It is said that culture defines us, that it gives us an identity, and that is true in all senses, but when it comes to mixing, or dealing with other cultures which are not our own, things start getting complicated.
The same happens with business markets, and the music industry is no exception to this general behaviour.
Different regulations, sensibilities, business maturity, technological applications, etc. can make us vary our perceptions, and the way we relate to music, and the business we make with it.
Due to globalization, some markets have tried to standardize and make it simple for professionals, but still a lot of differences are found around the world when dealing with artists.
Some companies have united under a big cluster that groups up many labels, like Universal Music Group, which comprises Virgin Music, Island, Polydor, DECCA, Capitol, etc.
Just recently, the giant Japanese SONY MUSIC absorved EMI RECORDS, thus becoming the biggest music company in the world.
But if we move away from western culture, business changes a bit.
Music industry in India is different from the music industry in any other part of the world. The reason for this, is the close ties the Indian music business has with the Indian film industry. Indian film and music companies frequently finance each other’s projects, and generally what is good for one is good for the other.
Together with Korean entertainment companies, Universal, Sony, Warner and Avex dominate East Asia, including Hong Kong and Taiwan. In 2004 Universal announced a joint venture with the Shanghai Media Group, called SUM Entertainment. Currently, it represents a number of major PRC singers, including Jane Zhang. Since Beijing is the center for rock music in China, it is also the home of a number of medium and small indie music labels, like Modern Sky, Maybe Mars, or Tree Music.
One of the important subjects we should take into consideration, even if not business related at first, is religion. This is a very important issue, specially when it comes to dealing with professionals, who can claim they want to avoid working with women at certain levels, or who may want to bargain with your professional fees. Not all religions command their followers to behave in a certain way in business, but if they behave in a certain way in their every day life, they will undoubtedly copy that behaviour in business.
Another important subject is politics. Even if you know the market in one area, any government change can mean changing the rules, and thus making you also updaye a great deal of paperwork, and contacts.
And yet another important subject is economy.
As you can probably imagine, it is not the same making business in a good economical environment than in a harsh crisis.
Unfortunately, whenever a crisis reaches a market, one of the first business areas to be affected is culture in general, and music in particular. Many musicians must then work in other businesses to be able to make a living, and that situation is very difficult to revert, and sometimes even impossible to avoid.
And last but not least, technology has arrived to our world for a better living, and also for deep business changing.
The rising of digital companies such as YouTube, Spotify, SoundCloud, Bandcamp, Reverbnation, Cooncert, etc. allow audiences to legally listen to music for free, which has caused a business readjustment in the late years to do some profit with a variety of alternatives, such as publicity ads, ticket selling, merchandise, or concerts and events organization.
When it comes to numbers, some things are also to be taken into consideration: Global music revenues were up 5.9% in 2016
According to the Industry Observer, a shift of the model over the last two decades from ownership to access has resulted in sustainable growth, albeit modest. The growth of 5.9% to US$15.7 billion is the highest rate since IFPI began tracking the market in 1997.
The shift continues an upward trajectory following 15 years of significant decline – where the industry lost nearly 40% of its revenues between 1999 and 2014.
That said, music business is very much alive. It is now easier than never to spot new talents who can achieve thousands of followers in social networks and other formats, and be profitable, like Justin Bieber on YouTube when he started, or Owl City on old good My Space, and Leona Lewis on XFactor, as well as Jordan Smith on The Voice, or just recently Amaia and other contestants on Operacion Triunfo in Spain, and any other similar examples around the world.
Big companies have moved their business models from producing records and CDs, to selling online, and also selling expensive tickets for bands on tour- from old bands like U2, Depeche Mode, Madonna, to new talents like Adele, Rihanna, Zaz - besides providing other services such as distribution, and promotion.
However, and as usual, any business depends on the people you partner with. Those companies ready to adjust to the new ways of making business in our fast changing environment will be able to survive and become leaders of the new musical era. And the future digital world will demand high levels of collaboration, and less competition, to reach business goals.
Many challenges lie ahead off us, but with Artificial Intelligence knocking on our doors, the possibilities of making a bright future for our business is just a matter of perfect timing, and fast adjustment to new realities.
You may think that booking an artist is just that: the fact of booking, close a deal, and make business profit. But, things may be a little different depending on what kind of music that specific artist is playing.
So, for example, the jazz world behaves different than the raggeaton and latin arena, and so does classic music in comparison to pop/rock.
There are still huge differences in contract clauses and professional fees that should be aligned at some point. But of course, while the market is still free, those complexities will not diminish soon.
Some small bars and pubs still sign contracts with musicians without including an insurance, or without line up, or without a defined fix amount. Some do not even sign a contract, and end up paying in cash - which practice we should avoid, but still happens nowadays.
Worst case scenario is when an artist does not even get paid for the show, but is asked to bring audience instead, and just ask them to leave some coins after the gig, using the typical busker style. That may have helped some venues to survive during our last crisis in Spain, but we should be going back to normal standards again soon - although it seems that we got used to this abuse and some are reluctant to change this practice.
I believe that we need to understand that while the music industry is a business, Music is an art. We need to respect the value that musicians bring to our society, and treat them as valued professionals for making us feel and experience real emotions.
Business reasons aside, money is no excuse to stop music from being what it really is: pure magic.