Ever wondered why there is much commonality between the ways musicians run their respective businesses? My research so far has revealed many recurring patterns and 6 archetypes found amongst Musicpreneurs. Meeting and speaking with artists further enriches my work.
Let’s talk about 6 major archetypes of Music Business Models (MBM). After the first part where I explored Experience, Patronage & Blogging, this is Part 2/2: Freelance, Synergy, & Ecosystem.
The main concept of this MBM is to offer a personal service to a client – solving a problem, satisfying a need (functional, social or emotional) or through educating them.
Freelance work works on a per hour/minute or contractual basis. Usual forms include consultation, musical work (production, arrangement, recording, performance, composition etc.) and support. The main focus is to get the job done, rather than to form a personal relationship (although this can add value).
Revenue comes through your per-hour rate or some other agreed remuneration. Added value, such as priority, fast delivery, granting copyright for the work, dedicated service (etc.) can work as an up-sell. Feel-good experiences come at a premium.
The upsides of this model: the more experience you have, the higher the rates you can charge. People pick someone they trust and form recurring commercial relationships with them. Word of mouth can bring more clients than you can handle.
Common challenges? It’s a time-for-money exchange, thus it cannot be scaled up. It requires you to be there; no work, no revenue.
What assets are essential in order to master freelancing? Perfect your skillsets and services, offer an experience, build word of mouth, follow up on your satisfied customers, and have a team to delegate work to.
The main goal of Synergy is to enable a collaboration/partnership between two or more ventures. This in turn should create a unique, holistic experience or product for the audience, usually for a limited amount of time.
Synergy is a powerful concept. Each project requires resources, vision, production, execution and awareness. Synergies put these elements together: with the artist (usually) providing the vision, IP and (perhaps) production or execution. The other party(ies) usually provide mainly financial/human resources and awareness.
Since it’s a joint venture, Synergy’s profit is often split according to a pre-production arrangement. Many brands exchange the artist’s coolness, reputation and ideas for cash and marketing, but this is not a hard-and-fast rule. Further revenue streams could include branded merch, public appearances, media features, tickets for the experience/product, royalties, and so on.
The main strength of this model: it brings unique concepts to life. What would be a video game without a soundtrack, a branded festival experience without a cool concept or an artist’s community without exclusive products?
Common challenges? Not everyone can enter this game. It is about whom you know and how much you’ve developed your brand.
What do you need in order to master Synergies? Strong artistic ideas, a trusted network, patience/excellent timing, and an entrepreneurial, holistic mindset.
The main aim of an Ecosystem is to create a network of intertwined projects under the same umbrella. These projects should provide value to each other, which in turn elevates the whole ecosystem. Each project is a self-contained entity, although they are all pieces of the artist’s holistic vision.
All projects have certain characteristics. They are simple in terms of concept, they are fully-fledged experiences/services (no restrictions or trial periods), they offer a clear call to action (further engagement, purchase or direction to another activity), they piggyback each other and they drive value back to the same source (creator or brand). One approach: launch a new project fast and test it. Decide whether it should be a one-off, or join your Ecosystem of other projects.
Revenue can come from any or all of the projects within your Ecosystem. A recurring pattern: many projects are free of charge, driving attention to the select few projects that are optimised to make a profit. An alternative way to create revenue is by bundling the value of each project into one service bundle.
This MBM mainly benefits from its interconnectivity: once an individual enters the Ecosystem, they are compelled to stay and explore more. The more they engage, the more difficult it is to switch.
Common challenges? Unnecessary expenses for the production, too much work that could take away the fun, and unclear/complicated connections between the projects.
What can help you master Ecosystems? Start with a strong core project/idea, gain feedback from your audience, build an engaged community and, finally, add revenue streams and more projects into the ecosystem.
The next day
If you want to get a grasp of the concept of Music Business Models, read my previous essay: MBM (101 | Design).
Please get in touch with me if you think that you or an artist you know has an interesting business model.
Finally, since you read this all the way to the end, why not share this article with the world? Let’s create an environment of open knowledge!
A small team of passionate patrons supported my research. Thanks.
Tommy Darker is an independent musician, thinker about the future of the music industry, and founder of Darker Music Talks, a series of discussions between experts and musicians. He will speak about Music Business Models at Midem Academy (June 7, 15.30).