Saturday, April 12, 2014

Why 'creatives' need the same love as tech startups

JOHN PLETZ ON TECHNOLOGY

Why 'creatives' need the same love as tech startups

Chicago-based Music Dealers helps independent musicians get their songs featured on commercials by brands such as Coke and McDonald's Corp.
For brands, it's cheaper to use independent music in Music Dealers' online catalog than a well-known song. The musicians are happy, because they gain both money and exposure. Music Dealers has distributed millions in payments to artists, whose music has been featured prominently in campaigns such as McDonald's ads during the Sochi Olympics.
Music Dealers' rise made a star of CEO Eric Sheinkop, who cowrote a book about music licensing in December. He went on the road to promote his book and company at South by Southwest in Austin, Texas, where 150 Music Dealers-affiliated artists also performed.
Mr. Sheinkop's presentation at Chicago's trade-show booth was more than lip service: He recently committed to keeping Music Dealers' headquarters here despite overtures from cities such as Las Vegas and Kansas City, and the allure of Los Angeles, New York and London, each of which is home to a Music Dealers satellite office.
He tells Crain's contributor Steve Hendershot more about why he's staying.
Crain's: Why were you considering making the move?
Eric Sheinkop: We had been debating (moving) for the past year. As soon as Music Dealers started doing well, the first thing I did was open up an office in Los Angeles, then New York, then London. All of them got a lot more attention and did a lot better than the Chicago office, even though we kept Chicago as the headquarters. And then other cities started coming after us to move our headquarters, like Kansas City and Las Vegas.
Crain's: How did Chicago convince Music Dealers to stay put?
ES: I grew up in Chicago, and I have a lot of pride for everything Chicago. As musicians we haven't always felt like we had the support of the city, but when the (Department of Cultural Affairs and Special Events, or DCASE) contacted us, and we saw that the mayor wanted to show artists that it was a friendly town for them, and that he was willing to cultivate that culture and bring artists there, well, we would do anything we could to get behind that.
DCASE came to us and said they want to create a reason for creatives to stay in Chicago. We all know that when people start getting attention, they just leave, and that's always a shame. Everybody has always said: 'To make it in Chicago, you have to make it outside of Chicago first,' which is kind of sad. But (DCASE) is looking at some things like tax incentives and initiatives like paying for staff training. And while there isn't any one particular thing that made us stay, we can see that they are trying, and that's very meaningful. (Mr. Sheinkop declined to detail the tax incentives offered to Music Dealers.)
Crain's: Why do you think the arts suddenly has the city's attention?
ES: As great as 1871 is, the amount of success and money that have come out of it isn't mind-blowing. The city is going to have to support other arts besides just tech, besides just coders and entrepreneurs. And I think they're seeing that. A couple of years ago, you never would have seen a Chicago-sponsored show with Chance the Rapper headlining and all these great eclectic Chicago groups. So I think the city is taking the right steps. I think they see they have to go beyond the tech world. Those startups are incredibly risky, so you've got to hedge your bets.
Steve Hendershot is a Chicago-based freelance writer and a regular contributor to Crain's.
Follow John on Twitter at @JohnPletz.