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Understanding the business side of music
Art

Understanding the business side of music

Music is part of the thriving creative industry that can contribute to the economic value as well as build a positive image. In Ethiopia there are many iconic artistes that have gained global acclaim and behind those artistes are unrecognized hardworking music managers.

Leul Shoaferaw is the founding director of WAG Entertainment Agency. WAG is a company that specializes in artiste management, event management, creative production and corporate brand integration. The company aims to fill the gap of representation, organization and management for up-and-coming young professional artistes. The company includes artistes such as Endeguena Mulu (Ethiopian Records), Negarit, The Green Manalishi and Edom Baheru. WAG positions itself as the promoter and representation of the new wave of music movement in Ethiopia.

Music managers are professionals who handle the business aspect of music. These activities include finding gigs, negotiating on behalf of the artiste on possible job offers, managing the money of the musician, finding investment opportunities, engage with other industry professionals like booking agents, venues, promoters, etc. Additionally, music managers are involved in advising, and guiding musicians to further their professional career. Even though music management is not a common trend in Ethiopia, it has always been an important profession in the global music industry. The commercial side of music proves to be a challenge for musicians as they have to meddle between creating the product and selling the product and this drains their creative capacity. Leul told the Reporter that this is why music managers are important. “Tthey enable an environment where musicians focus entirely on making music while the rest of the job is being handled by the music manager,” he said.

“When I decided to pursue a career in the creative sector as an artiste and entrepreneur, I never had the guidance or the creative support that would nurture my talent and development. In the beginning, I came across a lot of setbacks because of the lack of understanding of the business and lack of exposure. Learning through tough experiences, I invested my time and resources to take part in various international initiatives that were focused on collaborations and business development. I went to Burkina Faso, Kenya, Ghana, Benin, France and Belgium to help myself gain experience to succeed in my venture. It also equipped me with the necessary tools that helped me in formulating hands-on and technology compliant business models,” Leul told The Reporter.

 

Leul said that he started WAG Entertainment Agency for two major reasons. The first ideological reason is about the vision of the company which aims at elevating art and solidifying culture as a way of living. Art is not just an emotional outlet; it is where everything we know makes a paradigm shift. “I believe arts and culture are important because they not only entertain but also challenge, and make the society aspire for a better world.”

The second and practical reason is to package relevant art as a commodity where people can consume it as a convenient good. As the world is venturing towards a digital age, it is evident there have be a new ways to reach your target market and sell your content. “In addition to traditional approaches such as shows, tours and live performances, the major vision we are spearheading, and testing is to make the contents we produce accessible on digital platforms,” Leul told The Reporter.
Even though, Ethiopia presents a huge marketing opportunity, it still lacks an adequate internet and technological surge. The lack of technological platform and the unavailability of a structured online payment system presents a considerable financial hurdle. Leul explained that they have been trying to solve this problem by seeking partnerships outside of Ethiopia, particularly Kenya to extend the marketing reach in the East Africa region.

Ethiopia is a nation with rich and diversified cultural heritage, i.e. language, tradition, art, music etc. and its music has an important social and cultural impact on society. Although Ethiopian music has existed for thousands of years, Ethiopia had never positioned itself as a culture exporter with the exception of a few notable artistes such as Mulatu Astatke, Mahmoud Ahmed and Endeguena Mulu, who has released four EPs with record labels in the US and UK. Leul says that the lack of export may attribute to many reasons although mostly it is about substandard production and conceptual quality of music as well as lack of exposure, lack of understanding of the global music business, communication challenges, etc.

Nahom Belaineh, a 28-year-old entrepreneur, who runs a company called Online Communications PLC, told The Reporter that his company offers full-fledged digital marketing, event organizing, and entertainment services. Nahom is currently managing the young and talented reggae artiste Yohana for over a year and a half. He has also managed Sami Dan for the first three years of his career since the launch of his debut album.

Nahom told The Reporter that one of the challenges is the lack of understanding about the importance of a manager by several stakeholders within the entertainment business. Most get offended when the artiste directs them to the manager for any queries as they prefer to talk directly with the artiste, some think the artiste is being arrogant, and others feel dealing with managers increases booking fees. What all must know is a manager works for the artiste and they are aware of any decisions made by the manager.

Nahom explained that the word industry refers to several businesses engaged within a certain sector and can be described with many statistical figures which cannot be said for the music market in Ethiopia.

For instance, in the textile industry, you can describe the number of players, job opportunities created, tax paid to the government, manufacturing capacity of each player and industry combined, foreign exchange generated by exporting, the market growth forecast for investment opportunities, etc.

Leul prefers to call it more of a music scene rather than a music industry. “What we have is music producers making music here and there without a proper and systematic approach of selling and marketing music and that is why WAG is helping to create an ecosystem that is an economically viable musical and cultural solution.”

Nahom added that the other biggest challenge is lack of structured distribution system to sell music and collect royalty fee which forces them to rely on the performance fees only thereby weakening their financial freedom. When artistes are unable to generate revenue from multiple sources they will inevitably be forced to depend on company’s sponsorship, directly to put out albums and indirectly to be booked for concerts as promoters cannot organize shows without it. Music business need to self-sustain primarily by enabling artistes to transact with listeners.

Nahom notes the impact of YouTube on the market. There has been a rise of releasing singles instead of putting out albums as they take too long and lots of money. YouTube has become an option for artistes where they can be able to make money. Artistes make money from YouTube through streaming and advertisement revenue sharing and on average it pays USD 740 per 1 million views and 55 percent of ad revenue generated. YouTube music channels here sign either a 50/50 deal of sharing revenue or buy publishing and distribution copyright in perpetuity for one time flat fee. Though YouTube’s pay per view is quite small, the main income is from ads. These ads are based on location, and there aren’t many ads targeting viewers from Ethiopia and so significant portion of ad revenue is generated from views abroad such as Europe, Middle East and North America. Songs such as Tigrinya and Amharic seem to be popular in these regions, hence the growing number of such type of songs being made. Additionally, YouTube has made it convenient to join the music industry. Unlike the past, one does not have to go through auditions. If one can afford to pay for lyrics, melody, music arrangement, mixing, mastering and video production, you can make a song and put in on YouTube and even have it aired on TV.

Nahom told The Reporter that as Ethiopia has not tapped into the enormous economic potential of the music business within the local market that should be the primary focus, not exporting music. Nahom believes exporting music is difficult because Ethiopia is a different country from other African countries, mainly in terms of language. Due to the colonial period, other African countries share similar languages and ties amongst them such as Francophone and Anglophone countries. A Kenyan artiste can look to promoting his music to listeners in Tanzania, Rwanda, Uganda and Burundi, and vice versa. We have several artists who won continental awards, AFRIMA and KORA, but do these artistes get either booking or collaboration requests from other African countries? Or are their songs heard by other Africans after the award and exposure? That is highly doubtable, Nahom said.

Contributed by Sesina Hailou