- His advice to would-be investors is to be passionate about the industry or find someone who is and invest in them. The ability to spot a talent that will not disappoint and invest in them when they are coming up is crucial in this business, he says.
- Mike advices investors to understand the various revenue sources and the inherent risks involved, consult with professionals in the industry and if possible have a mentor.
- He also emphasises the need to strengthen copyright laws. He points out that Kenyan music is not being compensated adequately because music users are hardly paying for it.
By BONFACE NYAGA
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It is said that there’s no business like show business, and those who have invested in it can attest to it. It is a world of glitz, glamour and make believe, dramatic highs and catastrophic lows.
An industry that has created as many billionaires as it has bankruptcies, rewarded strategic investments and punished folly with an unforgiving wrath. To the wise and experienced it’s a goldmine waiting to be explored, but to the ignorant, a mine field that will sink you financially. Unlike other sectors where the risks are obvious, showbiz is like a masquerade where nothing is as it seems. Nonetheless there are those who have put their money where their heart is and lived to tell the tale of a grand adventure.
Peter Nduati is the CEO and founder of Pine Creek Records, one of the few long standing Record labels in Kenya. After nearly 12 years of showbiz investment, he admits that there are easier ways of making money, but he pushes on because of passion. He started out in artiste management when he realised that local music was growing in popularity but there was no structured management. After a while, he went into content creation and begun offering 360 degree deals to his artistes. He says:
“There is money in showbiz: In 2008 you could make upwards of two million shillings profit per album. The main revenue sources then were CD sales, endorsements and performance fees. At one point we had over 22 artistes but with time we have scaled down and focused our energies on live performing artistes,”
Over the years his biggest challenge has been artistes failing to stick to the contract. “In many instances, he has poured cash to grow the talent and brand of various artistes only for them to either leave and start their own labels or take bookings without giving it (the label) their fair share.”
In his experience, artistes want to plant with the label but keep all the harvest to themselves.
“In comparison to the other lines of business I am in, Showbiz is by far the hardest,” he admits. “Unlike other sectors you can’t always predict how the market will react to the product. Artistes are also very temperamental, you can invest a lot of money into a project only for the artiste to change their mind about the whole thing.”
His advice to would-be investors is to be passionate about the industry or find someone who is and invest in them. The ability to spot a talent that will not disappoint and invest in them when they are coming up is crucial in this business, he says.
Mike Strano is the CEO and founder of Phat Entertainment. His was the first Kenyan entertainment magazine to be distributed to Tanzania, South Africa and the region. In 1999 he abandoned a promising future in Agribusiness to pursue his passion; showbiz. Since then his business interests have expanded to include Event Production, Intellectual Property management and video on demand.
PHAT! Intellectual Property, is arguably East Africa’s leading music publisher and has represented SHEER Publishing, in the Region, since 2012; with Clients including: Alikiba, Cannibal, Cindy Sanyu, Eric Musyoka, Eric Wainaina, Girum Mezmur, H_Art the Band, Jackie Chandiru, Jay A, Johnny Ragga, Kawesa, Kidum, Maurice Kirya, Navio, Radio and Weasel, Sauti Sol, Suzanna Owiyo, Timwork, Tsedenia, Xpat, and so many more.
In 2016, Business Daily and KPMG listed Phat at number 36 in the Top 100 Mid-Sized Businesses in Kenya. He says:
“My first business venture in showbiz actually drove me broke, I was young and inexperienced but it taught me a lot. You need to have a business plan before you put your money into showbiz, I never did, and it cost me time and money.”
Mike advices investors to understand the various revenue sources and the inherent risks involved, consult with professionals in the industry and if possible have a mentor.
Bernard Kioko is an IT guru who has made an indelible mark in the Kenyan showbiz industry. Through his company Bernsoft and Connect Forum he has created platforms for artistes to commercialise their talent.
He admits that investing in music in Kenya at the moment presents a major challenge because the return on investment is almost non-existent. However, this challenge presents an opportunity for long term investors to setup structures that ensure the sector becomes profitable.
STRENGTH IN NUMBERS
“We need a proper distribution network for the music industry to be profitable. Piracy is also a big issue but to me, piracy is just a result of poor distribution. Consumers want music but if we as an industry don’t find ways for them to access it easily they will go the piracy way,” he explains.
For the industry to function well, he says data needs to be shared and statistics derived so investors can make informed decisions.
He also emphasises the need to strengthen copyright laws. He points out that Kenyan music is not being compensated adequately because music users are hardly paying for it. He observes that to a large extent the problem stems from within the industry; in fighting among music stake holders has led the music users to devalue music.
“Governments and institutions pay a lot of attention to organised associations and lobbying groups.
Every musician should belong to an association that meets the vision and objectives they have as an artist. We cannot lobby the government for change when we are not united as an industry,” he says.
The unbreakable rule of showbiz is that the show must go on; money or no money, profit or loss.
Passionate artistes will continue making great music and when the beat hits the speaker the dance floor will be full. Yet for the sector to reach its full potential and contribute to the national economy money needs to be put on the table.
To navigate the mine field of showbiz risk, smart, experienced entrepreneurs and able investors need to come together and “face the music”.