HIVEWIRE #14: Diversified Portfolios: Placing Emerging Artists At The Intersection Of Venture And Social Capital

In an industry marked by volatility and the cyclical nature of success, the debate arises: is a laser focus on the primary mode of income the key to financial success, or should artists adopt a diversified strategy to safeguard against unforeseen dips in popularity and market-related changes?

HIVEWIRE #14: Diversified Portfolios: Placing Emerging Artists At The Intersection Of Venture And Social Capital

By Mayuyuka Kaunda; Contribuitor Yatin Srivastava

The dynamic nature of a career in the arts, particularly within the creative industry often prompts emerging artists to question the sustainability of their earnings. In an industry marked by volatility and the cyclical nature of success, the debate arises: is a laser focus on the primary mode of income the key to financial success, or should artists adopt a diversified strategy to safeguard against unforeseen dips in popularity and market-related changes? This article explores the potential benefits and challenges of diversification for emerging artists. It delves into the concept of artists as Venture Capitalists, with insights from prominent figures in the industry.

The Rise of Artist-Entrepreneurs

We propose that mid and top-tier Artists consider an opportunity to act as Venture Capitalists, entering the realm of investments and Entrepreneurship. This shift involves artists not only as creators but also as business owners, holding stakes in ventures beyond creative industries. The fusion of the worlds of culture and investment could open new avenues for financial growth, creating a symbiotic relationship between artistic expression and entrepreneurial success. The question that arises then is: why haven't we witnessed a surge of artist-entrepreneurs, especially in emerging markets? 

Challenges and Opportunities

While the potential benefits of artist-entrepreneurship are clear, challenges exist prima facie. Navigating the complexities of investments and managing diverse business interests requires a unique skill set. Additionally, there is a need for a supportive ecosystem that encourages artists to explore entrepreneurial avenues without compromising their artistic integrity. The discourse around whether to focus solely on creative output or adopt a diversified strategy continues in a rapidly evolving industry. The success stories of figures like Ryan Reynolds and Mr Eazi suggest that diversification, when approached strategically, can be a potent tool for success. As the worlds of culture and investment converge, there is a call for a new breed of artist-entrepreneurs to emerge, reshaping the landscape and providing artists with sustainable financial futures. The knock-on effect of this would be other areas getting buoyed by new funding, investment and the establishment of interconnected ecosystems. As Mr Eazi’s story demonstrates, a diverse portfolio spreads its tentacles to other areas.

Diversification As A Growth Driver

The central dilemma of diversification revolves around whether artists pursuing varied streams of income diminishes the value of their brands and creative output. While these concerns are valid and a deft balance must be struck, the focus here is on artists having equity in the businesses and causes they’re involved in; in contrast to traditional brand deals, ambassadorships, or sponsorships. The case study of actor Ryan Reynolds serves as an illustration of this approach, highlighting how his creative pursuits and investments in diverse industries, from F1, gin and football, have contributed to his growth as a marketing powerhouse. The actor has mastered the art of converting supporters and audiences into consumers by capturing the beauty of fandom and monetising it through storytelling. This is the clear strategy behind the award-winning ‘Welcome to Wrexham’, the sports documentary that tells the tale of the club, its players, support base and owners turned into a narrative that fed into the imagination of broadcasters and viewers alike. 

... and Emerging Artists Embracing Diversification

The emerging market equivalent of this model is exemplified by Mr Eazi, a trailblazing Artist with stakes in various ventures such as Fine Art, Sport, the Detty Rave concert series, Tech, and Music Distribution. Eazi's diversified portfolio is a strategic financial move and a means of strengthening relationships with fans and extending his career in the limelight. By exploring different ways to leverage his likeness and brand, Mr Eazi sets an example for other artists seeking financial stability beyond the conventional avenues of creative earnings. Through Zagadat capital - his investment vehicle - he’s got stakes in Eden Life Inc, emPawa Africa, betPawa, pawaPay, ChopLife Gaming, Cape Town Tigers Basketball Team, Decagon and un:hurd. Using such a strategic approach as a template for a diversified playbook, here are a few other case studies that have had positive outcomes:

>>> Sports: The relationship between Sports and Music is one that is unbreakable and one that offers mutually beneficial opportunities. Of course, Mr Eazi’s investment in a Basketball team and entry into the Gaming sphere is a classic  and commendable Venture Capitalist move. The role of storytelling has proven to be very successful in promoting and growing sports globally. This is something that has been explored through partnerships between leading brands and teams or sports codes, like the depiction of Wrexham’s story and Formula One’s ‘Drive To Survive’ series on Netflix. Red Bull has cornered this market to great effect, focusing on high-octane and adventure-driven sports to relay the ethos of their brand. In theory, a musician can do the same by matching their artistic output with a sport that represents their ‘vibe’ or ‘energy.’ For instance, Canadian Punjabi artists Karan Aujila and Ikky partnered up with the Sauber F1 team last year, featuring Valterri Bottas and Zhou Guanyu in the ‘Try Me’ music video.

>>> Fashion and Beauty: One of the recent developments in this space on the continent has been the partnership between Orlando Pirates and fashion designer Thebe Magugu. Magugu became the first emerging Artist to be awarded the Louis Vuitton and Moët Hennessy Prize (LVMH Prize) with a collection that was inspired by his African heritage. The institutionalisation of such relationships would be great for promoting both brands and mutually attracting more diverse audiences. However, when it comes to working with such big brands and entities that have huge amounts of capital and control over their respective industries, it is very important for Artists to look into their Contractual obligations and see very closely if that business partnership helps them. This becomes very important, considering someone as big as Kanye West has been fighting for years to be on the board of Adidas, considering his shoes were the sole reason the brand was doing positively for the past decade. Even till today, West and Adidas have been going back and forth, with Adidas continuing to use and sell Kanye’s Yeezy designs without his approval and further, suing him in various jurisdictions to remove all the contractual powers that West has. Hence, it is then very important to look at these relationships with a close legal eye and also see how it might play out in the future. 

A recent example of this is the formalisation of the relationship between both Kim Kardashian and The NBA for a SKIMS undergarment sponsorship and Kristin Juszczyk with the NFL on a league-wide basis. Such alliances can mimic how fashion and music are forging strong identities, this time tapping into the fandom surrounding team identities - something often communicated aesthetically. The warm reception of young fashion from emerging markets can be extended to the beauty market - through makeup and accessories that have pride of place either through their imagery, ingredients or nostalgic feel. An amazing surge of merchandising, licensing and cross-promotion could take place if the trifecta of music, fashion and beauty is harnessed in this way - where collaborations take place between the artists themselves, artists and corporations or athletes and brands. 

>>> Film: The recent announcement by Amazon Prime of its shutting down of original content from The Middle East and Africa (MENA) leaves a huge hole. This gap needn’t be filled by film enthusiasts only and provides a chance for emerging musicians to enter the space as producers. Music Videos already form a huge part of a musician’s scope of work, so the ins and outs will not be new to them. You can see a lot of this already happening in Asia. In India, popular Netflix shows like Class and Archies have featured musicians in various main roles. In Class, one of the leading characters was played by Mosel Koul, who founded the Delhi-based rock bank Kraken and plays the Guitar with stars such as Mumbai-based Rapper Divine, along with even Bollywood Artist Arijit Singh, and Archies featured Dot., a well-known and loved Singer-Songwriter in the country. Even one of the recent Shah-Rukh Khan films starred Sanjeeta Bhattacharya, a prominent Musician and Singer from New Delhi. Even if not as a leading role, but definitely a prominent one.

Similarly, it is not uncommon to see K-pop Artists or Musicians across TV shows and Movies in Asian TV shows or Movies. In the UK, Kano, Little Simz and Dave have all been a part of the ‘Top Boy’ series on Netflix (the return and rerun of which was actually bankrolled by Drake himself, adding himself as a Producer on the show) while Kano has also appeared recently in a Netflix film titled ‘The Kitchen’. Riz Ahmed of the transatlantic Swet Shop Boys is now a well established, award winning Actor and broaches similar topics across his music and movies.

>>> Climate Governance: Reflecting the environment, in both the abstract and literal sense, has always been an artist's job. With climate change affecting us in more ways, particularly in the Global South, art can become a tool for driving change. As Midia’s Climate Report suggests, “a variety of forms. Suggestions could include aiming for carbon-neutral events and venues, partnering with sustainable energy providers for streaming servers, opting for virtual events instead of encouraging business travel, and low-emission public transport alternatives to cars, flights, and helicopters. Even for artists, labels, and managers, encouraging music that speaks out and can educate and inspire audiences to make the world a better place has a powerful role to play.” London based Artist Kelvin Rash is a good example of this, with Climate Change and Governance being a centre point to not just his music, but anything that he does creatively as an Artist. The all-female Russian band ‘Pussy Riot’ comes to mind too, with their members speaking out constantly against Climate Change and their Government in their music, even leading to them being arrested and detained on various occasions. 

The band Coldplay have done more than shed light on the issue, taking steps to offset its carbon footprint transparently and accountable through sustainability updates. The same has also been done by other worldwide Artists such as Billie Eilish. This applies across all spheres of art, of course, where production, transportation and servers play a central role in how the work is created and disseminated. The Coldplay playbook is appealing due to its lack of dependence on foreign bodies, and funds established by emerging market creatives can drive these conversations and have concrete outcomes. As seen above, the establishment of investment-driven platforms by artists from emerging markets isn’t solely about generating income. These can be tools for shaping the narrative, engaging audiences authentically and impacting their environment figuratively and literally as well.

In conclusion, the exploration of diversified portfolios by creatives from emerging markets may very well displace the traditional notion of artists solely relying on their creative output for financial success. As creatives parse opportunities in industries and causes that interest them, the knock-on effects are undeniable and point to the potential growth for them and the ecosystems they occupy. Viewed through a broad lens, creative entrepreneurship needn't be limited to financial opportunities with social, environmental and institutional avenues available for increased investment. This paradigm shift towards artist-entrepreneurship in emerging markets would be transformative in strengthening relationships with varied industry stakeholders, brands and fans.

Check out the HIVEWIRE playlist - The Hive

One 'The Hive' is where our diverse team shares new music and trends from emerging markets. New additions this week: