Artist Managers as Entrepreneurs - Midem 2015

hi good afternoon everybody my name is Didier I am a member of the IMF the international music manager forum I'm the treasurer of the IMF the international music manager forum is a artist managers organizations with about 22 national organizations throughout the world representing in excess of 30 countries I am the president of the French organization artist managers organization called Amer and we are very pleased to see you this afternoon I'm immediately going to ask my dear friends here both Emily and Ron to introduce themselves quickly and then we're gonna go to the subject Emily my name is Emily white I run a management and consulting firm called white Smith entertainment and we are based in New York and Los Angeles I'm Ron stone and I'm president and founder of gold Mountain entertainment we have offices in four cities in America and we've been a business management business for 40 years and if you go on Google and look up gold mountain Ron stone gold mountain you'll be more impressed than I will be just to name a few because he's too shy to mention from Bob Dylan to Joni Mitchell Neil Young Beck Nia Varner I mean small bands you know just like you know that's whom he used to manage in the past very quickly on with old witnesses we've all been witnessing changes major changes in our business and we do believe today that the managers role has deeply changed and basically what we think is that basically the the manager becomes a real entrepreneur and that there is a transfer of risk both entrepreneurial and financial from major record companies or major labels onto the manager who is now developing careers Pro helping breaking new Act the question is is a really a transfer of risk how do you finance creation how do you finance development strategy a few numbers how much money does it take to take an app to a market what is the new business model for a manager is it a sustainable model how many arts do you need to manage what are the conditions to do so what is the evolution of potential evolution of the manager and label relation what about sharing the value on the internet that's a an issue that we have been focusing on for quite a few years what about big data and smart data those are a few issues we would like to address this afternoon we'd like to make this as interactive as possible so please feel free if you want to join into the conversation just raise your hand you have mics on the floor and you will be welcome rather than having an exchange at the end it's not a Q&A session finishing ending this panel it's during the panel don't hesitate you know just raise your hand and you can interrupt and ask either Emily or Ron whatever question you have to start please Ron maybe what is the manager's role and what's the evolution as you've been around for quite some time well as succinctly as possible the manager is the CEO of the artist company the artist doesn't like to think of themselves as a company but it's the music business the music is the the energy and the business is what functions so as the CEO just like any corporation you have all the divisions of labor you have manufacturing distribution marketing promotion sales accounting legal quality control across the whole spectrum it's exactly the same as any company in any corporation except you have a crazy person as the chairman of the board and as a manager you have to spend your day basically being the English - English translator you have to explain to the artists what's going on and try to figure out what the artist saying in order to interpret their desires and their goals to the businesspeople that you've set in motion in the old days prior to the internet the record company played a central role because they were the financiers for the for the company they put up all the money and in exchange for that they took all the money so as things have progressed you know in the old days the record company would put up all the money and take 80 80 to 85 percent of the income and now in today's marketplace as the manager has become the entrepreneur and taken on the risk of the finances that's flipped because now you do need a distribution company and strangely enough all the big companies that used to be the primary drivers financially for all the finances for the record company from the record company have now taken on the role of destroyed distribution all the major companies own all the distribution nothing has changed in that sphere so no matter how you raise the money no matter how you create the money you still have to deal with the big companies as distributors but the profit has switched the artist or the entrepreneur entity that's been created between the manager and the artist they get 80% than the record company in the form of distribution gets the 20% which has all sorts of complications but Emily your turn same question what a manage does sure Sam same question yes so a manager sets the short and long term goals with the artist and we assemble the ancillary team members around the artists or inherit those team members and maybe make changes you know if it makes sense and then we make sure that team is working towards the short and long term goals for the artist so someone slacking you know that like Ron said were the CEO we need to make sure the team is engaged and they're working as hard as possible for the artists we're also the liaison generally between the artist and the team and definitely between the artist and kind of everyone else so we help filter all the business and everything that comes to our office so the artist can focus on art that being said you know we're incredibly transparent about everything we do in management and in my world we are uh and you know we share everything with our artists and they approve everything so as much as I want my artists focusing on art I do make sure that they have all the information of everything that they're doing so I might answer the same questions over and over but they do have a record of it they do have it an email and you know they can transparently see everything that's going on with the business side of their career so can I do it just so you don't think I'm being flipped when I went like this what I like to do with the artist is I like to give them choices amongst things I've already filtered out all the bad ideas so in other words I give them choices amongst two or three things or even four or five things of things I already know I can make work so that they don't choose something that paints me into a corner where I can't so honestly is not exactly the most essential ingredient okay can we talk about the the the managers business model that was there was a time I just want to comment on that real quick I'm sorry that's one of the most frustrating things about being a manager for me is there's that reputation of not being honest or being sleazy or whatever and I think that's something that has evolved is an artist can log into their TuneCore account or you're talking about CD Baby before and know exactly what's going on so there are a lot of managers that are really doing right and really doing good things and yeah that's a tough thing for me when there's that kind of sleazy reputation I think that has changed because if you screw someone over in business everyone's going to know you know that's your reputation and as we remove the smoke and mirrors and everything becomes much more transparent I I think it's very exciting and that's a big reason why I love the modern music industry okay she she did she just call me sleazy that's that's why I'm distill okay but that is something that I let you guys maybe sort out a bit later okay fine yeah okay good there will be a private talk afterwards um meanwhile getting back to the business model I'm gonna get there you know I want to talk about business models there was a time there was a simple contract there was a percentage of income Snepp gross that's not the point today paid from the artist to the manager but now tomorrow if you're setting up companies if you're setting up labels if you're setting up publishing companies touring PR social media marketing and promotion companies etc for your artists how'd you get paid I mean because you have conflict of interest do you become a shareholder do you become a business developer do you work then to just when you set up a company for your artists do you then become a shareholder of the company or is it on a project-by-project basis how do you work well here's where I get to defend myself about the sleazy part yes please I don't have any contracts with my clients in 45 years I've never had a contract for the thing okay it's always transparent and my deal is straightforward with everyone I make 15% of their income income not gross on the touring side its 15% of the gross but on the record side it's 15% of the net so all the costs of the operation of the business come out off the top and I share in the percentage of their gross which is actually net we also work on Commission that's something I'm really really proud of because there's obviously plenty of rules in the industry where they get a fee at the first of every month no matter what you know the publicist is going to get paid the radio promo person's going to get paid so generally you know we only make money if our artist does and we really live and die by them so I love working directly with artists and I love that we all succeed or we all fail together I think that's a really really honest way to work actually but don't you aren't you facing conflicts of interest if you're running the label and being the manager at the same time and same for the publishing and same etc etcetera when I've started labels the artist is always owned it so my thinking with that is I love it when the artist owns their master maybe for the first time in 20 years and they control that so to be totally blunt I've always just kin to you work on Commission as a manager and not gotten too involved with that much to the chagrin of my attorney who wants me to be a shareholder and owner and all that but when I set up artists labels or publishing companies that so the artists can own it I me as well I get a commission on the earnings of the artist I have no proprietary interest in the record company or the publishing or anything else and this alleviates any illusion of conflict of interest um okay can we get I mean really down to us and take an example for example I mean we did have a conversation I understand that you did recently for one of your ads yes in fact can you talk about it I mean it's Joni Mitchell basically okay no I want to talk about that's the one I want to talk about yeah about Joni Mitchell for example um so she's not signed to any major record company anymore uh not for new product but you know her product exists in the world of Warner Brothers who owns there who owns all the masters forever that's the catalog exploitation yes and that's Hannah and that's a situation by virtue of the new circumstances we can avoid going forward with artists because the object here is at the end of the day we want the artists to own their own art and you make a distribution deal for a limited amount of time and the artist owns its own art and I will tell you that the proprietary interest the ownership is a kind of meaningless of accoutrement of the of the deal because the truth is everything is available on the internet so ownership all the fun all the fun is out of ownership so um so you know with regard to kind of labels and artists run labels and things like that I want to highlight um someone on our roster named Fox Stephenson who's an EDM and dance artist from the UK and Fox is on spinnin in Europe and he's on fire power in the US and he has his own label called cloud head that generates significant revenue every month so that's been something that's very fascinating for me where we're not necessarily on a major on an indie or just doing our own thing we're doing all of the above and it's kind of blowing my mind I co manage phox with someone who's younger than me so I'm learning a lot about the EDM scene and kind of teaching micromanage or the business but to me when I realized we were on three labels and those other labels which are totally legit are letting us also have our own label it doesn't really get more modern than that I mean I think that's going to change an EDM as it did in hip-hop as majors come in and get more involved with it's not a new genre it's been around a long time but obviously it's hitting the tipping point so that's something that that's really exciting can you get back to Joni Mitchell when today Wow I was gonna I was going to use Ricky Lee Jones as an example so we Ricky Lee Jones has been an artist for I don't know since the 70s she had a big hit Chucky's in love probably before everyone here was born but we just we just put out a new record which comes out the 23rd of June and this particular business model is exactly how we did this record we use crowd crowd funding through pledge we raised over six figures we then made a distribution deal with an independent distributor in in Nashville Tennessee called 30 Tigers yeah excellent and and the record comes out we raised over a quarter of a million dollars we made the record we have a budget basically the manufacturing distribution the manufacturing with the exclusion with distribution all the finances are on us in the marketplace she could not get a deal with any record company for more than $75,000 the life expectancy of that record would be three months after which time the record company would move on to other projects so as an artist who owns her own label we take this budget and we push it out over a six nine or 12 month time period we're doing business in 80 countries we have enough money based on pre-sales our own that and here's the best part the best part is that because of the crowdsource funding we don't actually have to pay that money back basically we have to deliver them finish product they basically pre bought the record eight months before the record was made people bought the record and said here's the money please send me to record when you're done and you know who they are and we have their addresses yes we have their email addresses and in point of fact I'm using them for record promotion where I cut I send them emails and say you know the records on this particular radio station in your market if you want your CD you should be calling them and then we'll submit a glamorous life managers lead and in point of fact we are going to ship enough product internationally and domestically to pay off all of that and the day after the record is released we'll be in profit and the object here is to recycle that profit and keep the process going for six nine twelve months however long it takes to get to what we consider critical mass and I tell I tell everyone in the in my company that the music business has lost the decimal point what used to be a million is now a hundred thousand what used to be a hundred thousand is now ten thousand so the threshold for success for an artist what would you call her legendary artist or heritage artist is around fifty thousand units we're going to ship that money and that means we'll be in profit in July and we'll be able to recycle that money as it comes in to prolong the project for as long as possible the key ingredient here which has changed dramatically over the past twenty years is that there's no expectation to make any money selling records zero in the old days used to go on tour to promote the sale of the record now the sale of the record is a promotional tool we use for touring and the economics are just obvious in it even in the old days you made fifteen to twenty percent of the sale of the CD and on the concert to where you make forty to fifty percent so if the CD sells for ten or fifteen dollars you're making a buck and a half a buck seventy-five the concert ticket sells for $40 you're making twenty dollars where's the money everything is geared towards touring and touring income so the record becomes a marketing tool and for a manager to have control of the finances in terms of how that money is spent for marketing promoting record it becomes a tool that we married to the touring business and we get tremendous bang for the buck in the old days you buy an ad in Rolling Stone would cost fifteen thousand dollars and it's like the shotgun theory you're hoping to hit your audience but now you take that same fifteen thousand dollars and you spend fifteen hundred dollars in ten markets and you target your audience you know through the internet through through you know and people don't understand that you can buy advertising on cable television for three hundred dollars for thirty seconds so you can go into Boston and you can buy ten ten ads on on Boston on the cable channel that showing in America the hot show is John Stewart so you could buy a 30-second spot on Jon Stewart for three hundred dollars and you could target your specific demographic in that market and get much more bang for the buck than the record companies approached they would never think nor would they bother to spend money for television advertising on a record and yet cable advertising is cheaper than radio advertising sorry that's okay before we go maybe more because they see it this is a read invitation to go into numbers to know if the business is sustainable what how many up what kind of investment does it take to bring an act to the market before we get more into exactly do you have any questions here please from the floor hi I was wondering about that previous campaign for that heritage artists and you mentioned you raised fervor $250,000 it's not news that was not fix for you that wasn't pledge but then did you go ahead and raise more money to make it all happen or was that you know the the money we raised from pledge was for the actual making of the record okay the distribution deal finances the marketing and promotion going forward okay so with a distribution deal you'll get an advance upfront as well to cover yes okay so once you that was a debt you're referring to once that was paid off yes yeah that debt has to be paid off but so if you raise a quarter of a million dollars and half of it is raised from crowd source then you only have to pay back 100 five thousand so in the old days an artist would make a dollar and a half a record in this particular model you make between five and six dollars a record so all you have to do is figure out how many records at five dollars a piece you have to sell to pay off the the distribution deal and it comes out to about twelve thousand check my math anyone less than sixty seven and Riccio is the record and and she owns record ah I will tell you that the ownership is a mixed blessing because because for example we got a reorder for vinyl which by the way we love vinyl for two reasons one vinyl or hardcore fans and two they're called final vinyl final when somebody buys when you know a vendor buys the vinyl that's that's a sale that's can't come back CDs are on 30 60 and 90 days vinyl they buy them you get paid so we love vinyl absolutely and I was just going to ask as well one other question if you don't mind how small a team do you think you would need or all the smallest team you can build to run a campaign like the one you mentioned like where you dealing with that many different countries that many different organizations and that's okay here here again is why having control of the apparatus of the record company is vital record companies have people on salaries they do 20 projects they don't necessarily love the project you have but you can hire off-the-shelf people the publicist the marketing person the radio promotion guy for three to six months 10 years you pay them a fee and they have to be dedicated to that project otherwise they're not taking it on and they have to deliver on that project otherwise they don't exist beyond the original arrangement of three to six months so you end up with the team of people basically that are actually focused on your particular project for as long as it's in the marketplace and my core team is for people all right so really that's the less manageable by most people but you could do it with one person that's at depends on the size of the artist I mean I was nineteen when I started with The Dresden Dolls there were two people in the beta there was Amanda from the band Brian and me you know and and we collected all that information and went all over the world um you know working with 30 Tigers there's a great staff in Nashville helping out so it totally depends but I started as an intern with Dresden Dolls and that turned out to be very successful so sometimes they're gonna be too many cooks you know but but your team is basically what you can afford in other words you're hiring off-the-shelf talent which by the way there's thousands of people to choose from because they're all unemployed from the record companies and and they're talented and they're motivated and you don't have to put them in an office and you don't have to pay their health insurance it's a really really good deal you get a lot of service for your money right okay but in thank you a few questions over here hi going back to the business model question if I understood understood correctly so your answer was that the Commission model is still the one that you're using or are there that's it I mean I consult from time to time but generally that's on companies so as far as artist management goes yeah we take 15% okay and and I sometimes I'll take a client on that doesn't earn enough money to justify taking 15% because 15% of nothing yeah there's nothing so if I take on that kind of client I charge them a monthly fee until such point as they're earning enough money and then we switch to that percentage model and then I deduct the fee I took and what we do with new artists on that is we commission on day one dollar on no matter what so even if it's a hundred dollars that's lunch for the interns or whatever that's $15 and you'd be amazed if you're supporting at the club level and it's 250 500 and night how much that adds up I don't hear this often cuz luckily I have a great relationship with our artists but the argument might be oh well we're not making any money and it's like well then don't have a manager you know cuz we're putting all that time in so that's kind of what we do with artists early on and that's also helped to set the tone and the precedent I mean when I was younger there were a few bands I didn't commission on in the early days and then once we built them up and they were making money and we would invoice for commissions it was oh Emily is all about money so whenever I set that tone of commissioning on day one dollar one they really understand that it's a professional relationship and also like I see this in younger managers all the time like they might think they're doing a favor for the band or whatever the band doesn't know that all you're teaching them is that that's how it is so I think if you are going to do something like that make sure the artist knows because otherwise you might build up that resentment and that's no good for anyone all right I think then again there can be other business models you can become a partner in a label in a publishing company or in a touring structure okay and you can be a business partner so there's no conflict of interest in running the company getting paid to run the company be the manager at the same time okay so we have a kind of a very broad approach of what management is some managers are not making any money from management but they make money from touring from publishing from being a label basically so there are different models and and I mean you can be very creative it can be per company you can set up a company but you can also make a split per project because if you make a split the company you will have how do you end the contract okay which is good question okay because the company you're in their fault for for a long time okay a way to protect your artists and and for yourself to find a way out could be per project okay so you have different ways of managing artists today not only on Commission but but that leads to the conflict of interest because if you're making money in one particular area and not in another that's where you're going to focus even if your subconscious even if you're consciously trying to be fair you're going to definitely put the time and energy into the area where you're making the money so to avoid that conflict of interest having that percentage eliminates that thinking I mean you know subconsciously you know your your tendency in a company where you have five or six clients is to put the time and energy into the one that's making the money and but you're hiring people in your and you're paying people doing a job to run to help running a label of a publishing company and you might not get the return on that on on this particular job if you're only on a percentage I mean so it's I mean it's it is debatable it's a conundrum yeah and it is open to to discussion I think there was another question from the floor good afternoon I was having a conversation a few weeks ago with a guy who works at a big data company and we were having a conversation a big data company they do a lot of music data analysis what have you and we had this conversation around exactly what you were saying how everything is flipped upside down where the album is emotional to for the live performance in touring and the questioner was arised that is it really possible for a small and medium-sized artist to really make a living off of primarily touring being the main stream of revenue because it can be a difficult thing so I want to pose a question to you all sure um a revenue stream that hasn't been mentioned yet that's really important for us and often at that level is publishing I mean I personally tend to be drawn to strong songwriters and because the publishing industry is so robust and is doing well that's often my first call on a new band like hey we started to land some sinks we're getting radio we're getting some traction because I can count on my publishers to invest in a band more than a label so um a lot of my artists hate touring you know and we customize each plan around each artist so I think you need to look at yourself and what your strengths are and ideally how you want to live your lifestyle so it's not necessarily oh the record helps us because with my artists owning their masters when they land sinks they get that money you know so there is money to be made on the master side for sure it's not necessarily how it was back in the day but there's there's a wide variety of revenue streams available to artists right now which I love also the business model that I'm talking about works best for an artist that has a brand name that can raise enough money on the on the crowdsourcing can make money on the road my particular interest is also songwriting and publishing but I try never to make a a publishing deal that gives away any ownership to the publishing I usually hire publishers based on a percentage basis from their side ninety ten eighty five fifteen twenty twenty eighty but basically I try to make my artist understand that ten fifteen years from now that publishing money is all the income they're ever going have going forward and if I want to do right by my client I try and keep them from selling their publishing publishers make money by investing for ownership so if you sell your publishing for 25% or 50% you've sold that asset forever for money that you use up in a year or two but you pay for for the rest of your life so if you can afford not to take an advance from publishing 10-15 years later that's the smartest thing you can do most artists you know they have this attitude that the first couple albums are you know they're just starting out they'll sell their publishing without really understanding the ramifications of that and and also for licensing purposes going forward to own your own publishing is to have a future but notice it's not a hundred percent you know I've presented here before because a lot of people get very scared of publishing even industry people are scared of publishing because there were so many bad deals before I explain this to my artists all the time you can do whatever you want with your publishing which is really exciting and when I look at you know the artists pie and the various rights that are available that might be one where we do give up a percentage once in a while and it's what really depends it could be a young artist and we've used that money to tour to go to South by to hire a publicist and all these things or I know people that have put down payments on their homes with it you know so it completely depends and that's been much more reliable and consistent income than trying to hit up labels all the time and to underline the fact that I'm not as sleazy as she thinks I am publishing advances are commissionable income so I'm willing to forego the Commission on the publishing for the long term benefit for both the artist than myself but I will admit my greed is long-term as opposed to a median that's smart so he's sleazy and she's only interested in money it's perfect I mean that you know can we talk about music no that's not the issue um walking exactly no you didn't know right now I know so basically is it a sustainable business today how many acts do you guys are you guys working with how much money does it take to go to the Mart bring a project to the market is it sustainable is it something you would recommend to do I I teach a class at UCLA and in the Graduate School of Business about music and my first lecture tells them that they should all go to medical school or law school and forget the code and forget the music business it's an interesting dichotomy when I started out was the late 60s and there were no rules we kind of made up the business as we went along in a strange circumstance we're in that same business now there really are no rules if you can figure out a new path to the marketplace you can create that path it's it's I don't think it's sustainable because the music business there's a scary there was a scary thing in The Wall Street Journal in 1999 before Napster the music business worldwide was thirty six billion dollars collectively all sources of income now that number is 18 billion which means over the past 25 years we've lost 50% of the value of music in the market place and we're in the fourth generation of kids who think music is for free it's not sustainable maybe we shouldn't have sued them is the first problem well you know if we would have it look I was in high school at the time when Napster came out and I remember thinking god I would pay 10 22 I would pay $50 a month for this service and obviously hindsight's 2020 but I was super excited when Spotify finally came to the US market you know 10 15 years after Napster because had we embraced that technology maybe fans or kids or whatever would value music a little bit more you know but that's a different panel and a different conversation so I asked my question so I've been sorry that's my phone right there is the rebounding I was said earlier about the live business the touring business being quite a big generator of income how about perform performing collect performing write collected by societies as well as sync is that is that also avenues that managers are exploring as well oh yeah of course absolutely but keep in mind performing writes most of that income is generated by broadcast either internet broadcaster or celestial or radio and interestingly enough in in England and I think in Europe the artist participates in those royalties in the US the artist does not get paid for performance royalties on the radio the new Millennium Copyright Act of 2000 gives the artist the participation in the performance only on the Internet the only people get paid when a record is played on a radio or the publisher and the writer the artist does not get paid and clearly we're trying to correct that but there's you know tens of millions of dollars that the artist could get their hands on if the law was changed we are way ahead in Europe in terms of collecting society's neighboring rights and and private copying way ahead of the u.s. so to talk about management being sustainable it might see well it is a difficult thing it might seem like it's a difficult thing but the longer you do it the more people you get to know the more knowledge you bring in the more artists you work with and although you need to be very mindful of your time you know and I feel the same way about publicist and pretty much an attorneys definitely be very aware of not taking on too much but yeah personally I'm only managing about four artists right now I think there's about twelve on our roster and that can that includes consulting as well as our comedy clients and our sports clients so that's something I've done on purpose over the past few years to keep it very very focused but our revenue and our company has grown every year and I see that because it and we just continue to expand our network our knowledge and things like that and I want to address when you talked about how much money you know it takes to bring an artist to market it depends on the artist for sure if we're talking about you know trying to enter the pop world that's one thing but it can be zero you know like it can report on your own you can distribute on your own you can start building up fans on social media you can collect email addresses that's often how I start with new bands I'm one of the cheapest managers you'll meet because I don't want my bands to go into debt immediately so with all the tools and resources available we would be nuts not to use all that enormous how long does it take to go from zero to making money about a year I've been lucky enough to have a track record to get artists who I mean this might be pennies to you but grossing about $100,000 in a year is usually the goal and we build that up with directed fans sales with sync with performing writes with publishing with all these revenue streams you know that that's generally what we look for now the art the music has to be great of course the artist has to not be an you know communicate with their fans and work well with us those are generally are two criteria when it comes to artists we work with we have to love it and they have to treat people well because that makes a big difference with fans as well as industry team so to use the new business model is applicable to artist development yes you take it from the zero do you agree Ron I here we go I don't know whether it's a lifestyle choice or not but I try not to take a client on that doesn't gross a million dollars a year the threshold for making money even at a million dollars a year your commission you have to pay people you have to pay rent you have overhead at the end of the day your 150,000 dollar Commission basically gives up forty or fifty thousand dollars in cash in your pocket maybe I can do five or six clients a year and we're now working twice as hard to make half as much money so my attraction is to brand name artists somebody who I can manage from the middle position to the higher position to its I think what you're doing is the hardest part of the business I just start on a blank canvas and paint is just they may just start on a blank canvas with Eric Burdon though who had no internet presence and is obviously a huge legend so there's a brand name for sure and who is missing revenue streams and missing fans on the internet but he would be attractive to me as a client for that brand mean because it's not that hard to reinvent a quality artist that has a brand name my point is there's a lot of work to do no matter the age or the size or yes but if but if you're starting with somebody who has a brand name you're starting with an audience that you can reach even when you're starting with a brand name though I mean this is something that's applicable to a lot of the artists in the audience I do the same things when classic rock artists asked us to consult as a 20 year old you know it's collecting those email addresses it's knowing who the fans are it's engaging it's maybe helping that classic rock artist get on a Coachella or a Bumbershoot to start to you know spread the word to a new generation so a lot of the tactics are actually very similar I think I think you're agreeing with me I'm agreeing that we didn't have to spend any money to help spread the word on Eric Burdon nor nor have we had to on Fox Stephenson and it won't take a year well it's cuz a certain set of people know who he is already my point people know who he was before I think we have a point I think I think we have a few questions from the floor please thank you very much provided that the publishing is one of the major sources of profit today and along with the touring and M sales I have a question as an artist and producer what are the common and maybe the recommended models of the artists to publisher relationships and what models do you insist on in favor of your artists like is it content-based when the publisher owns the content or is it artists based when the publisher invests in the in the artist as a brand for this as a creator of this material it just depends every deal is going to be different so I've definitely reworked deals where it says you have to be on a major label you know to get this advance whatever and a lot of those are deals I inherited and I've reworked that we're okay you know that's not realistic you know the artist wants to start their own label they want a little bit more control so maybe the compromise is it has to be with a major distributor we also do a lot of admin deals where artists own their rights and control their publishing so it depends on what the artists want you know what the songwriter wants and and what else you know they need to help achieve their goals it really just depends artists artists but but as a rule of thumb if you can make an admin deal and do not give up ownership for a specific amount of time even if you have to pay a premium for covers and licenses that's the better better move you'll you'll get less money upfront but you make much more money in the long term hey I'm back yes so to come back to a part where you were telling us about the industry being worth 36 billion and now 18 billion and you hooked in with the story about that you were interested in Napster as a kid and that you wished you had the ability to be able to pay for a service monthly which we now have a little bit with Spotify I'm very curious how you guys think about the service like Spotify is a revenue stream because with us as a label it is extremely disappointing to be fair what kind of music independent music so so just as a as a touchstone on a million Spotify listens a million Spotify listens you make a percentage of one penny the artist will get somewhere between six and eight thousand dollars it's not sustainable what do you recommend instead I recommend we take Spotify across Rd and spank them but what what is an alternative medium for people to listen to music alright I don't think I think these these paths to the marketplace are established what we have to do is we have to flex our muscles as the artists and get them to pay a fair share they're all making lots and lots and lots of money and the artist is not getting a fair share so let's clear well you understand this let's just clear something up streaming platforms which is what we should say not just Spotify pay rightsholders so again with Fox Stephenson I mean he has a lot of streams but he's making money every month on Spotify on streaming platforms and not just on his own label but on labels across the board so again you know had we monetize this years ago we'd be in a way different position now we've monetized it we need to get more users on board that's the other thing and and instead of getting point zero zero one we need to get one penny and you know it is actually amazing when everybody complains about the point zero zero one or whatever it's not actually a sustainable business model what I would love to see is a streaming platform where you know take all the revenue that comes in it's $100,000 or 100 million dollars and divide it evenly by amount of streams you know and make that publicly available and I was talking to one of my artists that's insane ah why should why should Beyonce pay for everybody else before you interrupted I was just going to answer that so I managed an artist who's in Wilko a very big band and he also has a project called the autumn defense he's well aware that Wilco is going to make more money than his side-project but no one can complain if it's fair and equal so that's what I think is very important you can know look there is it when you buy a ticket to a concert you don't take the money and divide it up amongst everybody who's performing and people who are playing a 300 seat Club and somebody who's playing a hundred thousand seat venue it's just insane so what do you recommend I recommend that Spotify and all the streaming audio delivering systems pay a royalty of one penny one penny how is that sustainable though confessional about one any generates that one penny would generate six billion dollars a year in income we just tell them that yes can I ask you one quick follow-up question you are mentioning that you were you know bringing a new records out from the artist from the 70s Rick Lee Jones do you also release that on Spotify and they also have tips about timing well what we've done with Spotify is we've given them the first song her audience is her demographic is somewhere between 35 and 60 they're not listening to Spotify they're not participating but we want to stick our toe in the water and figure it out so we release the first song on Spotify and we'll see what happens if she I mean for example on when I said that you know a million Spotify hits generated 8006 $6,800 that was for Rickie Lee Jones so the bottom line is we don't want to leave that money on the table but we do not want to focus on it we do not want to pay attention on for a new artists Spotify is legitimate opportunity but keep in mind Spotify is now a five billion dollar a year company and the artist gets paid point zero zero one for every the only good thing about Spotify is you get paid every time somebody streams it forever which means every time they stream it you know you used to buy a CD and pay you know ten dollars that was it okay now if a song sustains itself for ten years on Spotify you may end up making more money on Spotify even at point zero zero one then you would be selling the record but there's an inequity here that's Justin conscionable to me that the people who own the pathway to the marketplace are skimming off 99.99 percent of the income the artist is generating the reason that they're making that money the artist needs to get a bigger share period I want to comment on when doing real quick I'm what again each artist is different so we tailor each campaign I'm not a big fan of windowing because I don't want to miss a single fan it's a pen you know like if we live in such an ATD society if someone's on Spotify or RDO or Deezer or whatever and they go to look for the music and they don't find it they're just going to move on to something else that said I've just been getting Mathew freed Berger from The Fiery Furnaces organized and you know they've released like ten albums or something there's been no data collection so right now his new self release is on Bandcamp we're doing an app thing with free form and things like that and I'm being very meticulous about recapturing that fanbase because nobody has done that before but as we get things go you know like six music just played the album so I'm like okay we need to start distributing further because of what I just said I don't want to miss a single fan so I think you need to look at each artist and see what makes sense but I don't understand article about this I don't understand why labels aren't leading with VanCamp and noise trade and things like that because assuming your label has kind of a similar genre to each artist you know you just want to be communicating as directly as possible as consistently as possible over the years to your audience so and to follow that up when when you're putting out records as a manager who's now taken on the responsibility of company it's a bell-shaped curve you have audience very young you have audience very old but there's a centerpiece of where you think your demographic is well that's where you have to put your resources because you have limited resources so when you get out to the edges you're not really allocating monies to those to those edges yes you want every fan but you can't spend money chasing the smallest piece I think there was a question over here hi yeah I've a comment on Spotify and a question about something else I think it's important to understand when one Spotify you know put out their press release on the two billion royalty to artists what that word artists means and it is in fact a payer to the four rights holders of which the lion's share goes to the label so in fact the writers publishers and performers get a really really small amount of that brontë what we were saying before it's rights holders yeah but but the business model we're talking about is putting out records the artists putting out its own record so that eliminates the lion's share going to a label the lion's share now comes to the artist who's putting out their own record I appreciate that I just wanted to really say that that's a point of clarification in all of these talks where when we say artists we mean the proportion of money going to label isn't necessarily here because Ricky owns our album a lot of mine do so just about but I agree with you that's something I think a transparency issue again that the the business model for me works best if the artist is the writer the publisher and the owner of the record then 100 percent of that income comes to the artist and and those are the attractive aspects of creating this particular business model as I said it's not applicable to every artist some artists will you know truth is if you believe your artist has no long-term application in the marketplace go to the record company and get as much money as you can and get a big advance for publishing take the big advance for your merchandise and take a big advance on the next tour then when they run out a year later you've already paid for five years so my question which your monitors hot on producers these days are negotiating a percentage on on publisher share in lieu of the disappearance of the point system that they used to have what is your reaction to that is that something that's happening in general I'm pretty so I managed some producers they tend to be artists as well when it comes to publishing I'm pretty strict about that if you write the song you get some publishing where it does get a little bit more creative is may be participating in the master and sync and things like that but you know we see three things there's certain rates for a major there's certain rates for an indie and there's certain rates for self release and at the self release level because there's more control we can often have the producer participate on sank on sales and things like that so again kind of talking about publishing we make the deals up as we go you know I kind of have that to go off of but we can get really creative dependent depending on the situation so what I would I do when a I have a producer we create a penny rate in other words if the record sells at $10 or $12 we pay the producer based on a penny rate what what would four points on a record record deal on a regular record deal mean financially and then we create a percentage so if the producer will get somewhere between ten and fifteen percent of the profit the net profit based on a on a calculation of how many songs they had on the record so if there's ten songs on the record and producer produced all ten ten to ten to fifteen percent of that penny rate it's a good rule of thumb it comes out about somewhere between three and four percent if you calculated it based on a traditional record deal so when you take an artist on board for the very beginning and so when you take an artist on board from the very beginning of their career and they're obviously not making any revenue and you say it takes about a year to create that revenue to keep it going and obviously you fully believe in the artist because you want to take one board as waiting on board is there a time period where you realize like people aren't biting they're not taking the music and it's not going anywhere like it's a risk that it's going to happen when do you let that artists go and when Jun very rarely have dropped an artist I mean honestly the only time I did was when this tour was put together and a ton was a ton of work was put into it and then a week before they just backed out for no reason and I was kind of like I can't really waste my time like that um but again with so many like direct revenue streams now available to the artists it's rare that they would be making no money and if they aren't making any money I'm probably not doing my job very well so luckily I haven't been in that situation I will tell you you're a far far better manager if your artist is really talented okay okay any any more questions from the floor yes so um on you're obviously quite a skeptic of streaming services like Spotify what do you think of the potential launch of an apple streaming service and how it's going to affect your business in the future well I'm rooting for the success of all streaming audio delivery systems I want them all to work I want them all to make money the only complaint they have is they have to make a more equitable share of an arrangement with the artists it clearly is the future most people you know in the old days you used to collect music now you basically use music you know you used to use to go to somebody's house and look into their vinyl collection you could tell their whole psychological makeup now you have to steal their phone so I've asked question but I want to ask another one should I mind its some let's say take an artist who's emerging and they've already got a bit of a big fan base and they want to release that album as a surprise so something like PledgeMusic wouldn't be an avenue they could use but they're interested in private investment have you ever dealt with let's say yes sorry have you ever dealt with getting artists private investment from let's say people when the technology sector who just want to get stuck into music one have like like something fun to be involved oh listen to what you just said I mean I don't want to generalize because there's obviously a lot of great people out there and if they want to invest in music that's a good thing I have seen a lot of those instances though where they don't understand our business and don't understand how it works so I do like working with partners that tend to understand music a little bit more because you just said oh it's fun you know and all that it's like he was talking about email it you know emailing fans to call-in radio stations this is grunt work you know what I mean like I'm very blunt when I interview people for our company if you think this is about being cool and hanging out or whatever like that might be 5% of it and that 5% I'm sick of you know so um people that just want to invest in music to like have fun might not necessarily be the best partner well also anybody who invests money in a music project is stupid and and and also they expect to return on their investment so now you're dealing with a stupid person who wants to get paid but how about let's say getting a brand to invest in an artist getting a brand to invest in an artist you know if they don't get a return financially they get a return in awareness exposure oh they only get a return if it's successful and they're a and complain and moan if they're not what they're getting is the credibility of being associated with an artist so that might not necessarily have a monetary value but that's a huge reason why a brand would want to align and then on the artist side those partnerships only work if it's genuine if it's a product or service that the artist is absolutely into if it's forced or it's fake the audience and the fans are you know that's gonna be a turn-off for everyone she's corrected authenticity is the key but the truth of it is brand brands like Microsoft or big companies they are not interested in developing artists because there's no upside for them what they want is they want artists that have tremendous fan appeal so that they could get value for their investment and at that point you don't need them question to run considering your career considering the artists you've worked with I would imagine it should be very simple for you to pick up your phone call any presidents of any major record company and work directly with them so why are you going into this 360 degree yard well it just gets back to the conversation we had at lunch but most I want to share I mean it's this movie but I want to share all those lunch conversation most of the people who are running record companies now have no business running record companies they're either A&R guys who had a success or their accountants and lawyers they're their life expectancy that record company is between a year and two years most of my clients and I would hazard a guess most of any managers clients you hope that you're going to have a relationship that's going to last more than that so you're dealing with somebody who wants short-term return on their investment and isn't tremendously impatient and because they're their jobs you know they get paid in the fourth quarter they're their bonuses are based on the income of that company two bad years they're gone well why would you want to spend your time and energy getting into business with somebody who has no expectation of longevity also the record company is expected expecting their return on investment to be even more immediate than your own they want to return on investment within three to six months most artists even the best artists even with all the the the accoutrement breaking in your direction it's going to take a year or two Emily what are your relation to the labels what's your position in this very often come to us and one reason why that happens is as I was saying before labels expect you to have a social footprint they expect you to have fans they may even expect you to have sinks they're going to expect you to have things going on so because that's not necessarily a partner I've cared about or necessarily felt like I had to rely on we just do things on our own and they come to us and that allows us to do smarter deals better deals have the artist retain their rights and but I also work with artists who tend to have their own studios or record on their own so that helps a lot you know we have songs and albums and masters ready to go but I do think you know traditionally the relationship between label and management might not be so great and we have more in common than ever you know it's a small industry we're all trying to spread music we're all trying to you know do right by our artists for the hopefully and there's more and more transparency on the label side as well so they are our partners when we work with them and it's not my job to beat them up it's to be partners and get the artists as far as possible but you agree you agree that there's a transfer of risk for sure yeah and it's another matter the risk the risk is more our time I think yeah there's plenty of managers that invest and things things like that when I've done that again it can kind of be that resentment or maybe they think that's a normal thing to do so really to me that the biggest risk of a manager is our time the time investment is huge yeah and to the point about that we made about advertisers or companies coming to invest in the client the record companies have the same kind of dynamic they show up and they're interested because you've already eliminated a good portion of their risk and at that moment you have to decide whether you want the money or you want to keep control over your product and your client and at that particular juncture the decision is do you think this artist is going to last if you think the artist is not going to last cash out get the money and make a run for it if you think the artist is going to last then making a record deal there's no upside whatsoever okay I think we are coming to the end of this panel conversation here maybe if there are a few more questions from the floor no okay thank you very much thank you Emily white and thank you.run Tao

Channel: midem

Views: 53,864

Rating: 4.9015241 out of 5

Keywords: midem, music, managers, artists, entrepreneurs

Id: 3KtlulfyKD8

Length: 60min 59sec (3659 seconds)

Published: Fri Jun 05 2015