The music industry has seen quite the shift in the past year. At the Royalties Summit on May 6, Trusted Advisor united business managers from tech, music, and entertainment to discuss the rapidly changing world of licensing, royalties, and ownership models.
Since the pandemic, musicians and their teams are generating revenue in new and novel ways. Our panel, “Business Managers on Music Clients,” discussed how leading business managers Kristin Lee, founder of KLBM, Josh Klein, founder of TKG, and Leftbrain Royalty Consultant Andrew Ullah have helped their clients navigate a changing industry landscape.
Music clients and a changing relationship with finance
With touring and live shows off the table, Lee noticed that the pandemic made clients confront the way they spend money.
“Immediately I looked at long-term cash flow, reserves, to see what is on hand. It is important to have a safety plan because even looking at the next year in front of us, it might be a slow build until we get to the position we were two or three years ago,” Lee said.
This made clients more closely scrutinize their finances — clients became a lot more attentive and a lot more involved with day-to-day management.
Klein found that on the business management side, he had to navigate fields he wasn’t immediately familiar with. At the start of early 2020, Lee and Klein found that many of their clients had to file for unemployment, something neither of them have had to deal with before the pandemic.
“Any artist, for the next fifteen years, never thought ‘What if I can’t play a show?’ I’ve gotten a lot closer to my clients over the past year. The past year has made business management a lot more inclusive, as more clients want to get educated on their finances. I’ve helped people file for unemployment, and my firm had to get informed really quickly on PPP loans, PPP funding, what’s deductible and not deductible, it’s become an evolving process,” Klein said.
Changing revenue streams for music clients
However, while the pandemic might’ve put a stop to live touring, all three business managers saw their clients find creative ways to generate alternative revenue.
Lee has seen clients turn to Patreon, while Klein directed his clients to Twitch to fund and host live concerts. Clients have also started businesses in alternate fields like venture capital. More importantly, Lee and Klein have seen that while before, the music industry was very label and tour driven, the business has pivoted to focus a lot more on sponsorship and branding.
But royalties by far have seen astronomical growth in the past year. As income from streaming skyrocketed, the past year revealed how outdated many music management systems are when it comes to monetizing and tracking royalty revenue.
“The amount of data coming inbound has only been amplified in the past year, which is all the more reason to ensure all your data is correct, especially with sources that are licensing to these streaming platforms,” Ullah siad. “Otherwise it’s going to get locked up, and historically people aren’t driven to fix it because the revenue lost often benefits these record labels rather than the artist.”
Ultimately, this past year has allowed music clients to step back and reflect on their career.
“In the music business you are always going,” Klein said, “But the past year gave people the chance to take a step back, record music, and think differently about their brand.”
