Wednesday, December 23, 2020

Consultants Are the New Management Role

 I heard from a whining artist the other day that managers only took a percentage of what the artist earned. The artist was angry since he got an offer that he could pay for management services and as usual though he became screwed.

I have seen more and more managers actually turning into more of a consultant. Even more and more of them call themselves consultants. In my opinion, that is also where the management role is going to be, and here are the reasons why.

Yes, in the old days the management role was just a percentage. At the same time, this is quite long time ago and the industry has changed. This is mainly in the 70’s, 80’s, and 90’s people born in those years are now middle-aged. Back then the artist made money. Touring was a substantial part of the income. Getting a percentage of that and merch sales could make you a living, not a big a living but an income. Same with record sales. The sales came hand in hand with the release that also could be sold and get some monetary value. This was more the 70’s and 80’s, in the 90’s it started to change.

In the mid 80’s there were many managers just discovering artists then went out to the record labels shopping for a deal with a large up-front payment. Back then many labels used tax reductions to get losses deducted. Not unusual that they signed five artists in the same style and genre to put money into one, and the other four were just to kill the competition and the expression was to ‘shelve them.’ This set up worked for the manager that they just went out found a deal with a large upfront. Signed off the band took their percentage from the upfront money and then just disappeared or lost interest in the band. Went out and did the whole thing all over again, leaving so many artists stranded on labels that didn’t want to do anything for them.

This is now history. These tax reductions cannot be done. The labels now need the artist that actually is already making money. Also, they got every tool in the world to see when the artists start to make money by following numbers on streaming sites and social media. This left the manager role in 2000’s to be the developer of artists. Before you got some money now you become the investor for artists. The problem here was that the risk taken is so much bigger. In the early methods, you could easily see money after a year. Now the investment time of ROI could be as long as five years. To solve this many managers took on several bands at the same time. The risk was too big that working with an artist for three years and just when you should get some money back on your investment the artist quit. Instead, you spread the risk but did just what was needed to have them on and see where it leads to.

Over 2000’s since distribution became very easy and at no cost many artists started to manage themselves. With that, they also lost the knowledge of the manager. It was not just the money, the manager had the knowledge of how the industry worked, the manager also had the network to get things done, they did know how to ask for favours or how things needed to look before they went for something. Into the2010’s you just got more and more artists doing their self-management running around like headless chickens getting nowhere. Today,  we see many artists killing their careers with self-management. 

This of course destroyed a lot of the plans a manager could execute. That with all the risks that the manager had to do made many cross-over to other fields. The Management role became just a training course to get into a better position at a streaming service or a publisher. Then in the mid-2010’s a hybrid started to appear. Managers still needed money, the artist still needed the advice and the network. Of course, in most cases, the manager didn’t want to risk time or getting no salary for years to help an unknown artist. In many cases, they really didn’t want to get involved in that kind of way. They wanted to help but not to invest five years of non-stop free work.

Now we see this new role unfolds. Especially with the hit of Covid where the live industry went on to their knees. Under the table I see more and more managers become consultants and let an artist pay a fee for a certain time, usually a release of something. They do different things like co-ordinate the release, deals with PR, and with the distribution and shape social media and homepages up. A necessary thing for an artist to have, it’s the only way to stand out in the massive wave of music that is released every day.

Some managers think this is wrong. They get artists complaining like the guy at the beginning of this text, demanding that they should work for free and commit to working with the artist's music. They look back on history and get told that managers work for a percentage. That was true, back then the artist actually had money to share a percentage. Today 20% of zero is still zero. The artist invests in their career so they can make it a hobby until the money comes in. A manager is in a working profession and they need to have money to uphold the network and pay the bills. 

 “But please don't put your life in the hands of a rock and roll band who'll throw it all away” sang Oasis. My guess is that it’s so true. The managers that will go on the percentage will be the partners of the band, like a wife or a boyfriend. They work for free since they want to be part of the project. They are managers but I would like to have a new word for them. In reality, they are managers in training as they go along.

The professional managers will be setting up services as a consultant, that is the future. More and more are doing it and it is worth paying for their services and knowledge. We just have to teach people not to think that this world works as the world before cell phones and the internet.

Original story in Cashbox Magazine Canada

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