House music producers frequently complain that there’s no money to be made in the industry. They’re not entirely wrong – a Scottish producer recently pointed out that whilst millionaire Aphex Twin played their track at a show, they only had £40 in his bank account.
But it is by no means the full story. For there is money to be made from the acquisition of record labels and their catalogues. Last year, Armada Music founded the Beat Music Fund – who call themselves “the world’s first dance music investment company”.
As Ears To The House reported last Friday, their recent purchases include King Street Sounds, the Chocolate Puma catalogue and the entire catalogue of Kevin Saunderson’s KMS label. Although the figures are being kept firmly under wraps, a well-connected industry source says that the offers made were, in all three cases, “on the more generous side”.
The deal has meant EDM stars like Hardwell and Armin Van Buuren are now in the same business group as house music staples like Kerri Chandler and Louie Vega. But could there be more bedfellows to add into the mix? An investment company, after all, has been created to make investments – so who could be next on Beat Music Fund’s shopping list?
If they wanted to acquire more gems from house music’s early days, they could start with Nervous Records in New York. The label – founded by Mike Weiss in 1991 – released a huge amount of early output by the likes of Armand Van Helden, Mood II Swing, Todd Edwards, and Todd Terry.
We understand that the overwhelming majority of those early master recordings are still owned by Nervous – which could make a tempting proposition for the investment company. Alternatively, there are a number of other early US house labels which have long disappeared – but whose catalogues might well be available for a sensible price.
Another line of thinking is that Kerri Chandler himself could sell more of his catalogue to the fund. As Ears To The House reported on Wednesday, his Madhouse Records label has now closed – with his own masters returned to him. Chandler is understood to be keen to own as many of his own master recordings as possible – but perhaps a large cash offer might change his mind.
Of course, if Beat Music really wanted to splash the cash, there is one company they could make a beeline for – but it wouldn’t come cheap. House music behemoth Defected was taken over in a Wez Saunders led management buyout last year for an eight-figure sum. The company has an enormous catalogue alongside its events business – Defected becoming part of the Armada Music group would certainly be an intriguing prospect.
We shall be keeping an eye on what Beat Music decides to purchase next – not least because we strongly suspect they aren’t going to be the only “dance music investment company” for long…