music royalties asset class vince valholla

Producer Vince Valholla is introducing a fashion industry business model to the music business

18 years ago (January 20, 2005), record producer Vince Valholla was finalizing the formation of his new record label, Valholla Worldwide Entertainment Group (formally Valholla Entertainment). He previously served as a marketing consultant and independent A&R in Miami, Florida, and wanted to learn all he could before starting a label. With Motown and Bad Boy Records as inspiration, he, his team, and partners (artists) built arguably one of the top independent record labels to come out of South Florida. Today, he’s game-planning the company’s next move and is potentially selling a minority stake in the group of companies. In this interview, we talk about his “Label is the Artist” business model and the future of his burgeoning company.

TTN: Your company recently released a case study about a business model Valholla is implementing that is similar to a fashion house. Explain how it works.

VV: The model is called the “Label is the Artist,” and it isn’t entirely brand new. The new element is the “creative director” aspect of it. The creative director is tasked with overseeing and producing a range of songs and projects through collaboration with other artists, songwriters, and producers. In most cases, the imprint, creative director, or label will be listed as an artist, although they may not be performing on the track. The label is responsible for marketing the song or project and also has a controlling stake in the copyright. A DJ/producer may implement a similar model, but the “Label is the Artist” model runs at scale. Once implemented, not only would labels control more copyrights, but they wouldn’t have to sign as many artists directly. In turn, more hands-on artist development, with creatives getting individual attention.

emerging music business model label is the artist music asset investment
via Valholla Records “Label is the Artist” case study

With music revenues growing year over year, thanks to streaming, why is this model needed for music labels?

The reality is artists want control over their careers, creative direction, and masters. I think they deserve that. The issue is if you run a label that doesn’t own any masters, and you have a limited licensing window for releases you do have interest in, what is the exit strategy? Label services is also a great model but independent companies need capital to do it at scale. I believe that soon there will be labels that will release music using the “Label is the Artist” model and won’t have any artists signed directly to them. Do you see all these catalog and music company sales happening now? The biggest deals are connected to copyrights that are owned. This model addresses that for the record label of the future. 

Was that your motivation behind your Vince & The Valholla Empire project?

Partially, yes. I’ve been producing music for most of my career, but it took a backseat because I focused on executive-producing projects from our artists and partners. In 2019, I started to think about the future of our label and I also got the itch to start producing more music. I had a vision of releasing music via a “rotating collective” that I’d collaborate with, and I came up with Vince & The Valholla Empire. Think of it as a group with no definitive members. Just me and the people I’m collaborating with at the time. Our first experiment with the “Label is the Artist” model was with a song Kirby recorded called “Metro.” She didn’t care about commercially releasing it, so we released it with Valholla listed as the artist featuring her. We’ve since had numerous releases and collaborations where our label is listed as the primary artist. 

In your case study, you mentioned “spoilage” when it comes to music. Please explain.

Do you know how many amazing songs never see the light of day and end up rotting on a hard drive? Too many. So, when writing camps happen, or songs are written for artists and they don’t end up being released, I call it spoilage. I think if a song is good, it should come out. With streaming, you no longer need a rollout for every release. There’s no reason why great songs should go unheard. That’s why I plan on releasing most of the music I produce in some form. 

photo courtesy of Valholla Records

You recently mentioned that your company is currently in a seed round on Twitter last year. Is Valholla still expanding into tech?

Yes, we’ve been in talks with several private equity firms and VCs about partnering with us, but with the current economic climate, we’re taking our tech expansion in another direction. We are in the process of selling a minority stake in Valholla Worldwide (the parent company of Valholla Records) and after that happens, I plan on personally investing in building the things I have a vision for on the tech side. I think it makes more sense so people can use what I want to build before asking for funding. For our existing business though, we’ll be expanding with a focus on the “Label is the Artist” model, hence why we plan on selling a minority stake soon.

You’ve built Valholla without taking outside investment after all these years, why sell a stake in your company now?

Expansion. As a company, we’ve done everything we could independently. In order to reach a global scale, you need partners to help with that. That’s my motivation. I’m just happy to be in a position to be able to sell. Most companies fail after 5-10 years. We’re still here, with consistent growth. We took the stairs.

Do you ever envision a full acquisition of Valholla in the future?

Maybe. But not anytime soon. One thing I can tell you is I’ll be making music for as long as I’m able to. If I sold, I’d just build the next company up from scratch. I’ve done it before. 

Read Valholla’s Case Study HERE

Follow Valholla’s official playlist Valholla NOW on Spotify HERE

Listen to “FOREVER” Vince & The Valholla Empire’s latest release with ADN Lewis HERE