Music Funding 101

How A Sponsorship Replaces A Record Label

The beauty of a sponsorship (if large enough) is that it takes care of almost all the things that a traditional label normally does. Not only that, but once a sponsorship is agreed to, the band knows for a fact that the agreed activities will take place, as opposed to being signed to a label where the band has no idea if anything is going to take place at all. (And on top of that, the band can't leave the label because of the contract.) Matter of fact, for every band that you see being marketed by a major label, there are probably 300 others that you don't see, because they are not high enough on the label's priority; so they are stuck.

A sponsorship, to start with, can hire all the same radio airplay promotion people that the labels would hire, IF the label were actually going to do it in the first place. And not only this, but radio ads, which are very expensive items for labels to consider, are a standard item for even the smaller sponsorship examples on TalentFunding.com

Touring, another item that is very costly and difficult for a label to set up, is one of the very first activities that almost all sponsorships cover (unless the sponsorship is the "trying to get signed" type). Touring is the first way that you get a sponsor's name in front of the eyeballs of lots of fans, and it's tied directly to the "fun" aspect of band sponsorships in general.

Large scale CD manufacturing, which is needed for larger sponsorships, is about all that most bands get from a regular label. CD manufacturing is not as big of a sponsorship advantage as radio or touring, but it is still useful, and the band will like getting it done their own way (since they have control over it).

One hidden advantage of sponsorships is the A&R function of regular labels (which encompasses the selection of songs for the album and for promotion). With sponsorships, the need for "song selection" by some "controlling" label people is eliminated; it is instead done by the band-sponsor partnership.

Speed is also a sponsorship advantage; since the money is obtained up front, it is ready to be spent as needed. A regular label needs to see what kind of initial sales there are before it decides to spend more money (if it spends it at all).

And what about the contract length? Most label-deals are multi-album, which means several years; some are as long as seven years. Sponsorships however can be as short as eight weeks, although longer is definitely better, especially if paid in advance.

About the only area where a traditional label works better (again, assuming the label wants to do it for the band) is in getting CDs into retail stores and selling them there (that's two separate feats). Labels have to be good at this, since it's where most of the money comes from for them. But even this area is changing due to downloads. And even so, when it comes to getting cash from CD sales, almost every single indie bands sells all of their CDs at live shows, not in stores. Matter of fact, indie bands make most of their money from CDs and merchandise sold at these live shows.

So, bands should view sponsorships as a way to remove almost all the negative aspects of the regular music business. As long as a suitable sponsor can be found which matches the persona of the band, and as long as the money is there, a band can be much happier with a sponsorship than with a label deal.

Next Article: How Much Time A Band Should Spend On Sponsorship Searching
List of All Articles