The music industry is feeling the economic pinch. Music artists and pop stars who are aware that the music industry is downsizing are developing business plans to keep their music. The recent trend is musicians morphing themselves to a brand and seeking out investors and brand partners for better financial security.

Just recently, music executives converged at Cannes for the Midem, the industry’s annual conference. In contrast to previous Midem gatherings, last year saw the significant decrease in CD profits, boarded-up music stores, and illegal music file sharing of music amplified.

Music artists are also feeling the effects. Music group The Zutons were scrapped by their record label last week after poor profit returns from their latest album. Singer Lily Allen also complained about being put in a two-star “grotty” (grotesque) hotel by her record company in Paris.

Quite obviously, the music industry is suffering from financial losses as music labels can no longer cater to the demands of a rock star’s way of living. Aspiring musicians must now map out business strategies along with the demo tape if they are to succeed in getting accepted by a major recording company.

The situation calls for innovation and this was exactly what the Honey Ryder duo did while they were in Cannes. Honey Ryder spent the week looking for prospective business partners willing to invest in their group’s 100 shares, which is priced at £3,500 each. According to Marty Shone, investors will get a dividend on future profits on CDs, downloads and licensing deals. As an added incentive, shareholders will also receive a tax rebate as the venture qualifies for Enterprise Investment Scheme.

Shone, a former banker at Credit Suisse, explains that in investing, inexpensive goods like music tend to endure recessions. So far, Honey Ryder has sold 70 shares. Honey Ryder’s major sources of income will include live performances, sponsorship deals and getting their songs included in television and film soundtracks.

According to Tim Clark, who manages Robbie Williams, artists are now becoming brands. He is a little apprehensive, though, with the entry of digital media corporations like Nokia and Apple. Clark said that with the current trend making digital music readily available in the digital platform, artists must take control of the situation or the digital dealers will take over and sell cheap music at their expense.

The music industry is not as big as it was in 2000. Aspiring singers and musicians who want to live in a penthouse and travel the world in a private jet must fish the money for such luxuries from their own pockets. Simply put, the age of rock stars and pop artists getting huge cash advances is now gone.

Several strategies have been created to help the struggling industry, and one of them is the 50-50 scheme provided by R$R Music, a talent website created by Eric Nicoli, former chairman of EMI. The company will shoulder everything from lawyers to voice-coaching. But if the artist wants to get a 5-star hotel accommodation, then it means less profit for him.

These kinds of strategies might be hard for some artists but if they want to show their wares and earn from them, doing some of the unconventional might help them build and strengthen their careers in the long run.

Tags: music industry