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Evaluation of the Managerial Skills – Part 1

Evaluation of the Managerial Skills That Artists And Artist Managers Should Develop: Transforming Artistic Creativity into a Sustainable Source of Income – Part 1

 

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1.0 Introduction

1.1 Background to the study  

The arts and creative sector is comprised of different industries amongst them the music industry. The sector contributes significantly to the modern economy (Allen 2013).  The Department for Culture, Media and Sports (DCMS) (2016) in the UK defines the creative industries to include ‘the industries that have their origin in individual creativity, skill, and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property’ (p.3). The sector accounts for a significant proportion of the UK Gross Domestic Product (GDP). In 2010, the creative industries generated £7.5 billion in exports. The sector has undergone remarkable growth over the past few years. For example, the industries’ Gross Value Added (GVA), which measures the value of products and services generated from a particular sector or industry of an economy, has increased substantially (Organisation for Economic Co-operation and Development 2005). In 2012, the industry’s GVA was estimated to be £71.4 billion, which accounted for 5.2% of the UK economy. This represented a 15.6% increase from 2008 (Yum 2016). Similarly, the creative industries’ GVA grew by 8.9% between 2013 and 2014. This accounts for approximately 4.6% of the UK’s total economy. Similarly, the industry constitutes a fundamental component of the Australian economy. A report by the Ministry of Arts in Australia showed that the industry contributed $31.1 billion to the country’s GDP between 2008 and 2009 (Yum 2016).

The creative industry is comprised of different industry players that include music, visual, and performing artists (Create UK 2012).  The UK is ranked as the global leader with regard to the creative industry. For example, with reference to music, the UK is considered to be the industry leader, both commercially and artistically. Hon (2013) asserts that ‘the music industry encompasses the compositions, recordings and also live performances by music artists’ (p. 289). Therefore, the UK plays an essential role in shaping how the world perceives the arts and creative industries.  The music industry is considerably large and is comprised of different players such as music journalists, artist management, retailers, manufacturers, and academics (Hon 2013). Developing competitiveness in the creative industry requires the industry players to develop adequate skills and knowledge on how to deal with changes occurring in the contemporary industry.

1.2 Problem statement

The UK creative industry has undergone considerable transformation over the past few decades. This has considerably improved the industry’s attractiveness to different artists (Yum 2016). The creative industry in the UK is trading in a market that is increasingly becoming competitive, which poses a challenge to the UK’s global market position (Create UK 2012). Allen (2013) asserts that the music business is undergoing continuous change, which has resulted in considerable change in large records label capacity to influence artists’ careers. Bauer, Viola, and Strauss (2011) identify high competition, long-term and expensive costs of education, minimally regulated career paths, and low levels of income as some of the challenges facing artists.

In spite of these challenges, the creative industry in the UK continues to generate a substantial amount of returns (DCMS 2016). However, artists continue to experience a challenge in maximising returns from the industry. One of the major factors limiting artists’ capacity to generate returns entails the integration of poor artist management practices (BMWi 2014). Bauer, Viola and Strauss (2011) emphasises that ‘a crucial requirement for any artistic profession is commitment’ (p. 627). However, a significant proportion of the artists’ effort is not adequately or rarely rewards with reference to returns.

Austin and Devin (2009) identify the artists’ inability to determine the value of their work as one of the factors that have contributed to this outcome. Alternatively, Austin and Devin (2009) identify a lack of business knowledge as another factor that hinders artists from making a living from their artistic talent.  Banks and Hesmondhalgh (2009) assert that as a result of these aspects, artists have been forced to result in self-employment. The rationale for seeking self-employment is to supplement their earning (Trappey et al 2012). To succeed in the contemporary music industry, it is imperative for musicians and artists to focus on developing effective entrepreneurial and managerial skills (Bauer, Viola & Strauss 2011). The need for artists to develop effective managerial skills is underlined by the fact that gaining the requisite managerial skills and knowledge enhances the artist’s capacity to deal with the challenges that characterise the contemporary creative arts industry.  Gupta (2008) defines managerial skills as the ‘knowledge and ability of the individuals in a managerial position to fulfill some specific managerial activities or tasks’ (p. 45).  Managerial skills provide individuals with the capability to successfully manage dynamic situations.  

By developing the relevant managerial skills, the likelihood of artists achieving sustainability in the contemporary music industry will be improved substantially despite the prevailing industry challenges (Allen 2013). Failure to develop the requisite managerial skills might negatively impact the artist’s ability to derive earnings from their creativity. Bauer, Viola and Strauss (2011) assert that ‘keeping the nobility of art in management in art may nowadays be considered as a tool that influences the balance between the needs of art and the needs of its creator, a worker exposed to market forces’ (p. 628). Allen (2013) argues that managers have become a critical component in enhancing artist’s career. Therefore, it is imperative for industry players to consider inspiring musicians and creative artists with the relevant skills and knowledge to enable them to grow and maintain their competitiveness in the rapidly changing industry.  Howard (2011) accentuates that ‘artists’ managers can enable musicians to benefit from the growth in the music industry by not just focusing on ‘getting record deals, posting the deal and acting as a liaison between the label and the band’ (p.1). Similarly, individual artists should consider developing the requisite managerial skills in order to remain competitive. Developing managerial skills is critical in improving the effectiveness with which artists take calculated risks. Thus, managerial skills enable artists to be effective in exploiting opportunities that arise in the creative arts industry. Allen (2013) emphasises that ‘technology and changes in the legal environment of the music business create new direction and challenges for artists, but they also provide opportunities’ (p.2).  

1.3 Aims and Objectives

This study intends to explore the requisite managerial skills that artists and artist managers should develop in order to succeed in the contemporary music industry. The rationale of developing managerial skills is to enable artists to transform their artistic creativity into a source of sustainable source of income.   In the quest to achieve the research purpose, the research study focuses on the following research objectives.

  1. To determine the relevant managerial skills that artists and artist managers should develop.
  2. To investigate the relevant managerial approaches that artists and artist managers should develop.
  3. To examine how managerial skills can contribute to improvement in artists’ competitiveness in the contemporary music industry.

1.4 Research questions 

In line with the above research objective, the research sought to respond to the following research questions.

  1. What are the relevant managerial skills should artists and artists managers develop?
  2. In what ways can managerial skills contribute to improvement in artists’ competitiveness in the contemporary music industry?
  3. What are the relevant managerial approaches that artists and artist managers should develop?

1.5 Research hypothesis

In relation to the above research objectives, the following research hypotheses were tested.

  1. Null hypothesis; managerial skills significantly influence artists’ capacity to generate income from their artistic creativity.
  2.   Alternate hypothesis; there is no significant relationship between developing managerial skills and the artists’ level of income from their artistic career.

1.6 Significance of the Study

Currently, artists must consider their artistic work as an investment. Therefore, artists must develop the requisite skills that will enable them to deal with the changes that occur in the contemporary business environment (Allen 2013).  The research study will draw insight into the relationship between management and achieving competitiveness in the rapidly changing industry. In addition to the above aspect, the research study will significantly contribute to the development of knowledge on the managerial challenges faced by artists. Through the creation of this knowledge, managers will be able to determine how they can overcome the challenges faced. For example, managers will understand the rationale of developing managerial skills in establishing a connection with the contemporary music market. The study will further create an adequate understanding of the most effective managerial approaches and strategies that they can employ in transforming artistic creativity into a career.  From the knowledge gained, artists will be able to manage their talent hence increasing their capacity to generate earnings from their artistic creativity.

1.7 Limitations of the Study

As a result of the broad nature of the creative industries, the research study focuses on the music market segment. The study specifically examines how managerial skills can be employed in managing artists in the contemporary music industry. In an effort to generate realistic data from the market, the research study is based on a qualitative research approach. Thus, research data was gathered from the market. One of the major challenges associated with qualitative research study is that a substantial amount of resources with regard to time and money are incurred (Myers & Newman 2007). This challenge was overcome through the integration of the sampling technique.

2.0 Literature review 

As one of the components of the cultural and creative industries, the music industry constitutes a fundamental component of the global labour market. Its significance arises from its contribution to the country’s growth (Lehman & Wickman 2013). Countries around the world have benefited significantly from the creative industry. For example, Australia has experienced remarkable economic growth due to the contribution of the cultural and creative industries. In 2010, the cultural and creative industries in Australia accounted for approximately 7% of the country’s national earnings (Zawadzki 2016).  During the same year, 4.3% of the total population in New South Wales was employed in the cultural and creative industry (Zawadzki 2016).   Similarly, the UK has benefited remarkably from growth experienced in the cultural and creative industry.  For example, in 2015, the music industry contributed £4.1 billion to the UK economy (UK Music 2017). Between 2012 and 2015, the contribution of the music industry to the UK economy increased by 17% (UK Music 2017).  This data indicates the high potential inherent in the UK music industry.

To succeed in the contemporary music industry, artists must be committed (Eikohof & Haunschild 2007).  In spite of their efforts, artists are inadequately rewarded with regard to the income generated from their artistic creativity.  One of the factors that contribute to inadequate compensation entails the fact that artists are unable to determine the value of their work (Bauer, Viola & Strauss 2011).  This indicates the existence of a gap in the artists’ personal attributes.  Additionally, Lehman and Wickham (2013) emphasise that artists have not developed a market-oriented approach in their artistic work.  In their opinion, Lehman and Wickham (2013) affirm that ‘ whilst artists of all genres might seek an audience for their output, viz. consumers, their artistic creativity is primarily self-oriented rather than consumer-oriented in nature’ (p. 665).  Pedler, Burgoyne, and Boydell (2013), managerial skills are an essential personal attribute that individuals intending to succeed in different fields should consider developing.  A study conducted to determine the relevance of developing personal attributes in the contemporary cultural industry such as the music industry identified a number of aspects that musicians as cultural artists should develop.  Amongst the personal attributes identified include confidence and inner strength (33%), resilience and determination (17%), openness and adaptability to change (20%), and passion for the field (13%) (Bennett 2016).   The element of confidence and inner strength entails the artist’s capability to sell his or her artistic talent to the artistic community and beyond while openness and adaptability to change entails the artist’s capability to maintain artistic vision while responding to opportunities that emerge (Bennett 2016).  On the other hand, the element of motivation and drive refers to the artists’ capacity to remain focused and motivated to achieve the intended personal goals. Therefore, the artist must be committed to achieving the intended goal in spite of encountering disappointments and setbacks.

Labour in the music sector is characterised by minimally regulated career paths, intense competition, and high risk (Bauer, Viola & Strauss 2011). Menger (2001) asserts that ‘employment and unemployment in the artistic labour market are increasingly simultaneously’ (p.1 Pedler, Burgoyne and Boydell (2013) accentuate that some musicians are ranked amongst the best-paid in the cultural and creative arts sector (Connolly & Krueger 2006).

Nevertheless, Bauer, Viola and Strauss (2011) accentuate that the average income of a significant proportion of artists is relatively low (Schulze 2003).  Some artists are lowly rewarded compared while others in the same profession are highly paid.  Adler (2006) emphasises that this phenomenon has led to the emergence of the ‘superstar’ phenomenon which dominates the contemporary global music industry.  Conversely, Abbing (2002) accentuates that the global music industry is characterised by a ‘winner takes all’ phenomenon, which is evidenced by the fact that a few musicians earn enormous amounts of money from their artistic creativity.  Schelepa et al. (2008) emphasises that amateur musicians are considered to be among the artist who earns low income from their artistic creativity and are hence forced to seek alternative sources of income. Pedler, Burgoyne, and Boydell (2013) argue that most semi-professional and amateur musicians consider their artistic work to be a ‘well-paying’ and interesting hobby as opposed to being a source of income.

These aspects indicate that the artistic labour market is not only characterised by a significant degree of uncertainty but also a discrepancy with regard to rewards that artists receive. The prevailing uncertainty should motivate artists to be innovative in order to achieve the intended outcome.   In an effort to overcome the challenges experienced, most artists resort to alternative sources of income. For example, artists engage in multiple professional engagements in an effort to supplement their income from artistic creativity (Royseng et al. 2007).  In addition to artists’ inability to determine the value of their work, artists lack adequate business knowledge to enable them to exploit the opportunities inherent in their creativity and subsequently make a living out of their talent (Royseng et al. 2007; BMWi 2014).

In spite of these aspects, it is possible for amateur musicians to transform their artistic creativity into a sustainable source of income hence earning a living from artistic activities.  To achieve this outcome, artists must be committed to developing the requisite managerial skills in order to be competitive.  Menger (2001) accentuates that to succeed in making a living out of their artistic creativity; musicians must be knowledgeable on how to deal with the management or economic issues that might arise.  This view is supported by Weaver and Bowman (2006) who emphasise that similar to the income of a self-employed person, the income of artists such as musicians depends more on their talent, effort, and skill. On the contrary, artists must possess managerial and entrepreneurial skills. Thus, developing management skills is a key factor for success in the contemporary music industry.   Developing managerial and entrepreneurial skills is critical in assisting artists to appreciate the value of their talent. For example, managerial skills enable artists to make optimal decisions regarding their artistic creativity, which increases the likelihood of making a livelihood from their artistic creativity.   Oakes (2003)  is of the view that developing managerial skills enable artists to address simple entrepreneurial issues that affect their career, for example, the target customer and the volume of sales that the artists have to make in order to generate a living from their artistic creativity.  Thus, developing managerial skills is essential in assisting artists change their perception of music from an aesthetic view to a commercial view.

2.1 Managerial Skills and Marketing

One of the fundamental managerial skills that musicians should develop in order to remain competitive in the contemporary music industry relates to marketing.   Musicians should entrench market-oriented skills in order to develop sustainable competitiveness. To achieve this outcome, artists must develop skills that will enable them optimally market their music and deal with emergent marketing management issues as their product (music) progresses through the different phases of the product life cycle.

2.1.1 Integration of Product Lifecycle Model

Lehman and Wichham (2014) are of the view that ‘unknown artists only attempt to market their output occasionally and in a rather ad hoc manner’ (p. 675).  In this phase, the artist’s work is not influenced by market preferences, which makes marketing their products largely difficult. This explains why amateur musicians fail to make a living out of their artistic creativity.   To overcome this problem, artists should develop skills on how to optimally apply the product life cycle (PLC) model in order to enhance their career path in the music industry.  Ferrell and Hartline (2011) affirm that the ‘PLC model offers a useful framework for discussion product strategy over time’ (p. 216).   The PLC model is comprised of different stages that include product development, introduction, growth, maturity, and decline stages (Lehman & Wickman 2014).  The development stage emphasises the importance of undertaking extensive market research in order to determine the prevailing product gaps.  Thus, by identifying gaps in their music, musicians can adjust their approach to composing music. Additionally, by gaining knowledge on how to apply the PLC model, viz. the development phase, musicians can successfully formulate strategies on how to adjust their products in order to align with the prevailing market conditions. For example, at the maturity stage, the artists’ work reaches a plateau whereby their music experience difficulty in generating revenue. At this stage, further expenditure on their artistic work may yield minimal returns.  However, artists can modify their artistic work in order to limit the likelihood of their products declining (Lehman & Wickham 2014).  Gaining this knowledge will enable musicians to succeed in providing the target customers’ needs and wants.

Knowledge of product introduction will enable musicians to succeed in introducing their products in the market. For example, during the introduction phase, the musicians are unknown within the music industry.  Thus, in order to create market awareness of their market presence, musicians can undertake extensive market campaigns. The campaign should be intended at enhancing the level of familiarisation within the customer.  Lehman and Wichman (2017) assert that ‘during the introduction phase, a product may be redeveloped in order to overcome unforeseen shortcomings in its design’ (p. 678).  By applying the relevant skills, music artists will succeed in introducing their products into the market hence increasing the likelihood of their products gaining market acceptance.  The subsequent outcome is that music artists will generate high profits.

Therefore, the application of the PLC framework can provide musicians with knowledge on how to plan for future success within the music industry (Lehman & Wickham 2014). This arises from the fact that the PLC model can enable musicians to develop a comprehensive understanding of the prevailing environmental market conditions such as the customers’ tastes and preferences with reference to music. On the basis of this aspect, musicians can be able to adjust their music to align with the market changes.   The development of marketing management skills with regard to the application of the PLC models is critical in ensuring that musicians are able to monitor the performance of their products in the market.    Narasimhan et al. (2006) are of the view that the PLC model ‘provides perspective for the formulation of viable marketing activities across each of the five stages, with each stage possessing distinct characteristics that prescribe different strategy priorities for the effective marketing of a product line’ (p.34).  In summary, the application of the PLC framework provides artists an opportunity to manage their music as a product throughout the product’s lifetime.

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