Mr Eazi has consistently restated his presence in the music industry as not just a musician, but also one of very few who see music as what it really is— a business. He has gradually built his success in the music industry on smart strategy, effective marketing campaigns, collaborations, and intentional partnerships.
One of his ventures, Empawa Africa, is responsible for producing the next generation of African superstars who see the industry through the same prism he does. These artistes are running their own businesses and holding onto equity whilst carefully negotiating partnerships that are beneficial to their growth.
In a recent tweet from Mr Eazi, he talked about offering equity investment to his fans for streaming his music. For Eazi, it’s his way of giving back to his fans. Most reactions to the tweet either applauded the thought process or simply asked “how?”. So, in this article I will be breaking down how this strategy can work. Let’s dive in.
This strategy simply put is equity investment. Now, what is equity investment? An equity investment is money that is invested in a company by purchasing shares of that company in the stock market. These shares are typically traded in a stock exchange. For clarity sake; stock market is a place where company shares can be bought or sold, it could be either private or public. So what is Mr Eazi doing? He is creating a value proposition through equity and as a musician, he is using his content, creativity and intellectual property (IP) as the transaction fee.
In Simple English What Is Mr Eazi Doing?
- Mr Eazi creates a new single and offers shares in it; i.e value proposition. The share buying can happen in two ways:
- Before the song drops, he uses his previous track record as collateral to his investors (the fans) to seek funding from them in form of shares and then uses this money to prepare the product (the song) and organize publicity campaigns for the newly released song. This way he can create enough value for the shares which have been bought.
- Mr Eazi seeks loans from close friends and family then prepares the product(the song), carries out campaigns, then brings the product with value already to the stock market and sells shares on it.
- Note that Mr Eazi is selling shares on his single and not his label. Also, this is a business venture between Mr Eazi and his investors (the fans).
As with every business venture, there are risks involved. The first of these risks is IP valuation. How exactly do we determine how much these songs are worth? Unlike a lot of businesses, it may be quite tricky trying to put a monetary value to intellectual property, especially as it is not yet out and tested in the open market. With music, there is no surefire way of knowing what songs will end up being smash hits or which will just land flat.
Secondly, there is always the risk that a legal issue like over sampling, licensing, or copyrighting may come up in future. Issues like this could lead to the song getting pulled off streaming services. This means there is no way to make money off the song.
The final challenge lies in access to purchasing shares. Mr Eazi can only sell a limited percentage of shares and in an event where there are a lot of fans willing to invest, the value of the shares would drop if the market is saturated. On the flip side, if only a few people are given access to purchase the shares, it reduces its appeal.
In conclusion, this is really a brilliant idea, but in the process of executing there are bound to be challenges. However, this is the burden of innovation. Wherever this experiment leads Mr Eazi, one fact reigns supreme— he’s an outlier, a business man and one of very few that are genuinely passionate about equity for Africa and Africans.