The music economy series of articles looked at a number of areas where an artist can make their money from. Determining one’s worth in line with competitive forces and industry trends is particularly challenging in this era of the independent DIY (do it yourself) artist. This time around the focus is on the buzz word that many like to throw around, called “branding”. Let’s first have a look at what constitutes the establishment of a brand…
According to investopedia , a brand is “a distinguishing symbol, mark, logo, name, word, sentence or a combination of these items that companies use to distinguish their product from others in the market. Legal protection given to a brand name is called a trademark.” In the Accounting discipline the element of “brand value” would be categorised as an intangible asset because one cannot see or hold a brand. According to financial principles, establishing the value of a brand is measured by past performances in order to determine the future selling value, were it to be sold to a willing buyer.
In the context of an artist, if they wanted to sell their name to a company, aspects such as sales records of albums and merchandise would be looked at first. Another revenue stream that would be duly considered would be concert bookings, particularly the frequency thereof. The aim is to ascertain a monetary value of all income streams when tallied. Other future and developmental determinants would be the artist’s relevancy in terms of their media presence and social standing (public perception), just as an example. The value of a brand is thus given a future worth according to expected earnings from the artist’s brand.
Brand valuation is a premise for a practice done by major record labels who sign artists on a 360 deal. The 360 deal entails that an artist would sign over their name to the record label and they can monetise as much as they want, from using the artist’s name whichever way they deem commercially fit. You as the artistic creator of the brand, upon signing over your name, will not have much say as to what happens with your brand from that point onwards.
Other forms of revenue streams that are aligned with an artist’s brand are advertising and brand endorsements. Revenue in the form of endorsements is mainly pegged on public perception. This means the status of an artist as an endorser/ brand ambassador is dependent on how they behave in public, as a starting point. Negative backlash or reported bad behaviour of an artist could compromise the relationship of the endorsed company with their clients, thus affecting their financial earnings. It is thus advisable that artists behave responsibly should they seek to get earnings through endorsements and brand ambassadorial advertising.
An artist’s ‘brand’ should therefore be viewed as an extension of the artist. It isn’t completely them – but something they should be responsible with. Hence, it is even viewable as a legal person, meaning the brand as an entity can be sued should it infringe upon other people’s rights. Protect your name and reputation as much as you can and at all times. Failure to do that will hurt your pockets at some point in time.