You have heard all their stories, of artists (Kizz Daniel , Reekado
Banks, Ycee, Brymo, Runtown….) leaving labels and that has been dealt
with extensively in the media.
I rather take a look at the real reason why all Nigerian record
labels fail. I choose to see the fall outs with artists and label as a
symptom of the failure of the record label.
However, the natural question to ask at this point is why do all
Nigerian record labels fail despite the opportunities for a thriving
business?
So here are some of my ideas from my study of the Nigerian music
industry and personal experience from running Social media influencing
and Talent management.
CAPITAL INTENSIVE
It is difficult for financial institutions to fund record labels
because of their structure, especially at startup phase, as revenues are
lean and their isn’t really an insured plan for recouping working
capital lent other than emplacing a physical asset collateral for the
debt.
The equipment required is relatively cheap. Today, you can make music
with a laptop, a microphone, a keyboard and some software. Everything
else is an extra.
Some of the best classic albums that sparked the rebirth of the
Nigerian music scene in Nigeria today were made that way. It will be
hard getting anybody to confess to that though.
EGOs
Every successful Nigerian artist is eventually going to be bigger
than the record label sooner than later when endorsement money starts
rolling in.
It becomes obvious to the artist that he is actually bankrolling the
record label’s operations as well as the costs of new projects. Anybody
half smart will recognize that you can take your destiny into your hands
and boycott the label.
The moment you, a label owner has a winner, get that artist to start
an imprint under you, seek fresh talent to replenish the old,
renegotiate the contract, take a lesser piece of the pie, use your clout
to provide the new imprint distribution deals and other support
services for a fee or a piece of every new talent signed.
LEAN ROASTER
You have seen them all, those one or two artist record labels. When
one artist walks, the label closes shop. It is called a key man
insurance risk. Keep your label on top of its game.
Keep a sizeable roster and keep all signed satisfied to your business structure.
EXPENSIVE RECORD CONTRACTS
The art of negotiating the advance is a compulsory course for all new
label execs. For those who don’t know the advance is what a record
label gives an artist he hopes to sign and promote.
Maybe you have heard of a record label buying the artist an house,
car, paying some bills, giving them salaries, wardrobe allowance, pocket
money, club privileges etc. that is the advance.
One opinion (W Tyler Allen) says this is a major way to set an artist
up for failure — by giving them illusions that they’re on the road to
success, when their brand still hasn’t matured.
My philosophy for most of these Nigerian record labels is don’t box
yourself in for the talent, regardless how talented he or she is,
especially when the talent is fresh and has no record of attracting
revenue streams to you or previous label.
What a label owes an artist most is a structure or plan on how to
succeed in their joint venture. Plus all that money spent on buying cars
and picking tabs at the club will be of better use in finding good
music producers, video directors, publicists etc.
EXPENSIVE SUPPLIERS
I believe there is a bubble somewhere in here. Everybody agrees they
need to have the best suppliers; stylist, video directors, publicists to
succeed in this business but at what cost should be the driving
question.
Most of these artists will be indebted for the rest of their lives if
they can’t deliver a smash hit or sizeable performance or endorsement
fee.
My candid suggestion is tie everybody into a percentage share as
against pay for hire. Give them a piece of the pie, i.e. the contract,
you all can play together for the long run and for even better returns.
That however, means they have to believe in your ability to deliver
on the envisaged future. In the medium to the long term, it will be nice
to see record labels finance their own support teams, create needed
alliances or buy equity into these other businesses.
It is also because of this, that A & R Chris Randing suggests
that labels should really be a partnership of at least four people or
entities a music producer, a business affairs person, a radio person and
a marketing person.
PRODUCTION CAPACITY
It is called a record label because it is supposed to produce
records. A label should have production capacity or should have sourced
that capacity on the outside.
That capacity can not be negotiated on a song basis. It is better on a
term basis. A producer that will work for you for a term, say
3/6/9/12/months. This way your rooster can always be busy creating
music.
TECHNICAL/BUSINESS STRUCTURE
Like every startup, music or otherwise, hungry for success but with slow or no revenue build up.
It is important that start is equipped to fulfill administrative
tasks, sign, draw, read legal agreements, engage bankers for the lowest
cost structure possibly.
The End!!
Thank you for reading.
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