The Business of Music
KIZITO OKECHUKWU | APRIL 2, 2019
Photo: Chaka Khan at the Cape Town International Jazz Festival 2019
Music is the art that makes us heard. Whether it’s expressing love, sharing memories and experiences or even making political statements, music finds the ear of everyone, young or old, often helping to make the day or night a better one.
For musicians, agents, managers, marketers and record labels, it’s an industry that employs millions of people and is worth over US$17.3 billion globally.
However, in the entrepreneurial space, it’s an industry that has not gained much traction. Many people do not see musicians as entrepreneurs, but they are! I doubt there are entrepreneurship programmes or initiatives that focus on incubating and mentoring young musicians, polishing their talents and promoting their talent. Sure, TV shows like Idols and The Voice have proved hugely popular and advanced quite a few musical careers, but in a broader context, their contribution is fairly minimal. I might be ignorant, but I think organisations like Sony do have some programmes for attracting music talents. The truth is that the entrepreneurship ecosystem has greatly ignored this industry and I’m not sure that the venture capitalists and developmental financial institutions in the entrepreneurship space even consider budding musicians investment-worthy.
Last week, I attended the annual International Cape Town Jazz Festival. I try to do this every year, yes as a music lover but actually more as a business person, as I also find it a great space to network with my peers and key individuals in both the private and public sector within the corporate hospitality village – and the jazz provides the perfect relaxed ambiance to do just that. The festival had quite a few business A-listers in attendance. I saw Patrice Motsepe and his wife Dr Precious Motsepe, a few ministers, MECs, corporate CEOs and business people. Even Alan Winde, the MEC of Economic Development from Western Cape, who’s set to be the next Premier of Western Cape was there. We had a brief chat and he jokingly said we must connect in 39 days’ time – showing he’s really counting down the days before the elections. Among other performers at the jazz, Chaka Khan also had a stellar performance with a packed crowd. This is the power of music. It brings people, be they business-minded or social butterflies, together from everywhere and anywhere.
So what about the monetizing power of music? I believe that young, upcoming musicians should be regarded as entrepreneurs – even as start-ups. Simply put, they’ve got a product to sell, yet need support and investment to maximize their market presence. Let’s crunch a few numbers.
Just last week alone, South Africa hosted Ed Sheeran for two shows in both Johannesburg and Cape Town. I think the Johannesburg show had over 70 000 in attendance each day with an average ticket price of R900. That, over two days, equates to R126 million, excluding drinks and snacks sold. Cape Town had over 50 000 fans each day, raking in some R90 million. Both venues (including drinks/snacks) together should have brought in almost R300 million for the organisers.
With ticket prices of R1300, the Jazz Festival generated some R26 million over two days, which excludes sales of merchandise, drinks and snacks sales. With corporate sponsors in play, I reckon the festival could have generated close to R100 million. This is great for South Africa’s economy and I think we must exploit young musical talents and grow them to become global and local brands.
The monetizing muscle of the music industry will never wane. Now we must find avenues to empower more ‘musical start-ups’ to get their piece of the pie and be sustainable. In addition to TV talent shows, we need to incubate, mentor and accelerate their growth, much as we do
with other sectors – or any other start-ups. Venture capitalists and developmental financial institutions should consider them as a viable business model that needs to be supported and formalized, much like what’s been done in the US. I guess big names in South Africa like AKA, Cassper Nyovest, and Shekhinah are already formalised and are doing good stuff. The focus must also be in growing young talents.
I could close with a musical analogy, but there are just too many to choose from!
Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane is Africa’s largest startup campus.
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