Looking for someone to fund your music career? The best investors may be the ones who DON'T like your music.

By?Peter Sinclair, CEO & Co-Founder at beatBread

We've all heard the cliché: a major label talent scout with "great taste and a good ear" discovers a humble musician in a back-alley club. They like the music, give the "kid, I'll turn you into a star" speech, then sign the artist to a deal.

Industry legends like Berry Gordy and Clive Davis are celebrated for their track record of spotting talent, hearing and developing something no one else can, and turning out a superstar. This kind of A&R talent is pure magic. In many ways, it's even more exceptional than the talent possessed by the artists these legends have produced.?

But that "golden ear" story has its limits. Ultimately, A&R isn't just about creativity and marketing; it's also about financial relationships. And that’s where the problems start.?

Most labels and A&Rs will try to flatter an artist with claims that they "get" the artist's music and uniquely connect to their creative vision. And they’ll make that aesthetic connection central to their pitch to sign the act. ?

This is all wrong. Funding music is done best by people who don’t pretend to have a golden ear, and who may even have a tin ear. Artists are served better when the decisions about who gets funding (and how much they should get) are made by people who are great with data, not those with great taste. And it’s best when those tin-eared data nerds take their direction from machines and algorithms, which have no taste at all. ?

I'm not talking about what’s best for investors and return on capital; I'm talking about what is best for artists and even the art itself. That may sound crazy, but bear with me for a moment.??

First, let's acknowledge that the "golden ear" story has changed. Labels almost never invest in early-stage talent based on sound alone anymore. They now want to see a proven fan base and real social and streaming numbers before they even look at an artist. But that doesn’t mean A&R is dead. Most labels still need to believe that artists they sign will get to 10, 20, or even 100 times where they are today to justify their investments. Hard data can’t predict that growth with certainty, so there's a lot of "gut" and "guess" when labels decide who to fund, and for how much. Even mid-size distributors, who are usually more data-driven, employ A&R staff to help make investment decisions. ?

On its face, this all makes sense. ?

Art is art.?

Good music is good music.??

But there is a danger to this approach for artists when decisions are being made not about the music or the marketing... but about the money. If you’re an artist, accepting investment in your future from people grounding decisions and their sales pitch on creative fit can have long-term repercussions: ?

People who make aesthetic investment decisions will want a say in artistic decisions.

It could be an edit to the song, the choice of a producer, an unexpected veto on the "look" of a marketing campaign, or a marketing tactics they find inauthentic or distasteful. Whether it is in the contract or not, there are subtle ways an investor will exert influence at the expense of artistic vision, control, and integrity.

The stories of artists clashing with labels on creative decisions (Prince, Bill Withers, Halsey, and thousands of others) are cliché for a reason. Financiers who try to control artistic decisions are almost always bad for the art and bad for the artist.

Subjective investment processes are expensive. ?

A&Rs gotta eat, and their meals come off the artist's plate. Any deal that needs to cut out a good slice to pay A&R salaries, expense accounts, first-class travel, dining, etc. will result in economic terms less favorable to artists — in the end, all of those unfair and predatory terms we read about are driven, in large part, by the expense of labels' decision-making processes and the staff they employ to support and enforce their aesthetic investment theses.

High expenses create a “minimum hurdle” of returns for labels and shut out a whole class of artists from ever receiving financial support. Artists with real commercial potential who don't fit a particular trend or who might only ever resonate with an under-represented niche of society are less likely to get funded. ?

Worst of all, artists without family wealth or personal connections will have to wait longer and longer to get funding, because early-stage deal making is too expensive for labels today. ?It’s not just unfair, it’s bad for the art and bad for fans.?Without funding, more artists without wealth and family connections will pack it in before their big break.

A business relationship predicated on an aesthetic connection between artist and funder is often dishonest.

A&Rs and label execs who try to convince artists just how much they are “blown away" and "get" the music may not be as smitten as they seem. Flattery works, and when it's a salesperson flattering you, hold on to your wallet.

Even if the A&R is genuine about their love for the music, artists who are flattered end up taking financial terms that aren't good for them — sacrificing ownership or locking themselves into a long-term deal with distribution or marketing partners who aren't a good fit or who can’t be fired if they don’t perform.

There’s a reason you hear about artist being “stuck” in a bad deal. ?It’s not only because label deals are long term, and take a lion’s share of the economics, it’s also because they end up being stuck long term with partners who used to “get them” but whose creative fit faded.?

All of this explains why it’s good to have a funder who doesn't care what the music sounds like, who uses data and automation, doesn't pay for expensive staff and won't interfere with creative – or flatter you into a deal.?

This is the approach we take at beatBread. Every artist investment decision is based purely on data. The decisions are not led by humans, but by code and algorithms that look at an artist's fanbase, streaming, social media, and millions of other data points in between.

Everything else about an artist's career – all that subjective, ineffable, and magic stuff that is super important and can’t be distilled down to data – is none of our concern. We fund the music and get out of the way.?

We want to enable more artists to put more music out into the world, have more control, and get a greater share of the rewards. But we couldn't do that without automating the funding process. Artificial intelligence and machine learning enable us to do deals that are too small for labels to bother with and for artists that don't fit the label mold. ?

AI, ML and automation allow us to generate offers not just for “neglected” and “early stage” artists but for "label level artists" worth millions of dollars too. Often with better terms because we don't have a huge finance team, no phalanx of lawyers, no A&R meetings, and no huge marketing departments in expensive offices either.?

If we made decisions based on taste or weren't so maniacal about automation, artists who come to us for funding would find themselves in the same position they're often in with labels – lost in oblivion, disappointed, abused, or never considered in the first place. ?

I'm not claiming that taste and aesthetic fit shouldn't be the primary factor driving artists' choice of creative, marketing, and promotion partners. "Golden ears" have brought us some of the greats, and they still have a huge role to play on the creative side of the music business (which should always be the biggest side of the business). Of course, collaborators deserve to get paid if they deliver value. That's why we include these creative partners and independent labels in some of our deals. But even in those cases, numbers and code drive the funding decisions, and the creative partners focus on the creative. ?

At beatBread, we believe the traditional label model mixes finance and creative decisions too closely, creating an unholy marriage that results in friction, expense, and, too often, bad outcomes. We believe that keeping taste out of the funding conversations gives more artists more flexibility, freedom, control, ownership, and room to create better music.??