The Music Bank

Lars Ulrich, drummer from Metallica, recently said the role of the music label was to be that of a bank. Historically, that was a big role of the label. There was a simple trade off. The label would present seed money to the artist in exchange for an advance to the band. The band was usually in desperate need of money for recording and touring, while the label had hopes of recovering the money many times over through album sales.

Well, that equation has been disrupted. First of all, cd sales are down and the labels don’t have as much money to initially invest in a band. Secondly, up front costs don’t need to be as high as they were in the past. There are more outlets for bands to promote for close to free and to record for much cheaper.

The comment is interesting in this context because Metallica had the luxury of reaping enormous benefits from the record labels. They now have devoted fans and enormous notoriety all around the world. They could go completely in house with their business from now on and probably come out ahead by owning everything.

The question still remains for the up and coming artist. Where do they get the seed money to record an album, purchase equipment, load up on merchandise, and hit the road? I recently attended a music biz discussion where the artist Corey Smith was one of the panelists. He said that he did everything as cheap as he could from recording to tour expenses. This created an atmosphere where he was not as desperate for money, was able to hold more ownership of his songs, and was able to develop on his own.

An added benefit of this strategy is that bands need to be touring to make money to fund other parts of the band. This in turn builds a fan base and hones musical skills.

Even though the pool is full of artists, it has never been easier to take the entrepreneurial route as an artist.

Stay tuned,
Erik
erikrostad.com