How to Start an Artist Development Company

by Andra Picincu - Updated July 25, 2018
Musicians rely on artist development companies for guidance and support.

Entertainment is a huge industry. In 2016, this market was worth $1.8 trillion in the U.S. alone. Experts predict that it will reach $2.2 trillion by 2021. If you're good at discovering new talent, you could launch an artist development company. This will give you a chance to help aspiring musicians and make a name for yourself.

What Is Artist Development?

Artist development companies provide services that help increase awareness of musicians so they can grow their careers. These may include artist relations, promotion, song production, social media marketing and vocal coaching.

Some companies also help with the creative direction of shows and video campaigns. Others create Kodi music add-ons, YouTube videos and other materials to promote new talent and generate exposure for musical performers. They work closely with aspiring artists, helping them develop the skills needed to succeed in this industry.

Choose Your Niche

If you're planning to launch your own artist development business, start by choosing a niche. Pick a specific music genre on which to focus, such as country, rock or hip-hop. The more narrow your niche, the more targeted your efforts will be.

Research the market in which you're interested. Gather information about emerging artists, successful musical performers and industry trends. Rock, for instance, accounted for 22.2 percent of total music consumption in the U.S. in 2017. Rap, pop, R&B and country were the next on the list.

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Get a License

Most states don't require a professional license for artist managers and artist development companies. Those that require one usually charge a bonding fee.

California, for example, has strict laws relating to talent agencies and artists. Those who work in this industry must obtain a license from the labor commissioner. Furthermore, they must display their license number in any advertisement designed to attract talent.

Colorado, on the other hand, only requires a business license, not a specific professional license. Artist development companies that operate in Florida must carry a license unless they are registered as non-profit organizations. Some states also require artist relations managers and agents to have sample contracts.

Check the laws in your state to determine whether or not licensing is necessary. You must also register your company's name, choose a business structure and apply for an employer identification number. These steps are required for starting any type of business.

Draft a Contract

Before you start searching for talent, make a contract that describes your services and requirements, payment terms, termination clauses and other aspects. Consider your state's laws as well. Include a confidentiality clause to prevent other parties from disclosing your business information.

Make a Business Plan

A love for music is not enough to ensure the success of your business. You need a plan to grow and promote your artist development agency. Assess the costs involved, choose a location and come up with a marketing strategy.

Also, determine how you're going to generate revenue. In general, artist relations managers take a percentage cut of their artists’ earnings. This commission usually varies between 15 percent and 25 percent. Beware that it can take months for an artist to earn money, so make sure you have sufficient funds to keep your business running.

Another option is to offer package deals at a fixed price. Some companies charge different rates based on the services provided. Video production, for instance, will have a different price than online advertising.

You could also provide an artist development deal, which usually involves working with aspiring musicians for up to one year. Basically, you will help them develop their skills, release their first song and build a fan base. In this case, your company takes control of the artists' publishing rights.

Advertise Your Services

Decide how you are going to promote your services and reach out to artists. From setting up a website to advertising on social networks and sponsoring festivals, your possibilities are endless. Hold auditions in your city, connect with club owners and attend local events where you could find potential talent.

Connections are everything in the entertainment industry. The more people you know, the higher your chances of success. Get involved in the local music community and market your services both online and offline. Send out press releases, distribute flyers and go out to shows.

About the Author

Andra Picincu is a digital marketing consultant with over nine years of experience. She works closely with small businesses and large organizations alike to help them grow and increase brand awareness.

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