Music Entrepreneur’s Journey: Building Global Success from Estonia

Jakob

Hey guys and welcome back to the Sound Conditions Podcast. Today we have an episode in partnership with Tallinn Music Week that I will be at next week. Britt, welcome to the studio.

Britt Randma

Nice to see you and see you at Tally Music Week!

Jakob

Absolutely. Okay, we're to talk about something interesting today and that is music export and management from small countries. I live in Norway and I lived most of my life in Denmark, both two small countries that has done pretty well on the international stage. But people oftentimes would not believe how difficult it is to actually make a living even when you're successful. We're going to talk about those topics today and the reason why we're talking to you, Britt, is because you are successful in your territory and you just won a bunch of awards and it's going to be really interesting to sort of dissect the financial reality of that to some degree and also just your experience of being in a small country with music export what that actually means. But Britt, for the people who don't know you and your accolades, who are you and what do?

Britt Randma

Hmm? So my name is Britt Ranma, I'm from Estonia and I work, basically I am an entrepreneur, music entrepreneur, that's how I would largely introduce myself. I do a company called Main Character Agency and I manage a couple of acts, currently mainly focused on Night Tapes, which has won Music Moves Europe award and I do several things because I'm from a small country so to make it sustainable basically you have to tap into different territories. I'm also working in Music Estonia as a marketing and communication manager and I'm also working or doing organizing parties called Reiville Minuka and I'm also a DJ so tapping into different territories and also as a freelancer providing different services to artists. Now less because time is a limited resource of course but yeah I've had the privilege to work with so many different Estonian artists and see how things are done as I have previous experiences as well. in record labels, sub labels of Sony Music and sub label of Warner Music working with local acts. So it has given a great overview of how to do things basically, which has also been a great platform to basically export to music or like see how things are done in a more professional way. I think like organization like Music Estonia and also like the Festival Tally Music Week has actually like really elevated the ground for us through that, like getting more international people to Estonia to get collaborations, know, partners etc. So like they have done a wonderful work with that.

Jakob

Amazing. You what strikes me is... you do multiple things and you know, for the average station, you're like, oh, why is she so busy? But the financial reality of local music in a small market is exactly that. Like not even has the manager a hard time sustaining like a seemingly successful act, but even also the band members and the artists, it's given that you might be one of top 10 names in a country and still not make what really is a livable wage. Could you maybe high level explain what is the

Britt Randma

Mm-hmm.

Britt Randma

Mm-hmm.

Britt Randma

Mm-hmm.

Britt Randma

Mm-hmm.

Jakob

financial reality of a local successful act.

Britt Randma

Yeah, it's basically you either have like two options if you work with artists, right? So you can either choose the path of doing things locally basically and do something that is quite commercial and go with this way because like there are examples of these type of artists who are doing quite well. For example, we have a big name called Nublu who is like a local hip hop act. There's also like pop and hip hop are the biggest genres I would say in general. And like you of course need to sing in Estonian to resonate with local audience. Or the second thing you could do is like kind of focus for other markets, which is of course the longer way. And that's kind of as an artist manager, for example, I'm actually in a similar role with the upcoming artists basically just like building a foundation, which takes several years to get into like more secure place. And then at some point you basically start actually like earning. But yeah, it's funny because like a lot of people work with night tapes who are actually based in London. and the lead singer is also originally from Estonia so it is a bit different case but like we have kind of given the main focus for markets abroad and our main audience is actually based in US like around like 80 % of our listeners are US people so like just last year we did like a first headline tour which was basically sold out only in New York we didn't sell 80 I think 80 tickets were left to sell and it was like 650 capacity which is not the typical venue size we even do in Europe and UK where we are based, right? But yeah, it's more complex way because it just takes a lot of more time and what you need to consider is that you kind of, it's like an investment project. In the beginning, you will invest a lot of money and it will hopefully return and you basically need investors or partners because like if you don't have a lot of resources by yourself, it is not possible to do that. For example, like just when we went to US, the visas for four people were 14K. I think most of the fans actually can't pay that amount. It's not very realistic unless you are going to go there several times, you know, you're going to maximize the potential of there. But because like if you just have one gig, then it doesn't make sense. Right. So it's a very complex word. And like every time, like there's like a lot of artists also from Estonia who come to me and like they ask for advice or they're like, would you like to manage me or like would you want to work with my music expert? And I'm like, well, I'm just going to be really honest with you.

Britt Randma

First of all, music management is a very complex position. You're kind of very hands-on, it takes a lot of time. It's very time-occupying, but it doesn't give you the immediate like kind of financials. So like it's, you are literally like building the foundation together with an artist. And like when somebody wants help with music export, this is even like more complex thing when you come from a small place, because when you're located in a smaller territory, then like you basically need to go out to other territories to make these connections, you know, and to build new partners. So it's time consuming, but it's very doable. For example, I actually used to live in LA for nine months. I went there with a program that we have in Baltic states called Puff. So I was working in a music management company there. And everything that seemed very surreal, unrealistic and not reachable to me as an Estonian, we have like 1.4 million people. So you can just imagine the difference of a size of the industry in LA. compared to like Estonia where I come from and I remember like I worked with Wise Blood and Beach House and I was like Tiny Desk for example seemed like such an impossible thing to reach to but then I understood like if you're in the right environment if you work hard enough that you have a great product like you will reach to these things at some point it's just a question of time how much time will it take you know and it does take investment of course because like to enlarge into new territories you need to

Jakob

Hmm.

Britt Randma

go there. That's the thing. A lot of things can be done digitally, of course, as well, as we live in a digital space. like this is like from one way, it's like difficulty, but from the other way, it's like such a wonderful opportunity to connect with anyone in the world, right? So like, like it's just lovely to maybe find ways digitally how to reach to people, but then as well have this real life interaction with them. So like you can actually build a meaningful connection, for example, with the fan base you have as an So it is a complex word, but at the same time it's a beautiful challenge, I would say.

Jakob

Yeah, well, yeah, that's one way of framing it. coming on the financials, I have this picture I use once in a while because I live in a country in Norway where pretty much all financials are transparent. You can also see what every single person owns, but then you need to register and people can see anyways. like pretty much everything is transparent. So I have a pretty good sense of like what companies, artists, managements are earning. I...

Britt Randma

Mm-hmm.

Britt Randma

Mm-hmm.

Jakob

sort of in my book when I look at local artists that sort of take out salaries or cost of their companies, know, if you do like 250,000 euros a year, you know, you do really well, like as an artist, you're like top 20. And people say like,

Britt Randma

Mm-hmm. Mm.

Jakob

Well, that's amazing. Like, what do mean you can't earn money on music? But I'm like, okay, sure. Let's just play that for two seconds. First of all, these people have been investing for 15, 20 years. They have not been making money up to that point. They're also public figures. And you would say they can be rarer than big, CEOs. So if you look at, okay, so what does a top 100 CEO earn in Norway? And what does a top... 10, well that's the top 20 assets to earn in OWE. So a top 20 assets to know I can maybe make 250,000 euros. A top 100 to you can maybe make, yeah, around two to four million euros. So just like, know, it is not well paid even at the top. And even if you look at, you know,

Britt Randma

Mm-hmm.

Jakob

You see these acquisitions of catalogs. Well, just Bieber just sold his catalog for 200 million. Like, yeah, that's a lot of money. I understand that. But again, if you look at the contrary, like what he has achieved compared to a tech founder, like it, there's not a proportion and oftentimes a 10, 20, 30 X difference in success and the equal value. The reason why I like that picture, it just, it just reminds people that you need to compare it to what it is, which is success.

Britt Randma

Yeah.

Jakob

And if you want to take that down to the micro level, like the upcoming artists or like locally breakthrough, that's the same financial reality. I have, I have friends who've won like, you know, national Grammys. I even have a friend who's a world champion in DJing, like, know, highly successful, big plays. won like an award for like, you know, the best theater play in Denmark, like hugely successful and barely paying rent.

Britt Randma

Mm-hmm.

Britt Randma

Yeah, I think, yeah.

Jakob

And that is all from the Finnish reality.

Britt Randma

Yeah, I think the numbers that you kind of often see online don't reflect the real reality. And that's very typical in the creative industries. And it's funny because actually, the workload can be similar probably to startup environment, I would assume, because like it's kind of like a lifestyle job. you actually 24-7, you're either if you're not like directly working, you're still thinking about your work or like, for example, like quite often when I'm in these like social events, in some ways it doesn't feel like a job. But at the same time, I'm representing my act. I'm representing myself. You know, I'm mingling. I'm networking. So like in some ways it is still work, you know So like we definitely work more actually than like normal hours are right? So yeah, it's very funny how like creative industries like it's so much more complex and for and I've had complexities for example For one act I work with like we try to get like Fundings like basically like fund support that is like private capital and It was super hard. I understood that it's very hard to kind of measure the success in music, especially if the person you're representing is not very familiar with the specific music scene that you're in. It seems like it's way easier in classical music because it has been existing longer basically. And I guess the venues or the awards are more familiar to these type of people. But I work in an alternative music sector. So just trying to explain

Jakob

Mm-hmm.

Jakob

Hmm.

Britt Randma

to an investor basically, like what makes an alternative music successful was quite interesting experience to go through because they were like literally like they were directly saying to me as well I don't understand how it works, like what are the measures of the success in this industry you know or like in this genre and I was like just like trying to put down like yeah like for example these stats are showing that or like performing in these festivals and like these type of elements like if you can you know still like make enough money that you're basically like surviving on your craft only for example like this is also like a measure of success i would say in a music industry basically or like for example i in my personal career i consider that the success that like i can say that i'm full time working in music even though i'm doing several things right like this like small measures of success even though like of course it would be easier to maybe like choose a job that is very stable and is like i don't know nine to five very limited in some ways there's like very specific like, you know, tasks, etc. But I think that's what kind of that's what it makes this job interesting for me as well, that it's always different. It's very diverse. It gives me opportunity to talk with so many different people who have such a different view to the world. And I feel like there's so much to learn from everyone, even like there's so much to learn from different fields. For example, I feel like even sports, as an example, like also much better funded than music, I feel. So like I think there's like a lot we can learn from each other and take from each other even though I don't agree with that thing that I think music shouldn't be competitive I think there's like room for everyone right it's just a question of taste and it's very subjective so like it's just like I do see with the band I manage for example that probably in like one to three years we're gonna make it as a sustainable career and this is like our focus that we could all live off this project basically. This is like one of my main kind of goals in the next few years because like we like as an example I can just bring like within a year this project has grown so much that for example like from publishing money we have received a hundred times more bigger amount than

Britt Randma

used to be, which shows that there has been an incredible growth, right? And like you can really tell that we are getting into a better place but we're still not quite there or I feel like it can still be so much better even though like we have like, I don't know, our most listened song has 10 million views, like listens. For most people this is what success looks like, right? If you would have a conversation with someone who is, who hasn't reached that milestone yet, they would probably be like, like yes, this is a measure of success and it is.

Jakob

Hmm.

Britt Randma

but at the same time, you can't expect this to still be financially stable project, which is kind of funny, because it is kind of surreal, like where is this money going to then? But yeah, if there's different partners as well, then you are distributing your money, that's also a thing probably to know as an artist or artist manager, but at the same time, you get the help of a team, which can also help you to progress and probably help you grow faster. For example, one specific goal I have for this year as well is we have a very small team basically and we have somehow managed to basically work like this. We have a label, we have an independent label right now and we do have a we do have a UK EU booking agent and we also have a US agent which is UTA, one of the biggest agencies in the world. But for example I do see that we need to grow the inner team basically to reach to new milestones and basically make more money. So for example like

Jakob

Thanks.

Britt Randma

I do see that I have a lot of different tasks because I am sometimes doing tour management, I'm doing merch, I'm doing... So there's like a list of different things but for example if there would be a separate person who would be responsible for merch, probably we could get even more money from this source, right? So like, so like this is like one of the main goals to actually like you need to expand to grow and this is a very important understanding as an entrepreneur that like literally you're not able to do everything by yourself. You need people to grow. That's kind of like one of the main understandings from last year.

Jakob

Mm-hmm. Yeah, it makes sense. I think, you know, this is the fundamental issue with music in general is there's really only money at the top, to be completely honest, because even, let's say, if you're of Estonia and you go on an American tour, like, I can only imagine that you guys have broken even on sold out concerts. Like, it's probably not more than that. Like, if you can take home a salary that's comparable to, like, a day rate for everyone, like, that's...

Britt Randma

Mm-hmm.

Britt Randma

Mm-hmm.

Jakob

Probably not even what happened. I can imagine. So like, you know, I think it's, I've been listening a lot. have a background in music production and I listened to a lot of, the writer is podcasts. I think I've, I haven't listened to all, but I've listened to like 150 episodes. I, you know, I always dive deep in one specific podcast. And I think I now I'm totally butchering what was said, but Justin Trantner, which is one of the world's most successful songwriters, he said something to the effect of.

Britt Randma

Mm-hmm.

Britt Randma

Mm-hmm.

Jakob

That if the song has a billion streams, that still is a stretch to live on. Because if you want to do the calculations, right? Yeah, I know, know. If you want to do the calculations, right, on average, you can argue, depending on sizes, the publishing share of a million streams is probably like $1,000. That's it, right? And then if the three writers in the room, then you have 350, something like that. And then oftentimes there's publisher. And if most of the income is international, you can probably erase it out at 40 % chance to publishers and sub publishers, which means as a writer with three people in room, you're left with what? $200 per million streams. If you want to times it up to a billion, that's $200,000 in a billion streams for a songwriter. Like if you live in Los Angeles, like Justin does, like

Britt Randma

Mm-hmm.

Jakob

Again, the statistics are you want to earn $150,000 per year in a household to live just comfortable. So if you have a billion streams in like the settings of where these songwriters live, it's like one year's living on a comfortable setting. That's about it, right? So what his argument was like, luckily he has radio, terrestrial radio, which pays much better and stuff like that. But that's the reality.

Britt Randma

Mm-hmm.

Britt Randma

Yeah.

Britt Randma

Mm.

Jakob

That's the reality of most of these artists and unless they try to convert like money in certain other ways, which sometimes is successful, you're not going to see the success unless you can monetize in different ways. So what are your guys' reflections on like alternative monetization of music? Do you guys have strategies or plans for that?

Britt Randma

Yeah, that's true.

Britt Randma

Ahem. Yeah, I mean, like we're constantly trying to find new ways how to do it. And we kind of want to find ways how to, of course, raise the money, but also build the community. That's also really important for us. But yeah, it's interesting how as a musician or band, you actually need to think about so many different things. Like literally, probably as we are all aware, the main money comes from the live gigs, right? Because it's a very direct basic. income but there's so many other sources like you can write for others but again like if your project is kind of the priority then you probably don't actually have so much time to write for others so it's again like a limited capacity also what I've understood like merch is really like important but I feel like there's like we are finding always like so many new ways how to like for example like these separate platforms where people can subscribe and pay and you can like provide something exclusive for them and think that might be a more sustainable way to communicate in social media, Because people are expecting to share so much, but do we all need to do that? It used to be that artists were these mystical creatures in some ways when there wasn't this digital space, right? But maybe it should be accessible in some ways to these people who are very curious and want to know more, right? And probably these people would like to support or invest in these artists' careers, right? that could be actually like a good way to earn but I mean like we're constantly like trying to find like ways how to do it ourselves as well I feel like we're still learning and there's like just interesting to see what people other people also come up with to find ways how to kind of innovate that I don't know have you for example heard about any like interesting new integrations what like musicians or artists or I don't know even like record companies have come up with

Jakob

Yeah, I think there's a lot of efforts and I do see opportunities. There's one company I'm following on the side called Even that basically is a pre-selling digital album before they're released. And I see a lot of success and potential there where they're saying for the fans who wants to access the thing, sell records the same way we did back in the days, obviously with less distribution cost. And oftentimes there's so much more than that, whatever we make on streaming.

Britt Randma

Mm-hmm. Mm.

Jakob

But fundamentally, no. Like, you know, there's one part of the world that's really nailed this, which is sort of Asia, especially Korea and Japan. And they know how to sort of cater to the super fan economy. But I have not yet seen anything that's sort of scaling. There's a few companies, like even, that I see like really, really growing. But I think it's also just down to the association with fandom culture in the West.

Britt Randma

Mm-hmm.

Britt Randma

Yep.

Britt Randma

Mm-hmm.

Jakob

That's sort of my perception that it's ingrained in several Asian cultures to have this support. We had a podcast, an episode here on the podcast where they talked about that the goal of the fans for the artist in many cases, especially in career, it is to...

Britt Randma

Mm-hmm.

Jakob

pay back the loans that the artists need to go through in order to build a career. So they actually with their fans like are transparent about I'm almost paid down my loans. I've almost paid down like everything I've cost like so should it becomes a participation for the fans to partake in the success of the artists not just in the in the audience sense but in a financial sense and that does not exist here.

Britt Randma

Mm-hmm.

Britt Randma

We For example, there was at some point a really interesting startup in Estonia that kind of kind of engaging fans in owning the percentage of a song. So it was kind of like a startup that literally you could basically invest in there and like get in return, you get the percentage. And like this was done with one of the most successful rappers we have. But for some reason, this didn't I think I'm not sure if this startup still exists. But I remember like in the beginning, everyone was kind of excited to see how it goes through but like you know you have a very direct thing how can you it's literally like investment like how investment works right so like that was interesting to see like kind of trying something new

Jakob

Yeah, the problem with, again, because I know these models, which are very smart, the problem with these models and the problem with music in general is that things need to scale in order to be viable. Which means you might have startups and companies that provide a lot of value. They're actually solving a problem. But because scale can't be reached, not scale in music sense, but scale in like capital, like capitalistic sense. If that can't be reached, it's not going to be a viable technical solution. It's not going to support founders, not going to support employees or a technical stack, which means a lot of

Britt Randma

Mm-hmm.

Britt Randma

Yeah, exactly.

Britt Randma

Mm-hmm.

Jakob

these like high impact ideas in the music business, music industry that are very good, they just don't have financial viability. And that's the issue, because it's not that easy just solving a problem. You need to solve a problem and make a lot of money. And oftentimes, people who build companies for the artist,

Britt Randma

Mm-hmm.

Britt Randma

Mm.

Jakob

are so not selfish, which generally speaking is a good human thing, but they're so not selfish that the capitalistic requirement of building this is just not focused on enough, which means they do it out of love and goodness, which rarely makes a great investment. So again, that's the conflict and element of all this.

Britt Randma

Mm-hmm.

Britt Randma

Yeah. Because quite often, especially what I've noticed in smaller markets is like your friends either starts to manage you or it's like, don't know, your family member. Like we see that quite a lot. It's not that rare, you know. So like in that sense, it's kind of like you just actually try to do something. you just I think there's like in general, like a lot of people who have like everyone's kind of who is in this industry have learned everything by themselves. Like we don't have like a lot of like international companies that you can actually like learn this from someone else.

Jakob

Mm.

Britt Randma

like just like finding the way by doing stuff right so from that sense it's already like completely different interesting which is like interesting to see but yes like because like i think i feel like in my position as well like i have to be the business-minded person in this crew because like otherwise this project will i mean artists in the end they don't want to like of course it's amazing if artists as well is proactive and they are business-minded individuals but like is kind of not their task if they have like a team around them who can support it with these things like but yeah like you have to like just like find ways how to make it into sustainable thing for example like currently a challenge I'm I have on my way is like we're gonna go to a US tour in the end of year which is gonna last for a month basically it's gonna be 21 dates which means a big investment and I know we will make this money back in return because like there is a hope with this tour that we're gonna get to zero or over like so we might actually earn some money there as well Which is quite rare for a second tour like third tour in US, right? But in the beginning I still need to do costs for example if we're gonna do it with a tour bus I probably need to pay like 60k Where can I where I'm gonna get that money, you know all these kind of questions that occur in your mind And there are of course several ways how to do that, you know, but usually finding partners because you don't have that much money yourself if you're not already like if you haven't done this already like for several years and you don't have like a lot of different sources of income right

Jakob

Hmm. Yeah. I think I've had some really interesting talks in the podcast, which is really talking about where is, where's the next generation of artists. And I don't necessarily have an opinion because I also grew up with music with like,

Britt Randma

Mm-hmm.

Jakob

the assistant speaking are really well crafted, but I believe there's like a model or, you know, feasibility of success, a more and more are to be assets that also has focus in business. So the last manager that was on the podcast was Mike Holland. He's Logix manager, the Grammy award winning manager. And, and what he talked about logic was that he is, he is holistically business and assistant.

Britt Randma

Mm-hmm.

Britt Randma

Mm-hmm.

Jakob

And that's why financially that's very, very viable product. And we also discussed that with the sort of AI coming in, I know this is more like the pressing issue for commercial pop, but when AI comes in and sort of takes a place of a lot of like part of the value chain, which it ultimately will.

Britt Randma

Mm-hmm.

Jakob

Monetization of fandom and connection is going to be more and more important. Like that's what the gaming industry and the streamers to a big degree really have cracked and very few artists have done that. But it's not just that you can just, you know, have the mentality of being a streamer. Like there's a lot of financial... reflection that goes into becoming a streamer as a gamer. And that's a part of the whole plan. Like the monetization in, for example, the gaming industries is much more front of mind. And I know it's not the same because they're not necessarily artists, but there's truths to the financial aspects of being a creator that probably needs to be applied to music much more in order to create that financial sustainability. And for me, I think that's the most interesting talk I have about artistry. It is like, so... It's always been hard to be a narcissist. Fair enough. You can argue in many ways it would be harder in the future because things would get even more crowded. The production element of music will be much more diluted by people, like from machines versus people. But I firmly believe in most of the people that I speak with, the craving for human connection is going to increase, which means there's an opportunity for us to stare, but in order to also successfully do that, need to develop a value. And in order to develop a value, you need to be fully present. And in order to be fully present, you need to have financial means to do so. So like that whole ecosystem is just going to be strengthened in, well, in these my thesis that business and artistry at macro level, at scale will more and more be dependent on

Britt Randma

Mm-hmm.

Jakob

Financial sustainability and business acumen from a Nazi's perspective. I don't know if everyone agrees, but that's sort of where my head is heading. What do you think about that?

Britt Randma

I mean, it does make sense. Think, yeah, I can already see that as well. And I think it is said that like robots can, like, you know, take over the very specific tasks of like, but they don't have the emotional intelligence that people have, right? And music creation does feel like a very... like very thing that is based on emotional intelligence so like I mean with the band I work like we're kind of like taking the role of like we definitely will not use AI because like we feel like Usually, I don't know why, but you can also recognize the music that AI is used to. Or AI has been used to, it doesn't have the same soul, it somehow feels mechanical, which is really interesting. But I do think that the most important thing we need to find a way are the fans. Definitely, because in the end they are the paying customers. And this needs to be an honest and value-based exchange, basically. Because both sides want to get something out of it usually and it's not like you know like there's and like for me it's like I try to find ways how fans could kind of engage with creating everything or the world together with us like I think like that's like a very interesting challenge for example like with the new album because it was created in different places because a lot of it was created on tour so like it has songs that are made in London it has a song that is made in of course. It has a song that is made in Los Angeles. It has a song that is made in Mexico having a view of mountains, you know. So we would like to like find ways how to, for example, our label said that they have a system that you can like kind of do like a geolocation game somehow, which seems really fun, like kind of like Pokemon Go, like with songs, you know. Like, so like we want to try something like this. And like I feel like for us, it is like we try

Britt Randma

To find ways how to meet with people in physical spaces because this is the real way of like actually forming like meaningful connections. It's of course like nice to have like your own discord you know for example which we have to just like talk with like the hardcore fans and like this is usually the group that we share the most exclusive information with like for example like if we do like we have a new song coming out then like already like a week ago right the day after we did a music video, I already sent pictures there for the hardcore fans and they were like, my god, something is happening, you know? And we didn't even have a link out that this song is gonna come out. Probably three days later we shared a pre-save link. So yeah, just finding these small little things I think is the way to go. But yeah, how to make it sustainable, that's always the biggest question. I think this is the hardest question and I feel like it's always like, you look at other people and you feel like they have it figured out but I feel like this is the industry that is constantly changing and no one knows the answers like everyone you speak to are kind of like yeah like I'm trying this and I'm trying that but I feel like nobody really has the answers which makes it like fun and exciting

Jakob

Mm.

Jakob

Yeah. Well, yeah, I agree. No one has the answers, but I think, I think there's, it's somehow easy to explain as a why, because let's say, let's say, weird example, just I thought about it like Kaya cosmetics, like it's a Swedish brand, like this big Kaya influencer. And whenever she does like similar drops like you, like drops of inspiration in her community, whatever, when something drops, there's a product.

Britt Randma

Mm-hmm.

Britt Randma

Mm-hmm.

Britt Randma

Mm-hmm.

Jakob

And that product probably costs between 30 to 80 euros. When a Nazi's drops, it's a stream, which is like a fractional of nothing, which means. Yeah. Yes. So.

Britt Randma

Mm-hmm.

Britt Randma

Yeah, like three cents or under, like 0.00, 0.5, three cents or something like this.

Jakob

The artist has a product like Kaia Cosmetics has. It's just like five thousandths of the price. Do you get what mean? So that's the big issue in my opinion. The sheer amount of scale you need to reach just to make like a five thousandth of the price viable is just immense.

Britt Randma

Mm-hmm.

Britt Randma

Yeah.

Britt Randma

Mm-hmm.

Jakob

Obviously it's cheaper to distribute because it doesn't cost much to put something on Spotify and it doesn't necessarily cost that much to make music. Of course, there's costs associated to it, but that's the basic concept. If there's nothing to buy at a high price and also if people are not paying for music, like restaurants, you're sitting listening to music, a cafe, they're paying for the coffee, they're not paying for the music.

Britt Randma

Mm-hmm.

Britt Randma

Mm-hmm.

Jakob

Yes, someone is paying some sort of rights allocation, but the end user is not paying for it. So I believe the biggest issue is just, first of all, there's not a lot of products to buy, and the products you're able to buy cost nothing. And if that would happen in any other industry, there would also be financial issues. But how to solve that, that's difficult.

Britt Randma

Mm-hmm, that's true.

Britt Randma

Mm-hmm.

Britt Randma

Yeah, because in a way like... I do understand that to make more money you need to basically create more products. That's how it works in the world we live in, right? But at the same time, there are moral questions like, do we need like, I don't know, 50 different t-shirts to be created? Is it sustainable? Does it go with your personal values that you have as an individual or as a band? I often occur finding myself thinking about these things as well. But even though, yes, of course it would be smart to have a makeup brand. Of course it would be smart to have a fashion line as don't know Kanye has for example. Of course it would be great to have a luxury jewelry brand that you have with your brand face name, right? So I do understand how it works but I feel like there are ecological questions, I'll have to solve that. Again, luckily I feel like we are more thinking about it as a society. And a funny thing actually about Estonia is like I do feel like a lot of people don't actually think about their product as a very... They don't think about it very business, as a business, because I would say that a lot of artists are quite dependent on fundings, like in Estonia. And luckily we live in the European Union. Bless, bless. And we have access to these type of tools, And we do have some national funding opportunities as well, like for example we have a fund that you can apply for to go to showcase music festivals for example which usually don't pay you right so like at least you can you don't have to use your personal money for that but at the same time there is a complexity in that you can get kind of lazy with that so like you can ask this funding money every like quite often but this means this doesn't mean that it's gonna be like sustainable business right you should actually think it as a private business that you need to

Jakob

Hmm.

Britt Randma

Develop, right? So like from that sense it's there's a complexity in that which I see in the Estonian music industry and like as a music as music Estonia is the export office like we'd quite often try to remind it for example to bands like in the end your goal is kind of to make a sustainable business that you would earn money enough that you don't need these fundings you know the funding of course it's great if you can like also get this money for extra activities but at the same time it should be self-sustainable but yeah that's the complexity if you come from a small

Jakob

Yeah.

Britt Randma

Place it's very hard to make it happen like you have to go to bigger markets right where there's more money for example like touring in US was very inspiring for me because I did see that first of all customers so much more proactive than like in the country I'm from like people and there might be a reason for that might also be that we are not usually based in there so they don't have access to that always so it's like exclusivity thing right could be one of the things but at the same time I did feel like there is actually possibility to earn more money in this space because people have this consuming like mind space in some ways right so like most of the people like a lot of people when we did the headline concerts for example did come by the merch and like a lot of them actually bought like all the merch items because it was a rare chance for them to get these things and like this kind of shows the way how they want to support you right so like that was kind of like inspiring to see in some ways but at the same time You do understand that it's specific to this specific country, right? so that was really interesting to yeah kind of see and like just to see the potential what and sometimes the truth is like with an eye and I've talked with many other like music managers or like touring managers and some of the even like Artists who are bigger in numbers than we are like you hear the numbers that people are making of merch per night And you're like they're probably making more money with the merch than they are

Jakob

Yeah.

Britt Randma

Breaking with a concert if the production is complicated, So you're like... Yeah, it's just... Interesting world we live in.

Jakob

I one of the biggest reflection I have on this conversation so far when it comes to entrepreneurship is that there needs to be some sort of grounding and understanding that as a music tech founder, which I work a lot with, we are often trying to solve a problem for the artist. And I believe that is a bad idea. And I'll explain why.

Britt Randma

Mm-hmm.

Jakob

To have a viable business, need to solve the problem for the people who are willing to pay and have capability of paying. This is the core issue of building startups in the music industry. Because as you, as you, don't know the reference you had to what specific startup that was doing like fractionalized investment in, in artists. But generally speaking, I would believe the value proposition for that startup would be something like, know, artists are creating music. They have fans. You want to help finance the, the artists expenses and have an income so they can invest and then they can have part of the revenue at the end of the day. you're building it for the artists and.

Britt Randma

Mm-hmm.

Jakob

Whenever you solve a problem for an artist. First all, it doesn't scale that much because there's not that many artists. And it's really, really hard making money on something that's not really solving a problem exactly for the end user. Because the end user in this case would be the fans. You're not solving a problem for them. You're giving them an opportunity. And the artists in most cases do not have the capability of paying, which means it's very rarely viable to build a company. that's centered around artists. And even if you have success, for example, like yourself, when you have a business model centered around artists, that's not a given that's a financial success. It doesn't make it any less meaningful. It doesn't make it any less like that's not the life someone wants to pursue. And for many, many years, that was the life that I pursued. It's just, that is how fundamentally flawed the industry is, that the thing we value the most does not have the capability of paying. and to be realistic, and now I'm speaking to them from nurse listening out there. When you choose to sacrifice many, many years of building a company to build worth, we just need to be mindful of who are we solving the issue for and who is willing to pay. And even though I support the notion of solving problems for artists, Just make sure that oftentimes that's a byproduct. You sell something for someone who is willing to pay something and the byproduct of that is a better life for the artist. And that's like macro level, probably the best approach. It's not super related to this talk, Britt, but I think for me, it's really important to sort of tie some comments around this because I have been in your world. I'm not anymore. And I know how purposeful it is. I know how wonderful and stressful and hard, but wonderful it is. And...

Britt Randma

Mm-hmm.

Jakob

I hope there's going to be one day where the value that people and artists and managers brings to the audience can be valued financially in a way that is a bit more proportionate to the value that brings them than is right now. But before we sort of close the conversation, where are you as a manager when it comes to finances? do you have a positive outlook? Like, is this worth it for you? Do you want to continue pursuing this or is the stress of it all too much over time? Like, what do you think about?

Britt Randma

Yeah, I mean, it is a complex world and but I would love to pursue this career. I of course do find myself in this moments where I'm like, my God, what have I done with my life? Have I done the wrong choice? You know, but at the same time, if I ask myself this question, like if I wouldn't like if I could do anything in the world, what would I do? Then I often find myself thinking that I am living my dream, right? And this has been kind of everything I've dreamed of. And like I have

Jakob

Yes.

Jakob

Mm.

Britt Randma

Had so many of these conversations when people are coming for you like, my god, you are doing such wonderful work. I could do that for free. And I'm like, yeah, I used to think like that as well, but not anymore. That's not, that's sadly, that's just not sustainable. But I do think that it's possible, but you have to really have artists who are willing to put in the work as much as you do, because like you have to be a hardworking person. And I do think that if you're doing that on the internet,

Jakob

Yeah.

Britt Randma

Or global level it's doable. If you just do it for example like in Estonia and you have quite niche artists then I don't think it's very reliable. You need to have something on the side basically to support your coming down visions. Kind of similar to actually artists who usually do like other type of work to support their creative project, right? So I would say that I'm definitely not making as much living probably as like my other friends who have like stable jobs but I do see that long term that it might pay off. I guess I live in fate, which is kind of absurd, but I do see that a couple of last years, my income has grown and this gives me, I guess this also gives me the promise that yes, actually the stuff I've invested is slowly returning in some ways. So that's why I would say yes, I would.

Jakob

Hmm.

Jakob

Yeah.

Britt Randma

But it's not an easy job. So everyone who is listening and thinking of doing that It's not like fast turnaround money project like if you want that in your life, this is not the job for you So just be aware But yeah It's at the same time like the most wonderful and exciting thing you can do and like there's just constantly so much to learn and that's the beauty of it and you see Like you get to see a lot of different countries you get to see different worlds how people live in and this is also very inspiring for me

Jakob

Yeah. Britt, thank you for your time. I'm looking forward to meeting you at the Italian Music Week. And for everyone else there, you're welcome.

Britt Randma

Mm-hmm. Same, same. Actually, I wanted to add that like currently, for example, I'm going to be in one program which is meant for music managers, which is based in UK and there we need to do our financial prognosis and these type of things. And like as a music manager, you said as well before that you're not very... You think more about others than you do think about yourself quite often, because like if this is your main priority, like you need to... Like basically your job is like living the dreams through someone else and trying to find opportunities. Opportunities for them. But with this program, I love that I need to think about me as a company and like I need to do prognosis like, okay, like, like what is the reality of that? Because quite often you actually don't have time to like very specifically look that through. But like I love that this will give me this opportunity and I will probably have like very like a lot of reflections from there. What could be done? What can like what I should be doing more and what should I be doing less? So like hopefully when we see Intellimusic, we will be able to discuss that as well.

Jakob

Yeah. Amazing, Britt. Thank you so much. And guys out there, you're welcome to come. I'm going to be there. Britt is going to be there and a whole bunch of nice people. Thank you, Britt. We'll talk soon.

Britt Randma

Yes. Thank you so much. Lovely conversation.

Jakob

Great.