CLOSE-UP: LIVE ISSUE/THE ARTIST NETWORK - Can a stable of artists really offer new benefits to clients? Will the Artist Network act as a wake-up call to the ad industry? Jenny Watts asks

When the former Eurythmics star Dave Stewart moved to the sleepy West Sussex hamlet inhabited by the St Luke's chairman, Andy Law, neither expected it to rekindle an idea that the two had first broached years previously.

Yet two years and £10 million in funding later, that concept, Artist Network, has turned into reality. Law and Stewart have teamed up with the Body Shop founders Anita and Gordon Roddick, Endemol's Malcolm Gerrie, the film director Shekhar Kapur, and Michael Phillip, the former chairman of Deutsche Asset Management, to create an artist-friendly entertainment company, positioned as bereft of the corruption and short-term profit ideals that allegedly govern the entertainment industry.

Comprising music, film, TV, publishing and visual arts divisions, Artist Network will aim to encourage its artists and departments to work in collaboration with each other on their various projects. Law says: "We intend to support and nurture, and recruit carefully, like we did at St Luke's."

Nurturing and co-ownership were the buzzwords that set St Luke's alight when it launched seven years ago. And now the mission statement behind Artist Network's principles works on the same lines - each artist will be set up in their own company, which they will co-own. "In each case we own the company together, but the percentage of the profits will change; that's negotiated on an artist-by-artist basis,

Law says.

But is championing better deals for the collective artists commercially viable? After all, it's still ultimately a business. If the Artist Network is going to be offering, for example, a record label with more generous royalty rates than conventional deals, it begs the question of how the company will make enough money to expand the business. "Like we did with St Luke's,

Law responds, pointing to a low overhead structure that will be the result of artists collaborating on projects. This sounds like a great idea in theory, but isn't the artist community renowned for its famous egos? "Isn't advertising?

Law responds.

The question for St Luke's is what a setup like this can offer an advertising agency. Law talks of it as a logical progression and a natural fit with the agency. "St Luke's is interwoven into the idea of Artist Network,

he maintains. "It's also a creative company owned by the people themselves. So we do have a proven track record."

Indeed, while St Luke's has seemed pretty quiet lately, it has actually been reorganising itself to adapt to the changes the Artist Network will bring. Since elevating Phil Teer and Neil Henderson to its joint managing directors, Law's role has evolved to encompass talking to clients and listening to their business issues. The idea is that, with these different areas of expertise offered through Artist Network, the agency now has a broader palate of executions to solve any problems. "The departmental structure of St Luke's has elongated,

he claims. "We can now listen to the problems of clients and immediately translate them."

And they may well be on to something. Tellingly, the fastest growing part of St Luke's is its consultancy business, which advocates non-advertising solutions and is making the most money for the company. "That's the surest sign there's an appetite among the client community to do business in a new way,

Law says.

"Ad agencies haven't changed since the 50s and the creative communications industry is very set in its ways. There are definitely other ways to communicate to the customer."

The Artist Network believes capitalising on this fragmenting media and the profusion of digital broadcasting is the answer. "Anyone with a laptop and a digital film editing programme has got more power to edit than Hollywood had 15 years ago. This generation has grown up on this," Law enthuses.

Logistically, if the cross-discipline projects take off the way Law hopes, his organisation will have its hands full managing the ensuing breadth of businesses. And the Artist Network is ultimately working on the premise that artists will have the talent for cross-working - something that the acting abilities of musicians such as Madonna have given some cause to doubt. "So she made a duff film, well so has Tom Cruise,

Law counters, saying cynical people always lampoon anyone who tries to be innovative.

And certainly, the Artist Network shouldn't be knocked for trying to do something new. However certain industry executives, while applauding the initiative's originality, question the seasoned captains steering the ship. "If you're going to do something different, use young emerging talent, not old has-beens who are trying to reclaim some exposure,

one says.

He also says that Stewart has been touting the idea around for ages, to little interest. But Law counters: "If Dave's been talking to agencies it's actually been to give the industry a wake-up call."

Doubtless there will be some who wish they had listened, as there's a lot of experience among those heading it up. And this could be the reason why this venture succeeds where others - such as George Michael's company Aegean, launched in the 90s - have failed. "This isn't just another record label, it's a much bigger business idea,

Law says. "No-one has attempted this before."

Law reckons they're on track to raise another £10 million by September, and his determination is palpable. "I've spent six years trying to get to this place. I expect us to stumble and find the way, but I do expect it to be a success."