The traditional business model for record labels that involves promotion and marketing driven by record sales and artists with a massive fan base is changing. And leaders of local music company Regenerate are capitalizing on the shifts in technology and in the industry.
“We’ve finally gotten to a place where we can turn all our attention to artist development,” Chris Garmon, president of Regenerate Music, said. “Due to declining record sales and oversaturation, major labors have pretty much stopped doing artist development.”
Generally, it’s difficult these days to get a deal with a major label, unless the artist already has a solid fan base, Garmon said.
Regenerate artist Micah Massey has been nominated for a Grammy: Best Christian Song for his work on "Your Presence Is Heaven."
Major labels don’t make enough revenue from trying to give an artist a big break, he said.
The traditional business model is also built around one major revenue stream from record sales.
But promoting major world tours using traditional media methods or relying on soaring record sales is not what Regenerate is about.
“We’ve found more cost-effective ways, such as guerilla marketing and fundraising, to supplement the lack of income,” Garmon said.
Artist development, social media strategy
Regenerate leaders help artists define their art and fan base, come up with a plan to engage those fans and encourage them to think about a sustainable business model.
They also help artists raise money to pay for Regenerate’s artist development. That way, the artist retains full ownership of their work.
Then, Regenerate leaders use social media to manage and promote the artists. And that doesn’t mean simply setting up a Twitter account.
It means increasing the number of people who connect with an artist via Facebook, Twitter, YouTube and other outlets.
And it means getting those people to consume content.
Leaders target specific people who would be likely to engage and buy music or otherwise consume content.
For example, leaders have helped one of the company’s bands, called Behold the Brave, get 4,500 new Twitter followers.
About 10 percent of those people are buying the band’s music on iTunes, Garmon said.
Another Regenerate artist, Rusty Clanton, has gained about 5,000 new Twitter followers in the past two months. Of those, half have also gone to read Clanton’s bio and subscribed to his YouTube channel, Garmon said.
“Fifty percent of them have engaged by going to two additional sites and consuming product,” he said.
The company makes money when artists they develop do well, but Regenerate leaders are also helping their artists come up with ways to supplement their own income.
For example, they encourage their artists to teach music lessons online.
They also use crowdsourcing, such as Kickstarter and PledgeMusic, to raise money.
And once they raise that money, Regenerate leaders work with the artists to help them spend that money wisely.
Small business connection
Regenerate leaders also aim to work on strategic partnerships between their artists and small business leaders, Garmon said.
The old business model may have included a big corporation, such as Coca-Cola, sponsoring a large, mainstream pop artist, but Regenerate leaders hope to get small businesses connected with smaller artists.
That piece of their work is still in its prototype phase, Garmon said.
Regenerate leaders have also expanded their social media management capabilities to be available to small businesses and nonprofits.
They recently took over the social media management for the nonprofit missions organization called Retouch the World.
“[Regenerate] has increased our followers by seven or eight times on Twitter [in the past month],” Chris Hadsell, founder and president of Retouch, said.
Having more followers and more people who know about Retouch is important. For example, now the organization is working to get girls out of prostitution in Kenya.
The social media campaign helped secure funding for 10 girls to be able to go to school and have food, books and HIV medicines, if needed.
“We couldn’t have done it without what [Garmon] is doing social media-wise,” Hadsell said.