Investment Funds Find Promise with New Artists
While new voices in music continue to emerge today, the industry is unfortunately not always kind to new artists trying to break out. It can be hard for a band or a singer to get that record deal or viral video that will get them noticed. But Wall Street investors are now eyeing a new sort of investment fund with this emerging market of new music, in order to finance tours and album creations.
According to the Wall Street Journal, financial managers are merging hand-in-hand with big players in the music industry to finance the projects and tours for new artists. The newest player on this block is known as Unison Fund. WSJ Journalist Hannah Karp wrote, “The Unison Fund is just the latest of efforts to fund music outside of the major record labels, whose global revenues are down 60% from [the year] 2000, according to the International Federation of the Phonographic Industry, while the concert industry is raking in record sales.”
The main goal of these new fund groups is not to strip the profits and song rights from the artists, but rather give new artists the money they need to grow their brand, with the promise of a return in other ventures. For example, both the fund investors and artists will profit from big money-rakers like summer concerts and new album promotions. These organized funds are quite a far cry from the traditional workings of a big-name record label, in terms of financial structure. The funds have the assurance and backing of the investors, and give the artists nearly free-rein with what to produce with the money. Whereas big-name record labels may take a cut from tours, merchandise, and hold the rights to the songs themselves to ensure their profit.
As this new market strategy starts to gain momentum, it remains to be seen if either method is inherently better than the other. Only time will tell, but it will surely shake things up in how new artists are finding financial backing to achieve their dreams.