Q&A with Andre Mullen: Why should artist managers consider alternative funding sources?

beatBread spoke with Andre Mullen, Founder of The Paradigm Shift – a boutique consulting firm for artist managers and creative entrepreneurs – about how managers can help their clients find the best source of funding for their unique needs.  

When should managers consider major label alternatives? 

Mullen: Managers should consider alternatives to signing a major label deal based on a simple question: how much control do you and your client want to have?  

If your answer is "total control," then you’re better off looking at an alternative. 

What should artist managers consider before signing with a label? 

Mullen: Most artists who sign with a major label fail. For every 100 artists that a major signs, 99 most likely won't recoup the costs of their advance and those artists get dropped. Unfortunately, too many artist managers believe that partnering with a label is only one way to become successful in the music industry. This is wrong. 

While I'm not "anti-label," the truth of the matter is that labels are all about the bottom line. They look at artists as numbers on their spreadsheets hoping for hits. That’s why as a manager you must do your due diligence for your client before signing on the dotted line.  

First, your client doesn't want a loan from a label. 

Ari Herstand, author of the book How to Make It in the New Music Business, once said, “The major label deal is the worst kind of loan in the history of loans.”  

He’s right. While it may feel great to get an influx of money to fuel your client’s music career, keep in mind a label loan could deter or defer those goals.  

Second, your client wants to retain ownership of their music.  

When your client accepts an advance from a label, in the majority of cases, your artist gives up ownership of their masters – and the revenue that comes with it.  

It can take years – or in most cases, never – to get ownership of your client’s catalog back. Consider what giving up ownership of your client’s music means to them and their long-term goals before advising that they sign with a major label. 

Next, your client wants to keep control of their music output.  

In the major label system, releases become more involved according to your agreement and advance. That advance comes with conditions, one of many being the label's control over your client’s music output.  

Despite the number of songs you may have ready to go, the label will dictate if, how, and when those records will be released through their system and your agreement. If your client releases music regularly and consistently, consider how an advance could affect their release schedule. 

Streaming revenue doesn’t always pay the bills, so consider how a label advance will affect your client's payout from streaming platforms.  

With an advance, marketing, and promotional support from a label, the amount made from streams is much lower. The shares of streaming revenue are still mostly in the hands of labels, with artists typically receiving just a little over 10%. 

There are plenty of distributors that will allow your client to release their music without a record label. Money generated from distributors is 100% free of major label involvement, meaning any money received is 100% your client's.  

Revenue from streams can be used for remarketing and/or building the artist's business. 

Why should managers seek out funding alternatives? 

Mullen: The path to music career success for your client has changed: they don’t need a traditional label deal anymore. 

There are more artist-friendly platforms that provide access and services for everything from digital marketing to radio, press, playlist promotions, and much more. Smart managers are seeking private investors and music funding platforms that provide the services their clients need without taking ownership or control over their career – like beatBread. 

beatBread allows artists the ability to tap into the capital funding they need without the restrictions of a traditional label deal. Your client the ability to customize their deal terms, retain ownership, creative control, and chart their own course with your help.