I ♥ Lawyers and Accountants x

This article first appeared in the Record of the Day weekly magazine. Subscribers can access the archive here.

Lawyers and accountants are traditionally singled out as the “bad guys” within the music business. Andy Edwards challenges this assertion, outlines what they bring to the table and offers suggestions of how get the most from your lawyer and accountant

The music business was ruined by lawyers and accountants” is a well-worn line used by speakers at conferences, pundits and commentators alike. It may play well to the crowd, but the assertion is not backed up by facts.

The line is usually in the context of consolidation and corporate culture within the industry. It is just easier to label lawyers and accountants as the “bad guys”, rather than the somewhat amorphous concept of “corporatisation”.

The trouble is the line sticks in people’s minds and induces either disdain or fear depending on whom you speak to. The recent Music Week 30 Under 30, aside from its lack of diversity, did not contain a single lawyer or accountant.

Where is the next Gavin Maude or Sonia Diwan? Where is the next Pat Savage or Lisa Morris? There are plenty of candidates out there both in-house and in private practice.

On the label side, it often seems accountants get overlooked, but when they do get the opportunity they can really shine. Island Records under the Ted and Darcus co-presidency was a joy to work with. Not only did the co-presidents compliment one another beautifully, they arguably had a third co-president in David Sharpe whose background in accountancy equipped him with solid operational and shrewd deal making skills.

It was no surprise to me when Darcus ascended to the sole presidency of Island and Ted took the reigns at Virgin, that David became COO for Universal overall. That is strength in depth in practice.

Lawyers have been far more high profile on the label side than accountants, many with larger-than-life characters and incredibly sharp minds. Paul Russell, who ran CBS Records, Sony Music and Sony Music Europe during the ’80s and ’90s is one such character, often referred to by rank and file as “Mr Scary”, bear in mind his boss was Walter Yetnikoff then Tommy Mottola.

It was in the mid 2000s before I worked closely with Paul Russell at a music rights start-up. The pressure was on. He and I ended up having a massive stand-up row one day about a “stupid fucking deal”. It was a one hell of a show down, but next day we sat down and like a true gentleman Paul gave me all the respect in the world as we discussed our differing points of view on the matter in hand. Paul was persuaded and everything was resolved.

The point being: learn when and how to pushback. Even the toughest of corporate lawyers can be swayed if you have the courage of your convictions and a reasoned argument. Paul Russell wasn’t that scary, he even said “calm down, Andy, luv” at one point in his gruff voice, cigar in hand. We got there.

In artist management, lawyers and accountants play a huge role. Some have become managers themselves, such as Sarah Stennett or Anthony Addis.

There are no restrictions on who can become a manager. It really does take all sorts. You can be a former publicist like Andrew Loog-Oldham or a former merchant banker like Prince Rupert Loewenstein, both of whom managed The Rolling Stones. Andrew made them famous, Prince Rupert made them rich.

Whatever your background, for the benefit of your artist you need to learn to work effectively with the artist’s lawyer and accountant. A good lawyer will protect and enhance an artist’s interests. A good accountant will always save the artist money. A good manager will ensure both are well briefed and well informed and the whole team delivers great value to the artist as client.

A Christmas eCard from a law firm, full of creativity and humour! 

ClintonsNEW

 

Accountants need to be involved in deal making from an early stage. They may not be driving the deal but they need to know what is going on. The deal must fit the artist’s business structure and be tax efficient.

In a negotiation, some conversations are best handled lawyer-to-lawyer, at other times the manager should speak to the other side. Be clear with one another about what is happening and work as a team.

Depending on the politics of the situation, it may be necessary to play good cop/ bad cop. Very often the lawyer gets labelled “bad cop”, not an easy role to play but it enables the manager to smooth things over with the other side while getting the right result for the artist. Sometimes I have played “bad cop” from the management side. What that really means, for me, is being firm and direct about whatever needs to be resolved, without too much drama.

A common accusation levelled at the professions is that they create work for themselves. If you think that is so, come up with a solution. In one instance I persuaded a major music corporation to reduce a 23 page boilerplate service agreement to a much shorter 12 page document before involving the artist lawyer. My argument was simple: the boilerplate was not appropriate to the situation and my counterpart on the other side was very accommodating. It saved the lawyer’s time and the artist client’s money.

Lawyers and accountants usually charge by the hour, so use their time wisely. By all means socialise, but on a business call keep things brief and to the point. If the Partner involves a Junior Associate, embrace that. It saves the client money and in any event the Partner will oversee the Associate’s work.

Specialist music accountants and lawyers may charge higher hourly rates compared to general firms, especially those outside of London, but they almost always deliver better value. They understand the business, are more efficient and avoid pitfalls that a non-specialist might fail to recognise.

Most people are wise enough to use specialist lawyers, but I have seen major problems arise when non-specialist accountants have been appointed by music clients trying to save money. It simply is not worth it in the long run.

How do you find a good lawyer or accountant? Ask. Give me a call!

Diversity in the Music Industry and the 30 Under 30 List

Andy Edwards poses some questions to consider in the wake of the 30 Under 30 diversity discussion

 

This article first appeared in the Record of the Day weekly magazine. Subscribers can access the archive here.

If it’s not the Oscars it’s the BRITS, if it’s not the Billboard Power 100 it’s Music Week’s 30 Under 30, the question of diversity within the music industry has boiled to the surface this year. In 2016 this is deeply troubling.

Music Week’s front cover featuring 30 people under 30, initially nominated by readers, and then finally selected by MW, was the latest lightning rod for this topic. If the next generation of executives cannot be truly diverse, what hope is there?

One criticism leveled at Music Week is that editorial judgment should have been exercised and a broader list of names proactively sought. Instead, Music Week reported on the candidates whose names had been put forward. Judging by the list of 108 names that did not make the final 30, the total list put forward was overwhelmingly white.

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Perhaps any attempt to disproportionately select candidates of colour would have masked the real story and a much broader underlying problem? Music Week did report the facts whether we like those facts or not.

The counter list put forth by DJ Semtex is incredibly powerful. One person came up with 30 alternative names in a matter of hours, a list that was overwhelming colourful and brimming with talent. A further list from Complex made a similar point.

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What interests me most of all right now is to understand what is going on and why. In very broad terms, it strikes me the Music Week list is made up largely of what we would consider to be the “traditional” music business, whether that is corporates or established PR and management companies.

In contrast, Semtex’s list – while containing quite a few major label people – skewed much more heavily to the self-starters, the entrepreneurs, those with portfolio careers and the emerging music businesses – the blogs, the YouTube channels, the club nights, and so on. The same was broadly true of the Complex list.

Compilers of such lists have to consider a much broader range of job roles than ever before and a much broader range of organizations and career paths. What constitutes the “music industry” itself can be debated at length.

If the music industry is to reflect the wider world, what is that wider world? The last UK census in 2011 revealed that 13% of the UK population is non-white, but in London that percentage rises to 40%. Undeniably the industry is still overwhelmingly London-centric, but should we be looking at percentages at all? What should our reference points be?

And what of the challenges of a London-centric industry? Moving to London was part of the attraction of being in the music industry, but with rents and property prices at an all-time high, does that also stifle diversity of a different kind? Factor in ever increasing levels of student debt and the problem multiplies. Some have said only the posh Home Counties middle class need apply – probably a blog post in itself!

So we as an industry need to ask ourselves some questions.

The Who and What Questions:

  • Who does the industry employ? What are the numbers by ethnicity?
  • What is the break down across sectors of the industry?
  • What are the emerging sectors that should form part of the music industry?
  • What are the ethnicity numbers by job role? Creative vs Business roles?
  • Does music genre play a role in determining the spread of diversity?
  • What are the conventions and processes that are restraining diversity?

The Why Questions:

  • Why do some jobs attract a more diverse range of applicants than others?
  • Why do people from certain backgrounds want to work in music?
  • Why do people from certain backgrounds not want to work in music?
  • Is the music industry attracting the right mix of people? What is the right mix?
  • Why do employers recruit in the way that they do?

There is a lot of soul searching to be done. Perhaps we all have to ask questions about our own journeys, experiences and motivations in order to make those connections with others. We should constantly question and challenge ourselves.

I grew up in a small town in the north of England. I remember a kid in the playground calling me “Jew Boy” because I had curly hair, a big nose and my Dad worked for a bank. I didn’t know any Jewish people at the time, but I did know what it felt like to be different and I have always been appreciative and inquisitive of people’s differences.

Working in the music business was an opportunity to do something different. I like being around crazy people, but really I’m the commercially focused sensible one. At Sony Music in the ‘90s, I was a Marketing Analyst. No one knew what I did and I always had to explain. So a part of me jumped for joy that the first name on the Music Week 30 under 30 list was an Analyst from Sony Music.

As an indie kid from up north, Sony was also an opportunity to expand my knowledge of black music. With colleagues such as Semtex, Matthew Ross, Adam Sieff and others I filled up on hip hop, soul and jazz. I was clueless but I learned.

Moving around the industry, one learns about the differing professions and tribes. You listen, learn and absorb. As the industry grows more complex a broader range of skills are required. It also means opening one’s eyes and ears to those with different backgrounds, experiences and perspectives.

But this runs counter to the way in which the industry has traditionally organized itself. The “its who you know” mantra is self-selecting. A female colleague describing an iconic label she worked at recalled, “there was a certain type of person and you either fitted in or you didn’t”. Like attracts like.

On another occasion, when interviewing for an assistant role for a colleague, one candidate spoke enthusiastically about some work they had done for their local church. Afterwards, my colleague remarked “hummm, bible basher”, completely misunderstanding the background and culture of the candidate. Clue: 48% of London’s church-goers are black.

Some organisations deploy more sophisticated recruitment techniques such as competency based interviews or algorithms yet many tech companies have diversity challenges also. These techniques can also be self-selecting and if candidates are not attracted to certain industry sectors or roles, one has to ask “why?

This is not an easy process, whether that is on a macro level or a mirco level. Relaying back to personal experience, the best and most productive working relationships have always been those where I have worked with someone who is the polar opposite to myself. That might not necessarily make for an easy experience but it is always exciting, challenging and most of all delivers exceptional results.

The music industry has to grapple with a much bigger picture on a macro level. It is not just music; other creative sectors such as film, TV and publishing are facing similar issues. It seems no one is handling this well.

This is a topic that is already being hotly debated at UK Music board level for some time. The senior figures within our industry are already deeply concerned and are seeking to understand the issues and challenges, including some of the questions I have raised above.

There will be outreach, through UK Music and its members: the BPI, AIM, MPA, PRS, MMF and so on are all intending on surveying their memberships. Ged Doherty and Keith Harris are looking at this issue specifically. I would ask anyone reading this article to engage and retweet and spread the word. There will be more announcements to come. Watch this space and get involved.

@andyedwardsbiz

Open Compute Project – Collaborative Competition

Major corporations whether their business is content, media, tech or finance are often, rightly, targeted by regulators who seek to limit anything that may be perceived as anti-competitive behaviour.

The presumption is that market dominance is bad, that collusion is bad and that any collaboration between huge corporations is a bad thing.

This is not always the case and in an increasingly changing world, while dominant market players should be subjected to close scrutiny collective action does not necessarily warrant intervention, regulation or restriction.

A case in point is the Open Compute Project (OCP). It came about because the major tech giants had grown so huge that they needed to look beyond typical hardware solutions for their data centres and design their own hardware from scratch. Data centre racks need to evolve, requiring more and more power to propel graphics processing, VR and AI, etc to their full potential.

Facebook was the first to recognise the benefits of open source hardware and founded the OCP in 2011. Not only would this help reduce hardware costs, but by creating standards accelerates and expands the potential for AI as it is these underlying technologies that will drive neural networks.

This was a bold move by Facebook and it has taken five years to persuade the majority of major tech players and other major institutions to come on board.

The Open Compute Project Foundation was incorporated as a non-profit organisation whose members now include Microsoft, Intel, Rackspace, Ericsson, Cisco, Juniper Networks, AT&T Goldman Sachs, Fidelity and the famously secretive Apple who joined in 2015.

Last week it was announced that Google has joined OCP, leaving Amazon as one of the last remaining tech companies not to join the project.

The conclusion is pretty clear: data centres power all of these businesses but they are not the basis on which these businesses compete. By collaborating on the foundations, the tech giants are laying the field for a higher-level game where the real competition between them will play out, i.e. who has the best solutions.

@andyedwardsbiz

Kendrick Lamar, Bowie, Iman and the Art of Conversation

My social media feed over the past few days has been dominated by Kendrick Lamar and his “untitled unmastered” EP, which was also unannounced.

Releasing unfinished demos is nothing new, but what made this collection stand out was the manner in which it provided a glimpse into the creative process of Kendrick Lamar. The New Yorker went as far as saying it “reads as evidence of a Post-­Impressionist sort of self-awareness”.

Perhaps untitled unmastered goes some way to help redefine what makes great art in the modern world. It draws his audience closer to the creative process and becomes a part of the conversation with his audience and amongst his audience and that conversation is an art form itself.

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This is something the post-YouTube generation have recognised intuitively. They are not about three or four promo videos uploaded in sync with an album cycle every eighteen months or so. They are about a constant steam of moments and experiences some polished, some not but all part of an ongoing dialogue with their audience.

This is in stark contrast to the way in which commercial music has become over the past twenty years or so. Through the 1990s and early 2000s it was about co-writing, remixing, polishing, positioning, scheduling and media training. Even as social media has achieved unstoppable momentum, many artists found it hard to grasp the concept of spontaneous imperfection.  So too have managers and label executives, as everyone tries to balance existing conventions with new possibilities.

For too long they have lived in a world where their art is defined by sporadic releases and performances rather than an ongoing conversation with their audience. Conversations are imperfect, there are umms and ahhhs, but through that dialogue comes a closer connection between those conversing.

Ironically, it was an artist from a previous generation, David Bowie, who best exemplified this notion of art through conversation. Bowie always had a truly holistic way of expressing himself, even his own death formed part of his art.

Not only that but the manner in which his widow, Iman, picked up that conversation through social media was especially poignant. She continued the dialogue with such honesty and integrity. It was real. It was heartfelt. It resonated so very profoundly.

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Perhaps not all artists are comfortable with exposing their feelings to that extent. Perhaps this was a singularly unique occurrence where an artist’s grieving widow is also a public figure in her own right. Nevertheless, it beautifully illustrates the concept of conversation as art.

Some may say both were contrived to some degree. Kendrick Lamar certainly curated which unfinished tracks he wanted to release. Iman was certainly controlled and dignified in how she expressed herself and there were limits. There was privacy, especially surrounding Bowie’s funeral.

Artists can still set their own boundaries even if their creative expression becomes more fluid and exposed to scrutiny. Cynics may fear a constant stream of noise, but for the true artist it is a chance to redefine themselves through honesty, integrity, consistency and the art of conversation.

@andyedwardsbiz

Talking Blockchain at The Great Escape Convention

Taken from The Great Escape website:

More details have been announced today about CMU Insights @ The Great Escape 2016, the conference that sits at the heart of the TGE Convention. Taking place at Dukes @ Komedia on the Thursday and Friday of the festival, this is a totally different kind of music conference, putting the spotlight on four key themes: data + transparency; CDs + merch; YouTube + video; and diversity + health.

Each strand is packed with timely talks and conversations, with training elements, original research, case studies and lively debate. Today we reveal details about some of the speakers set to appear in two of our CMU Insights strands: ‘Transparency! Data! Blockchain! Let’s make buzzwords happen!‘ and ‘What if YouTube actually is the future?’

Making buzzwords happen
‘Transparency’ has been the big buzzword in the music community this year, while another buzzy term – the ‘blockchain’ – has been increasingly held up as the technology that could make digital music more transparent and more efficient. Leading the debate around the blockchain has been PledgeMusic founder Benji Rogers, who will keynote at The Great Escape this May to outline his vision of how new technologies could power a prolific music database that could in turn make digital payments quicker and fairer.

He will be joined by digital music experts Sammy Andrews and Andy Edwards, both also vocal proponents of the need for more transparency and the role technology can play. They will map out what needs to happen to fix the issues around music data and digital royalties, and then debate the issues with a panel of managers, lawyers, publishers and label chiefs, who will discuss the role different stakeholders must play, and why they should bother.

Ensuring everyone is fully up to speed with the jargon, CMU’s Chris Cooke will provide a Beginners Guide To The Blockchain, while earlier in the day he will be joined by music lawyer Nigel Dewar-Gibb of Lewis Silkin to explain how digital data and revenue currently works its way through the system, identifying where the blockages lie, and identifying what questions need to be asked of digital services, labels, publishers and the collecting societies.

The power of music video online
Hosted by digital entrepreneur and Tracks2 co-founder Brittney Bean, our video-focused strand will explore both the licensing challenges and the commercial potential of YouTube, explain why music video is now about more than the ‘music video’, and identify what kinds of video content really work online, on YouTube and well beyond.

Vevo’s Tom Connaughton will delve into how artists, labels and promoters can create video content that really engages and excites fans, whilst Rebecca Lammers of Laika Network, Claire Mas of Communion Music Group, and Chloé Julien of BandSquare will demonstrate how the music industry can really maximise the value of video online.

Are Power Lists A Bit Uncool?

This article first appeared in Record of the Day Magazine.

Billboard’s Power 100 has come in for severe criticism this week owing to the predominantly white male make-up of the names on the list. One commentator went so far as calling the list a “sausagefest”. Less than 10% of the list were female and over 90% of the names were white.

These are pretty appalling statistics for an industry that promotes a spectrum of music with black and female performers very often achieving a disproportionate level of success. The diversity issue in general is being hotly debated already by greater minds than mine, but what puzzles me most of all is why we continue to bother with these “power” lists at all? They seem totally anachronistic and out of touch with the modern world in which we operate.

A list of people doing cool stuff seems OK to me. We all want to know the people who are making things happen and breaking through. Perhaps we seek inspiration and ideas to inform our own perspective. That’s fine.

It is the word “power” that is troubling and distorts the make-up of these lists into a tick-box quasi-corporate exercise. It is a word deeply rooted in the culture of show business, a business historically driven by Svengalis and gatekeepers who sought to control talent, media and the market, whether it was movies or music or any other branch of the entertainment industry.

Power lists do not seem to exist to the same degree in other industries. I Googled “Silicon Valley Power 100” and got a renewable energy company in Santa Clara. Wired have a top 100, but prefer to call theirs “influencers”.

I have witnessed a number of these Power 100 people in action and can appreciate what they can achieve in a specific set of circumstances at a specific time. Another way of saying it is these people “make things happen” and you do not necessarily need “power” to make things happen and certainly not in the modern world.

Conversely, no amount of collective “power” from all the Power 100 lists over the past twenty years was able to stop an eighteen year old kid from writing a computer programme that would upend the entire music business. Shawn Fanning did not have any power, but a whole bunch of people downloaded that programme and others like it and the music business changed forever. The whole thing was consumer driven.

What I would love to see and what no music business power list has ever done is this: “Number 1) The Consumer” and then 99 blank spaces, because that is the reality facing the modern music business. This is what should focus our minds.

The music industry is moving in the right direction, but we are still weighed down by this notion of power. UMG may have more power than Beggars Banquet to negotiate terms with a streaming service, but neither company has the power to persuade consumers to adopt such a service. Far more people still use YouTube than any subscription based service whether the industry likes it or not and as Martin Mills pointed out earlier this week, the whole industry has to come together in a fair and transparent manner if there is any hope of addressing the safe harbour/ value gap issue.

Against this backdrop, power lists just seem hopelessly dated. Which is no reflection on the individuals whose names appear on these lists, they are all interesting and engaging people when you have the opportunity to meet them.

Spend time with Marc Geiger and he doesn’t tell you how powerful he is, although he is a powerful personality. He’ll bang on about how great his team are. The WME team are truly awesome and not just the music department, the brands team are incredible. They all weave together brilliantly and there are no weak links. Best of all are the WME assistants: they are the best foot soldiers in the entire entertainment industry bar none – well that is one show business tradition that is still relevant in today’s world, the WME Assistant. Geiger leads and inspires but he cannot do it all himself and neither does anyone else on that list, or elsewhere.

I have yet to meet a music business executive who can do it all, although some are perceived with a Wizard of Oz type mystique. A red carpet schmoozer may be hopeless with contracts and finances. Personally, I’m the other way around. I’m uncomfortable with the red carpet stuff, but if you owe my artist client money I will hunt you down until you pay. At least there were some teams on the Billboard list, acknowledging genuine collaboration.

Ultimately, no one is the Wizard of Oz. We are all people behind a curtain. Finding, developing, nurturing, collaborating, connecting, engaging, expanding and hopefully at the end of all that there is an outcome that people will remember.

Scooter Braun, also on the list, puts this beautifully, albeit in a slightly different context. His most impressive interview of late centred around some advice he received from David Geffen who insisted he read the poem Ithaka, “which is about the journey. It’s always about the journey. And he said something to me I’ll never forget. He said: ‘Hundred years from now, no one’s gonna remember me, and sure as hell no one’s gonna remember you.’ And I realized, he’s right. No one’s gonna remember me. But they’ll feel my impact, and that’s good enough for me.”

@andyedwardsbiz

Who Will Build The Music Industry’s Global Rights Database?

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The following MBW blog comes from Andy Edwards (pictured), Board Director of the UK’s Music Managers Forum (MMF).

The failure of the Global Repertoire Database (GRD) has left many people scratching their heads, wondering how such a huge problem can ever be solved.

Optimists such as Benji Rogers and the Berklee College of Music team point to Blockchain technology as the way forward.

Blockchain has huge potential, but there is still the question of how such a solution is organized, financed and administered.

The original GRD working group was put together by the EU and involved a wide variety of participants including Apple, Amazon, Google, various Collective Management Organizations (CMOs) and music publishers.

Given the GRD had the potential to benefit so many, it was disappointing that the cost of developing the GRD was ultimately met by so few: a handful of CMOs.

With an insufficient number of CMOs willing to back the project the GRD stalled, by which time costs had reached £8 million, with no tangible outcome.

“WITH AN INSUFFICIENT NUMBER OF CMOS WILLING TO BACK THE PROJECT, THE GRD STALLED – BY WHICH TIME COSTS HAD REACHED £8M.”

The recent lawsuits against Spotify highlight the responsibility tech companies face. The onus is on digital service providers to clear all the necessary music rights. The fact Spotify is planning to build its own publishing administration system is welcome but raises the question: if all DSP’s licensing music – Apple and Google included – face the same problem, why silo the solution(s)?

Collective problems are never simple or easy to solve and any solution won’t please everyone. The challenge is not dissimilar to those faced more broadly within the tech community.

The World Wide Web Consortium (W3C) and the Internet Corporation for Assigned Names and Numbers (ICANN) are two examples. Both organizations are far from perfect, but they managed to move reasonably quickly and establish an ecosystem.

The common standards set by the tech industry helped enable the greatest accumulation of knowledge and wealth in the history of mankind.  That is some feat and well worth closer inspection. Here are a few key take-outs:

  1. They did something. W3C was founded by Tim Berners-Lee in 1994, only five years after he first invented the world wide web. ICANN was conceived and founded in 1998, a green paper was issued in February that year and ICANN was incorporated by September that year.
  2. Neither organisation had everyone on board initially, nor were they completely global or democratic, but they were non-for profit and intended to be independent with some level of governance and oversight from the outset.
  3. Governments played a key role in their inception: the European Commission with W3C, the US Department of Commerce with ICANN.
  4. Academic institutions also played a part: MIT in W3C and Information Sciences Institute at USC in launching ICANN.
  5. Both organisations scaled over time. W3C members now include businesses, non-profit, universities and individuals. ICANN has a number of advisory committees and observers as varied as the European Space Agency, the League of Arab States and the World Bank.
  6. Both have faced criticism. In the case of ICANN, the role of the US government has come in for continued scrutiny and whichever path is followed no one will be completely satisfied. But at least ICANN exists and continues its important role that has evolved over time.
  7. Finally, there was something pioneering and entrepreneurial about both institutions. While the GRD is not a profit-making exercise in itself, perhaps some entrepreneurial spirit to kick-start its existence is needed.

Continuing with the start-up analogy:

  • Who will be the GRD’s co-founders?
  • Who will provide the seed capital?
  • How will it develop its offering?
  • How will it scale?
  • What will the roadmap look like for participants and for funding rounds?
  • What are the rules, governance and oversight?

Fundamentally this is about solving problems and setting common standards. It is not about power and control, which obsesses too many stakeholders and ultimately constrains everyone.

Establish common standards through a GRD and creativity and wealth will scale new heights for the benefit of everyone.

This article also appears on Music Business Worldwide

Why Sharing Equity Is A Big Deal

The announcement last week that Warner Music will share the proceeds of its equity stakes in digital music services with its artists, quickly followed by a similar announcement from Sony Music is hugely significant. The artist community has been in the dark about these equity positions for years and it has taken a great deal of persistence to reach this point. Universal Music is the only major not to formally state its position on equity but one would hope it is only a matter of time before it does so.

A number of commentators most notably Mark Mulligan and Tim Ingham have made the point that the net value of these equity stakes to the artist may not be that significant and that the real battle lies elsewhere. Mark suggests that streaming is not a license or a sale and that the correct remuneration for artists’ lies somewhere between the 50% rate for a license and the (roughly) 15% an artist might receive for a sale. The midway point between those two figures is roughly double what most artists currently get paid on streaming income. His point is this argument is worth more than the fight over equity.

 

EQUITY – THE BACKSTORY

Coming back to equity, it is worth remembering the reason major labels took equity in start-up music services in the first place. During the first dot.com boom, founders were exiting at huge valuations either by sale or IPO, very often without generating any revenue. It made sense to grab as much equity as possible as part of the music licensing negotiation and Jay Samit and other label digital executives at the time quickly set a precedent that has continued to this day.

In the case of Spotify, it was reported at the time by Techcrunch that the majors and Merlin collectively received a 17.3% shareholding on the Series A funding round and paid an aggregate €8,808 for that shareholding. It is worth pointing out that Techcrunch questioned this number at the time believing the amount paid was ten times that amount had the music companies matched what other Series A investors actually paid for their shareholdings. Clearly the majors did not do that and these were peppercorn payments as part of a broader licensing negotiation.

What also needs to be understood is the extent to which those original shareholdings have been diluted through subsequent funding rounds, of which there have been eleven. Further clarity is needed on this.

Where equity is a more valuable element for artists are companies such as Soundcloud in its present circumstances. Soundcloud is striking deals with music companies, but it has a long way to go to generate the sort of revenue numbers Spotify is already achieving. Accordingly, if Soundcloud is acquired, which is a strong possibility, then equity will form a greater part of the total value accounted back to the artist relative to advances and earnings.

 

ALIGNMENT OF INTERESTS – is what it is about

Equity is still hugely important for artists. Start-ups will come and go and each takes their own path. In certain circumstances, the equity piece will derive the greatest value, in other cases not. What is most important – and which Stephen Cooper of Warner Music stresses – is that the interests of the label and the artist are aligned whatever the outcome. This is an important step in the right direction and is greatly welcomed.

@andyedwardsbiz

The Skills Day

This article first appeared on the Kingston Wheelers website. For the past four years I have organised a Skills Day for the club, although Mark Dempster officially organised in 2015 and I just did the MC’ing on the day in addition to bringing in pro riders Yanto Barker and Alice Barnes. The idea is to give as many people as possible the experience of riding in a big group at race speed – its useful for riders participating in Ride London for the first time as it is for those seeking to participate in road racing.  Thanks to Jo Thompson for the write up.

 

On Saturday 21st November the annual club Skills Day took place at Hillingdon Cycle Track. This year we were delighted to welcome pro riders Yanto Barker and Alice Barnes to come and share their knowledge with the club and practice group riding drills. The day was split up into three parts, with an intro and group riding sessions, then back inside for a Q&A with Yanto and Alice hosted by Andy Edwards, finished off with two races – a five lap race followed by a 10 lap handicap.

Jo Thompson recounts the day:

A chilly day, 5c and 20mph winds. Arriving at Hillingdon for my first time I was a bit apprehensive. About 50 bikes of assorted sizes, colours were already parked up, hanging from their saddles on the bike racks. I found a space for mine and then entered the small building to the warmth, Wheelers everywhere, sitting chatting, eating cake already and drinking hot drinks.

Andy talked, we listened. My eyes noticed a young lady sitting in GB kit…. And a another Man in a sponsored jersey who looked familiar. Andy introduced them, Alice Barnes and Yanto Barker and the penny dropped. This is going to be an awesome day.

We were told we were going out in groups, so we put our lids on and all the women gathered together. We were then split into two groups. I went in the group with Alice leading us and Andy covered the rear of our group. We started off at a steady pace practising ‘through and off’. Not as easy as I thought, especially with a 20mph wind hitting me when I was on the front. Alice gave us instructions and hints to help.

Andy made sure we were continually moving and keeping a close gap. We practised this for a few laps and then stopped for a brief chat. Yanto joined us, so we split into another two groups. We practised ‘through and off’ at a faster pace, which at some points seemed to be easier but others harder as the circuit would split you with either a hill or a bend.

After a few laps, Yanto took the lead and then steadily took us up a notch again, moving on and faster we stayed with him in a line, each keeping the wheel in front close. This was fun, we working quite hard and I could really feel when I was catching the head wind or making a gap on a bend or hill, so I started to find my own lines out of the bends and over the hills, this made it easier over all for me. Yanto was really encouraging and supportive.

After this we all gathered in the building for something to eat and drink. Andy then, asked Wheelers – Mark, Harry and Declan their take on racing and some of their events (a bit of banter followed). We then heard from Yanto Barker and Alice Barnes, out of sitting there listening to Elite riders telling their stories and sharing their advice, the main thing that struck me was their down to earthly-ness.

Next up, back on our bikes for some Races… Clockwise this time. The dark starting to loom we pedalled down to the start line. The temperature was really starting to drop and we were itching to set off. I didn’t really know what to expect with this race thing. Scratch apparently. We all head off in a big group and as the group gets faster, you try to keep up. So off we set, trying to warm up. Straight away people started to pass me and the group surged forward. I was definitely not ready for this but tucked down low and grabbed someone’s wheel.

Onwards we headed, into headwinds, up slopes around bends, the pace started to quicken and more and more effort was being demanded. I pushed hard and started to move up and past a few riders, there was a split happening and I didn’t want to be in the back. Laps passed and my lungs were starting to burn, I still wasn’t warmed up enough, grabbing wheels I hung on for as long as I could but the group ahead started to surge more and we started to splinter. I lost a wheel and got the headwind…. I tried and tried but there was no way back. I carried on pushing to catch for a couple more laps which I now realise was completely useless and a show of inexperience.

A short rest and we were off again. I wasn’t too happy as my legs were feeling heavy.

We split into groups and given handicaps. 10 laps. (muttered swearing commenced from me) A bit like cat and mouse, the back group (fastest) had to catch the first group (ladies) – I won’t say slowest as I think we gave them a run for their money.

Alice Barnes lead us off, Sarah behind her and me at the rear. At least I was warmed up now. Alice lead a good pace and we sat closely together, the headwind had seemed to have picked up but the tailwind sections was almost worth it. Averaging around 21mph we kept on… at some point Yanto joined us. He took the lead and gave Alice some relief. Still pushing on Yanto said that they weren’t gaining on us. I couldn’t believe this but it gave me a push to keep on it.

Pushing harder with each lap, I just stuck as much as I could to Sarah’s wheel. I took the corners and slopes in my own line. Last corner of lap 5 – I turn to look behind me, a lone rider is gaining on us – I shouted to tell Yanto. Lap 6 – I look to my right and there is a group gaining on us. On another part of the circuit. A sudden kick of adrenaline and competitiveness showed itself. Yanto kept checking on us and we kept together.

At some point early into Lap 6, the lone rider was with us, I think Sarah was tired and I moved in front but we’d started to drop. I grabbed the lone rider’s wheel and Alice shouted at me to keep on.

He let me on his wheel and we surged forward, the next thing I knew someone went past, fast. Then another, and then I as in a group again, though not ladies. Alice was still with me pushing me on. The lone rider shouted for me to get on a wheel which was really uplifting. Alice suddenly gave me a massive saddle push from behind and I felt overwhelmed to keep pushing. My lungs were burning and my legs dying. I tried to get out of the saddle and push but nothing. Alice gave me another massive saddle push but I was done. I had to slacken off. She told me we had done really well and we kept them off for nearly 7 laps. Not bad.

Alice stayed with me for the rest of the lap and we cooled down over lap 8. A truly lovely young lady.

Once over the line we stopped to watch the sprint. Declan and Yanto fighting it out…

Overall an awesome day I really felt part of and will be back for more.

Rod Ellingworth in Conversation

The article first appeared on the Kingston Wheelers website. Thanks Harry!

On Wednesday 11th November we had the pleasure of an evening with Rod Ellingworth, Head of Performance Operations at Team Sky. The evening at Hampton Court Golf Club was organised by Andy Edwards and hosted in partnership with Sigma Sport and London Dynamo. It was great to see members from all the clubs together, a rare sight outside of Surrey League races.

Andy gave us an intro to the evening, with some background into his cycling career and how he and Rod first discussed the idea of an interview at the National Road Race Championships last year in Abergavenny. Andy had a go at mixing it alongside World Tour pros at the Nationals and he remarked on how close the connection is between grassroots and elite cycling, with amateurs and pros often mixing it up on the same stage or social circles, not something you find in other sports such as football or F1.

Rod is from a cycling family, with his father a founding member of Clayton Velo and his brother sponsoring the local cycling club. Rod’s early racing career was funded through the local council, receiving £100 for race expenses.

Looking back at his own racing career, Rod recalled how he used to complete a training diary which he’d photocopy and send to his coach Alan Sturgess. For training he’d go on club rides, ride the track and do a 10 mile TT most weekends, along with Tuesday night circuit training.

Rod on… having the right mindset

Rod believes having the right mindset is really important for young racers. He first saw Mark Cavendish ride at the Manchester Velodrome, when a rider came down in front of him causing him to crash hard. Rod said most people would have called it a day, but Cav got back on the bike and tried to ride on. When Rod came on board as a coach he wanted to ensure his young riders were being pushed to the limit, as that would make sure they could compete with the best in the world. The Olympic Madison race averages 54km/h so he had his track riders training at 65km/h behind derny bikes.

Rod on… winter training

Rod is a big believer in using the turbo during winter to ensure you are still train peak power. He also highlighted that you should keep riding in the drops during winter (“get laid across the bike”), to ensure it’s not a shock to the system when you get back on the race bike in spring. On winter club runs riders should maximise opportunities for training through chain gangs and sprinting for town signs.

Rod on… the National Road Race Championship in 2015

This year the Team Sky riders (Kennaugh, Stannard and Rowe) and Mark Cavendish absolutely battered themselves to get away from the main field. Some of the world tour riders have a complex about getting beaten by continental riders, so there’s a tendency to overdo it in national races. Rod thought the effort showed at the Tour de France a week later.

Rod on… Geraint Thomas

G will have free reign in 2016, with a focus on winning the Tour of Flanders. Chris Froome will still be the main rider for the Tour, but Rod thinks G is capable of winning the Flanders/Tour double in the future. His excellent season this year has been partly due to weight loss. In an age of specialisation (grand tour or classics riders) G is one of the best all-rounders in the peloton.

Rod on… the future of British Cycling

Rod highlighted the importance of grassroots racing as a means for young racers to get the right experience. As races are getting harder to part on, cycling clubs must ensure they continue to host and support local races, with everyone doing their bit to marshal and make them happen.