The Future of Financing Creative Artists
I wrote the book The Business of Creativity because of this disconnect that exists between the creative industry as a whole and the investment sector and also in some ways the tech community - Michael Jacobsen
London’s West End played centre stage to what was a passionate discussion about The Future of Financing Creative Artists. Few weeks ago, Michael Jacobsen keynoted at the Follow The Entrepreneur Investor Summit on The Future of Backing Creative Artists. He explained that he wrote the book The Business of Creativity “because of this disconnect that exists between the creative industry as a whole and the investment sector and also in some ways the tech community.”
Ariadne Capital’s founder Julie Meyer convened entrepreneurs, investors and lawyers who share a common interest in creativity to delve deeper into the issue of funding. Michael Jacobsen, who co-owned Dirty Dancing’s world rights was joined by Sherry Roberts, founder of online interior design boutique The Longest Stay; Jimmy Nguyen, partner at U.S. Law Firm Davis Wright Tremaine LLP; Antony Rose, co-founder and CEO of 6Tribes; Richard Mason, writer and co-founder of Orson & Co; Bruno Pellegrini, founder and CEO of Userfarm; Mehjabeen Patrick, COO of talent agency Creative England; Steve Lazarus, former business development director at Dow Jones International and Yahoo and now senior adviser at Ariadne Capital.
Creatives, talents and creators have all mastered the art of creativity but turning one’s craftsmanship into a business while reigning in investments remains a challenge. Jacobsen indicated that investors’ perception is misconstrued “people need to understand what entertainment is and investors need to meet creatives half way.” Entrepreneur Sherry Roberts concurs “people tend to create a schism between business creativity. I am a creative entrepreneur.”
It all boils down to the definition of creativity. Nguyen pointed out that there are various forms of entertainment and amusement. He described the three components of the creative ecosystem. “First, we have the creators, then investors who pay for the creation and finally the distribution. Technology plays a central role in the distribution of creative content to various audience but it has its limit and cannot be used in all forms of art for instance musicals and plays.”
If creativity is to be considered as a business commodity, then supply and demand constitute an essential part of this market. Antony Rose interjected that “it is not about supply of creativity but demand but ownership of the creation of demand.” Meyer simply replied “the creation of demand is marketing.”
The role of technology
Rose pointed out that “technology plays an active role in this ecosystem.” Both he and Richard Mason agreed that “it builds bridges between talents and audiences.” Back on the subject of funding, how can creatives monetise their talents using technology? For instance, YouTube’s vlogger Zoella’s net worth is $3 million according to Fullnetworth.com, surely the platform played an important part in her success.
Nguyen expanded his argument by saying that “people on YouTube don’t make money.” A point well taken by writer Richard Mason who added that “YouTube is a discovery platform.” To illustrate this point, Nguyen took the example of the world’s best paid television actress Sofia Vergara. He explained that the bulk of her income comes from endorsement deals facilitated by her popular status.
According to Nguyen, technological transformation goes even further in the United States. He discussed how platforms like Amazon and Netflix are redefining the television industry. “They are playing a much greater role in the production of TV shows thus enabling them to control both distribution and audiences.”
The power shift is happening in other creative fields beside television. Rose alluded to Apple’s rise in the music industry with its iTunes store.
Technology might play a major role in the shift operating in various part of the creative industry but for Patrick “the financial power unfortunately remains in the hand of a small group of people.” Jacobsen claims that in the United Kingdom most creative projects are funded by either Luke Johnson or Lord Jeffreys; “there is a fundamental problem with funding. In London there is a large community of accelerators and investors who seldom finance creative endeavours.” He alongside Roberts and Patrick believed that “financiers need to fundamentally changed their perception of the creative industry”.
Pellegrini disagreed “creatives need to disrupt the status quo.” For Patrick, funding is an important issue “the cycle of money is important to keep creativity alive but creativity is a risk and financiers don’t want to back it.”
Meyer explained that “VCs are all about capital gain.” Roberts argued perceptions need to be challenged “financiers need to get the big picture.” According to Jacobsen, the creative industry is worth £71 billion pounds, just half the size of the tech industry annually. It grows at around 10% annually and represents close to 5% of the European GDP.
Maybe it’s time to Hack Society, disrupt the financial sector or enable more people to get involved in the funding cycle. In short what Meyer described as “wealth creation for a sustainable economy.”
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- Tags: 2015, 6Tribes, Antony Rose, Ariadne Capital, blog, Bruno Pellegrini, creative artists, Creative England, entrepreneurcountry, entrepreneurs, funding, global, Jimmy Nguyen, Julie Meyer, Mehjabeen Patrick, Michael Jacobsen, Orson & Co, Richard Mason, Sherry Roberts, Steve Lazarus, The Business of Creativity, The Longest Stay, united kingdom, Userfarm