Investing in Music

I came across a blog post through CNN Money this week by investor, Brad Svrluga entitled, "Investing in the music business, where 'you can't make money'." Svrluga writes about investing opportunities and analyses which to pass on and which to take up. In this particular blog post, he writes about why he thinks the music industry is one that shouldn't be ignored when considering which opportunities to put your money into.

Most people are aware of the music industry's reputation for being a rather risky one with many outside, and inside, factors constantly changing it. Consider technology. With more and more advances, the consumer's music medium changes. We've seen cylinders, records, tape, digital CDs, and audio file downloads. Along with that, genres change, artists are more eclectic, and we see things like the controversial auto-tune. With each new idea, change, "advancement", etc. we are constantly thinking, "Will this last? Will this be the new norm?"

Any businessperson can tell you taking risks is a good thing. Obviously, you want to know as much as possibly to make a sound decision. With something like technology and the music industry, it changes all the time. Because investors aren't too fond of throwing their money out to random opportunities in the hopes that one will be successful (and frankly, who is?), they often pass up the music industry as an option. 

Svrluga noted a well-known business mogul stating, "as Warren Buffett famously said, 'the time to get interested is when no one else is. You can't buy what's popular and do well'." I couldn't agree with that statement more, and I'm glad Svrluga recognized someone so powerful in business. If everybody is trying to get a piece of one thing, everyone will be hurt financially. By going against the grain and choosing the music industry as an industry that takes good risks and does well, he claims it has done well for him. "I look for investment opportunities that run counter to conventional wisdom. I pay attention when I see a music opportunity. Knowing that, fortunately for me, it's unlikely that many of my peers in the business will also pay attention," Svrluga wrote. You should take his words of wisdom if you're interested in taking on such investments.

So while some people see certain factors changing the music industry possibly for the worse, they've never failed in my eyes. Music will always be there, just like most of the entertainment industry, and shouldn't be overlooked from investors. Yes, some music companies are declining due to digital download thieveries and related unfortunate happenings, but there are always ways to make those lemons into lemonade. Investors should take advantage of the opportunity to earn from the opportunity, as well as help out those companies that may be looking for extra support.

If you'd like to read more of Brad Svrluga's posts, you can do so through his site, "Can I Buy A Vowel?" or follow his twitter account, @bradsvrluga. Happy music investing!