Project description
A music producer working in a renowned London music studio saw a business opportunity in marketing music productions in 3D audio format. His business model consists of four sources of income:
- an artist academy (training artists to produce music themselves),
- a music promotion agency (training artists to market music themselves),
- a music production company with a focus on 3D content (as a professional service),
- a music label including distribution and publishing (as a professional service).
The first two of these four sources of income are based on coaching and services that help artists produce their songs better and market them more successfully themselves. Those who do not want to do this themselves can also use professional services: These are the subject of the last two business areas. Here, the production of music as an artistic service and the professional distribution of music are offered.
We wrote the business plan for this complex business model and calculated the company value, which helped the entrepreneur in his negotiations with investors. He got financed with EUR 1.5 million.
What banks look at in a music publishing business plan
A music publisher earns income from rights: royalties from streaming, broadcasting, licensing and live performance, usually collected through collecting societies. The plan should show the catalogue, the contracts with artists and composers, and the expected royalty flows.
Because revenue arrives with a delay, the liquidity plan must bridge the time between investing in artists or catalogue and receiving the first payments. Costs include advances, promotion, administration and legal advice.
Lenders value a transparent view of rights ownership, contract terms and the diversification of income. Scenarios for the success and underperformance of releases show the bank the range of possible outcomes.
