Bruce Warila: The State Of Music Industry Investing
EXCLUSIVE MUSIC INVESTORS WHITE PAPER
"Looking
across the spectrum of previous music industry investments…(most) are
held hostage to, and will remain a prisoner of, the large label system
that has dominated the music industry for decades."
Investment dollars flowing into music startups have dwindled. Some of the drought can be blamed on a poor economy, but the music sector has also seen more than its share of failures and false starts. It may not be easy to make money investing in music, but Bruce Warila says its far from impossible if you look in the right places.
Hypebot readers may know Bruce Warila from his contributions to Music Think Tank. He is an entrepreneur, analyst and part time investor that has been working with (including making small investments into) artists and various industry startups over the last five years.
Bruce has put together an exclusive three page white paper for Hypebot that outlines the state of current music industry investing and why he thinks the real investment opportunities have yet to be uncovered. Click here to download the PDF.
Thanks for posting this. We need more of this sort of discussion to make any progress with the music business.
I agree with Suzanne. Its time we stop tap dancing around the true issues and go right for the “pain”. Excellent work Bruce…Thanks for sharing!
Ok, you have my attention since your post is THE main reason why I’m in the music business. This has to be one of the closest coincidences I’ve come across to in all the years I’ve been a student of the music industry!!!
This is INCREDIBLE! It says alot about Bruce when he writes an article that deals with the same problems I set my self to solve several years ago. Every single problem listed on the PDF article are the problems we are intending to solve.
Bruce, if you read this we have more in common than I expected by simply visiting this link.
This is a great paper, Bruce. Certainly delivers on points-to-ponder.
Where I also agree with Suzanne about “more discussion” I think we need to take it a step further and start taking action.
I like your descriptors, but I see one really big piece missing. Generating revenue. I also find these two items contradictory; “It’s probably not selling music.” and “It’s fully capable of producing / spinning out hit songs.” A hit song isn’t just a great song. There are thousands, if not tens or hundreds of thousands of great songs out there. But a HIT song is a combination of market saturation and high record sales. Can you have a hit without selling music?
On a related note, I have a skeleton of a business model for a new type of label that I’d like to share with you. I would be very interested in getting your input via email if you don’t mind? FYI, I’m not trying to pitch it to you. I’m merely looking for feedback from a credible source.
Again, great piece! I’m going to subscribe to this blog right after I hit submit.
Dave Lopez – Mixing and Mastering Specialist
Cr@zyEye Music Services
Marketing Music Online
@Dave
“Can you have a hit without selling music?”
I think the file sharers would say yes you can. Depends what you call a hit I guess. I was using the phrase metaphorically.
You can contact me through my blog (ricewall).
Thanks all for the comments..
Wow, this is an awesome find… As someone trying to start and launch their own record label, any information like this helps.
An awesome read and a lot to chew on. My printed copy of this is covered with notes, which is pretty much the highest compliment I can give.
I have been working on a startup which is an exact fit for this model. So, yeah, I agree with the thinking.
It’s not fundable, though. Investors won’t get near the music business.
Bruce, you’re a gem. Thanks so much for sharing this – and thanks to Hypebot Bruce for sharing it with this audience!
The old school way was to only record AFTER what you call the “pain points.”
I’d argue that this reversal is the biggest problem in today’s industry.
Nice PDF Bruce. Alot of musicians nowadays are opening up their business eyes to new services and developing new ventures based off of their inefficiencies. I’m excited to see what new music inspired businesses develop. Thanks for the breakdown!
Thank you Bruce. Although in European countries the present challenges might be greater because of structural deficiencies, I completely agree with the scenario you depicted. I wonder how much time it will take for some markets (Italian) to recognize the actual status.
Excellent article. Excellent prediction. The company prophesied exists in its initial form: http://www.muzlink.com ~ It is simple and not obvious from the front but is already a member service of BMI, ASCAP, NARAS, CMA, NSAI etc. and growing… check it out. The secret is in the strategy.
The only people making money from music ARE:
* HMV buys 50 percent of 7Digital for €7.7 million Euros (about $11 million USD; September 3, 2009)
* MOG raises $5 million (August 27, 2009)
* ShowClix secures series A (terms not disclosed; August 27, 2009)
* RightsFlow raises $1.5 million (August 26, 2009)
* Audible Magic raises $1.3 million (August 21, 2009)
* MySpace acquires iLike for $20 million (August 19, 2009)
* Thumbplay gets $2 million (August 19, 2009)
* Qtrax announces investment from partners in Asia (terms not disclosed; August 18, 2009)
* FanSnap raises $5 million (August 17, 2009)
* OurStage raises $3 million (August 11, 2209)
* Ustream raises $2 million (August 11, 2009)
* RadioTime raises $900K (August 7, 2009)
* Bandsintown closes $200 thousand as a result of LaunchBox (August 05, 2009)
* Spotify raises $50 million (August 04, 2009)
* Midomi raises $4 million (August 04, 2009)
* Melodis lands $4 million (August 04, 2009)
* EMI receives an infusion of $492 million (July 30, 2009)
* Pandora raises $35 million (July 10, 2009)
* Bertelsmann and KKR form music rights joint venture valued around $347 million (July 08, 2009)
* Sony invests in IODA (terms not disclosed; July 02, 2009)
OVER
Tricky – Raising money does not equate to making money.
Awesome paper Bruce. Thank you for this. Working on a new model of a music company myself, and alot of these points will be taken into consideration. priceless info here.
iDream Studios was actually envisioned by DJ Parker, formerly of Carolina Blew Records. DJ was really psyched to find this White Paper because his company is set to build its first of 49 USA recording studios based on the same things that Bruce discusses.
iDream is launched to build the dreams of our artists.
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Angela Ursprung
CMO
iDream Studios, Inc