An Analysis on the Process of Making Music Record Label in Indonesia

AN ANALYSIS ON THE PROCESS OF MAKING MUSIC RECORD LABEL IN INDONESIA

Davin Ega Merpati ID no. 015201000042

A skripsi presented to the Faculty of Business President University In partial fulfillment of the requirements for Bachelor Degree in Business Administration

March 2014

PANEL OF EXAMINER APPROVAL SHEET

The Panel of Examiners declared that the skripsi entitled “An Analysis on the Process of Making Music Record Label in Indonesia” that was submitted by Davin Ega in Business Administration from the Faculty of Business was assessed and approved to have passed the Oral Examinations on (March, 24th 2014).

SURESH KUMAR, ST.,M.Si Chair - Panel of Examiners

ANTHON S. TONDO, SE.,MBA Examiner I

A.B.M. WITONO, Ph.D Examiner II

SKRIPSI ADVISER RECOMMENDATION LETTER

This skripsi entitled “An Analysis on the Process of Making Music Record Label in Indonesia” prepared and submitted by Davin Ega Merpati in partial fulfillment of the requirements for the degree of Bachelor of Business Administration in the Faculty of Business has been reviewed and found to have satisfied the requirements for a thesis fit to be examined. I therefore recommend this skripsi for Oral Defense.

Cikarang, Indonesia, March 24th 2014

Acknowledged by, Recommended by,

A.B.M. WITONO, Ph.D A.B.M.WITONO, Ph.D Head, Business Administration Advisor Study Program

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DECLARATION OF ORIGINALITY

I declare that this skripsi, entitled “Analysis on the Process in Making Music Record Label: Cases in Indonesia” is, to the best of my knowledge and belief, an original piece of work that has not been submitted, either in whole or in part, to another university to obtain a degree.

Cikarang, Indonesia, March 12th 2014

Davin Ega Merpati

ACKNOWLEDGEMENTS

First of all, I am as the writer of this thesis would like to thank Jesus Christ. It is such a blessing that I have done my thesis, entitle “An Analysis on the Process of Making Music Record Label in Indonesia” as my final project in partial fulfillment of the requirements for the degree of Business Administration at faculty of Business at President University.

I would thank you to some parties who help me during the process. Those parties are:

1. My parents and my sister for putting faith on me during my study and life at President University 2. Mr. Witono, Ph.D as my advisor who help me to arrange and give advises during the development of this final project 3. Mrs. Lina as staff of Business Administration who help me for every academic problem I have encountered 4. My beloved one Suci Putri Ramadhani who always support me in everything, thank you for giving me support up until now 5. Edwin Rinaldy and Ivan Octavian, my two best friends who always support me, thank you so much guys, you two are the best! 6. All of BA family, Said Fachri, James Louis, Edo Mahendra, Akhmad Syaiful a.k.a iip, Pophel Fuston, Mark Tanri, Stefanus Edmund, Lucius, Tritiya Kurniawan, Atelia Wirahaque, Febriandi Xin, Feriko, Katharina Rosyanti, Christin Widjaja, Nesia Ne, and many more, thanks for our togetherness from the first semester until now 7. All of thesis warrior and MABES, Garciano, Rizky Poetra, Windhea Vendanova, Kevin Adisya, Theo, Husni Yulianto, and many more, thanks for the moral support guys 8. Kons PLN member, Vino Fradatama, Teuku Fachrol, Aldo, Oni, Jibrut, Pak Budi, and many more 9. Pavillion C4/3A member, Bang Gendut, Bang Andi, Bang Derry, thank you for the great sharing about thesis

10. INPRSY member, Rafael Yefta, Ruben P. Saragih, Abimanyu Lioforta, Rendy Irawan, Robertus Rangga, Arnold, Firman, Soleh, Acong, thanks for the sharing about music, about life, and about youth! 11. Fadhillah A. Kasyidi, thank you for supporting me, I‟ll treat you later in warsus 12. And every other people who support me either directly or indirectly to finish this final project

Cikarang, March 12th 2014

Davin Ega Merpati

TABLE OF CONTENTS

Contents PANEL OF EXAMINER APPROVAL SHEET ...... ii SKRIPSI ADVISER RECOMMENDATION LETTER ...... iii DECLARATION OF ORIGINALITY ...... iv ACKNOWLEDGEMENTS ...... v TABLE OF CONTENTS ...... vii LIST OF FIGURES ...... ix LIST OF TABLES ...... x DEFINITION OF TERMS ...... xi ABSTRACT ...... xii CHAPTER I INTRODUCTION ...... 1 1.1 Background of Study ...... 1 1.2 Problem Identification ...... 3 1.3 Statement of Problem ...... 5 1.4 Research Objective ...... 5 1.5 Scope and Limitation ...... 5 1.6 Conceptual Framework ...... 6 CHAPTER II LITERATURE REVIEW ...... 7 2.1 Music Record Label in Indonesia ...... 7 2.2 Process in Making Music Record Label ...... 9 2.2.1 Agreements between Memberships ...... 11 2.2.2 Investor ...... 13 2.2.3 Distribution and Promoting Strategy ...... 14 2.2.4 “Work for hire” Agreement ...... 19 2.2.5 Producer Agreement ...... 20 2.2.6 Production Credit ...... 22 2.2.7 Liability Release/Permission Form ...... 24 2.3 Musician is a Different Kind of Entrepreneur ...... 25 2.4 Conceptualizing Entrepreneurship in Music ...... 27 CHAPTER III RESEARCH METHODOLOGY ...... 34

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3.1 Research Method ...... 34 3.2 Research Approach ...... 34 3.3 Data Collection ...... 35 CHAPTER IV DATA ANALYSIS ...... 37 4.1 Interviewees Profile ...... 37 4.2 Aldo Sianturi from Raksasa Record ...... 37 4.2.1 Aldo Sianturi Profile ...... 38 4.2.1 Analysis...... 39 4.3 Rifandi Rusli from Alfa Record ...... 42 4.3.1 Rifandi Rusli Profile ...... 43 4.3.2 Analysis...... 43 4.4 Arnold Limasnax from E-Motion ...... 45 4.4.1 Arnold Limasnax Profile...... 46 4.4.2 Analysis...... 47 4.4 Result Analysis ...... 48 CHAPTER V CONCLUSION AND RECOMMENDATION ...... 51 5.1 Conclusion ...... 51 5.2 Recommendation ...... 52 REFERENCES ...... 53 APPENDIX ...... 57 A. Interview Transcript Aldo Sianturi ...... 57 B. Interview Transcript Rifandi Rusli ...... 63 C. Interview Transcript Arnold Limasnax ...... 69

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LIST OF FIGURES

FIGURE 1.1: PROCESS IN MAKING MUSIC RECORD LABEL ...... 6 FIGURE 2.1: ORGANIZATIONAL STRUCTURES OF MUSIC INDUSTRY ...... 10 FIGURE 2.2: PRODUCER‟S JOB ...... 23 FIGURE 2.3: TEMPORARY ORGANIZING PROCESS ...... 31 FIGURE 4.1: SONG PIRACY‟S SOURCE ...... 50

LIST OF TABLES

TABLE 3.1: INTERVIEW QUESTIONNAIRE ...... 32

DEFINITION OF TERMS

EO : Entrepreneurship Orientation

EM : Entrepreneurial Marketing

Indie Label : Music record label that has no limitation in music genre

Major Label : Music record label that has limited number of music genre

ABSTRACT

Music is a common thing in everyone‟s life. Music is the only source for the musician to make a profit. But, with the help of entrepreneurs, musician can find a vessel to promote and enhance their music. Musician tries their best to fulfil the demand of the public and entrepreneurs help them to be famous in the public. The lack of number from the music record label in Indonesia makes the musician hard to develop themselves. Compare to US, UK, and Japan, Indonesia has a low numbers of music record label. With the theory from Bart, the researcher made this research in order to find how to develop a music record label. By analyzing how the entrepreneur build the music record label, the researcher found the process of making music record label, and how to develop it. Keyword: Entrepreneur, Music Record Label, Music.

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CHAPTER I INTRODUCTION

1.1 Background of Study Entrepreneurship‟s concept in the society already becomes the core in the economic and business field. But, it‟s still doesn‟t count a large numbers of entrepreneur acts outside economic and business field. However, these acts usually get unnoticed because of the strength of the bond between entrepreneurship and economics. “Money making” word usually linked to entrepreneur as in the music record label system which need “Artist” to gain the profit. However, musicians, most often possess the image of the starving artist who needs help from the music record label to increase their popularity and promoting themselves to the public. A musician is a person who is talented in making music or performing music creatively, or one who composes, conducts, or performs music (Macmillan, 2014). There‟s a probability to make a great business with the field of music as long as theories of entrepreneurship still connected to the economic aspect. The researcher believes that music should be considered as a great chance in the world of entrepreneur in terms of money making.

Music record label possesses a big opportunity to become a great start up business in Indonesia. Media service, network, and innovative idea are attached to the concept of entrepreneurship and its importance in helping music record label create a sustainable life for the musician in Indonesia. Many of young musicians in Indonesia desperately try to sign a contract with the label in order to achieve their dream to become a superstar. The connection between music and entrepreneurship creates a new business field in Indonesia. It becomes an innovative idea development in creative business industry in Indonesia. Without a strong understanding of entrepreneurship, entrepreneur can‟t start a new innovative business using the music aspect in order to gain profit. Innovation, in any field, is the new breakthrough development of new ideas and approaches for entrepreneur.

Innovation is the application of better solutions that meet new requirements, unarticulated needs, or existing market needs. This is accomplished through more effective products, processes, services, technologies, or ideas that are readily available to markets, governments and society. The term innovation can be defined as something original and, as consequence, new that "breaks into" the market or society. One usually associates to new phenomena that are important in some way (Frankelius, 2009). The entrepreneur who interested in the idea of the connection between music and entrepreneurship can find a new way to innovate the creative business in Indonesia by increasing the awareness of conceptualizing entrepreneurship orientation to the music world. By knowing this, the entrepreneur can play the role as an owner of music record label and seeing the musician as one of the main “resource” for their business. But there‟s another main resource that play an important role in the music record label named sound engineer/audio engineer.

A sound engineer/audio engineer is the people who learn about music but choose a different path with the recording, mixing and reproduction of sound skill. Audio engineer uses technology to produce sound for radio, movie, television, music, electronic products and computer games (Wikipedia, 2014). Most of sound engineer itself was a musician back then. But they choose a different path to become the most important supporting pillar to the musician rather than become a great artist.

Somehow, the descriptive words commonly associated with entrepreneurs looks similar to describe a musician (Pink, 2006). Even the descriptive words that mostly used to describe entrepreneur and musician look similar, their way of doing things is different. Musician uses innovation, creativity, and great leadership to channel his or her passion for music into a new method that challenges the difference of the way they earn money and has value in the public marketplace. But, they still need the entrepreneur who will support them to maximize their potentials. Entrepreneur can use their entrepreneurship skills to develop a “vessel” for the musician. That‟s why the process in making music record label mainly focus on the way of entrepreneurship applies in music. Music students in

2 music school have to be creative. In music school, creativity is highly valued. Music school teaches about the expression, the beauty of music art, and the ability to provoke and surprise an audience.

On the other hand, business schools are more focused on analytical analysis, how to work as a team, financial rewards for hard work, stable employment, and a clear set of rules to career advancement (Pink, 2006). Business students are more flexible about the way they adapt to the industry they actually want to work in. Musicians are more focused in terms of the industry that they work in. With their years of intense study, practicing, individual lessons, and performing, they matured their passion and their identity.

This case study uses the people from music record label‟s interview opinions to provide illustrations of the project-based nature of entrepreneurship in the making process of music record label. The researcher hoped that the result from this analysis provides further support for music business field‟s view of entrepreneurship and a starting point to develop more effective programs to support the entrepreneurship orientation in music through policy and education development.

1.2 Problem Identification Nowadays, there are many young musicians in Indonesia. Those people blessed with magnificent skill to play music instrument. To achieve their dream, they sign contracts with the music record label that ready to help them to make a history in the world of music. Mostly, after they graduate, they will continuously make great songs and apply it to the music recording label. This is why entrepreneur should take the chance to make a creative business industry in the field of music.

Even though the numbers of talented musician in Indonesia are great, the number of creative business industry music record label can‟t be compared to other countries. Just a few of many musicians in Indonesia can sign the contract in music record label. Indonesia has few numbers of music

3 record labels in comparison to United States, United Kingdom, and Japan. Indonesia only has 34 music record labels (Wikipedia: Label Rekaman, 2014). United States has 640 music record labels (Wikipedia: United States Record Label, 2010), United Kingdom has 209 music record labels (Wikipedia: UK Record Label, 2013), and Japan has 109 music record label (Wikipedia: Japanese Record Label, 2012). Based on those 4 data, the researcher concludes that the number of music record label in Indonesia is low.

Music record label has many requirements before offering a contract to musician. Genre is one of those requirements. A music genre is a conventional category that identifies pieces of music as belonging to a shared tradition or set of conventions. It is to be distinguished from musical form and musical style, although in practice these terms are sometimes used interchangeably (Jim, 2012). Music can be divided into different genres in several ways. The artistic nature of music means that these classifications are often arbitrary and controversial, and some genres may overlap. Music itself contains many unique genres. Commonly, people in Indonesia love to hear a song with jazz, or pop, or blues, or rock genre. But, because of the rapid growth of technology, musicians discover many new genres that use digital instrument to play a song. Musicians have their own specialty on specific genre. If the music record label genre and the musician don‟t match, the music record label doesn‟t want to offer a contract to the musician and vice versa.

Entrepreneur is essential to help the musician. But there‟s a rare occasion where musician want to start their own music record label. Musician doesn‟t need a title to make their own music record label. They have their own ways to change their unique view of the world into an entrepreneurial business. The way they master their business area is very important to use their own style and voice to their own entrepreneurial venture. Musicians will learn that designing a company that reflects his or her personal goals is empowering, creative, and fun.

1.3 Statement of Problem By using entrepreneurship approach, it can be applied to the business that tied with music. The lack of employment in creative industry especially in Indonesia, compared to United States, United Kingdom, and Japan, the few number of music studio label compare to the talented musician in Indonesia, and the lack of educational facility that teach how to manage music business become the main problem in this research. By interviewing the people who are in charge on music record label, the researcher hopes to find the solution to those problems. Therefore, a research needs to be done to find the solution.

1. How are the practices of music record labeling development in Indonesia? 2. Are there any differences between the practices and the Bart‟s step in making music record label? 3. What are the major challenges in making music record label?

1.4 Research Objective 1. Analyze the process in making music record label and the factor that support the making process

2. Find an innovative solution to improve the creative industry in Indonesia.

1.5 Scope and Limitation The scope are the process in making music record label and the factor that support it. This study was based on the interviews with 3 people from music record label. The data collection techniques that the researcher used were interview. The result from this research is descriptive. The main research will be focusing on the process in making music record label like Agreements, Investor, Distribution, “Work for hire” Agreement, Producer Agreement, Production Credit, and Permission Form. Originally, based on Bart (2002), there is one more step in making music record label. It is

trademark notice and registration. The researcher didn‟t include it in the research because it is hard to get the actual data of trademark. It is connecting to license and it is mostly private.

1.6 Conceptual Framework

Figure 1.1: Process in Making Music Record Label

Agreements between Memberships Investor Offering\ contract to the every member in Optional, It is not a must to get the music record label an investor

Distribution and Promoting “Work For Hire” Agreement Strategy

Contract for Sound Engineer Depend on the creativity of the recruitment owner

Production Credit Producer Agreement Must be listed in the liner Contract for outside notes for producers, session producers people, and others

Liability Release Form Music Record Company logo, Artwork, Label and Band Logo

Source: Based on Bart (2002)

CHAPTER II LITERATURE REVIEW

2.1 Music Record Label in Indonesia Indonesia main benefit is located on the cultural roots that have been implanted since the old order. The role of Sukarno, who was booed as “freedom taker” in artistic expression post- collapse, this time it should be studied as a person who contributed to dig and maintain Indonesian culture from the onslaught of foreign culture . Without such policies, it is hard to say that the Indonesian music industry will be a loyal lover. Although there are other factors such as facto - musicians Indonesia, using the momentum of the policy is to create a variety of music and song that is aligned with the policies of Sukarno (Newsmusik, 2000).

According to Bens Leo (Newsmusik, 2000), the history of the recording industry in Indonesia came from two places: Lokananta in Surakarta and Rhythm in Menteng Jakarta. Lokananta is owned by the government, and gave birth to the folk songs while Rhythm delivered many songs to entertainment. Names like Rachmat Kartolo, Nien Lesmana, and Patty Sisters have histories doing recording session there, which was originally just a small studio in a garage in Menteng, Central Jakarta. By the early 1970s, in South of Jakarta City Bandengan, Dick Tamimi Dimita set up a recording studio. The recording studio is also a pioneer recording for pop songs. It‟s because in this place, famous names like Koes Brothers, Panbers, Dara Puspita, Rasela, was born.

To create a love for the music of Indonesia, Sukarno (Former President of Republic of Indonesia) also encourages creativity by establishing Lokananta musicians. A state record companies documenting and disseminating the music of Indonesia to the various regions. Sukarno's policies have resulted anti-western dominant Indonesian language songs and folk songs in the country (Newsmusik, 2000).

In Suharto (Former President of Republic of Indonesia) era, intentional or not, also has continued to Indonesian-ness through the music continues. In this era of Soeharto, Indonesia's music industry is growing. Suharto did not issue anti-western policies as did Sukarno, but through policies that set TVRI as the only TV station in Indonesia, has been keeping the music industry Indonesian luck. Luck is caused TVRI broadcast only music of Indonesia. TVRI is the most effective medium to advertise, in secret, Indonesian music to remote regions (Newsmusik, 2000).

Indonesia music industry has the capital resources that culture of Indonesia as a loyal customer at the music and creative musician. However, it will not show the level of significance if it is not supported by good management and government support. Classical problems in the music industry such as piracy must be addressed, for example, in the study of Society and Culture Research Center, University of Indonesia (UI AEOS) in 2005 has shown that 46.50 % of music consumers in different regions of the sample studied stated that they buy pirated music. This figure is likely to continue to grow, and action must be taken immediately "merciless" if the government is serious about wanting to develop the creative industries.

When linked with the issue of "Indonesian music industry apocalypse" which is marked by a decrease in sales of record albums nationwide, actually only shows a shift and change course. The shift occurred from the national to the local. The emergence of indie labels in various regions in Indonesia, which has a market not only in the local community but to foreign countries. Indie label here not only be interpreted as a particular music group, but all music groups, including local language pop music and traditional music. Based on research conducted by the AEOS - UI in several regions in Indonesia, which previously did not know the record industry, since about five years ago, began to show different things. The technology is getting cheaper and familiar has led to interest in the community to make their own recordings.

Thus the shifts and changes in the music industry should be observed here that the recording industry. Doomsday for the Indonesian music

8 industry music can happen when people of Indonesia have not listened and do not have the creativity to play his music. It was made possible by the invasion of foreign music, not just the West, the more incentive to Indonesia. Excitement of young children in national and regional scale in music should be treated as opportunities in the music industry. Excavation and marketing of cultural resources in the music industry should be done continuously. In fact should be considered seriously for the export of Indonesian music. Not only survived the invasions of foreign music. Music export success abroad will evoke pride. The feedback of our society will be more proud of her music (Newsmusik, 2000).

2.2 Process in Making Music Record Label Based on Bart (Bart, 2002), there are some steps before an Entrepreneur can build a music record label. It contains many agreements that must be fulfilled first if you want to develop music record label. There are:

1. Agreements between memberships 2. Investor 3. Distribution and Promoting Strategy 4. “Work For Hire” Agreement 5. Producer Agreement 6. Production Credit 7. Liability Release/Permission Form 8. Trademark Notice and Registration

Figure 2.1: Principle Organizational Structures of the Music Industry

Source: Ian (1999)

2.2.1 Agreements between Memberships Before starting to build a music record label, there should be a clear written agreement that entrepreneur needs to make. An accord reached between two or more parties in which the terms of a transaction or a course of action have been negotiated and documented. An agreement is usually legally enforceable as long as it is negotiated freely between legally competent parties (investorword.com).

An agreement can be describe as a negotiated and usually legally enforceable understanding between two or more legally competent parties. Although a binding contract can result from an agreement, an agreement typically documents the give-and-take of a negotiated settlement and a contract specifies the minimum acceptable standard of performance (businessdictionary.com).

In that agreement, it contains how the finance process will be handled in the future. It‟s important to gain membership trust. The clear written agreement that stated above was a contract. In economics, contract theory studies how economic actors can and do construct contractual arrangements, generally in the presence of asymmetric information. Because of its connections with both agency and incentives, contract theory is often categorized within a field known as Law and economics (Bolton, 2005).

While it is not a requirement that a contract be in writing in order for the contract to be enforceable, there are some specific types of contracts that, by state law, are required to be in writing in order to protect the parties from fraud. The state laws relating to this issue are called statutes of frauds. There are six essential elements for a contract to be valid. The first three, considered here together, relate to the agreement itself; the other three relate to the parties making the contract (Murray, 2014):

1. Offer, Acceptance, and Mutual Consent Every contract must include a specific offer and acceptance of that specific offer. Both parties must consent of their free will. Neither party can be coerced or forced to sign the contract, nor must both parties agree to the same terms. Implied in these three conditions is

intent of the parties to create a binding agreement. If one or both parties are not serious, there's no contract. 2. Consideration. There must be something of value exchanged between the parties. The thing of value may be money or services, but both parties must give something. 3. Competence. Both parties must be of "sound mind" to comprehend the seriousness of the situation and understand what is required. This definition requires that neither party be a minor, both must be sober (not under the influence of drugs or alcohol when signing the contract), and neither can be mentally deficient. If one party is not competent the contract is not valid and the non-competent party can disavow (ignore) the contract. This article on entering into a contract with a minor explains the issues involved in this kind of situation. 4. Legal Purpose The contract must be for a legal purpose. It cannot be for something illegal, like a selling drugs or prostitution.

Before artists can be signed, they have to be discovered. Imagine, for this example, that Band X is discovered after an A&R representative from For Example Records goes to see Band X at a live show. Before the A&R person went to the show, he was given a demo tape by a trusted source and did his research on the band. At the club, he likes what he sees and now must convince the entire A&R staff to sign the band. When they are in agreement, the band is signed and the wheels go into motion. Band X must now plan its album. The A&R director and producer decide on the concept of the album and select the songs that will be on the album. For Example Records gives Band X a budget, which is used for studio musicians, studio engineers and studio time. The A&R executive then coordinates a time for the band to begin recording the album. (In the past, record labels had their own "in-house" recording studios, but today most record labels use independent recording studios.) As this is going on, the other departments of the record company are in full swing. A budget is allotted for advertising,

12 art, publicity and promotion. As graphic artists, designers and copywriters begin their work, the A&R department, as well as publicity, marketing and sales, decide on a release date for the album. The artist development department (along with other departments) plans the live performances, promotional tour and radio and TV appearances. The record company must make sure that there is promotion for Band X on the national, regional and local level (depending on how much money the label is willing to spend). Near the time that the album will be released, the label's departments are working hard to secure press coverage and exposure for the band. All the machine's parts are working together to make sure that Band X's album will sell many copies, ensuring the success of everyone involved, from the artist to the radio stations to the CD stores (entertainment.howstuffworks.com).

2.2.2 Investor Investor is neither a speculator who takes on high risks for high rewards nor a gambler who takes on the risk of total loss for out of proportion rewards but one whose primary objectives are preservation of the original investment, a steady income, and capital appreciation (businessdictionary.com).

An investor is a person or entity that purchases assets with the objective of receiving a financial return. The assets an investor may buy range widely, but include stocks, bonds, real estate, commodities, and collectibles (e.g. art). The portfolio of an investor commonly includes a variety of assets that balance the rewards and risks of each investment. An investor is distinguished from a speculator, who seeks to make quick, large gains from price increases on risky assets. Generally, an investor has a longer time horizon for achieving a return, which may include regular cash payments from the income the asset generates, capital appreciation from the rise in the asset price, or both. A young investor tends to buy assets with price appreciation potential, because a 25-year-old investor has many years for the asset to appreciate before the funds are needed for retirement. An

13 older, retired investor ordinarily seeks income and thus wants assets that offer regular cash payments (investorglossary.com).

An investor puts money behind an idea, a project or a company with the hope of making a financial return. The problem facing entrepreneurs is that there as many different types of investors as there are investors. Most professional investors are investing other people‟s money, so they cannot be cavalier about placing everything on one throw of the dice. So they expect an appropriate level of reward for the risk they are taking (Lovell, 2010). Investor might become a great source if entrepreneur doesn‟t have a fair amount of money before making a music record label. Entrepreneur needs to prepare the documents if they want to make a deal with the investor. That document contains an agreement about how the money will be distributed to the investor and it‟s legally under Federation of Law.

There are 2 types of investor. Those are private investor and professional investor (goinfront.com).

1. Private Investor A natural person who does not perform and is not in any other way engaged in giving investment services. 2. Professional Investor A corporation, partnership, proprietorship or any other entity whatsoever is a professional user even if they do not run investment services. A natural person involved in giving investment services. The definition of giving investment services is: “Being authorized to give investment services or registered with SEC (or authorities with similar functions in other countries)”.

2.2.3 Distribution and Promoting Strategy Before doing distribution and promoting, entrepreneur needs to make a plan. Entrepreneur needs to think about how big the money will spend for distribution, advertisement and promote (Bart, 2002). It‟s because sometimes, entrepreneur who start this business for the first time always spend the money to the recording and manufacturing cost so there‟s just a

14 few money left for distribution and promotion. This simple yet crucial to music record label.

Promotion is one of the market mix elements or features, and a term used frequently in marketing, the specification of five promotional mix or promotional plan. These elements are personal selling, advertising, sales promotion, direct marketing, and publicity (Rajagopal, 2007). A promotional mix specifies how much attention to pay to each of the five subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image.

Fundamentally, however there are three basic objectives of promotion. There are information, demand, and product (Dave, 2010). There are different ways to promote a product in different areas of media. Promoters use internet advertisement, special events, endorsements, and newspapers to advertise their product. Many times with the purchase of a product there is an incentive like discounts, free items, or a contest. This is to increase the sales of a given product.

A promotional recording, or promo, is an audio or video recording distributed for free, usually in order to promote a recording that is or soon will be commercially available. Promos are normally sent directly to broadcasters, such as music radio and television stations, and to tastemakers, such as DJs and music journalists, in advance of the release of commercial editions, in the hope that airplay, reviews, and other forms of exposure will result and stimulate the public's interest in the commercial release. Promos are often distributed in plain packaging, without the text or artwork that appears on the commercial version. Typically a promo is marked with some variation of the following text: "Licensed for promotional use only. Sale is prohibited." It may also state that the promo is still the property of the distributor and is to be "returned upon demand." However, it is not illegal to sell promotional recordings (Augusto, 2011),

2.2.3.1 Entrepreneur Orientation Entrepreneurial orientation is usually defined as a multidimensional construct, applied at the organizational level, which characterizes firm‟s entrepreneurial behavior and includes one or several of these three dimensions: risk-taking, innovativeness and pro-activeness (Fayolle, 2014) . a differentiation between entrepreneurship and entrepreneurial orientation is best addressed in issue of whether or not going into business and the basic entrepreneurial problem (Miles, 1978).

EO as the propensity of a company‟s top management to take risky action is innovative and proactive. Using this definition and prior literature, entrepreneurship researchers have used the term entrepreneurial orientation to describe a „fairly consistent set of related activities or processes ‟the extent to which a firm is entrepreneurial is commonly referred to as its “entrepreneurial orientation” (EO). The most widely used definition of EO is the processes, actions, methods, practices and decision making style within the firm. The key components of EO are risk-taking, proactiveness and innovativeness and competitive aggressiveness and autonomy (Dess, 1996).

Risk-taking is a core for every entrepreneur. It referred to the risk that entrepreneur take by making business for himself/herself rather than work for a company. But, by taking a risk, entrepreneur can gain many experiences that will be useful in the future and also find an opportunity. Entrepreneur need to become a risk-taker, dealing with uncertain returns in a market where prices and quantities are non-fixed and unknown (Richard, 2001). An entrepreneurial firm is one that engages in product-market innovation, undertakes somewhat risky ventures, and is first to come up with „proactive‟ innovations, beating competitors to the punch (Miller, 1978).

Proactiveness is a character that describes the entrepreneur‟s action to anticipate every opportunity that will come. This is crucial in music record label. To be able to anticipate the global market demand, entrepreneur can lead the way. Innovativeness is a work that commonly found in entrepreneur. Finding something new and maximize its potential is one of entrepreneur‟s ability. Proactive behavior involves acting in advance of a future situation,

16 rather than just reacting. It means taking control and making things happen rather than just adjusting to a situation or waiting for something to happen. Proactive employees generally do not need to be asked to act, nor do they require detailed instructions.

Proactive behavior can be contrasted with other work-related behaviors, such as proficiency, i.e. the fulfillment of predictable requirements of one‟s job, or adaptability, the successful coping with and support of change initiated by others in the organization. In regard to the latter, whereas adaptability is about responding to change, proactivity is about initiating change. Proactivity is not restricted to behaviors. Employees can be proactive in their prescribed role. Likewise, behaviors labeled as Organizational Citizenship Behavior can be carried out proactively or passively .In the context of EO, innovativeness typically emphasizes the importance of technological leadership to the business, as well as changes in its product lines (Bateman, 1993).

Autonomy refers to the independent action of an individual or a team in bringing forth an idea or a vision and carrying it through to completion without being held back by overly stringent organizational constraints (Miller, 1983). However, these two different perspectives are not always consistently implemented in empirical studies. Nevertheless, empirical research on EO has provided a broad range of insights. It was to show the merits of a configurationally approach to the study of organizations using the example of how entrepreneurship has different drivers and different manifestations in different types of companies.

2.2.3.2 Entrepreneurial Marketing Entrepreneurial marketing is less about a single marketing strategy and more about a marketing spirit that differentiates itself from traditional marketing practices. It eschews many of the fundamental principles of marketing because they are typically designed for large, well established firms. Entrepreneurial marketing utilizes a toolkit of new and unorthodox marketing practices to help emerging firms gain a foothold in crowded

17 markets. Many entrepreneurial marketing strategies are born out of necessity. New businesses might have 10, five, or just one person working on their marketing efforts. They work within limited budgets and have access to a fraction of the resources that their major competitors have. Luxuries like graphic design teams and advertising consultants are often outside the means of start-ups, requiring them to find ways to make the maximum impact with limited resources (marketing-schools.org).

Marketing is commonly connected to production and consumption activities. Many experts already gave the definition of marketing. The definition given is often different among the experts and the other expert. This difference is due to differences in the expert‟s view and reviewing global market. However, the definition of marketing is similar to entrepreneurship. But, entrepreneurial marketing is different from marketing and entrepreneur, it‟s greater than those. The definition of the most appropriate with these objectives, entrepreneurial marketing (EM) is an orientation as well as a process of pursuing opportunities and launching and growing ventures that create perceived customer value through relationships, especially by employing innovativeness, creativity, selling, market immersion, networking and flexibility (Gerry, 2012).

1. Passion and Flexibility EM engages in marketing with the entrepreneur deeply involved, not as an abstract phenomenon. 2. Market Immersion Experience and customer contacts are often weighed more in making decisions than in formal, systematic methods used by their larger corporate competitors. 3. Networking EM typically engages substantial networking and relationship building as a particularly important element. 4. Innovativeness In EM, striving to identify opportunities is a day-to-day activity for business owners, with 83 percent indicating that they are consistently looking for new business opportunities.

In music record label, entrepreneurial marketing is important. This is the main measurement of music record label‟s quality. There are many factors that affecting the entrepreneurial marketing such as passion and flexibility, market immersion, networking, and marketing planning.

2.2.3.3 Economic Entrepreneurship Due to the fact that music performance is considered as a cultural service to which the production and the service itself are inseparable, the music performer who performs the service is thus an inseparable element. Therefore, people must consider music performers as human resources that function as sources of inputs for production of a music performance. Because teamwork is an important component of the production of a music performance, it can be assumed that the particular organization of the human resources can be associated with a particular service production. the entrepreneur as an individual acting solely on their own initiative to create change and break boundaries despite resistance from society.

Musicians have been described to rely heavily upon network relationships to develop opportunities to perform. Despite whether or not a particular individual is involved in several new combinations, and therefore considered more entrepreneurial, the teamwork nature of the music community illustrates a heavy reliance on collaboration that does not recognize as important in the depiction of the entrepreneur. In spite of the correlations drawn here, the conception of entrepreneurship and the entrepreneur are tied heavily to economic motives and development, and do not draw attention to the fundamental role networks play in the organization and entrepreneurial developments in music performance work (Schumpeter, 1983).

2.2.4 “Work for hire” Agreement An audio engineer is concerned with the recording, manipulation, mixing and reproduction of sound. Many audio engineers creatively use technologies to produce sound for film, radio, television, music, electronic

19 products and computer games. Alternatively, the term audio engineer can refer to a scientist or engineer who develops new audio technologies working within the field of acoustical engineering. Audio engineering concerns the creative and practical aspects of sounds including speech and music, as well as the development of new audio technologies and advancing scientific understanding of audible sound (Wisegeek, 2013).

Work for hire agreement is for the sound engineers (producer). In order to approach the sound engineer, entrepreneur needs to make a deal about how the process of mixing and mastering will become. It is purposely made to prevent a future claim about the ownership of a song (Bart, 2002).

In the recording studio environment, a sound engineer records, edits, manipulates, mixes, or masters sound by technical means in order to realize an artist's or record producer's creative vision. While usually associated with music production, an audio engineer deals with sound for a wide range of applications, including post-production for video and film, live sound reinforcement, advertising, multimedia, and broadcasting. In larger productions, an audio engineer is responsible for the technical aspects of a sound recording or other audio production, and works together with a record producer or director, although the engineer's role may also be integrated with that of the producer. In smaller productions and studios the sound engineer and producer is often one and the same person. In typical sound reinforcement applications, audio engineers often assume the role of producer, making artistic and technical decisions, and sometimes even scheduling and budget decisions (Huber, 1995).

2.2.5 Producer Agreement If entrepreneurs can‟t approach sound engineer, then the entrepreneur needs to sign an agreement with outside producer. There are several things that need to be signed like: defining how the various costs of the recording sessions will be handled, what advances will be paid to the producer, and what producer royalties will be paid to the producer (Bart, 2002).

Mostly, outside producer includes live sound engineer. There are 4 types of live sound engineer (Davis, 1990):

1. Front of House (FOH) engineer is a person dealing with live sound reinforcement. This usually includes planning and installation of loudspeakers, cabling and equipment and mixing sound during the show. This may or may not include running the foldback sound. A live/sound reinforcement engineer hears source material and tries to correlate that sonic experience with system performance. 2. Wireless microphone engineer, or A2. This position is responsible for wireless microphones during a theatre production, a sports event or a corporate event. 3. Foldback or Monitor engineer is a person running foldback sound during a live event. The term "foldback" is outdated and refers to the practice of folding back audio signals from the FOH (Front of House) mixing console to the stage in order for musicians to hear themselves while performing. Monitor engineers usually have a separate audio system from the FOH engineer and manipulate audio signals independently from what the audience hears, in order to satisfy the requirements of each performer on stage. In-ear systems, digital and analog mixing consoles, and a variety of speaker enclosures are typically used by monitor engineers. In addition most monitor engineers must be familiar with wireless or RF (radio- frequency) equipment and must communicate personally with the artist during each performance. 4. Systems engineer responsible for the design setup of modern PA systems which are often very complex. A systems engineer is usually also referred to as a "crew chief" on tour and is responsible for the performance and day-to-day job requirements of the audio crew as a whole along with the FOH audio system. This is a sound-only position concerned with implementation, not to be confused with the interdisciplinary field of system engineering which requires a college degree.

2.2.6 Production Credit A record producer is an individual working within the music industry, whose job is to oversee and manage the recording of an artist's music. A producer has many roles that may include, but are not limited to, gathering ideas for the project, selecting songs and/or musicians, coaching the artist and musicians in the studio, controlling the recording sessions, and supervising the entire process through mixing and mastering. Producers also often take on a wider entrepreneurial role, with responsibility for the budget, schedules, and negotiations (Connor, 2011). In most cases the music producer is also a competent arranger, composer, musician or songwriter who can bring fresh ideas to a project. As well as making any songwriting and arrangement adjustments, the producer often selects and/or gives suggestions to the mixing engineer, who takes the raw recorded tracks and edits and modifies them with hardware and software tools and creates a stereo and/or surround sound "mix" of all the individual voices sounds and instruments, which is in turn given further adjustment by a mastering engineer. The producer will also liaise with the recording engineer who concentrates on the technical aspects of recording, whereas the executive producer keeps an eye on the overall project's marketability. The producer‟s responsibility in the music record label is quite high, so in order to appreciate them, entrepreneur needs to make sure that the production credits listed in the liner notes for producers, session people, and others conform to any contractual requirements.

Figure 2.2: Producer’s Job

Source: www.bemuso.com/musicbiz/recordcompaniesandlabels.html

2.2.7 Liability Release/Permission Form Entrepreneur needs to consider the possible necessity of getting a liability release or permission form signed in their company logo, artwork, or maybe band logo (Bart, 2002). Sometimes, there‟s a tricky legal issue in this area. But, by using liability release/permission form, entrepreneur can prevent that. A legal release is a legal instrument that acts to terminate any legal liability between the releaser and the releasee(s), signed by the releaser. A release may also be made orally in some circumstances. Releases are routinely used by photographers, in film production, by documentary filmmakers, or by radio and music producers when they photograph, film, video or record the voice or performance of individuals to be sure that the person consents or will not later object to the material being used for whatever purpose the release (Davis, 2007).

The album cover is a component of the overall packaging of an album. Especially in the case of vinyl records with cardboard sleeves, these packages are prone to wear and tear, although wear and tear does often take place to some degree on covers contained within plastic cases. A variety of treatments could be applied to improve both their appearance and durability, such as clear plastic wrap. Many products have been available for the storage of vinyl albums, often clear plastic sleeves. The surface of a vinyl record is readily damaged, so aside from the outer cardboard sleeve, there is usually an inner protective cover to protect against dust and handling. This is normally shaped to allow it to readily slide within the outer cover. The inner sleeve is either thin white paper, either plain or printed with information on other recordings available from the same company, or a paper sleeve supporting a thin plastic bag. These quite often have a circular cut out so that the record label can be read without directly handling the record, though when the inner sleeve is printed with lyrics, which became quite common, then there is usually no hole. Decca Records used a system of color coding on these sleeves where a blue color denoted a stereophonic recording while red denoted a monophonic recording (Sam, 2013).

2.3 Musician is a Different Kind of Entrepreneur Musicians don‟t need an M.B.A. in order to find ways to transform their unique view of the world into an entrepreneurial business. Mastery of key business areas will free the artist to bring his or her own style and voice to the entrepreneurial venture they create. The seemingly elusive goal of having a balanced life in the arts can become a reality. Musicians will learn that designing a company that reflects his or her personal goals is empowering, creative, and fun. Music students are by nature creative types, and individual creativity is highly valued and encouraged in music classes. Emotional expression, pursuit of beauty, and the ability to provoke and surprise an audience – all these are common in arts education. Business schools, on the other hand, prize analytical analysis, team work, financial rewards for hard work, stable employment, and a clear set of rules to career advancement (Pink, 2006). Business students may be drawn to one area of study or another – finance rather than marketing, for example – but they are much more flexible about which industry they actually work in. Musicians, with their years of intense study, practicing, individual lessons, and performing have their career goals fixed on one industry: music. This muse fuels their passion and their identity. For some musicians, just walking into the business school is tantamount to going over to the dark side. The business buildings are often modern, with high-tech classrooms and bolted down desks. Each floor of the building looks the same, and feels cold and sterile. Business students dress as if they are already working in an office. They carry laptops instead of instruments. Musicians have an abundance of the essential ingredients for becoming successful entrepreneurs. This list of descriptive words commonly associated with entrepreneurs can just as easily be describing people in the arts (Pink, 2006): 1. Passion - a powerful and compelling feeling for an activity, a topic, a concept. 2. Perseverance - steady persistence in a course of action despite setbacks or challenges. 3. Enthusiasm - a lively and optimistic interest in a pursuit. 4. Self-confidence - belief in one's own abilities and strengths.

5. Compassion - a deep understanding of the challenges of others and a desire to help. 6. Adaptability - the ability to adjust to changes in one's situation. 7. Resourcefulness - the ability to bring creative problem solving to a variety of situations. 8. Creativity - originality in thinking that produces new ideas, processes, and ways to communicate. 9. Inventiveness - using one's own imagination to invent or produce a new product or service. 10. Optimism - the belief that good ultimately prevails over evil; the tendency to think the best of people and events. 11. Multi-tasking - the ability to "juggle" many projects or activities simultaneously. 12. Persuasiveness - The ability to convince someone to see your point of view.

Musicians inherently possess many of the defining traits of entrepreneurs: passion, perseverance, creativity, resourcefulness, and the ability to “juggle” many projects or activities simultaneously. Their right brains are on overdrive, fully focused on cognitive processing that is holistic, random, symbolic, intuitive, nonverbal, and fantasy-oriented (Hopper, 2009).

The process of learning something new is more effective if the learner is in an active, searching mode rather than a receptive one (Silberman, 1996). “When learning is active, students do most of the work.

Introducing entrepreneurship to musicians in an active learning environment is a “sustained argument for empowerment and optimism" (Nalebuff & Ayres, 2006) and for exploring ways to upend the status quo. Innovation and creative problem solving, two crucial entrepreneurial skills to develop, thrive in playful, supportive, exploratory classrooms.

The early 2000′s radically changed the way music is promoted, enjoyed, shared, and consumed; and the next decades will continue to improve the way music is experienced. The fact that music is now mostly

26 digital means that entrepreneurs of all kinds are the new „gatekeepers‟ and can freely re-invent the way music is experienced. There are very little rules or status quo: as long as it reaches an audience and entertains, it works. From a label perspective the state of the music industry has gotten as intriguing as the A&R process. Every part of a release has become a truly creative force. Just as music styles change, the same has been happening with all facets of the business. Learn and understand the new channels of marketing, promotion and distribution and adapt as needed. In other words, follow the same guidelines as the artists by continuing to evolve, explore and experiment (Marcus, 2013)

2.4 Conceptualizing Entrepreneurship in Music Network entrepreneur is focused too strongly on linear development and opportunistic behavior for personal financial gain, and does not reflect social entrepreneur is heavily linked to drawing resources from economic functions for long-term social development, and does not account for the short-term, project-based nature of music work (Burt, 2000). Therefore, Theories of entrepreneurship offer important contributions to the field of entrepreneurship; they do not provide appropriate lenses to conceptualize entrepreneurship in music.

In order to do this, the former researcher argue that one of the critical steps is to abstract the concept of entrepreneurship from its economic associations. The former researcher believes there is a theoretical lens that serves this purpose well.

Entrepreneurship is an act, characterized by a creative step outside the boundaries of conventional practices in a particular social context. Within the social context, the individual or group responsible for carrying out the novel act are entrepreneurs (Lindgren & Packendorff 2003). The social context is a critical element in forming the uniqueness and creativity of the entrepreneurial act, as the originality or usefulness may not transfer to different environmental contexts.

Due to the integral role the social context plays in the novelty of the act, the act cannot be understood solely through individual actor

27 characteristics, but rather through the social construction of identities of individuals interacting with their environment and each other. The production of music in the high arts has largely been associated with the creative musician who is oblivious to financial concerns, in pursuit of realizing their artistic dreams (Throsby, 1994).

Entrepreneurial acts are temporary by nature because the creation and exploration that bring new practices or products to the environment give way to standardization and routine once it is adopted. It relates the temporary nature of entrepreneurial acts to project work, which entails organizing and delegating resources to a project under time restrictions. From this perspective, music should be produced without the influence or burden of monetary concerns. This conception of high art musicians can be understood through the popularized persona of the starving artist, through which the idea of poverty is seen as dignified or inspiring (Baumol & Bowen 1965).

As with project work, after the entrepreneurial act has been brought to an audience, the resources are then directed back to the regular function or are directed towards a new activity. Understanding entrepreneurial acts as temporary projects also means that the links between the entrepreneur and the act may be temporary. These values are also reflected in the beliefs held by some people that only subsidized musical groups perform music of cultural value, and that commercial ensembles must limit their repertoire to popularized music to be financially sustainable (Ploeg, 2006).

It is not necessary for the entrepreneur maintain a long-term relationship with the entrepreneurial act because once it has been completed or adopted, the work to maintain the innovation becomes routine, and the entrepreneur is able to invest their energy elsewhere. From this perspective, it can be understood that individuals may have varying roles in numerous and different entrepreneurial acts throughout their lifetime. Some of the dominant conceptions of entrepreneurship in academic research relate to profit-seeking, opportunistic, risk-taking behavior that creates economic growth in business. There has been a heavy emphasis on identifying

28 individualistic traits and behaviors that can be associated with entrepreneurial individuals, often focused on the founders of new firms or individuals in top management positions of large business organizations (Berglund & Johansson 2007).

Entrepreneurial acts are social constructions based on collective experiences, relationships and identities. The innovative idea that creates the momentum for an entrepreneurial act is the result of individuals interacting with one another. Beyond idea generation, an entrepreneurial act is also dependent on co-actors to bring it to fruition, and an audience to receive or be impacted by it (Lindgren & Packendorff 2003).

In music performance, there is little opportunity for technological improvements in the output of the service. The output of one man-hour of a performer playing a particular piece cannot be increased through technological developments. Due to the demand for certain quality aspects, substitution of performers with technological aids is an uncommon practice and therefore, the number of performers required for specific music performances remains quite stable (Baumol & Bowen 1965).

The nature of the entrepreneurial act may demand different roles and receive diverse influence from various actors, as well as demanding that different sets of actors in a network are mobilized. The transformation of innovative ideas into reality is achieved through the collaboration of loosely coupled co-actors towards a common goal. The co-actors‟ perception of identity is continually constructed and reconstructed based on a subjective view of their social interaction in entrepreneurial act.

Stable employment through long-term contracts is found almost exclusively in large organizations, such as orchestras, conservatories, and opera houses and turnover in those positions are a rare occurrence. With the exception of positions within orchestras, the different types of job positions musicians can apply for to make use of performing skills is very limited. Short-term and sub-contractual relationships are the predominant form of employment in artistic labor markets. Many musicians are simultaneously involved in various forms of contractual arrangements, such as long-term

29 orchestra positions, freelancing performance work, and teaching in conservatories (Menger, 1999).

Viewing entrepreneurial acts as temporary projects created through collaboration in actor networks, these acts may take on the form of temporary organizing processes. A multitude of elements contribute to the fragmented nature of the music performers‟ efforts and their motives for pursuing such work. Musicians‟ involvement in multiple jobs in and outside of the creative industries is seen as a way to diversify the risks of uncertain labour prospects, gain information about a wider environment, and gain experience working in different teams (Faulkner, 1999).

The perspective on temporary organizing processes to illustrate the process of carrying out project-based entrepreneurship. Projects progress through four stages, including: action-based entrepreneurship; fragmentation for commitment building; planned isolation; and institutionalized termination (Lundin & Söderholm, 2003).

Action-based entrepreneurship describes the stage where individuals try to procure support for their ideas and construct a social network that will allow them to realize their idea. A majority of culture workers are unable to support themselves primarily through their creative work, and have to devote substantial time to other work for financial sustenance. However, due to the importance of experiential learning, many young and inexperienced workers accept low financial rewards for culture work in exchange for the exposure and experience gained through work opportunities (Robinson & Montgomery 2000).

Planned isolation describes the stage when the project team organizes itself and works within the guidelines determined in the previous stage. Finally, institutionalized termination marks the end of the process, where the project is presented, the actor network ceases and the actors return to their previous engagements or embark on new projects in new network organizations (Lundin & Söderholm, 2003). A visual representation of the temporary organizing process outlined above has been developed in Figure One.

Figure 2.3: Temporary Organizing Process

Source: Lundin & Söderholm (2003)

The project-based view of entrepreneurship provides a theoretical lens that captures the essence of music work this research project aims to understand, the creative economy, to which music performance is a part of, is based on temporary relationships in a project-based economy. The semi- permanent work-groups, temporary jobs, freelancing and multiplicity of jobs that is common in the industry provide evidence of the project-based work many musicians regularly engage in (McRobbie, 2007). High consumer demand for differentiation and diversity in high art music requires continual innovation of the ensembles and music performed. In order to create the diversity of original music or approaches to music typical in the high arts, high art music performers have to take creative steps outside traditional approaches, and contribute new musical insight in their performances.

Concerts are an example of entrepreneurial acts, suggesting that concerts can present new ideas or new approaches that may be used in the future. In this way, entrepreneurship plays a critical role in cultural development in the high arts. The presentation of a concert can be described as project-work because it requires organizing musicians and delegating time and energy to meet the necessary requirements to present a concert by a specified date. At the completion of the concert, like in project work, the results of the work have been presented to an audience and the network ceases to have importance for the project. The musicians are then able to dedicate their efforts back to previous activities or to the development of new projects. Each individual concert produced is a unique project in itself, drawing upon different musicians to fill the specific needs for performers specified by the music and the social need of cohesive work group members. The entrepreneurial act in a music project is the result of new organizations

31 of individuals who collaborate and produce a cultural service that offers a new idea or new approach to the music.

The large number of temporary jobs or multiple jobs musicians are involved in may also indicate that musicians have varying roles in numerous entrepreneurial acts throughout their lifetime. The social construction of identity can be inferred to play a large role in the organization of musicians for project-work. The personal and social value of participation in the entrepreneurial act of music performance may outweigh the actors‟ value of monetary compensation. The musicians‟ narrative accounts provide individual perceptions about their interaction and organization in music performance activities. Narrative provides a useful tool to look into the way individuals understand and communicate the passage of time and the events that unfold (Abbott 2002).

The classical view of entrepreneurship, where entrepreneurship is rooted in economic objectives, limits its application in the field of music. Despite developments that have been made to address entrepreneurial phenomena in social and network contexts, the conceptualizations still leave many entrepreneurial acts unnoticed. The concept of entrepreneurship still remains heavily associated with traditional economic ideas. It described the presence of entrepreneurship in her work, but connected it to marketing the service (Ingram 2008).

The concept of skills and actions makes musicians must be able to be successful, especially for musicians working outside of the context of institutions. It connected entrepreneurship to taking a proactive approach to developing career opportunities by being: innovative, industrious, imaginative, creative, available, friendly, willing to take on any kind of task, ability to work with others (Brown 2008).

Most people in the profession are entrepreneurs because of the great need to be self-actualized workers a common example of this type of entrepreneurship is musicians who create a group and create interest in hopes that it takes off (Sandvoss 2008).

The creative economy is a project-based economy based on temporary relationships. The presentation of a concert is an example of project-work that involves organizing musicians, and dedicating time and energy to meet the requirements to present the concert by a specific date. As with projects, once the concert has been presented to the audience, the musicians are no longer tied to the specific project and can then dedicate energy to other projects. The entrepreneurial act culminates in the presentation of the project to the audience and subsequent use of the project would be regarded as standardization (McRobbie, 2007).

CHAPTER III RESEARCH METHODOLOGY

3.1 Research Method This research methodology was made to get relevant datas to analyze the process in making music record label. With this data, the researcher can get an actual data about how to make a music record label and analyze the factors that greatly affect the process in making music record label.

3.2 Research Approach The research approach includes a basic description of the theoretical and methodological focus of the research. Theoretical approach can be categorized as either inductive or deductive, and the methodological approach as quantitative or qualitative (Zikmund, 2000).

Inductive research is the process of making a general proposition on the basis of observation of particular facts. In short, it is based on fact and continued to generate conclusion. In this theory, individual actors and their role in the production between entrepreneur and music performance are the main focus.

The methodological approach depends on the data collection technique. The research data can be qualitative or quantitative. In this research, the researcher use qualitative data to analyze the problem. Qualitative research often uses descriptive accounts of people‟s experiences and structures in the world to accomplish this (Miles & Huberman 1994; Zikmund 2000).

The aim of using qualitative method is to discover information about processes, rather than outcomes or products. The researcher didn‟t use quantitative because the solution to the research problem cannot be found through quantitative methods, but instead relies on qualitative data to

34 provide the perceptions, views, impression and personal accounts to explain how entrepreneurship occurs in the context of music.

3.3 Data Collection The researcher was using qualitative data in order to analyze about the process in making music record label and the factors that greatly affected the music record label in Indonesia. The researcher used interview methods to gather the data because the researcher thinks that it is the most suitable method to get the data.

The researcher gathered the data by interviewing 3 people from music record label in Indonesia. These are 30 questions that were used to gain information according to the analysis that researcher work for.

Table 3.1: Interview Questionnaire

General questions

1. What is music record label in your own opinion? 2. Where did you learn about business in music field? 3. Did you see opportunities in music creative business before you make music record label? 4. Why did you choose to make this business? 5. What was the biggest factor that makes you choose this business? 6. What was the first thing that you do before you make music record label? 7. How long you develop this music record label? 8. How did you develop this business up until now? 9. What was the first thing that you do before making this music record label? 10. Can you tell me about the process how this music record label made? 11. What was the biggest challenge that you encountered since you start this business? 12. How did you solve that challenge?

Division and Recruitment

13. What kind of division that you have in your music record label?

14. What is the most important division in your label? 15. What is their main task?

16. What do you think about the current young musician in Indonesia?

17. How did you develop your newly recruited artist? 18. Can you tell me about the process in recruiting new artist? 19. What is more important, recruiting new artist or develop your current artist?

20. What is your requirement to sign artist?

Investor 21. Did you have any investor? 22. Who inspired you to make this music record label?

23. When did you start making this business? Distribution and Promotion Strategy

24. Do you have a specification in music genre?

25. As for now, what is the current mainstream music genre in your opinion? 26. Did your label following global market trends? 27a. If yes, how did you manage to overcome that situation with your

current artist?

27b. If no, why didn‟t you follow the global market trends? Business Opportunities 28. Do you think music record label business is a good business field

compared to the other business field? 29. What is the strong selling point in doing music industry business?

30. What kind of innovation that needs to be done in music industry?

Source: Based on Bart‟s Step (2002)

CHAPTER IV DATA ANALYSIS

4.1 Interviewees Profile As the researcher stated above, 3 people were interviewed in order to get the data. These people have vast experiences in music record label business in Indonesia. There are Aldo Sianturi from Raksasa Record, Rifandi Rusli from Alfa Record, and Arnold Limasnax from E-Motion.

The technique used for sampling the data of this study is interview. This method is used because the researcher need descriptive results to analyze the process in making music record label. Quantitative isn‟t suitable to get descriptive result.

4.2 Aldo Sianturi from Raksasa Record

The first interviewee that the researcher interviewed was Aldo Sianturi from Raksasa Record/Aksara Record. Raksasa record is originally born from Aksara record. The list of artist that has been signed by Raksasa/Aksara record:

1. The Adams 2. White Shoes & The Couples Company 3. Sore 4. Tika Panggabean 5. Goodnight Electric 6. The Brandals

7. Stereomantic 8. Vox 9. Efek Rumah Kaca

Raksasa record is a famous indie music record label in Indonesia. Originally made by David Tarigan and Hanin Sidharta (when it‟s still Aksara record) and with the help of Aldo Sianturi, they come up with a new name, Raksasa record. Raksasa record‟s base is located in Kebayoran Baru, South Jakarta. Their mission is to get involve in the development of indie musician in Indonesia. Based on this mission, they made their music record label to develop the existence of indie musician in Indonesia.

4.2.1 Aldo Sianturi Profile Aldo Sianturi is a music business consultant, speaker & author that works to help, assist & consult independent artists, musicians, bands, labels & other businesses to achieve sustainable success. Aldo has seen and stayed up to date with the constant changes in the music industry over the past two decades as well as keeping up with the pulse and motion of marketing, promotion and social media in today‟s world. Currently he's maintaining Music Business Column on Indomedia Australia, working as a Country Manager for Believe Digital (Indonesia), Indonesia Sales Representative for MIDEM 2014, Visual Rights Curator for Java Festival Production. His lifelong ambition is to make the perfect Indonesia Music Summit. He has lectured at Brawijaya University (Malang), Bina Nusantara (Jakarta), Indonesia University (Depok), SAE Institute Jakarta, MarkPlus Institute (Jakarta), Sumatera Utara University (Medan), Syiah Kuala University (Aceh), Hassanudin University (Makassar), UPN Veteran University (Yogyakarta), Padjajaran University (Bandung), Parahyangan University (Bandung) , Bandung Insitute Technology (Bandung), UNISBA (Universitas Islam Bandung) among many others (http://aldosianturi.com/about/).

4.2.1 Analysis Aldo Sianturi is one of the founders of Raksasa record. Since December 18th 2009, after the Aksara record officially was shut down, David Tarigan comes to him and they decided to build a new record label named Raksasa Record. Getting inspired by music itself, he starts to develop Raksasa Record. He defined the music record label as a place that purposely created for musician in order to develop their potential not just in music skill but also in the global market. He never learns about business in music field. Actually, he jumps straight to the world of music itself. Aldo saw a great opportunity in music record label business. He said that if someone can see what he sees, they will decide to make this kind of business. Therefore, the current situation in Indonesia is about the rising numbers of the unemployed. Opening a new business will reduce the number of unemployed. At least that‟s what he believes. Aldo stated that music has a strong selling point in business. It is located in the influence of their artist towards their fans in Indonesia. The more famous they become, the more profits that the music record label will gain. He said that he saw a great potential in music and he decided to make a business out of it. Up until now, he is still doing music performance in many events and doing seminar of music business in many events too. For him, music world is full of mystery. There is no one who can guess the limits of creativity in music. Following the global market, he saw a great opportunity in making a music record label. People cannot live without music, that‟s his belief. Aldo chose to make music record label because it is his personal interest. And he believes, someday, music business can rule the world. Music has limitless potentials to be able to stand out in business world. Currently they have marketing division including the promoters; they have sound engineer division, public relation division, manager division, and artist division in their music record label.

Starting from business canvas that he made, he makes a team consist of public relation division, sound engineer division, artist division, marketing division, and manager division. By giving tasks that they familiar with, everything go smoothly. He always learns to adapt to the change of

39 people‟s preference of music in Indonesia. He said that sometimes it‟s hard to dealing with when people‟s favorite genre is different from their signed artist‟s genre. Aldo said that the process in making music record label is a long one. Firstly, he made a plan about his music record label, and then he decided a name for it. After that he needs to sign several agreements with his division and other people who will contribute in his music record label. And finally, he made plans for the management strategy in the record label including, promotion strategy, marketing strategy, and many other things.

In order to develop their artists, they make scheduled jamming session inheir studio for their artists. In that way, their artists can practice to improve their skills. They also do their best to promote them via social media like soundcloud, reverbnation, facebook, twiter, and many more. Fresh artist gives a fresh image to the public, so after they recruit a new one, they make their artist performs in many events to boost their popularity. They randomly found these potential musicians. Sometimes they can find them by hanging out in music café, or maybe hearing random songs from soundcloud. After they found them, they approach their manager and offer a contract to them. But many of those musicians send their demo song to their music record label and record label can decide whether they offer a contract or not.

Aldo thinks that developing their current artist is a better choice. They cannot predict the limit of their creativity. Because the more popular our current artist, the more profit that they will gain. Aldo also talks about recruiting new artist. There will be a hard time when the freshly signed artist cannot adapt to their rules and regulations.

Although, there are times that they need to sign a new artist. Raksasa Record doesn‟t have any specific music genre in their artist requirements. Their goals are to help indie musician grow and develop their existence in Indonesia. Indie means freedom. So there is not a specific genre for their signing. They do not want to limit musician‟s creativity. At the start of 2013, Aldo thinks that boyband or girlband is too mainstream. But, as he

40 proceeds to the end of 2013, there are many musicians in Indonesia who make music only using digital instrument from computer.

Digital musician is a musician who needs a deeper understanding in manipulating frequencies to make a new sound. This is western influence. Mostly, they are following famous digital artist like Avicii, Zedd, Porter Robinson, and many more. Based on this, Raksasa Record faces a problem with their current artist. To solve that problem, they enhance their artist‟s presence among the newly global market artist through making an event and invite their artist as the guest stars or making a meet and greet event for their faithful fans.

For him, global music market in Indonesia is the biggest challenge. Indonesian can easily adapt to western / eastern culture. Because of this, there are many unique music genres created for example the boyband and girlband from Korea. Korea‟s culture influence makes uproar in Indonesia‟s music industry in 2013. In order to face the challenge, Aldo and his music record label decide to stick to their plan. They spread their influence by promoting their artist to the television show or maybe to the advertisement media. Every people have its own genre and they appreciate those who still stick with them until the very end. Maybe they can‟t beat those influences from Korea, but at least they can win over people who are still faithful to their artist. Aldo said that Indonesia has many potential musicians. Our great difference in culture makes our people easily adapt to certain situation. By combining cultural genre, a new undiscoverable music genre can be found.

It is proved that Indonesia has many exotic music cultures and our young musician can apply it into their music. He adores a band called The Trees and The Wild. They are fusing Javanese culture into music and successfully make a beautiful harmony in their song. Sadly, most of those talented musicians are still remain untouched. Limited number of music record labels becomes barriers for them to develop their potentials. It makes them “locked” in their daily performance activity such as playing at cafes.

Compare to Bart theories (Bart, 2002), it‟s likely similar. Before an entrepreneur start business, they have to do many things in order to legalize

41 their music record label. After that, the entrepreneur needs to come up with strategies to develop their music record label. Recruitment is also important.

1. Agreements between memberships As Aldo stated above, he is making agreements with his division member before he start the music record label business. It purposely made to prevent unpredictable contract problem in the future. It is a simple step yet crucial. 2. Investor Aldo has 3 investors in his business. 3. Distribution and Promoting Strategy Aldo spreads their artist‟s influence by promoting their artists to the television show or maybe to the advertisement media. 4. “Work For Hire” Agreement Aldo stated that he has a sound engineer in his division which means he actually has an agreement with those sound engineers. 5. Producer Agreement He already has engineers in his division, so it‟s not needed to make producer agreement. 6. Production Credit Aldo already has it because he already has his company‟s member. 7. Liability Release/Permission Form They have their own company logo, so it‟s obvious that Raksasa Record has liability release form.

4.3 Rifandi Rusli from Alfa Record

The second interviewee that the researcher interviewed was Rifandi Rusli from Alfa Record. Alfa Record starts its journey from a mastering

42 studio. Because of the good quality of their mastering audio skill, many artists want to master their song in Alfa Record. In 2006, they change their mastering studio into something more, a music record label. These are the list of Alfa Record‟s artist:

1. Lyla 2. Pee Wee Gaskins 3. Netral (grup musik) 4. Fali Wilmer 5. Putih Band 6. Lavina 7. Taksi Band 8. Branded 9. Lala Suwegas

4.3.1 Rifandi Rusli Profile Rifandi Rusli is the founder of Alfa Record. Alfa Record starts its journey from a mastering studio. Because of the good quality of their mastering audio skill, many artists want to master their song in Alfa Record. Back in 2001, Alfa Record is still a mastering studio. He builds Alfa Record together with his partner Ade Alfian. After realize that they can expand our business, the Alfa Record as the music record label is built.

4.3.2 Analysis In 2006, they change their mastering studio into something more, a music record label. He defines music record label as the facility that most of musician need in order to fulfil their hunger of being a star. Although there‟s a few of them prefer fulfilling their dream by their own way. He learns about music business from his experience in running a mastering studio. He doesn‟t really get the theory, but he carries on his music record label based on his experience alone.

Through the experiences that he earned by making a mastering studio, there‟s no doubt he can saw an opportunity in making music record label. The only weakness of this business is time consuming. That‟s his opinion. From the value of profit that he can gain by running this business, he doesn‟t have any excuse not to develop it. It all depends on their target sales and their network skills. Having many friends or networks that share the common interest can help them gain the target market. That‟s why socialize is important.

The most inspiring person for Rifandi is his family. All he wants to do is to make his family proud of him. This is his passion and he is happy that he can make his parents proud to see the way he is now. Rifandi stated that many young musicians in Indonesia are talented in their own style. Everybody is talented. Music isn‟t just about amazing skill in playing instrument. The way they interact with audience, the way that harmonize their play style with other new player, their ability to adapt in certain unpredictable situation in the stage when they‟re performing is also important. And for the music industry in Indonesia, he believes we still need more of this business to find unexplored music genre.

Believe it or not, music has its own charm. This charm will attract the profit for the one who wants to start seeing music as a business field. Music creative industry has its own potential. Rifandi stated that we can‟t measure the quality of a music just based on our perception, everybody have different taste in music. It‟s all up to the public. Rifandi stated that to develop artists, maintaining their performance is crucial. After their performance maintained, they will continue to help them producing song. That‟s the sound engineer main job. By casting “magic” to their song, the sound engineer already encourage the artist. He mostly waits for the artist submits their demo to them. After they listen to artist‟s song, they will know if they‟re worth signed or not. If they have the value that their music record label need, they will offer them contract.

1. Agreements between memberships

As Rifandi stated above, he makes a team first before opening this business which means he already reach agreements between members. 2. Investor Rifandi has 2 investors in his business. But he doesn‟t want to reveal their identity. 3. Distribution and Promotion Strategy Rifandi promotes their artist into a specific target market. He is customer oriented. He easily adapt to certain changes in the global music market. 4. “Work For Hire” Agreement. Rifandi stated that he has sound engineers as his starting team. So it means he has reached agreements with them. 5. Producer Agreement He already has engineer in his division, so it‟s not needed to make producer agreement. 6. Production Credit Rifandi already has it because he already has his company‟s member. 7. Liability Release/Permission Form Alpha Record already has their company‟s logo, so it‟s obvious that Alpha Record has liability release form.

4.4 Arnold Limasnax from E-Motion

The last interviewee was Arnold Limasnax from E-Motion. E- motion is an Indonesian Company, focus predominantly on entertainment industry. The development of its extensive capabilities has a long and

45 history, founded in 2005, E-motion initially focused on mobile content, music, and artist management and many other promotional strategy using the technology. E-motion began to pursue the dreams to be of one of the biggest company in the entertainment industry. The list of artists that they‟ve sign:

1. Anji Drive 2. Armada 3. Base Jam 4. Cassandra 5. Cosmic 6. D'Soul 7. Fazan 8. Fia 9. Ghaury 10. Gusty Pratama 11. Marcell Siahaan 12. Marsheilla 13. Night to Remember 14. Niory 15. Pinocchio 16. Shanty 17. Titi Kamal 18. Tompi 19. Volume

4.4.1 Arnold Limasnax Profile Arnold Limasnax is the founder of E-motion. E-motion is an Indonesian Company, focus predominantly on entertainment industry. The development of its extensive capabilities has a long and storied history. Back in 2005, he gets a concept of combining a music record label and technology. After discussing it with his friend, he decided to make a music record label.

4.4.2 Analysis E-motion initially focused on mobile content, music, and artist management and many other promotional strategies using the technology. E-motion began to pursue the dreams to be of one of the biggest company in the entertainment industry. Arnold defines music record label as where all superstars are born. It‟s the starting line where a musician wants to be known in the public. He has no one that inspires him to make music record label. It‟s just a sudden idea that comes to his mind back then. And he‟s very grateful that he can make his idea becomes reality.

Arnold makes E-motion because he saw a big opportunity in music. Before he made E-motion, he mainly focused on selling music through technology. He made E-motion because he believed that music business can be innovated through technology and he is a person who loves both music and technology. After all, both of them are his passion.

E-motion is focused on selling their artist song using social media and advertisement. So if they want to compete with their competitor, they need to adapt to certain changes in global music market. Following people‟s interest is the biggest challenge for E-motion. They can‟t fulfil people‟s demand because everybody has their own favorite music genre.

E-motion encourages their artists to maintain their fans. If they can‟t fulfil the global market demand, then it would be better if they stick to specific target market. Maintaining fans is important for the artists to regain their “presence” in the global music market. E-motion makes programs for their artist to practice in their free-time.

E-motion always encourages their artist after they perform on certain event. It will be a good experience for them. Experience is the best teacher. Artists who want to join with E-motion usually send their demo to E- motion. It contains 5 original songs from those artists without mastering. So it‟s just a raw mixed song without mastered. If E-motion is interested in their demo, they will contact those artists contact person.

For Arnold, Musicians in Indonesia have a promising future in terms of music quality. It all depends on the music record label. If the label can‟t maximize their potential, then it will be a waste for them. But, the number of talented musician in Indonesia can‟t be compared to the number of promising music record label in Indonesia.

1. Agreements between memberships Just like the other 2, Arnold also makes a team first before making his music record studio which means he already reach agreements between members. 2. Investor Arnold doesn‟t have any investor in his music record label. This is the difference between the other interviewees. 3. Distribution and Promoting Strategy Arnold tries to follow the popular song in Indonesia. He manages his music record label by adapting new concept every single time. 4. “Work For Hire” Agreement. Arnold also has his own sound engineer. 5. Producer Agreement He already has engineer in his division, so it‟s not needed to make producer agreement. 6. Production Credit Already has. 7. Liability Release/Permission Form E-motion uses their own logo for the artwork of their company. It means they are already has permission form.

4.4 Result Analysis 1. How are the practices of music record labeling development in Indonesia?

In Indonesia, there are several steps that entrepreneur need to do if they want to make a music record label business. From the data above, before they want to make a music label, they need to come up with a plan. After they finish in making a good plan, they need to find the people who

will work with them. Mostly, they are Marketing division, Management division, Promoter division, Sound Engineer division, and the most important one, Artist division. After the agreements with the division were completed, the music record label need to make a liability release form in order to use an artwork or logo for their own and it must be an original one. Having all things the mentioned steps, the music label will do their best to promote their artists. Indonesia has many talented musicians. It will become a waste if they can‟t develop their potential. The number of music record labels in Indonesia is low. Entrepreneurs should see this as an opportunity to gaining profit. Based on those 3 interviewees above, they can gain a big profit from music record label. By maintaining artist‟s fans, developing artist‟s skills, and mass promoting that those people used, they can develop music record label even further.

2. Are there any differences between the practices and the Bart‟s step in making music record label?

Based on Bart‟s steps in making music record label, there are several steps that needed to be accomplished. In Indonesia, from the data the researcher got from 3 interviewees, music record label also following those steps. But, in investor section, sometimes, if the entrepreneur has enough money to start business, they don‟t need to depend on the investor. In promoting step, they have different idea. It can be innovated through the idea of entrepreneur. So basically, in practices, entrepreneurs in Indonesia also use the same method except in investor step.

3. What is the biggest challenge in making music record label?

The biggest challenge that 3 interviewees faced is the differences in people‟s music taste. Music record labels find it hard to follow what people‟s want every year. Every year the music trends in Indonesia changes. Based on this music genre, there are 2 kinds of music record label in Indonesia, major label and indie label. If they are major labels, they mostly have enough popular genres that can fulfil what people want. Major label is a music label that focusing in one or a few number of music genres, but, the music genre that they choose to take has a great influence in public. If they

49 are indie label, they can manage to follow the global trends. Indie label doesn‟t have any music genre requirements in recruiting artist. Indie means freedom. But because of their non-focused music genre, their artist‟s popularity can‟t be compared to the one from major label. Every year the music taste of people changes and it‟s a hard thing to do for both of genres type.

In reality, the researcher found another big problem in music record label. It is song‟s piracy. Song‟s piracy can lead the music record label industry into despair. Even though, many of music record label think that song‟s piracy is marketing‟s strategy. By distributing the song for free in the web, they can boost the popularity of their artist. Sometimes, there are artist who wants their song to be valued by public. It is their right to do whatever they want with their own masterpiece. Artist prefers their song sold in I- tunes. I-tunes are one of the innovations in music industry which used to avoid piracy. Even people have to pay if they want to download from I- tunes, at least they can “feel” the pride of the musician. This doesn‟t mean much for the public, but this means so much to the artist.

Figure 4.1: Songs Piracy’s Source

CHAPTER V CONCLUSION AND RECCOMENDATION

5.1 Conclusion 1. Based on this research, the process in making music record label in Indonesia is more or likely following Bart‟s steps. The entrepreneur needs to do 7 steps before start music record label. 2. The difference between Indonesia‟s process and the one that Bart has are only in investor section and promoting section. 2A. In investor step, entrepreneur doesn‟t have to find an investor to make this business. If the entrepreneur has enough money to start this business, they can do it just fine without find an investor. It is optional to find an investor in Indonesia. But if they don‟t have enough money to start the business, it‟s a wise step to find an investor. 2B. In Promoting step, entrepreneur has many different ideas in doing promotion. They can innovate their own idea to help their artist in promoting their music. The promotion is depending on the entrepreneur‟s creativity. 3. There are 2 biggest challenges that the researcher found in the process in making music record label. 3A. First, it is music genre. Music genre is crucial problem for music record label. It follows the global trends and change almost every year. Based on this musical genre, there are 2 kinds of music record label. Those are major music label and indie music label. Major music label finds it hard to follow global music trend. Major music label usually focusing on popular genre in Indonesia, for example, Pop, Jazz, and Soloist. They need to adapt to certain changes of global music interest in order to win the global market in music industry. By following the global music trends, major music label gain more popularity and become more commercial. That‟s why most of musician prefers

to choose major music label than the other one. The other kind of label is indie music label. Indie means freedom. For musician, it is more suitable to choose indie music label, because the freedom in creativity to make music can‟t be limited. For indie music label, they don‟t really think that global music trend is a problem, because they promote their artist to certain communities. Indie music label usually comes with unique music genre like Hip-Rock, Psychedelic, New Waves, and many more. 3B. The second problem is song‟s piracy. This problem is rooted deep in people‟s daily life. By downloading the music from 4shared, mp3skull, stafaband, and many other sites, it can be called a piracy. Free music download makes musician harder to gain profit from their selling album. Sometimes, not only the free download thing is the problem for the musician, song plagiarism can also occurred because of piracy problem.

5.2 Recommendation 1. The researcher recommends making a new system deep in the music record label which makes the musical genre in their label much more flexible. By making the process in choosing musical genre much more flexible, the music record label can adapt to certain changes in the music global trends. 2. Music business entrepreneurship needs to be develop and offered in university courses. It is useful to learn that music is an important aspect to any other field. It also can be applied to many different fields. If an entrepreneur realizes the importance of music for human‟s daily life, they can make this opportunity to make a music record label.

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APPENDIX

A. Interview Transcript Aldo Sianturi Interviewer: The researcher

Interviewee: Aldo Sianturi from Raksasa Record

Interview setting: Interview conducted in Raksasa Record Band Studio in Kebayoran Baru. The interview conducted at 10.40am, January 24th 2014, Saturday afternoon

Affiliation with interviewee: By the help from the researcher’s friend from Institute Music of Indonesia who’s doing internship in Raksasa Record, the researcher can meet Aldo Sianturi

(Start of Interview)

Interviewer: What is music record label in your own opinion?

Interviewee: Hmm. I define the music record label as a place that purposely created for musician in order to develop their potential not just in music skill but also in the global market.

Interviewer: Where did you learn about business in music field?

Interviewee: I never learn about business in music field. Actually, I jump straight to the world of music itself. I saw great potential in music and I decided to make a business from it. Up until now, I‟m still doing music performance in many events and doing seminar of music business in many events too. I guess this is what people usually said, learning by doing.

Interviewer: As an Entrepreneur, did you see opportunities in music creative industry business before you make this music record label?

Interviewee: Of course! Music world is full of mystery for me from the beginning. There‟s no one who can guess the limit of

creativity in music. Following the global market, I see a great opportunity in making a music record label. People can‟t live without music, that‟s my belief.

Interviewer: Why did you choose to make this business?

Interviewee: It‟s my personal interest. And I believe, someday, music business can rule the world.

Interviewer: What was the biggest factor that makes you choose this business?

Interviewee: Biggest factor? Music has limitless potential to be able to stand out in business world. That‟s all.

Interviewer: Did have any investor in this business?

Interviewee: Yes, I have 3 investors but I can‟t tell their name. It‟s private hehe.

Interviewer: When did you start to make this business?

Interviewee: Since December 18th 2009, after the Aksara record officially shut down, David Tarigan comes to me and we decided to build a new record named Raksasa Record.

Interviewer: Who inspired you to make this music record label?

Interviewee: I‟m not inspired by people to make this record label, I‟m inspired by the music itself.

Interviewer: What was the first thing that you do before making this music record label?

Interviewee: I analyze the current music business in Indonesia. After analyze it, me and David build Raksasa Record.

Interviewer: How long did you develop this music record label?

Interviewee: It‟s already 4 years. And I believe that we will continue to develop our label until the very end.

Interviewer: How did you develop this business up until now?

Interviewee: Starting from business canvas that I made, I make a team consist of public relation division, sound engineer division, artist division, marketing division, and manager division. By giving tasks that they familiar with, everything go smoothly. Also, I always learn to adapt to the change of people‟s preference of music in Indonesia. Sometimes it‟s hard to dealing with when people‟s favorite genre is different from our signed artist‟s genre.

Interviewer: Can you tell me about the process how this music record label made?

Interviewee: It‟s a long story. Firstly, I make a plan about this music record label, and then I decide a name for it. After that I need to sign many agreements with my division and other people who will contribute in my music record label. And finally, I make plans for the management strategy in the record label including, promotion strategy, marketing strategy, and many other things.

Interviewer: What was the biggest challenge that you encountered since you start this business?

Interviewee: Global music market in Indonesia is the biggest challenge for me. Indonesian can easily adapt to western / eastern culture. Because of this, there are many unique music genres created for example the boyband and girlband from Korea. Korea‟s culture influence makes uproar in Indonesia‟s music industry.

Interviewer: How did you solve that challenge?

Interviewee: We decide to stick to our plan. We spread our influence by promoting our artist to the television show or maybe to the advertisement media. Every people have its own genre and we appreciate those who still stick with us until the very end.

Maybe we can‟t beat those influences from Korea, but at least we can win over people who still faithful to our artist.

Interviewer: What kind of division that you have in your music record label?

Interviewee: Currently we have marketing division including the promoters; we have sound engineer division, public relation division, manager division, and artist division.

Interviewer: What is the most important division in your label?

Interviewee: I think our sound engineers play the most important role in our music record label. Without these people, our music record label will be a joke.

Interviewer: What is their main task?

Interviewee: They record, edit, mixing, and also mastering the song from our artist. Artist without sound engineer means nothing. It‟s because how good the quality of the song will be decided by sound engineer. Musician composes songs, but sound engineer enhance songs.

Interviewer: What do you think about the current young musician in and the music record label in Indonesia?

Interviewee: Indonesia has many potential musicians. Our great difference in culture makes our people easily adapt to certain situation. By combining cultural genre, a new undiscoverable music genre can be found. It is proved that Indonesia has many exotic music cultures and our young musician can apply it into their music. I adore a band called The Trees and The Wild. They are fusing Javanese culture into music and successfully make a beautiful harmony in their song. Sadly, most of those talented musicians still remain untouched. Limited number of music record label becomes a barrier for them to develop their

potential. It makes them “locked” in their daily performance activity such as playing at cafe.

Interviewer: How did you develop your newly recruited artist?

Interviewee: We have our scheduled jamming session in our studio for them. In that way, they can practice to improve their skill. We also do our best to promote them via social media like soundcloud, reverbnation, facebook, twiter, and many more. Fresh artist gives a fresh image to the public, so after we recruit a new one, we make our artist performing in many events to boost their popularity.

Interviewer: Can you tell me the process in recruiting new artist?

Interviewer: We randomly found these potential musicians. Sometimes we can find them by hanging out in music café, or maybe hearing random songs from soundcloud. After we found them, we approach their manager and offer a contract to them. But many of those musicians send their demo song to our music record label and we can decide whether we offer a contract or not.

Interviewer: What is more important, recruiting new artist or develop your current artist?

Interviewee: I think develop our current artist is a better choice. We can‟t predict the limit of their creativity. Because the more popular our current artist, the more profit that we will gain. If we talk about recruiting new artist, there will be a hard time when the freshly signed artist can‟t adapt to our rules and regulation. Although, there are times that we need to sign a new artist.

Interviewer: Do you have any requirement to sign artist?

Interviewee: It depends on their skill, their harmony as a musician, their passion, their objective, and how they interact with their surroundings.

Interviewer: What about music genre? Do you prefer a specific one for your signing?

Interviewee: No. Our goals are to help indie musician grow and develop their existence in Indonesia. Indie means freedom. So there isn‟t a specific genre for our signing. We don‟t want to limit their creativity.

Interviewer: As for now, what is the mainstream music genre in your opinion?

Interviewee: At the start of 2013, I think boyband or girlband is too mainstream. But, as we proceed to the end of 2013, there are many musicians in Indonesia who make music only using digital instrument a.k.a computer. Digital musician is a musician who needs a deeper understanding in manipulating frequencies to make a new sound. This is western influence. Mostly, they are following famous digital artist like Avicii, Zedd, Porter Robinson, and many more.

Interviewer: Does your label following the global market trends?

Interviewee: We can‟t say that we don‟t follow the global market trend, so yes.

Interviewer: How did you manage to overcome this situation with your current artist?

Interviewee: We enhance their presence among the newly global market artist through making an event and invite them as the guest stars or making a meet and greet event for their faithful fans.

Interviewer: Do you think music record label business is a good business field compared to the other business field?

Interviewee: In my case, yes. If someone can see what I see, they will decide to make this kind of business. Therefore, we all know about the current situation in Indonesia about the rising

numbers of the unemployed. Opening a business field will reduce the number of unemployed. At least that‟s what I believe.

Interviewer: What is the strong selling point in doing music industry business?

Interviewee: It is located in the influence of our artist towards their fans in Indonesia. The more famous they become, the more profit that we will gain.

Interviewer: What kind of innovation that needs to be done in music industry?

Interviewee: I think music industry need to innovate their security of their artist‟s songs. As we know, piracy is everywhere.

Interviewer: Thanks for your time mas Aldo.

Interviewee: You‟re welcome, feel free to come again if you have another interview about music hehe.

B. Interview Transcript Rifandi Rusli Interviewer: The researcher

Interviewee: Rifandi Rusli from Alfa Record

Interview setting: Interview conducted in Comic Café Tebet after making an appointment with Rifandi Rusli. The interview conducted at 4.00pm, January 24th 2014, Saturday Evening

Affiliation with interviewee: The researcher know him quite well because the researcher’s band had several times practices in his studio

(Start of Interview)

Interviewer: What is music record label in your own opinion?

Interviewee: Music record label is the facility that most of musician need in order to fulfil their hunger of being a star. Although there‟s a few of them prefer fulfilling their dream by their own way.

Interviewer: Where did you learn about business in music field?

Interviewee: Business in music field? I learn it from my experience in running a mastering studio. I don‟t really get the theory, but I carry on this music record label based on my experience alone hehe.

Interviewer: As an Entrepreneur, did you see opportunities in music creative industry business before you make this music record label?

Interviewee: Through the experience I earned by making a mastering studio, there‟s no doubt I see an opportunity in making music record label. The only weakness of this business is time consuming. But that‟s just my opinion. As I said before, I‟m not good with theory lol.

Interviewer: Why did you choose to make this business?

Interviewee: From the value of profit that I can gain by running this business, do I have any objection to not running it? It all depends on your target sales and your network. Having many friends or networks that share the common interest can help us gain the target market. That‟s why socialize is important.

Interviewer: What was the biggest factor that makes you choose this business?

Interviewee: I love this business, that‟s why I decided to make it. You can say it‟s my passion.

Interviewer: Did you have any investor?

Interviewee: I do have 2 investors. But I can‟t reveal their identity hehehe.

Interviewer: When did you start to make this business?

Interviewee: 2001. Back then Alfa Record is still a mastering studio. I build Alfa Record together with my partner Ade Alfian. After realize that we can expand our business, the Alfa Record as the music record label is built.

Interviewer: Who inspired you to make this music record label?

Interviewee: My family. All I want to do is to make my family proud of me. This is my passion and I‟m happy that I can make them proud to see the way I am now.

Interviewer: What was the first thing that you do before making this music record label?

Interviewee: Making a plan of course. I like it when everything goes as I planned. Doing research, hanging out with the musician, also gather information about music record label are essential before making a music record label.

Interviewer: How long you develop this music record label?

Interviewee: Since 2001, how long is it? Oh, it‟s almost 13 years I‟ve been doing this business. It‟s not easy though.

Interviewer: How did you develop this business up until now?

Interviewee: Innovation is important. Starting from innovate my mastering studio into record label; I realize that innovation is important point in starting business.

Interviewer: Can you tell me about the process how this music record label made?

Interviewee: Firstly, I imagine about what it will be if I build a music record label. If I successfully imagine it, then I‟ll find a good name for my record label and legalize that name to earn my copyright. After that, I hired people to work with me. They are

producers/sound engineers, promoters, marketing division, and also the artist. I need to discuss the financial matter first back then become offering a mutual contract agreement.

Interviewer: What was the biggest challenge that you encountered since you start this business?

Interviewee: The difference in people‟s taste about music is the biggest challenge for me. There‟s no ending if we keep following their taste of music.

Interviewer: How did you solve that challenge?

Interviewee: I decided to develop a strategy in order to face this problem. I sign many artists whose unique genre and selling point to a specific people. By this method, I can maintain my artist existence.

Interviewer: What kind of division that you have in your music record label?

Interviewee: I have artists, sound engineer including me, and promoter.

Interviewer: What is the most important division in your label?

Interviewee: All of them are important. But if you insist an answer, I will say artists. They are the reason why I build music record label.

Interviewer: What is their main task?

Interviewee: Artist job is giving their maximize performance to amaze the audience. More importantly, they have to “hypnotize” the audience in order to get fans and bringing luck to my profit of course hehe.

Interviewer: What do you think about the current young musician in and the music record label in Indonesia?

Interviewee: Many young musicians in Indonesia are talented in their own style. Everybody is talented. Music isn‟t just about amazing

skill in playing instrument. The way they interact with audience, the way that harmonize their play style with other new player, their ability to adapt in certain unpredictable situation in the stage when they‟re performing is also important. And for the music industry in Indonesia, I believe we still need more of this business to find unexplored music genre. Believe it or not, music has its own charm. This charm will attract the profit for the one who want to start seeing music as a business field.

Interviewer: How did you develop your newly recruited artist?

Interviewee: To develop them, maintaining their performance is crucial. After their performance maintained, we will continue to help them producing song. That‟s the sound engineer main job. By casting “magic” to their song, the sound engineer already encourage the artist. Better quality song will attract the customer, right?

Interviewer: Can you tell me the process in recruiting new artist?

Interviewer: I mostly wait for the artist submits their demo to us. After we hear their song, we will know if they‟re worth signed or not. If they have the value that our music record label need, we will offer them contract.

Interviewer: What is more important, recruiting new artist or develop your current artist?

Interviewee: Both are actually important. Developing artist will bring a great result in terms of influence. But, in some cases, a new artist is also important. People have different taste in music. If we can recruit different artist that can fulfil people‟s music taste, why not?

Interviewer: Do you have any requirement to sign artist?

Interviewee: Sure. I have to hear their demo first. If I interested in them, I will invite them to my studio and doing audition. If they pass, then welcome to the brotherhood!

Interviewer: What about music genre? Do you prefer a specific one for your signing?

Interviewee: We don‟t have any specific genre requirements. We respect the musician as well as their uniqueness.

Interviewer: As for now, what is the mainstream music genre in your opinion?

Interviewee: Pop mellow songs will always in the top chart. If that‟s what you call mainstream, then that‟s my answer.

Interviewer: Does your label following the global market trends?

Interviewee: Sometimes. We need buyer of course. There are many times when I decided to sign a new artist whose music genre that suitable for the current global market.

Interviewer: How did you manage to overcome this situation with your current artist?

Interviewee: We adapt to certain changes as long it isn‟t too far from our original genre.

Interviewer: Do you think music record label business is a good business field compared to the other business field?

Interviewee: Yes. Music creative industry has its own potential. We can‟t measure the quality of a music just based on our perception, everybody have different taste in music. It‟s all up to the public.

Interviewer: What is the strong selling point in doing music industry business?

Interviewee: Popularity is power within music business. It determines the value of the artist and greatly affects their “price”.

Interviewer: What kind of innovation that needs to be done in music industry?

Interviewee: I think there‟s a need of digital distribution system that attracts people to do “streaming” but not to “download the streaming”. As we can see, youtube can be hacked nowadays. I think that‟s the best way to avoid song piracy. That‟s worth a lot for our artists.

Interviewer: Thanks for your time mas Rifandi.

Interviewee: You‟re welcome, no need to be so formal hahaha.

C. Interview Transcript Arnold Limasnax Interviewer: The researcher

Interviewee: Arnold Limasnax from E-motion

Interview setting: Interview conducted in E-motion studio in Jl. Blora 5, Central Jakarta. The interview conducted at 12.35pm, January 25th 2014, Sunday Afternoon

Affiliation with interviewee: The researcher made an appointment with him by phone 1 day before interview.

(Start of Interview)

Interviewer: What is music record label in your own opinion?

Interviewee: It is where all superstars are born. It‟s the starting line where a musician wants to be known in the public.

Interviewer: Where did you learn about business in music field?

Interviewee: I don‟t really know about music business. This idea came from watching a concert. At that time, I realize that musician needs a place to help them maximize their potential.

Interviewer: As an Entrepreneur, did you see opportunities in music creative industry business before you make this music record label?

Interviewee: I see a big opportunity in music. Before I made E-motion, I mainly focus on selling music through technology. I mean, by combining music and technology, I can easily promote my artist. So, based on that reason I made E-motion.

Interviewer: Why did you choose to make this business?

Interviewee: I made E-motion because I believe that music business can be innovated through technology and I‟m a person who loves both music and technology. After all, both of them are my passion hehehe.

Interviewer: What was the biggest factor that makes you choose this business?

Interviewee: The innovation in music business made me to do it. It will be more enjoyable when you work on the things that you like to do, right?

Interviewer: Did you have any investor?

Interviewee: No, I start this business with my own money. I save my money for the past 5 years before making E-motion.

Interviewer: When did you start to make this business?

Interviewee: Back in 2005 I get a concept of combining a music record label and technology. After discussing it with my friend, I decide to make a music record label.

Interviewer: Who inspired you to make this music record label?

Interviewee: I have no one inspire me to make music record label. It‟s just a sudden idea that comes to my mind back then. And I‟m very grateful that I can make my idea becomes reality.

Interviewer: What was the first thing that you do before making this music record label?

Interviewee: I build a team first. This team helped me in making a concept for my music record label.

Interviewer: How long did you develop this music record label?

Interviewee: It is almost 9 years if I include 2014.

Interviewer: How did you develop this business up until now?

Interviewee: Our record label is focused on selling our artist song using social media and advertisement. So if we want to compete with our competitor, we need to adapt to certain changes in global music market.

Interviewer: What was the biggest challenge that you encountered since you start this business?

Interviewee: Following people‟s interest is the biggest challenge for me. We can‟t fulfil their demand because everybody has their own favorite music genre.

Interviewer: How did you solve that challenge?

Interviewee: I encourage my artists to maintain their fans. If we can‟t fulfil the global market demand, then it would be better if we stick to specific target market. Maintaining fans is important for the artists to regain their “presence” in the global music market.

Interviewer: What kind of division that you have in your music record label?

Interviewee: Let‟s see. There‟s producer, marketing, promoter, IT for promoting via website, manager, and artist.

Interviewer: What is the most important division in your label?

Interviewee: It is artist, obviously. They are our main “weapon” in this business.

Interviewer: What is their main task?

Interviewee: Artist? Of course performing and maintaining their music performance in front of audience.

Interviewer: What do you think about the current young musician and the music record label in Indonesia?

Interviewee: Musicians in Indonesia have a promising future in terms of music quality. It all depends on the music record label. If the label can‟t maximize their potential, then it will be a waste for them. But, the number of talented musician in Indonesia can‟t be compared to the number of promising music record label in Indonesia.

Interviewer: How did you develop your newly recruited artist?

Interviewee: I make programs for my artist to practice in their free-time. I always encourage them after they perform on certain event. I think by giving them chance to performing in front of audience, it will be a good experience for them. Experience is the best teacher.

Interviewer: Can you tell me the process in recruiting new artist?

Interviewer: Artists who want to join with us usually send their demo to us. It contains 5 original songs from them without mastering. So

it‟s just a raw mixed song without mastered. If we like their demo, we will contact their contact person.

Interviewer: What is more important, recruiting new artist or develop your current artist?

Interviewee: Both are important because in order to following global market trend, we need to sign a new artist whose musical genre that market demanded. Developing current artist is also important; we have to seize specific target market in order to expand our market itself.

Interviewer: Do you have any requirement to sign artist?

Interviewee: Yes. The quality, skill, song‟s quality, and performance will be our main assessment points.

Interviewer: What about music genre? Do you prefer a specific one for your signing?

Interviewee: We mainly focus on Pop genre.

Interviewer: As for now, what is the mainstream music genre in your opinion?

Interviewee: If you talk about current mainstream music genre, I think it‟s the digital one. Electric Dance Music is phenomenal nowadays. Because of many events that made by Ismaya Group, people‟s interest in that genre is rapidly increase.

Interviewer: Does your label following the global market trends?

Interviewee: It depends on the situation. If we can afford to follow it then we will adapt to it. But if we can‟t do it, then I will make another plan.

Interviewer: How did you manage to overcome this situation with your current artist?

Interviewer: In the meantime, we still focused on developing our Pop artists. But maybe in the near future we will try to sign Indonesia‟s Electric Dance Music artist like Angger Dimas.

Interviewer: Do you think music record label business is a good business field compared to the other business field?

Interviewee: It depends on how you face it. For me it‟s a really great business because I can see the potential in this business industry.

Interviewer: What is the strong selling point in doing music industry business?

Interviewee: Our selling point is influence. Through influence, people will become our customer. Music is everywhere and human can‟t live without music. That‟s reality.

Interviewer: What kind of innovation that needs to be done in music industry?

Interviewee: Safe streaming video / song are the best innovation I think. As long their fans can view or hear the streaming, there‟s no problem, it will be beneficial to our promoting strategy. But, if the streaming feature has download function, it is piracy, and it isn‟t good for us.

Interviewer: Thanks for your time mas Arnold.

Interviewee: You‟re welcome.