SFF56: YOUR LABEL HAS A BUSINESS PLAN. DO YOU?

The priorities are changing. Who is building - and funding - your artist’s future?

But I’m gonna wait until its feels right…”

TL;DR

• A&R investment does not automatically mean artist development.

• Management needs a continuing strategy beyond campaign budgets.

• Sound Effects helps build that strategy and assemble the support. Labels should be part of the funding conversation. 

Managers regularly tell us they no longer receive the support, experience or expertise they once expected from their labels. 

Having led Insight & Strategy globally at Warner Music Group, I take that seriously. Yes, brilliant people remain inside labels, but removing experienced people removes knowledge, relationships and capacity. But those responsibilities don’t disappear with the salaries. 

Excel Umeh’s recent post questions whether leaner teams can deliver without losing what made them effective. 

Warner’s July 2025 restructuring targeted $300 million in annual savings, including approximately $170 million from headcount reductions. Universal is pursuing €250 million in annual savings, with further departures reported in October. 

Yet we keep hearing about investment in A&R. 

But hold on. Investment in what, exactly? 

Kyncl’s July memo included off-roster catalogue and publishing within its A&R investment framework. Buying established rights and funding an artist through years of uncertainty are different commercial decisions. So, as I argued in When Music Labels Become Investment Funds, managers must examine the priorities behind the language. 

more asset management company, than music company

My reading is that the centre of gravity is shifting towards acquiring demonstrated value, with more early development work and risk sitting outside the majors. Development hasn’t disappeared. Managers simply cannot afford to mistake an A&R investment announcement for a commitment to do that work for them. 

This commercial choice may be entirely rational for the senior management and shareholders of a major. But what makes sense for a record company’s investment portfolio does not automatically provide a strategy for an artist’s career, or sustain the wider music business that develops tomorrow’s talent. 

If the priority is acquiring value somebody else has created, who funds the uncertain years? Who develops the artist, builds the audience and carries the risk before there is an attractive asset to buy? 

“Yet we keep hearing about investment in A&R. “

Managers need answers to three questions. 

1.     What is actually committed? Establish which people, expertise, budget and time your label will provide. Identify what remains your responsibility and how you will deliver it. 

2.     Who owns the continuing plan? What sustains the career between campaign cycles? Who understands why fans care, reconnects with lapsed fans, attracts new ones and develops income beyond the next release? An artist’s future cannot depend on waiting for the next campaign cycle. 

3.     Who pays for the gaps? Taking responsibility doesn’t mean management must absorb every cost. Cost reductions are a reason to challenge investment priorities. Bring your label a specific proposal: the missing capability, what it costs, who delivers it and how both parties benefit. Ask them to help fund it. 

There is an exciting opportunity here to take greater control, build lasting fan relationships and get more from your partners. 

At Sound Effects, we help managers develop the strategy, identify missing capabilities and assemble the appropriate team, tools and partners.

We help you understand who your fans are, why they care, what could bring lapsed fans back and what could attract new ones. Through the Superfan Engine, we turn that understanding into opportunities for participation, advocacy and growth. We identify revenue opportunities rooted in what fans value and bring together the expertise to put the strategy into practice. 

Your label has its priorities. Your artist needs a continuing plan of their own. 

Come and have a coffee with us. Let’s look at your ambitions, the support already in place and what’s missing - then map what needs building, who should deliver it and who could help fund it.

WHAT COULD YOUR FANS HELP BUILD IF YOU INVESTED IN THEM?

Who’s strength do I speak of

Last week, I asked whether we were talking about superfans or super wallets.

With Amsterdam Dance Event opening today, I want to take that a step further. What are we prepared to invest in the people who care? My worry is that “superfan” still too easily becomes shorthand for someone we can sell more expensive shit to.

Fan-Centric & Superfan Revenue Models is an important conversation. Artists need sustainable businesses. But a plan built around asking the same people to spend more has limits.

A fanbase is an asset to invest in. Not a resource to be bleed dry for short-term gain, with the risk of destroying the very thing you’re hoping to grow.

Fans bring ideas, knowledge and connections. Someone who welcomes newcomers or introduces friends to your music can contribute enormously, even if they cannot afford another premium package.

From First Time Visitors to Lifetime Fans explores how those lasting relationships develop. For me, that starts with understanding what made the experience matter. Did someone feel they belonged? Did the music connect with something in their life? Did they find people who understood them?

Follower counts, likes and purchases can’t answer those questions on their own. Even repeat attendance only tells us they came back. Understanding why means talking to people about what they feel, value and believe. That understanding helps us see what fans might enjoy contributing, and identify other people likely to connect for similar reasons.

Then there’s Becoming the Fans First Choice in an Agentic World. In plain English, that includes AI helping people decide what to do. My question is what makes someone care enough to seek you out or recommend you to a friend.

Even after all the artists we’ve worked with, across different genres and far-flung corners of the world, we go into each project without preconceived ideas. The best innovations and opportunities come from the fans themselves. They’re hardly going to say, “Oh, what we really want is a Superfan App.” But listen properly, watch what they do, and those unspoken needs start to reveal themselves. That’s where the opportunities are.

Before planning the next premium offer, invite fans into a conversation about something they would love to help create. Understand why it matters, support a useful idea and show them what happened because they contributed.

Those conversations can also reveal worthwhile new offers: experiences people actually want, or partnerships that fit their interests. That gives revenue growth a foundation in what matters to fans.

That takes time, attention and resources between releases and events. It gives fans a reason to stay involved when there is nothing new to buy.

What could your fans help build if you invested in them?

Nancy, a behavioural scientist on our Sound Effects team, will be at ADE this week. If you’re exploring fan understanding and growth, reply and I’ll introduce you.