The Music Business Buddy
A podcast that aims to educate and inspire music creators in their quest to achieving their goals by gaining a greater understanding of the business of music. A new episode is released each Wednesday and aims to offer clarity and insight into a range of subjects across the music industry, all through the lens of a music creator for the benefit of other music creators. The series includes soundbites and interviews with guests from all over the world together with commentary and clarity on a range of topics. The podcast is hosted by award winning music industry professional Jonny Amos.
Jonny Amos is a music producer with credits on a range of major and independent labels, a songwriter with chart success in Europe and Asia, a senior lecturer in both music creation and music business at BIMM University UK, director of The SongLab Ltd and the author of The Music Business for Music Creators.
www.jonnyamos.com
The Music Business Buddy
Episode 28: Exploring the Role of Fintech in the Music Industry
Could fintech be the game-changer the music industry has been waiting for? Discover the intriguing insights of my previous guest, Keith Jopling, as we explore how financial technology is revolutionizing artist funding. This episode of The Music Business Buddy offers an eye-opening look at how fintech innovations are empowering artists to break free from traditional record label constraints as I explore new financial pathways that artists can now access which could radically alter the creative dynamics between artists and labels.
Join me for a compelling insight on the future of music funding and the challenges that record labels face as fintech gains ground. Let's delve into the internal dynamics of record labels, exploring how traditionalists might resist the change, and how artists can gain more control over their careers with fintech. This episode is essential listening for anyone fascinated by the evolving music industry landscape and the exciting possibilities fintech offers to musicians worldwide.
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The Music Business Buddy. The Music Business Buddy Hello everybody and a very warm welcome to you. You're listening to the Music Business Buddy with me, johnny Amos, podcasting out of Birmingham in England. I'm the author of the book the Music Business for Music Creators, available in hardback, paperback, e-book format. I'm also a music creator with credits on a variety of different labels, as either a writer or a producer. I'm a senior lecturer in both music business and music creation. Wherever you are, whatever you do, consider yourself welcome to this podcast and to a part of this community. I'm here to try and educate and inspire music creators from all over the world in their quest to achieving their goals by gaining a greater understanding of the business of music. Okay, so in today's episode I'm talking about fintech and the role that it could be playing in the music industry as we move forward. Now, this subject came up in a conversation that I had in last week's episode with the fantastic Keith Jopling. Let me just draw your attention to something that he said during the interview that we had.
Speaker 2:One of the fundamental things that I can see around the corner is a shake up in funding. Okay, I mean, that agency I talked about, that I worked at before Spotify, was partly financial services and I said to those guys before I left you're doing all this work in financial services. Fintech's going to be huge. Just get into FinTech now.
Speaker 1:All right, so let's just simplify things for a minute. Let's just go into what fintech is, right, it's a hybrid word that is short for financial technology, and it refers to the use of technology to basically improve and innovate financial services and processes. Right, so it encompasses a wide range of applications, from mobile banking and payment apps to blockchain technology and AI solutions tailored to financial sectors, that kind of thing. So they deal with lending and borrowing, investment insurance and also a lot of connotations to cryptocurrencies and the awareness of cryptocurrencies and the blockchain in general. So, you know, fintech companies basically offer, you know, a kind of innovative, inclusive, cost-effective approach, right, but where does this all sit with the subject of the music industry?
Speaker 2:Let's go a little deeper into that, and this is what Keith said so I think fintech is on the way to solving artist funding.
Speaker 1:Okay Now, traditionally, you know, record companies have been the people that have been there to fund an artist, to take the risks on the campaign, and we'll come back to that subject of risks shortly. But I was interested see what keith's take was on where this subject sits with labels, and this is what he said it's going to be really interesting for the labels, because it's one of the strongholds of a label is we can still.
Speaker 2:We're still the guys you come to for money and most creators need money.
Speaker 1:Right, they need that investment okay, so we know that record companies invest in artists. There's nothing new about that. It's been going on for decades, right? But perhaps it is not the only way. I mean, an artist has to invest in themselves before a label would invest in them anyway, right? But labels are far more than just investors, aren't't they? They have expertise. They have a wide knowledge base across various subsectors of the music industry, so they're good at the creative bits. Now let's think about what Keith says to that.
Speaker 2:When artists have a different route to funding. They're no longer held by the label to do the creative bit Okay.
Speaker 1:Now, this really really got me thinking. This really captured my imagination. Keith referred to perhaps having an A&R that's really really passionate about an artist, but then getting pushback from other departments within the record company. Perhaps the marketing team doesn't get it. Now, if you're signed to a major corporation and you're not happy with what the marketing team are doing or not doing, or you're not happy with how the track is being pushed on playlists or whatever it might be, even if you, as an artist, were to complain about that to a record company, you're not always going to get very far, are you? I mean, it's not like the company can then go and sack the marketing team, right? It's just not going to happen.
Speaker 1:For one thing, you know, people are protected by employment law, right? So this is where the global gig economy enters the scene the ability to build that team and this is a term we've heard a lot in recent years people building a team. Ie, let me get the right videographer, let me get the right band, let me get the right live engineer, let me get the right. You know, if we can build our team and we have the financial injection to be able to do that, that really becomes the game changer. Ok, so let's dig a little deeper into this. All right, let's just dream a little, right, you know, having a kind of fintech sort of funded music agency that dips into the creator gig economy and allows a much more custom approach to actually building a freelance team for the elements of record label creative tasking. You know, I want that person to do that job. I want that person to do that job. Now, very often, at major labels in particular, you have this pendulum of artists that swing in and out of favour, and for good reason, because there's only a certain number of resources. But maybe you only really need that team for two months a year. So what about if you only had to hire that team for two months of the year? This would feed into that very, very well.
Speaker 1:Imagine having a singer-songwriter that could have a team that is fully on board with what they do in terms of passion, knowledge of the game, knowledge of that genre, and then having an A&R who really loves that artist and a marketing team that really get how to push that artist. That's what we're talking about Now. We hear the term an artist-centered ecosystem. We hear that term a lot. I read a lot of reports and industry newsletters, and it's a term. It's a real buzz term at the minute and actually, when you really think about it, there's a lot to it. Now let me just phrase this question to you Imagine being given an advance but being told that you have to pay it back if your project doesn't work out.
Speaker 1:That really flips the record company model upside down, doesn't it? Because advances are recoupable, not returnable. The risk is on the label. But what about if the risk was on the artist? How comfortable would you be with that?
Speaker 1:One of the things that I have noticed in recent years is artists that sign to a record company early on in their career and then later down the line want to get out of that deal or wait for the deal to lapse so that they can then sign to a label services company where they own their own rights. So there's a pattern there that's started to emerge much more so in the last 10 years, and it all leans towards artists wanting to own their own rights. Now combine that with a newer type of marketing that is actually brand marketing rather than just data analysis or profile second guessing of marketing, actual brand marketing for an artist that then not only looks to market that artist in terms of how their releases are portrayed and used and consumed by people, but actually the roles that the music plays in the lives of other sectors. Right now, instead of relying upon a marketing team that's salaried to be able to do that, you could instead work with different creative marketers to try them out, test different ideas and if they don't work, you can change them for another, for another person that can do that same job. That is, from the creator gig economy. So instead of working inside a salaried business model, we're working way more heavily into that gig economy.
Speaker 1:Okay, now back to fintech again for a minute. So one of the companies that Keith mentioned were Beat Bread. Now, beat Bread are basically a fintech company. They fund music and they advance and empower independence, right. So they empower artists and labels with a choice of funding options to control their own business business model. Now, my research also led me to understand the role that a company called HiFi are playing. Hifi H-I-F-I and they launched about four, three or four years ago, I think, to help artists to kind of actually see what they're earning and therefore to see what they are worth. Now they kind of classify themselves as a financial rights organization right, that kind of building innovative products and service that work to financially empower the creator class.
Speaker 1:Now, to simplify that, what we're really talking about there is the ability to be able to use financial services to gain an understanding of where an artist or label is currently at and then investing further into them, into their goals, for them to then climb even further. Now let's contrast that against an existing record company called Snafu Records, s-n-a-f-u Snafu Records. Now, they are not a fintech company. They're a music focus company that uses AI and data analytics to identify and promote emerging artists, but the way in which they actually fund an artist is quite similar to a fintech company. Now, fintech company are focused on financial technology right, providing services like digital banking, payments, investment insurance. Snafu would operate in the music and entertainment industry rather than in the financial sector, but they are still using their own technology to build a forecast on what an artist would earn, based upon what their current streaming data says they are earning.
Speaker 1:Now. Collect all this together and what we can actually ascertain from this information is that an artist becomes a lot more investable when they've got data that people can understand, becomes a lot more investable when they've got data that people can understand. This is the same reason as to why Spotify allow artists and labels to engage with certain tools on their platform, like Marquee, like Showcase, like Discovery Mode, when they actually understand who their audience is. Now, that is not hugely different from how a record company signs artists, especially since the turn of the digital age, where they started to take less risks on unknown artists. Now, over the years, I've seen many artists that are told by the major record companies OK right, you're great, you've got loads of potential, but you just don't have the data yet. So the artists then go away, work on the data, ie building up their social media presence, building up their followers, their traffic, their engagement, building up their streams, etc. And then going back to that record company. But what about this? What about if they don't go back to that record company? What about if they take that data and they go to a company that understands how to use that data to build a financial projection upon what they could be earning over the next year or so? That's where we're at now.
Speaker 1:Okay, so all of this leans towards that artist-centered ecosystem that I referred to earlier. Now, this relies upon artists knowing how to build the first stages of their career. Now, in many ways, the artists do have the same tools that a lot of labels do. One of the things that really really changed everything in the last decade was the ability to read and absorb streaming data, because that was the first time that we all got to understand exactly what demographic information looks like on an almost live level. That was a real game changer, because it meant that artists have access to the same data as labels. Now, once you know how to read that data and once you know how to build inferences from it, you then know how to second guess what the future might look like, and that's really where kind of fintech steps in.
Speaker 1:Ok, so all of this circles back to the one subject that is often the biggest subject the artists face is you know, how do I get all this started? How do I become an investable artist? And I think actually what it really really circles back to is those same usual fundamental questions of you know. Who are you? What is your vision, what is your mission, what is your message? What genre are you in? See how you start to build your social media. Let's see what kind of streams you can get. Let's see how many people are listening. Who are those people? How often are people saving something? Let's take that lead single, work it into playlists. Once you start to kind of develop that further and further, it then becomes a position that is investable in. Where that investment comes from is the thing that might change. Okay, so there you go.
Speaker 1:I just thought I would draw some commentary after last week's episode. There was so much to pick apart from what Keith said. There was so much to kind of unpack and truly understand. So I just thought, instead of just me warbling on at the end of that episode, I thought I would build a separate episode and build it around that little subject. Okay, I hope that has been useful. Everybody, until next time. May the force be with you.
