had pumped at them by DJs who were ‘influenced’ by record firms to play particular records.  Now even the big record companies are struggling to make money based on their traditional model, so what place is there for the small entrepreneur?  Normally, the internet favours the bedroom businessman – with low start-up costs and overheads, and an emphasis on creativity rather than capital.  This new world order should make the music industry ripe for a takeover by start-ups.  But as even the larger, established firms are floundering, what opportunities are left?  This is the question I attempted to find the answer to at Music 4.5.  It was, quite literally, an underground event where the bigwigs of the music industry got together to announce the latest research and swap trade secrets.  This gave them the opportunity to carve up the market for the coming years, and give each other a hand-up in achieving market dominance.  If you are an entrepreneurial artist looking to break out, or an aspiring music mogul, this was the place to be.

The first insights into the industry were provided by Scott Cohen of Orchard, who unveiled some new research on who’s spending what, who’s buying what, and who’s going where.  If you are trying to access a market, then you need to know where the money is.  For reasons of commercial confidentiality, I’m under strict instructions not to reveal the full results of the research.  However,  I can let you know a couple of snippets.  For example, where you aware that ‘Music Obsessives’ make up a large portion of the total spend in the industry?  These are people who may rip an album the day it comes out because they can’t get to the shop, but then the next day will go out and buy the physical CD – even though they’ve already got the music for free?  Sounds crazy?  This is one of the markets you’ll be chasing, so you best get your head round it.

Later, one of the most relevant talks for the entrepreneurial artist came all the way from Sweden, in the form of Patrik Larsson of Headlock.  His talk detailed, among other things, how many of Sweden’s biggest names are shunning record labels altogether and managing their own careers without ever being signed.  By booking their own appearances at festivals, and arranging their own recording sessions, these bands retain total ownership of their catalogue, and only need the help of record companies for publishing and distribution.  They need never give away their rights when doing so.  So, if you’re the next Dizzee Rascal, think twice before falling for the charms of the smooth-talking A&R man who’s pitching for your business.  Who’s pockets will your beats and rhymes be lining?  If, however, you don’t know one end of a mic from the other, you’ll doubtless have noticed that the role of the traditional band manager can now encompass most of the work that the record company would have previously undertaken.  So if you’re a budding pop mogul, the current market may mean it’s easier for you to get started in the industry that has been the case previously.  Could you be the next Stock, Aitken or Waterman?

No music event would be complete without a discussion about technology.  With so many players in the digital music delivery market, there’s no secret it will be hard to break into the market and become the next Spotify or iTunes.  Difficult – but not impossible.  If this is your aspiration, would you know how to reach the goal?  Do you know how to get the labels onside, with their enormous and valuable back catalogues?  Do you know which label you need to approach first?  I’ve got a few cute ideas – because I turned up and learned from Gregor Pryor – a big-shot music industry lawyer at Reed Smith, who’s been involved in these crucial licensing deals.  Really, you should have been there…

Finally, for the Angel with a few quid to spend, there was a beauty parade of music industry start-ups.  If you had a great new idea for anything from a music player on your phone to a ticketing system for bands in your niche, then you’d have had the chance to sit in front of some music industry bigwigs and pitch for money, and also get feedback as to whether your idea was as brilliant as the CD or as awful as the 8-track.  I found a couple of new businesses to pique my interest, and had a later meeting with one of them.  I still might pursue the opportunity.  These finds are like diamonds – extraordinarily valuable, but rare and often buried in unimaginable quantities of muck.  Without making the effort to go to events like Music 4.5, you’ll never find them.

The event was held at the trendy Adam St. club in central London.  This half-day workshop was a precursor to the main Music 4.5 event, to be held in November 10th at Cafe de Paris.  If you’re serious about entering the music industry, then don’t miss it.  Check out www.music4point5.com/conference.html