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Is there a formula for music industry success?

Love music

Whether you are a musician looking to find their audience, or a business-orientated music fan who wants to start their own record label, or a promoter who wants to bring the best bands to their town, success can mean very different things. When you start out, it is crucial to decide how you define your own success and a plan to get there.

Musicians

Last year, Tom Hess from Music Think Tank put together a formula, which he claims is used by musicians who reach their goals faster than everyone else. That formula puts the potential of success as the combined value of an artist and proof of that value minus the risk, or if you would prefer it as algebra:

Potential for success = V*P-R

V = value | P = proof of that value | R = risk

His idea is that musicians need to maximise their value by learning from industry experts to understand the best strategies to achieve their goals, and then prove their worth by growing a large following, which can be shown by both fans that turn up at gigs but also social numbers from Facebook, Soundcloud, Spotify, and YouTube.

Once you have the knowledge and the fanbase, then it is all about mitigating risks – act like a committed musician by snapping up every chance that you get offered, and find the right people to work with – whether that is a mentor or a management team or both.

Obviously, before this formula works you will already need the talent and songs to get yourself into the running, but the globalised music business today is more cut-throat than ever, with thousands of talented artists vying for every spot – so a strategy to get yourself one step ahead is beneficial whether you want to become a stadium-playing rockstar or just want to find a small audience to share your passion.

Record labels

Some people still start record labels with the idea of becoming millionaires like the stories form the 70s and 80s, but today’s music industry is very different. Most record labels today start out with someone, often a friend or the artist/band looking to release the debut single, EP, or album of a new artist to help get the word out.

Whilst labels need to remain financially solvent to exist, their success or failure today is more often defined by the bands and artists on their roster, and the quality of their output – they are dependent on their customer success.

Ideally, the records the label releases will sell millions of copies and be streamed billions of times around the world, generating significant revenues for the artists and the label owners, but most small indie labels start out with a much smaller definition of success and that is getting their favourite music heard.

Promoters

As a promoter, you search for two separate types of success – bringing your favourite bands to town and packing the venue so that everyone has a great time and gets paid. However, like any two-sided marketplace – getting started can be difficult, as bigger bands might not trust someone starting out to organise and fill a large venue, while smaller bands have less of a following and can be much harder to get people to come to their gigs.

Success as a promoter is probably the easiest to define and measure – if you get it right you can make good money and everyone will love you, but if it doesn’t work out you will get the blame from all sides.

Photograph by Unsplash

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