Indie band turns itself into company instead of signing record deal (opens in new tab)

I've quite literally done that before. It worked out OK, but there was never enough capital to market the band properly and we ended up with about 800 CDs that still sit in my friend's closet.

The good part about it is that each member gets an equity stake, and people who are not performers, but also help out the band (guy at merch table, managers, website guy, recording engineer, etc) can get equity stakes as well. That way, everyone is invested in making the best product possible, and sees a tangible return when things start selling.

The bad part was that it was hard to explain retained capital to a drummer. As soon as the band started to turn a profit, people wanted their money out of it. It was impossible to convince them that the money would be better spent marketing the band so that they could sell even more albums/t-shirts.

This is very common... at least with the people I know. As an example, one of my bands formed an LLC, raised $20k in "VC" and went on the road. Once we got a good enough following, our LLC put together a deal with a record company for distribution. Everyone was happy and we had a good run.

If I may add a nice rant, I hate it when people bitch about evil record labels. Seriously, if an artist gets screwed by a label, it is their fault for not taking the time to learn the business or finding someone who will learn.

This is a fascinating action for both parties. Musicians decry the heavy hand and unending greed of most Record labels. Now the label has a vested interest but the band will act independently.

I don't think it's earth shattering in any way, and it's surely not the direction most bands should go as they aren't always the best at making their own decisions, and usually they just care about the music and not the business side of things. Sure a Manager can act as CEO but I still can't see it being a universal platform for bands in the future. What do you guys think?

It will be interesting to see how this band does!

I love the idea, and I'm glad that Normative is getting some attention. They've got a great sense of what works and what doesn't with the Internet. Check out www.amodernpromise.com - it's one of the best CD sales pages I've ever seen.