[A2k] Don't just buy the music, fans told - now you can invest in big names of the future

[Michelle Childs]

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>> From: "guardian.co.uk" <noreply@guardian.co.uk>
>> Date: 27 August 2008 12:54:41 BST
>> To: michelle.childs@keionline.org
>> Subject:] Don't just buy the music, fans told - now you can invest
>> in big names of the future
>>
>>
>> To see this story with its related links on the guardian.co.uk
>> site, go to http://www.guardian.co.uk/business/2008/aug/27/musicindustry.investing
>>
>> Don't just buy the music, fans told - now you can invest in big
>> names of the future
>>  Executives behind Kaiser Chiefs back new venture
>> 10 pounds  buys sleeve credit, CD and potential profit
>> Owen Gibson, media correspondent
>> Wednesday August 27 2008
>> The Guardian
>>
>>
>> It may not be the most obvious investment choice in these turbulent
>> economic times. But a new venture is seeking to convince music fans
>> to place their savings as well as their faith in rock 'n' roll.
>>
>> The music executives behind Kaiser Chiefs and Primal Scream are
>> backing a new website that will allow music fans to invest
>> financially as well as emotionally in hotly tipped new acts.
>>
>> The venture, dreamed up by a music business lawyer and backed by
>> the founder of Friends Reunited, is being billed as the latest
>> innovative funding model that could provide artists with an
>> alternative to major labels.
>>
>> Bandstocks will let the public buy a stake in an artist in &pound;
>> 10 increments. Once funding reaches a preordained level, for
>> example &pound;100,000, the money will be released for the act to
>> record an album.
>>
>>
>> Investors will get a copy of the album, a credit on the CD sleeve
>> and a percentage of the profits from its sale and licensing. They
>> will also get priority ticket booking and the opportunity to buy
>> limited edition releases. For the artist, founder Andrew Lewis
>> claimed that Bandstocks would offer a better return than a major-
>> label deal, as well as more freedom and control over copyright.
>>
>> He hoped that if successful, artists would return to release
>> subsequent albums using the scheme. But he admitted its success or
>> failure would depend on attracting sufficient investment from
>> members of the public. The site, backed by investment from music
>> manufacturing and distribution company The Vinyl Factory and four
>> years in development, has launched with two artists. FrYars is a 19-
>> year-old singer-songwriter who has been compared to Nick Cave,
>> Rufus Wainwright and Lloyd Cole. Jersey Budd, another singer-
>> songwriter, said he had turned down major-label deals to pursue
>> funding through Bandstocks.
>>
>> "I had the opportunity to do deals with a number of record labels
>> but I'm confident about my music and the future of Bandstocks,
>> which seems to be a much more honest and transparent way to release
>> records," he said.
>>
>> The site is also looking to attract established artists. Former Boo
>> Radleys guitarist and songwriter Martin Carr is to use the model to
>> fund his next album.
>>
>> The founders of B-Unique, the label that is home to Kaiser Chiefs
>> and others including Primal Scream and the Twang, will help find
>> and select artists to appear. Mark Lewis and Martin Toher, the two
>> former major label executives who launched B-Unique in 2001, will
>> act as artist and repertoire advisers.
>>
>> Lewis said he hoped albums by about 10 artists would be funded by
>> Bandstocks in its first year. Once the target figure is reached,
>> the money will be spent on recording and marketing the album.
>> Revenues from album sales and licensing will be divided up, with
>> half going to the artist, 30% to the Bandstocks holders and 20% to
>> the website.
>>
>> Lewis said Bandstocks would work with each artist to put together a
>> bespoke operation. It will use the same independent distribution
>> network as Arctic Monkeys, the White Stripes and Oasis. The
>> shifting sands of the music business, blown about by the winds of
>> technological change and rampant digital piracy, have given rise to
>> a range of new funding models. Some artists, such as the Charlatans
>> and Radiohead, have sought to give their music away free or on a
>> "pay what you like" basis.
>>
>> Steve Pankhurst, the web developer who co-founded Friends Reunited
>> in a back bedroom before selling it to ITV for &pound;120m in 2005,
>> has taken a small stake in Bandstocks.Sales pitches
>>
>> Going it alone
>> Radiohead released In Rainbows on a "pay what you like" basis to
>> huge media interest, before later reissuing it conventionally.
>> Millions downloaded the album, featuring Thom Yorke, but research
>> suggested that many more simply obtained it illegally anyway. The
>> Charlatans gave away You Cross My Path for nothing in the hope of
>> boosting live and licensing revenues.
>>
>> Venture capital
>> Some private equity houses have done deals with managers or artists
>> to bypass record labels.
>>
>> Brands
>> Bacardi recently signed a deal with Groove Armada to fund new
>> releases in return for being able to use their tracks and live
>> events to promote its brand.
>>
>> Advertising
>> A series of companies are attempting to launch ad-funded services.
>>
>> Subscription
>> Pay TV and broadband giant Sky plans a subscription service
>> offering a mix of millions of streaming songs plus some downloads
>> for a set monthly fee. It has signed a deal with Universal, with
>> other labels expected to follow.
>>
>> Copyright Guardian Newspapers Limited 2008
>>
>>
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