Musician As Employee: The Parlotones, Raphael Domalik Forge A New Business Model

The Parlotones are a pop rock band that have exceeded all expectations in their native South Africa and are now seeking a global audience with a special focus on the U.S. Manager Raphael Domalik has been working with The Parlotones in a unique business arrangement in which the investors own the overall company and the band is paid a salary as employees. They're also taking a very thorough approach to marketing and monetizing their brand both on and offline.

I recently talked with Raphael Domalik who manages The Parlotones as a co-owner of the business that employs them. It's not quite as weird as it sounds and they've been developing their approach since beginning work together in 2002. Domalik found the typical indie approach of working with task-specific firms and finding distribution to not work well in South Africa. So he and lead singer/songwriter Kahn Morbee, who has a strong business background, co-invested in an overarching business structure that then creates subsidiaries as needed for specific functions or regions.

The Parlotones 2011 EPK

The structure didn't fall into place all at once but the basic concept is that all revenue streams can be combined and reinvested into the development of the band. The investors own equity in the company while the rest of the band are employees receiving a consistent pay check. Subsidiaries are created to handle business in foreign countries or to handle tasks such as marketing where it benefits them to have separate entities when making business deals or interacting with major corporations.

Domalik says this process has not been easy but that it ultimately gives the band a support structure that is focused on a longterm vision of moving from great success in South Africa to future success worldwide. So, instead of working with firms focused on a single release, they control firms dedicated to supporting specific projects in relationship to the band's larger goals.

I asked Domalik about what would happen if a band member left and he said they're just starting to address such issues. However, he describes the band as very tightknit and committed to staying together for the long haul. Adequately documenting the business structure they've created would require taking a much closer look at all the entities involved and how they work together but the basic concept seems sound.

Yet given the enormous demands on everyone in such a startup, even one almost a decade in the making, my only criticism is that the band members themselves do not hold equity in the company based on the tech startup model in which early employees who give their all eventually profit from the company's overall success beyond salaries and related benefits. Domalik describes equity as almost meaningless at this stage given their continued focus on reinvestment but, if they do achieve outsized success, I imagine the discussion will become a bit more complicated.

Beyond that, I'm impressed by what The Parlotones have accomplished and by their approach to building in the U.S. Over the last year they've made multiple visits, landing on one coast, picking up a van and gear, traveling to gigs crosscountry, dropping everything off and returning home. They've performed at over 100 gigs in the States in the last year and, though they perform to as many as 20,000 in South Africa, have readily taken on the task of building with small audiences at local clubs.

As you can see from the latest news on their website, they've also been making all sorts of connections online with such opportunities as being song of the day on the Google Music blog, being featured on 1band1brand, appearing on CBS Interactive's Around The World For Free and being booked at the CMJ Music Marathon.

The Parlotones had already accomplished quite a bit beyond their musical activites with their own wine developed by the band and an impressive history of involvement with social concerns. For example they've been working with Invisible Children on a campaign to erect radio towers that would warn villagers in Uganda of coming raids so that they can hide their children and avoid having them forced into military service and bondage. In March they say they are going to climb Mt. Kilimanjaro in support of UN Women.

The story of Raphael Domalik and The Parlotones is complex with much that exceeds the capacity of a blog post but I think they offer a lot to consider on multiple levels. Clearly the business structure is designed for musicians staying together for the long haul though it could also be a model for an individual artist who controls all aspects of an enterprise, someone like Prince, for example, who can then bring in musicians as needed for specific projects.

More: Play Music City has an extended interview with Raphael Domalik discussing the history and business of The Parlotones.

Hypebot contributor Clyde Smith maintains his freelance writing hub at Flux Research and blogs at All World Dance and This Business of Blogging. To suggest topics for Hypebot, contact: clyde(at)fluxresearch(dot)com.