Analyse This … The Rise of the Music Industry Analyst

This article first appeared in Record of the Day magazine here.

The music industry has a tendency to pigeonhole people. This is especially so when it comes to jobs and job titles.

Different roles attract different characters. Within labels, roles traditionally fall into a few key strands: A&R, product manager, plugger, press officer and around them: sales, international, digital and business affairs amongst others.

One role that cuts through all of the above is the analyst. It is a role I have a lot of love and affection for because that is how I first started my career.

The life of an analyst in the music business:

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What is an Analyst?

Analysts cover a very broad remit in the modern music industry. Artist Insight details where an artist sits in the market, identifying their audience and how that audience behaves. At market level, broader trends can be established: where does streaming adoption sit? Who is still buying CDs? Etc.

We should all be familiar with social media stats, streaming stats, YouTube stats, all of which can be analysed on a per territory or global basis. Cause and effect can be easily monitored, layered with digital marketing and advertising spends. Taking it to another level marries usage and impacts with revenue generation to assess engagement and monetization.

In a world of big data, those who complain of too much data don’t know what they are doing. Or they need to hire an analyst. Someone who can make sense of complexity and cut to the essence of what is required to aid better decisions that drive an increasingly sophisticated business. The role of the analyst has come of age.

A good analyst is a match for any management consultant or MBA graduate.

 

What makes a good Analyst?

Analysts need to be smart and probably degree educated, they certainly need to be trained how to think. Some have quantitative degrees, but that is not a prerequisite.

Some come to the industry having worked in insight roles elsewhere. Some, like me, had a burning desire to work in the music business and fell into it.

A good analyst can zone in on mirco level issues such as a specific artist campaign, while understanding macro level trends of where the business is going. Most of all they have to be able to filter and interpret in a manner that connects with decision makers who have notoriously short attention spans.

Analysts need to understand the broader creative and social context of music (it helps to be on ticket allocations). They also need to understand the fundamental drivers of the business they are in. The latter comes down to reading the trades, Don Passman, Dissecting The Digital Dollar, etc. It also means getting to know their stakeholders and what they do.

Having being in the role of a decision maker for far longer than I was even an analyst, I can always tell industry newcomers because although they deliver great analysis maybe their context is not quite right. This is easily fixed through constructive feedback. Decision makers need filters too.

 

How it used to be

Twenty years ago, there were one or two analysts in each major and a couple of people at the BPI. Very few people knew what we did.

I was referred to as “the numbers guy”, a “statistician”, “the guy who walks around with the midweeks”, or more bluntly “what is it you do again, Andy?

It wasn’t supposed to be this way. I spent my university years promoting gigs for bands such as Nirvana. Solely in the interests of getting my 2:1, I searched for a music related topic for my technology-focused degree.

Peter Scaping, then Research Director of the BPI and Chris Green’s old boss, suggested: “Some people seem to think that one day music will be beamed into people’s homes. Why don’t you go away and think about that?

30,000 words later and I had written one of the first major pieces of analysis on digital music. It got me my start, but from then on I was labeled the geek.

Charles Wood, Media And Planning Director at Sony Music, called me up about a job, but initially I wasn’t that interested. The Eureka moment came at the second interview when Charles had me do a range of tasks. I thought two things: 1) This guy is seriously smart and 2) What a great way to learn about music marketing.

Music marketing in the 90s was more sophisticated than many people realize and with a real focus on numbers. The groundwork had been laid in the 1980s by Clive Farrell (RIP), Charles’ former boss who developed a method of analyzing TV advertising spend against chart sales data by TV region.

By the 90s data was more sophisticated and way ahead of the rest of the world. There was also airplay tracking and a bunch of other sources. The whole business revolved around charts (and still does).

As many analysts will tell you, there are relatively few opportunities to be the hero. Once such moment for me was this:

On a Tuesday morning I had Paul Burger (Chairman), Rob Stringer (Epic MD) and John Aston (Sales VP and Sony COO Nicola Tuer’s old boss) all standing in my office, with Burger yelling at me “you got your fucking numbers wrong, Andy!

Paul could yell louder than Rob (which is very loud) and he was pissed off because I had predicted Manic Street Preachers would not be number 1 by the weekend. Their new single If You Tolerate This (Then Your Children Will Be Next) would be narrowly beaten to the top spot by Steps as things stood.

No Paul, I got my numbers right.” Paul bought my argument and the Sony machine rolled into action. The Manics made number 1 with 146,529 sales to Steps’ 140,020. Without an analyst, Sony and the Manics would not have made it. That was a step-up moment for the band: their first number 1 single that kicked off global campaign taking them to the next level.

Moving forward to present day, the role of the analyst is better understood, better paid and better resourced although there is still some way to go. There are more career options if you intend to remain in that sort of position, but an analytical grounding has wide application across the whole music business.

  

Ex-Analysts

Charles has remained at Sony Music and is still doing what he does best. His predecessor, Peter Duckworth moved to Virgin Records and then become part of the senior management team at EMI and now jointly runs Now Music.
Lohan Presencer, my opposite number at Warners, moved into a marketing role, then to Ministry where he is now CEO. One of the smartest deal makers I know.

Emma Drew (nee Sharma), my opposite number at Universal, moved into digital marketing and now runs her own hugely successful YouTube channel creating nursery songs and animations for kids.

Pete Downton was an analyst at Warner Music before his elevation to VP of Digital. He is now Deputy CEO of 7Digital, another shrewd deal maker.

In making my move, the aim was twofold: 1) work more closely with artists and 2) move into digital. Since then I have alternated between start-ups and artist management. Initially marketing focused, later focused on deal making.

 

More career choices for Analysts

There are now far more options for those wishing to remain in analytical roles.

Fred Bolza and his team does great things at Sony and Mark Utley is building a solid team at Spotify. Tech + Music = More Opportunities For Analysts.

Another beneficiary of that crossover is Will Page, also at Spotify. An economist by trade, he presents in a hugely compelling way. On stage his PowerPoint skills possess the virtuosity of a Jimmy Page guitar solo.

Outside the corporate loop, Mark Mulligan and Chris Carey are building entrepreneurial businesses and credible media profiles as analysts.

 

Striking Out

For those who wish to strike out and diversify their career either into frontline marketing or commercial roles, you have to look within yourself and assess your own strengths and weaknesses. Think about how you can enrich your life and experiences through other avenues aside from your day job.

There is no reason why someone who started out as an analyst cannot make it all the way in this industry. Lohan has proven you can reach CEO level if you are smart and the right opportunities come your way.

Very often analyst types let themselves down through lack of confidence or lack of self-promotion. Super smart people can be their own worst critics when they need to be more brazen. They don’t see the big deal in the amazing things they do, while others make the mundane appear remarkable.

Sometimes you have to learn to say “fuck you” and/ or have a FUCK YOU attitude. Not to be obnoxious, but knowing when to stand your ground and to know your own worth. At other times you have to be charm personified.

Analysts can over think things, but when they do make decisions they tend to be good ones. Backing up a decision in advance of achieving an outcome requires conviction. Those are the moments that test your mettle.

Some people in the music business get paid a lot of money not because their job is inherently difficult on an intellectual level, but because they are under enormous pressure to deliver results. Moreover, they have to do so in what can be a highly political environment.   That could be managing a band constantly on the verge of breaking up or running a corporation with numerous stakeholders, either way it requires nerves of steel.

 

Knowing your worth

The difficulty with analyst roles is while they are incredibly demanding they are often undervalued. Analysts lack the professional status of lawyers and accountants or the frontline kudos of product managers. I would argue they are equally valuable and that value is now more apparent than ever.

To HR people and senior executives I would say: value proven analysts and do your best to retain, motivate and promote them. To the analysts reading this: don’t quote me (ha!) Only you can weight up your own situation, but consider your options and know your worth. This is your time.

I ♥ Lawyers and Accountants x

This article first appeared in the Record of the Day weekly magazine, but can also be viewed online 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! 

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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, but can also be viewed online 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, which places even more emphasis on diversity within our industry. **

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 “we don’t want her, she’s a bible basher”, completely misunderstanding the background and culture of the candidate.  Her comment would have been wrong had the candidate been white, but the candidate was a young black woman.  Church going is viewed very differently within the black community and especially so amongst younger age groups who consider going to church just as cool as going to a club.  Forty eight percent of London’s church goers are black.  This point was completely lost on my colleague who ended up hiring someone with a similar background to herself.   **

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

 

** NOTE – I have amended this paragraph from the first “polite” draft that was originally published to what actually happened.  Its been bugging me for a while that I did not write this authentically in the first place, but I am learning. (Feb 2018).

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?

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

Transparently Obvious: The Music Business Has To Change

RANSPARENTLY OBVIOUS: THE MUSIC BUSINESS HAS TO CHANGE

AE

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

Rethink Music, the report published by the Berklee College of Music and which puts the spotlight on transparency, has provoked a great deal of comment over the past few weeks.

I contributed to the report and have observed it all with interest.

Much attention surrounded the major label artist who only received their royalty statement in paper form. The example is a little extreme, but not uncommon.

One major label told me I could not have an Excel version of a PDF statement “as a matter of policy” and that I had to buy converter software and do it myself: not so simple as the PDF was not formatted correctly and it took forever.

In contrast, another major label emailed me an Excel within twenty minutes. It is a small thing, but some organizations seem to go out of their way to be unhelpful.

Responding to Rethink Music, the IFPI makes some valid points about investment and return.

Yes, many artists make a better margin on digital compared to physical, but so do labels.

One quibble: the IFPI’s “artist payments” figure includes advances (which are now also recouped against a share of ancillary income), but the IFPI compares it to “sales revenue” which according to their own figures does not include ancillaries; only digital, physical, performance rights and sync.

If this is so, I would question whether this is a like-for-like comparison?

“THE MUSIC INDUSTRY’S BUSINESS PRACTICES ARE OUTDATED, DISJOINTED AND UNALIGNED.”

The IFPI response completely avoids the matter of transparency, the most crucial matter of all and one that we must resolve.

We must have full transparency on all deals and calculations. Of course confidentiality is to be respected; but managers, lawyers and accountants also have an additional fiduciary duty of care to their artists, so they must act properly and that includes confidentiality.

Rights owners have no such responsibility and perhaps they should. Bottom line: there are no excuses for non-disclosure.

No matter what happens in the UK and Europe however, the balance of power within major labels and publishers lies in the USA.

It was, therefore, disappointing to read in the New York Post that: “Some music label executives [said] they are now questioning their support for Berklee’s internship program”.

Old school threats and bullying instead of addressing the matter at hand, this is not a good look. If anyone feels left out or disagrees, they should engage openly with the Berklee team.

Those interviewed by The Post also attempted to rubbish Rethink Music as a ‘“long advertisement for music publisher Kobalt,” which recently took in Google Ventures as a shareholder’, but the Berklee team clearly discloses Kobalt’s support.

As for Google Ventures, well it makes for a good story but anyone with any sophistication will understand the VCs who invested in Kobalt will have little, if any, regard for the position of YouTube, etc.

They just want to make good investments that create value for their fund. It is worth noting the comments of Bill Maris, who led the investment:

I discovered how messed up the music business is. Is it even a business? In what other industry can you provide a product, get no information on who bought it, how many times it sold, and then a year later get a cheque with no explanation?”

Maris has invested $2 billion into 300 companies from tech to life sciences.

“WE MUST HAVE FULL TRANSPARENCY ON ALL DEALS AND CALCULATIONS.”

This is not about bashing major labels for the hell of it.

On a day-to-day level, many of us in the management world like and respect the individual label executives with whom we work; but a substantial overhaul of business practices at a corporate level is essential and not just in labels; PROs and publishers also need to change.

The music business is no longer a self-contained cottage industry; it is deeply intertwined in a much bigger and more complex world where the consumer is the real power player.

Yet the music business is failing to achieve its full potential because it is tied up in knots: its business practices are outdated, disjointed and unaligned.

The Taylor Swift/ indie label/ Apple Music showdown illustrates what can be achieved when we unite as an industry with the artist front and centre.

If we continue to dodge transparency then the lack of trust between creators, their representatives and the major music corporations will continue to erode the opportunity that digital technology provides us.

It is that simple.

 

This article first appeared on Music Business Worldwide.