10 things we’ve learned in 2011

by Emmanuel Legrand

1 - Big is not enough – Ginormous you must be

With the latest episode of the EMI saga unfolding, it suddenly appears that the only way to survive in the music industry is to become bigger. Universal (and parent company Vivendi) believe that being the market leader is not enough, and that the only way to keep delivering big figures is by getting even bigger. Hence the acquisition of EMI’s recorded music division. Obviously getting bigger in a shrinking market is not the same as getting bigger in times of growth. But how big can you become without significantly distorting the market? How can a market function when you only have three main players plus a mosaic of small players and when number two and three together don’t even match the market leader in size? That is the billion dollars question that regulators will have to answer. And it is not just a rhetorical question.

2 - Publishing is where the real money is

The same level of consolidation that affects recorded music is now starting to take place in publishing. Sony/ATV and EMI Music publishing combined should become market leaders, with Universal Music Publishing second and Warner Chappell third. Then comes new player BMG Rights Management, which has snapped in recent months Chrysalis and Bug Music, but failed to win EMI Music Publishing. Investing money in music publishing does not seem to worry VC companies and capital can be raised for acquisitions. These people are not in the habit of throwing money through the windows so there must be some rationale behind that. Maybe it is the belief that, no matter what, music publishing will always deliver a return on investment. But the real cost of this way of thinking is felt in the bio-diversity of the eco-system, and not for the better.

3 - Who controls data follows the flow of money

The year ended with two almost simultaneous announcements: Live Nation was acquiring measurement company BigChampagne; and Google, via YouTube, was buying RightsFlow, a music licensing and rights management company. Add to that the on-going discussions between stakeholders regarding the Global Repertoire Database, the launch of radio monitoring company Kollector, and the development of MusicMetric, which monitors “buzz” around artists, and suddenly there’s that feeling that data is king. Live Nation needs to be able to identify traction on artists to better sell concert tickets; YouTube needs a back office to cope with the scope of the data they generate on a daily basis to identify and pay rights owners; music industry stakeholders and digital services need the best database of metadata to ensure that rights owners are properly compensated. It is not only the flow of money that you can control through data, it is the market as a whole. And we ain’t seen nothing yet in this field.

4 - In video there’s a business

The successes of YouTube and Vevo have changed the currency of music videos. From a product that only had the L column filled in a P&L, suddenly there are a few pennies in the P, thanks to YouTube’s ad schemes, but mostly thanks to Vevo’s aggressive way to package videos to consumers and sell the eyeballs to advertisers. Since its inception, Vevo has poured $100 million back into the music industry. That was just based on business in the US, and the company is now expanding internationally. Against all odds, Vevo is proving that videos are still one of the most potent way to promote music, but can also be moneymakers. Bravo!

5 – Streaming is not yet a win-win

With the successful launch of Spotify in the US and Deezer rolling out its service throughout the world, the focus is now on the value of these streaming services. To consumers, these services do provide value. They allow access to millions of tracks with good sound quality and in a completely legal way. And it is so good that you don’t need to “own” the songs any more, since you can access them any time and anywhere. But with the decision by some artists like Coldplay to hold their new tracks and prevent them from being on Spotify has shifted the debate on the financial value these services bring to rights holders. A lot of record company executives (and a few artist managers too, obviously) only see these services as another form of evil in that they might be legal and fully licensed, so they lure people away from rogue sites, but they also cannibalise digital sales. Spotify CEO Daniel Ek argued that the service was a significant contributor to the music industry’s bottom line (especially in Sweden where it first launched) and that it is only the start of a process that will see more and more consumers switching to a subscription model for music, and that will see revenues grow in parallel. It is vital for the music industry that Ek’s vision prevails, but there are already new challenges…

6 – Is the cloud full of smoke?

They all went into the cloud – the Apples, Amazons and Googles of this world – and for the moment, the verdict is still open on how (or if) it will transform the landscape. But the cloud has the potential to be a massive game changer if consumers can secure in the cloud all the music that they own, and then access a vast number of services that will enhance their experience. If this idea eventually picks up, if will have repercussions for rights owners and discussions are going on about what set of rights services need to clear with rights owners. 2012 will most certainly clarify some of this and also give indications as to whether yes or no this new development is the panacea that many would like it to be.

7 – Finding the appropriate copyright regime for the digital age is complicated

Attempts to modernise or adapt copyright legislation by taking into consideration all its aspect is damn complicated, it seems. The US is caught in a battle of words (and more) between what bloggers call “Big Content” (all the creative industries) and, to simplify, internet and mobile companies over a text called ‘Stop Online Piracy Act’ or SOPA. The UK is launching the process that will see the revisions of its copyright regime and there are already clashes about which way to go. India has been delaying for many months the discussion on a new Copyright Bill. And on and on. Never has it been so difficult to strike a balance between the rights of copyright holders and the aspirations of consumers, and the needs of companies with new business models or visions. It is fascinating that copyright and rights holders could be portrayed as preventing innovation and a danger to freedom, and big businesses (seriously big businesses) could appear as the paragons of freedom.

8 – Is the music industry finally turning the corner?

Universal Music big boss Lucian Grainge believes it, and so does Nick Gatfield, CEO of Sony Music UK, who sees a turnaround in two-three years. There are indeed some indicators that something might be happening: digital sales up, countries that have been enjoying negative growth for the most part of the decade seem to have stabilised. One major trend to watch in 2012 to see if the situation really improves.

9 – Lana Del Rey’s ‘Video Games’ is brilliant…

…but will she last?

10 - All hail the new Queen of Pop, Adele

It was her year! Adele’s the most successful artist of the year and it looks like she’s going to challenge Lady GaGa for the crown of the most successful act of the century. To Adele’s credit (and to that of all the Beggars team around the world), it was as organic as a success it could be, by letting the music do the talking (OK, there was a bit of marketing too, at least in the US…). Of course the videos were great, of course she has the voice, but would that be enough to warrant such success? What sold her to millions was that she did not sound fake, that she was her own self, and that she had bloody good songs too. Adele’s success marks the end of Cowell’s illusion that you can go on ad vitam in selling wind. Sure enough he will continue to offload his armies of wannabes, but Adele’s global success just killed the idea that it was just good enough to appear on TV and mumble half-baked versions of existing songs as long as you looked good. And come to think of it, half of the year she was mute, so what would have happened in she had had her voice, eh?

Best wishes for the New Year!

Sad ‘morna’ for Cesaria Evora

By Emmanuel Legrand

Cesaria Evora, who died on Dec. 17 at the age of 70, was called “the barefoot diva” but aside from the stunning voice, she was nothing of a diva. She was the anti-diva. She was the least self-centred star you could ever meet. She was a colourful, humble, lively and funny person. She saw what was happening to her as a blessing and enjoyed every moment of it.

For her life before achieving global success had not been very enjoyable. She was from Mindelo, a port on Sao Vincente, one of the islands of the Cape Verde archipelago, off the coasts of Africa. Her father died when she was seven and had to earn a living at a very early age, which she did in her teens by relying on her main asset – a voice that flowed like honey. She had problems with men (she married three times), she looked after her kids and struggled to make both ends meet.

Her reputation grew in Mindelo and also in Portugal. She sang ‘mornas’, the traditional songs from Cape Verde, reflecting the tough lives of the people on the islands. She also used to sing taking her shoes off – hence the ‘barefoot’ reference – something she continued to do throughout her career, despite her fame.

In the late 80s, her music attracted the ears of Jose da Silva, a Parisian of Cape Verdean origin, who took her under his wings and got her to record for the newly created label Lusafrica. Sealing a deal with indie distributor Melodie, da Silva released her first album in France, ‘La diva aux pieds nus’ (the barefoot diva), which started to get media and public attention. And suddenly she graduated from the bars of Mindelo in Cape Verde to the world stage.

Melodie’s PR Francois Post became an evangelist and started calling all media (yours truly included) to rave about this incredible artist. And for once, it was not just hype for the sake of it. Evora was not sold on her looks but on her voice and on the beauty of her music. There was substance, there was a real history to her life. She was not manufactured. I remember writing a piece in 1988 for trade magazine Music & Media, trying to explain that she was not your average pop act, but that she was worth listening to (and to my surprise, the piece was published!).

Her voice and her demeanour won large audiences. And hundreds of thousands started buying her albums, in France and in the rest of the world. Da Silva – who was also managing her – made an international distribution deal with BMG for her recordings. Her most successful album was 1992’s ‘Miss Perfumado’, which helped her crack the US market. In 2004, she won a Grammy for her album ‘Voz D’Amor’, crowning an amazing career.

She spent most of the 90s travelling the world, winning new fans each time she was performing. On stage, she would just let the music take over. There would no props, aside from her bare feet and a glass of alcohol that she could sip while smoking a cigarette when her musicians played an instrumental tune. There was nothing revolutionary in her music, but it came from her heart and from the soul of generations of Africans who had suffered from slavery, colonisation and deprived lives.

Once, flying to Hong Kong for Midem Asia in 1996, I ended up on the same flight as her. She was due to perform in HK and also in Macau, where she would be greeted as a superstar by the Portuguese community living there. She was on an Air France flight from Paris and she was flying coach. When I asked someone who was working with her how come she was not in business, which would have been fair for a person her age with her status, I was told that she was due to fly business but her musicians were flying coach, so she gave up her comfort in order to be with them and enjoy their presence rather than being alone at the front of the place. While in HK, she stayed in a rather small room at the YMCA, but as long as she could smoke and crack jokes with her musicians she was happy.

In September of this year, she gave a very touching and heartbreaking interview to my friend Veronique Mortaigne from French daily Le Monde (Mortaigne wrote a book about Evora) in which she was announcing that she was quitting the business of touring to look after her health. “I need to rest,” she said to Mortaigne. She had just been going through some serious heart problems and revealed that she had a stratospheric blood pressure that was mostly due to her diet of sweets. Evora was extremely emotional during the interview. It was to be her last public comment.

Upon learning about her passing, Cape Verde president Jorge Fonseca called for two days of national mourning. She was the voice of Cape Verde and she never lost sight of where she came from. And she touched the hearts of millions with her soulful voice. Up there she is probably singing a few mornas, cracking jokes, lighting a cigarette and sipping a well-deserved drink. 

Barbara Orbison, R.I.P.

By Emmanuel Legrand

Barbara Orbison, widow of the great Roy Orbison, died in Los Angeles on Dec. 6 at the age of 60. She had pancreatic cancer.

When she met Orbison, she was a 17-year-old German student in Leeds. He was 32. They married the year after they met and built a partnership in which she was spouse, lover, mother, friend and manager looking after his business, especially his publishing and recording assets.

Musexpo Europe’s international publishers’ panel:
Barbara Orbison is third from right.

As she explained in June 2009, at Musexpo in London during a music publishing panel that I moderated, it was not always easy to be all of this at the same time. She joked that sometimes the business woman had to make a tough decision that the artist would not like, but they would still be able to continue to operate as a couple or as parents, as if nothing had happened. 

There is no doubt that she helped him put his career back on tracks. She discovered all the intricacies of the music business the hard way. She realised that Orbison had been ripped-off quite a few times and decided to bring some order to his financial situation and took control of the various aspects of his career.

Interviewing her at Musexpo was a blast. She was a fascinating woman, not least because of her incredible life and her beauty. During the panel, she exuded confidence and was straight to the point, eager to share her experience and very much a hands-on executive. She was very grounded and you could see that she was a tough business operator. And she definitely knew what she was talking about: she asked me during the prep meeting some very specific questions about European publishers. 

Overall, she was in charge of Orbison Productions, which included three Barbara Orbison-owned companies: Orbison Records, Barbara Orbison Productions, and Still Working Music, the music publishing unit – fittingly located in the Orbison Building in Nashville, Tennessee. After his death in 1988 she became the custodian of his legacy and was very controlling of Orbison’s image and of the use made of his music. 

Of course, Roy’s copyrights were crucial to the company (she described his catalogue during the Musexpo panel as “a cash cow”) but she was also signing and batting for new songwriters. She was awarded BMI's 2010 Song of the Year for ‘You Belong With Me’, co-written by Taylor Swift (who performed the song) and Liz Rose.

She was very active keeping Orbison's legacy alive. With her son Roy Kelton Orbison Jr., she oversaw the production of the four-CD box set ‘Roy Orbison: The Soul of Rock and Roll’ (Sony Legacy). 

In January 2010, with the organizers of Midem, we tried to lure her to Cannes to talk about her business, but unfortunately she stayed in the US, as she was due to accept a star on the Hollywood Walk of Fame on behalf of her husband. Can’t compete with that!

She is survived by her sons Wesley Orbison, 46, Roy Kelton Orbison, Jr., 41 and Alexander Orbison, 36.

According to AP, she will be buried next to her husband at Westwood Village Memorial Park in Los Angeles. And ‘A Celebration of Life’ will be held at a date to be confirmed in Nashville.

China and India – The sleeping music giants?

By Emmanuel Legrand

[This story was initially commissioned by the UK’s BASCA. Here’s an expanded version of the story published in the winter issue of the organisation’s magazine.]

China and India have been catching the attention of the British music community for decades. But while quite a few British artists could claim to be “big in Japan”, few can pretend to be “big in India” or “big in China”. For how long? The ambition to crack the world’s two most populated countries in the world should come a normal career step for any act, since they are extremely attractive markets.

It is easy to see why China and India may look like ideal playgrounds for British songwriters, composers, artists, labels and music publishers: both countries have an impressive population (1.3 and 1.2 billion inhabitants, respectively), with a large share of under 25. Despite remnants of poverty, they have booming economies and a growing middle class counting hundreds of millions of people with purchasing power and an eagerness to consume; plus they are the two largest markets in the world for mobile phone usage.

But the conditions for a thriving music market have not been achieved yet in both countries - although they offer a lot promise, they certainly have their own market idiosyncrasies to deal with. On the positive side, both India and China have made efforts in the past decade to bring their copyright regime in line with that of other countries.

“Generally speaking, the Chinese copyright law in itself is adequate enough to build a sound business, and like in China, India’s Copyright Law in itself is generally speaking adequate,” says KT Ang, the Singapore-based Regional Director & Regional Counsel of the International Confederation of Societies of Authors and Composers (CISAC) for the Asia-Pacific region. But, added KT Ang, in China the problem stems from the “implementation of the law” that has been “less than desirable,” while in India “the difficulties are the market practices and interpretations being made of it by the courts.”

Taste Media's
Safta Jaffery

For Safta Jaffery, Managing Director of London-based Taste Media, one of the key issues in India is the “lack of philosophy of paying royalties and no culture of respecting copyright”. Jaffery spent the most part of three years, between 2008 and 2010 focusing on the Indian and Chinese markets. He was working on a project together with ‘Slumdog Millionaire’ score composer A.R. Rahman and an established music publisher, with the ambition to create a credible publishing company in India, but the project was stopped because, in Jaffery’s words, “nobody believed we were going to get paid”.

“I think we were blindly optimistic,” explains Jaffery, who adds that it is unlikely that the system would change in the foreseeable future. “It is a system that has been working for a long time and which benefits all the main players, who are incredibly powerful and who have no interest at all in changing the way it works,” he continues. “If you have a good song, film producers will take it, pay a flat fee and that’s all. Who is going to break this mould?”

Bollywood legend Javed Akhtar
speaking at the World Copyright Summit

One who has tried and still does – with some success – is Bollywood legend Javed Akhtar. The Indian lyricist, poet and screenwriter is the most prominent figure in the fight to try to get the government and legislators change the copyright regime in the country. Thanks in part to his efforts, the Indian Parliament is about to debate and, hopefully adopt, this autumn a new Copyright Act, which will amend the Copyright Act of 1957. One key amendment in the bill proposed by the government asserts that authors of underlying works and those to whom they assign their works are each entitled to an equal share of the royalties received for non-film uses, including for performing rights.

This will mark a radical transformation from the previous regime, which was centred on the “work-for-hire” philosophy and transferred all ownership of works from composers, lyricists and performers to film producers. In his keynote speech at the World Copyright Summit in June in Brussels, Akhtar noted that even the greatest composers in the country such as A.R. Rahman did not earn royalties from the use of their works in India, but ironically did so when their works were played outside the country.

“Historically, India’s songwriters have not been able to exploit performing rights,” explains Karen Buse, MD of International at PRS for Music. “The major change in the new proposed Copyright Act is that it prohibits composers from waiving all their rights. We believe this is a good thing.”

For Universal Music Publishing Group Executive Vice President for International, Andrew Jenkins, the proposed changes in the Indian copyright law, introducing a non-cessible performing right to songwriters will be a game changer. “Songwriters and composers will not be able to assign all their rights, so this will change the situation significantly,” he explains. “Indian songwriters will enjoy an ongoing right to royalties when their songs are used in future. At the moment, there is not much incentive for [non-Indian] composers to write for Bollywood movies if they have to give up all their rights.”

Jenkins believes that the Indian government “is determined to bring India’s copyright practices in line with the rest of the world; it will create a level playing field for both local and international songwriters from the world in India.”

Most industry executives agree that India presented opportunities in the music field. “There have been three quite welcomed developments in India in the past 10 years: they have reduced significantly the level of piracy in the country, there is the beginning of a retail structure, and commercial radio is emerging as a sector,” comments Dominic McGonigal, Director of Government Relations at performers’ and record companies’ music licensing organisation PPL.

Deep Emotions's
Achille Forler

Universal Music Publishing was until recently the only major publisher operating with a stand-alone company in India - Mumbai-based Deep Emotions Publishing, a joint venture initially set up by BMG and a French expat, Achille Forler. Meanwhile, in September, Sony/ATV announced a joint venture with Sony Music India to administer and develop the company’s publishing catalogue. “This is good news,” says Forler, Managing Director of Deep Emotions Publishing. “The more the players, the better.”

Forler, who has been working in the music business in India for almost 20 years, has been focusing, alongside Akhtar, on the status of local collection society, IPRS. For historical reasons, the society has been controlled by record companies and the current situation is challenged by Akhtar and a few other authors and composers who are pushing for changes and more transparency. “Our idea is to simply say that authors’ societies must be controlled by authors,” says Forler.

PRS for Music's
Karen Buse

“There are challenges in certain areas,” PRS’ Buse says, rather diplomatically. For her, revenues collected by IPRS are growing and progress has been made in many areas and there are potential benefits for UK songwriters/composers with new satellite channels that could play international movies. “We are seeing double digit growth with public performances this year,” she explained.

However, the level of revenues remains low: PRS for Music PRS regularly receives about £5,000 per year from China and is expecting £50,000 in 2011, while streams from India should reach £50-60,000 for 2011. On the flip side, she said, PRS does collect significant amounts of money that go back to Indian and Chinese songwriters.

On the question of performance rights for recordings, PPL’s McGonigal, reports some progress in India, where revenues from performance rights for recordings grew from $26.2 million in 2009 to $40.1 million in 2010, according to the IFPI. “Revenues in India are still low but they are there and they are growing,” says McGonigal, who was the signatory of the reciprocal agreement between PPL in the UK and its sister society PPL India in 2006. He attributes most of the growth to positive developments in the mobile sphere.

Mobilium International's
Ralph Simon

According to local data, Indians bought roughly 150 million portable devices, in 2010. The mobile market reaches over 800 million consumers in India. Ralph Simon, Chief Executive Officer of Mobilium International, believes that a lot of progress has been made in India thanks to what he describes as “the mammoth rise of mobile and the delivery of all kinds of IP and copyrighted content to phones – including audio content from Bollywood movies”.

Simon notes that with “the rise of the Indian ‘underground’ music scene, more artists and writers are opting for their own control and holding all digital rights” but admits that Copyright laws in India “are vastly outdated and urgently in need of addressing digital developments of all kinds”.

In addition, the country only opened up its radio airwaves about a decade ago. However, even though about 250 stations operate in the country, very little revenues go back to songwriters and publishers in terms of rights, according to Forler. But despite administrating over 2.7 million works, Deep Emotions receives a mere $40-45,000 per year from IPRS. “Public performance rights barely exist,” he said. For Indian songwriters, it was not that there were no performance rights, but they were not getting a penny of it as they had relinquished their rights to Indian film studios, according to Forler, who wants the system to change.

Not only do radio stations pay very little right, but many of them challenge in court the validity of performing rights. To make matters worse, IPRS and authors recently suffered legal setbacks. “A couple of Indian High Court decisions that effectively held that when a composer or author agrees to have his musical work included onto a sound recording, he thereafter loses his exclusive right of public performance or broadcast to the producer of the sound recording,” explained CISAC’s KT Ang.

But even is the situation was to be rectified, western artists would not stand to gain much as there is a very limited amount of non-local music played by Indian radio stations. “There is very little pop on Indian radio – it’s mostly Bollywood music,” confirms Buse.

The same applies to China, where local repertoire dominates the market and where MCSC, the Music Copyright Society of China, is in charge of collecting and distributing royalties. PRS for Music CEO Robert Ashcroft went recently to China to meet the key players, including sister society MCSC, and assess the importance of the market.

For Buse, at best, western music accounts for 10% of the total music played in China, and PRS could claim 2 to 3% of that amount. “In China, the biggest challenges are the still rampant piracy and the very low tariffs,” explains Buse. “Up until last year, broadcasters were not paying performing rights and the new tariff is so low – 0.2% of their revenues – that it will not generate much revenues.”

CISAC’s KT Ang confirmed that British songwriters could potentially generate revenues in China, mostly through covers of songs. “If a UK work is being covered or used in China, it would be perfectly possible to make money,” he says. “However, it is important to the writer to have a good representative in China who knows the market and has the right connections in the industry.”

MCSC was established in 1992, in the wake of the country’s first Copyright Act, implemented in 1991, which established the framework for authorship, ownership of works and copyright regulation. The copyright law was amended in 2001 and the main issue for rights holders has been the slow pace of its implementation and enforcement. In addition, for Ralph Simon, “There is still a lot of teething that both countries and their collection societies have to overcome to be fully cognisant with the digital and mobile age and its new demands.”

UMPG's
Andrew Jenkins

UMPG’s Jenkins agrees that, “China is a difficult place to do business because it does not fit any rules that we are used to working with”. “But the Chinese government is slowly moving forward to try to make things easier [for foreign businesses]. We ourselves must adapt to fit in there just as much as we look for changes in the Chinese market,” he adds.

For all those who have worked with China, one of the factors to take on board is that the political system is centralised with decisions made by the ruling Communist Party. MCSC, for example, is under the supervision and management of the General Administration of Press and Publication of China (GAPP) and its offshoot, the National Copyright Administration of China (NCAC).

 “Everything goes through the government and no company eager to do business there wants to damage the relationship with the government,” says a music industry executive, pointing out to the recent difficulties of Google in China, which have shown that no matter how big the company, trading is China can be hazardous.

One industry executive suggests that the pace of change in China is likely to be slow as the current status quo benefits local artists, and that the country will open up when it will also have guarantees that revenues will come from the foreign exploitation of Chinese repertoire. “They have no advantage in speeding up the process,” says the executive.

Yet, many executives also believe that China is a land of opportunities. Stuart Watson, founder of Singapore-based music company SWAT, has organised several trade mission to China and India for western companies. “It is very exciting to be in Asia at the moment and China epitomizes the excitement,” says Watson.

He notes that many encouraging changes have taken place in China recently. Until recently, he explained, karaoke bars did not pay royalties in China, although they were by law supposed to since 2006. It is estimated that over 3,000 establishment (out of an estimated 100,000 in the country) will be licensed in 2012 and start paying royalties per booth rather than as a percentage of their turnover. “This could be huge,” says Watson.

Thanks to a rise in karaoke and sync revenues, Jenkins reported that UMPG “has seen an incredible growth in revenues year on year in China and expects the trend to continue.” Jenkins mentions, for example, a recent $100,000 sync deal based on a Bee Gees song to be used in an advertising spot. “If a Chinese company wants to use a certain type of music, they are prepared to pay for that,” he says.

Jenkins also points to a deal made in July 2011 by major labels and China’s leading online platform Baidu, for long considered a rogue site. In July 2011, Baidu announced an agreement with One-Stop China – a joint venture formed by Universal, Warner, and Sony – to distribution their catalogues and the launch of its music online platform Baidu Ting. “This is a breakthrough that will monetise key areas of digital music use in China,” says Jenkins.

Overall, most executives appear to believe that there is potential in both countries. Forler is buoyant regarding the future of the music market in India. “Very few countries have such a passion for music like India, so that’s why I am optimistic,” he says. “We need to fix a few things, and I do expect that in the near future, it will not be $45,000 a year that I will get from IPRS, but rather $400 or 500,000!”

SWAT’s Watson advises to adopt a strategy of localised efforts. For example, he suggests to pitch Indian film producers and try to work with them, and also advertising agencies, both in China and India. But for that strategy to work, “you need people on the ground,” he explains. “In Asia it is all about knowing the right people and establishing long-term relations.”

Mobilium International's Simon considers that India and China are both “in the middle of a tussle and a transition between the pre-digital view and the post-digital cross platform era”. However, he seems more confident about building digital business in China than in India. He explains, “One can build a sound business [in India], but the waste of money, time, productivity and energy on non commerce producing administration – vital as it is – saps a lot from growing young new age companies. In China, there appears to be an earnest attempt at safeguarding creative rights – as this is also in accordance with the WTO rules that China has signed up to.”

Universal’s Jenkins believes that both India and China will become in the next 5-10 years Top 10 music markets, with India perhaps leading the way. “Undoubtedly these are the two most exciting and challenging markets we operate in, both of them with huge potential,” he said. “If you plan to invest in China, you should take a longer term view. In India, we are already seeing double digit annual growth in the music business and you might see a more immediate result.”


[Update (08/03/2012): MCSC has signed early march 2012 an agreement with Chinese broadcasters' organisation CRTA that will see domestic and international creators receive remuneration for the use of their works by Chinese public TV and radio channels. In a statement, international trade body CISAC notes that the tariffs paid by broadcasters in China are very low compared to those in other markets but the streams of revenues to songwriters and composers should increase in the long term. However, only a very small portion of these revenues will go to international creators since most of the music played on Chinese airwaves is domestic.]

Ken Russell in his own words (Part 2)

By Emmanuel Legrand

In Part 2 of our tribute to Ken Russell, here is a Q&A session with the British filmmaker, transcribed from a filmed interview done in 2006 at his house in Southampton, a few weeks before he was due to receive a Lifetime achievement Award at the Festival ‘Le Cinema de la Musique’ in Besancon, France.

Q: How does it feel to get this Award?

K. Russell: I am very honoured to have this award, a lifetime achievement, but I have been conscious of the value of pictures and music since a very early age. In fact, I would say from 10 years of age when I had my own little hand-cranked projector and a hand-cranked gramophone and gave film shows in my dad’s garage in aid to the Spitfire fund to fight the Nazis. The trouble was, the only films I could get for my hand-cranked projector of any feature length were German expressionist films, such as Fritz Lang’s ‘Metropolis’, which was rather ironic. While I was showing films in aid of the Spitfire fund, we were being bombed by the Nazis, the sons of Siegfried.

Q: When did you decide to go from projecting movies to making movies?

K. Russell: Well, I always wanted to get into the film industry. But it was terribly difficult just after the war and unless you knew someone personally, you stood no chance. So I took photography and learned from that cinematography too. And when I started to have some money that I earned from my photographs, I borrowed a 16mm camera and saved that for the film and the dubbing of the film. And lo and behold I made three amateur movies, which got me on the prestigious art show Monitor. Monitor was the first BBC art show and was probably the first art show in the world that was on every two weeks. It wasn’t a one-off and it went on for years. We were encouraged to follow our own enthusiasm. Some directors were keen on sculpture, painting or whatever. I was keen on music. So I was allowed to make documentaries on Prokofiev, on English composer named Gordon Jacob, Bartok, Elgar, Delius and Debussy, to name but a few.

When I made the switch from the small screen to the large screen, I was also able to convince the big companies that composers could be mass entertainment. When I went to United Artist, and said, ‘I’d love to do a film of Tchaikovsky, their faces fell. They said, ‘What’s the pitch?’ I said, ‘It’s about a homosexual who falls in love with a nymphomaniac…’ They gave me the money right away and I never looked back!

Q: ‘Music Lovers’ became your first success. But initially, it was not an easy sell, was it?

K. Russell: Before I ended up with United Artist, I first put it to Harry Saltzman, the producer of the Bond films, because he promised me that after making ‘Billion Dollar Brain’ for him, I could make an “art” film, as he called it. I proposed Tchaikovsky and he turned me down. He said, ‘I’ll investigate it for you; come back next week.’ When I came back the next week he said, ‘I’m afraid – and he was smiling when he said that – I’m afraid [Russian-born film score composer] Dimitri Tiomkin is already working on one for the Soviets, and he’s even written the music’. Yeah, that was true I’m afraid [The film was 1969’s Tchaikovsky directed by Igor Talankin]. And laugh you may because he orchestrated Tchaikovsky’s delectable ‘Serenade for Strings’ and it was a disaster all around.

But I really loved Tchaikovsky because he really turned me onto the real power of music. I was ill at one time and while recuperating I happened to hear by chance on the radio an amazing piece of music. When the announcer told us at the end of the extract what it was I jumped on my bicycle and rode to the nearest record shop and asked for Tchaikovsky’s ‘Piano Concerto No. 1 in B-flat minor’. I listened to it and to other subsequent Tchaikovsky works and other Russian works – I went on from him to Rimsky-Korsakov, the moderns, Stravinsky, etc –, and I found that as I listened to these amazing scores, I saw pictures. And I couldn’t stop seeing them and I still can’t.

So that further turned me on to the possibility of pictures and music. And since Tchaikovsky was the one who turned me on to this amazing world, I think I owed him a favour, so I made a film on him. I think it is pretty accurate, as far as we know. I mean, I did say that he did commit suicide and it seems that this was indeed the case. God rest his soul.

Q: What attracted you to Mahler?

K. Russell: In the case of Gustav Mahler, I really wanted to make a TV film on him but he was too big for TV. So I waited until I was in a position to convince a producer to invest a small sum of money in a film on Mahler. I shot the film outside my home in the Lake District, which is England’s answer to Bavaria. And, again, his music is very autobiographical. So I just followed his music and followed his life even to the extent of using a musical device in the film, in rondo form, which is the statement of the film: variations, theme again, variations, variations. The theme in the movie is Mahler’s train journey going back home and the variation are flashbacks through his life. And since his music is, in some instances, very satirical, you’ll forgive me if I simply followed the master and did a few satirical sequences…

Q: Tommy is pretty different from anything you did before.

K. Russell: I am very much into classical music. The only pop music I really like are by the great masters: Cole Porter, Gershwin, etc. Rock music leaves me pretty chilly. But when I was asked by Pete Townshend if I was interested directing his rock opera ‘Tommy’ I gave it some considerable listening. And I thought this was music of quality. It was not the usual bang crash bang crash wall endlessly. And it was in fact an opera insofar it had a series of numbers and it did tell a story. And it was a moral story.

I think Pete was influenced by Buddhism but I also felt it was quite a Catholic story and, as a lapsed Catholic myself, I thought I had an inside into it that somehow embellished the story.

I was able to explain to Pete that certain areas in the film and the story were not explained properly so I convinced him to write three or four extra numbers to facilitate that. And I think the actual melodies are exceptional as far as rock music is concerned – I can whistle all the way through it and everyone can.

It was a very happy experience. People warned me against it, saying they’re all on drugs, they take their time. They do this they do the other. They won’t do this, they won’t do that.

But I found on the contrary that they were the best group of people I worked with and they were near Sainthood. It was pretty embarrassing… But we all had a great time making the film. And we brought it under budget and on time, which is not always the case with films. It can produce some difficult things when one is not prepared for it.

Tommy, I think, was a bit of a groundbreaking film, insofar as it is really about twenty video clips all put together, which I don’t think there were such things in 1975. And if they were, they were pretty basic, so maybe I’ve got a lot to answer for. Oh dear! 

Ken Russell -- A tribute to a great British filmmaker and music lover (Part 1)

By Emmanuel Legrand

Ken Russell – who died on November 27 at the age of 84 – was one of the great British maverick film directors. Alongside Lindsay Anderson and Nicolas Roeg, Russell debunked a few taboos in films and introduced a new form of modernity in British cinema.

He was a kind of British Fellini, creating visual universes that were unique, and had, like his Italian counterpart, an appetite for unconventional narratives and stories, as well as a capacity to make some arrangements with reality: Russell’s ‘Mahler’ or his film on Tchaikovsky are probably as close to real life as Fellini’s ‘Casonova’ – in other words, pure fiction.

Excess was normal to him, even pushed to the limits of grotesque. And he would court controversy too. Think of the nude scene of Alan Bates and Oliver Reed wrestling in ‘Women in Love’, or the sex scenes with nuns in ‘The Devils’.

From a very young age, Russell was passionate about film and music, especially classical music. He made his dent in filmmaking through commissions for British TV shows such as Monitor. But he is better known for his music-related films such as 1970’s ‘The Music Lovers’, 1974’s ‘Mahler’, 1975’s ‘Tommy’ and 1976’s ‘Lisztomania’ – for which he pioneered the Dolby stereo sound.

‘The Music Lovers’ is about Russian composer Tchaikovsky, with Richard Chamberlain and Glenda Jackson. To sell the movie to his producers, Russell described the movie as the story of “a homosexual who falls in love with a nymphomaniac”. And the film is pretty much about that, and a few more things, shot in a flamboyant, if not decadent style.

‘Mahler’, which was shot in the Lake District in Northern England, has a lot of depth in that it tries to explain the mysteries of creation through the life of the Austrian composer. The music in the movie is haunting and it rates probably as one of Russell’s’ greatest achievements.

Russell was no fan of rock music, which he described as “an endless bang crash bang crash wall”… But when he was confronted with Pete Townshend’s rock opus ‘Tommy’ he decided to have a go at it. The movie has aged but remains one of the great rock movies of all time, not least because of its cast (The who, of course, but also Eric Clapton, Elton John, Tina Turner, etc).

In an interview I did with him in 2006, Russell said that he believed that ‘Tommy’ pre-dated and opened the era of MTV, since the film was a series of music videos. He also came to respect the rock stars who were playing in the film. He was warned that he would go through problems with such a bunch of hellraisers, but all went fine. “Since they were not professional actors, they were very concentrated and eager to do well,” he told me. “And they let their ego aside before getting on the set.”

Russell mentioned his fondness for The Who’s drummer Keith Moon, whom he thought was the most talented of the lot for comedy and acting. In the famous scene in which he plays Uncle Ernie, Moon breaks half a dozen eggs in a glass and swallows them. “He was perfect and we only did a few shots,” said Russell. “He was charming and talented.” But when asked what his favourite scenes from ‘Tommy’ was, Russell would roar with laughter at the mention of the one in which Ann-Margret swims in a sea of beans and chocolate.

‘Tommy’ is one of the few movies, with ‘Music Lovers’, that Russell continued to make money from. Russell explained why: “I had an agent who was not too good and quite lazy, so he made some very bad deals. I do get royalties from ‘Tommy’, not as much as I should, but at least I am getting something.”

Russell told me that his worst working experience was with Russian dancer Rudolph Nureyev who was the lead actor in ‘Valentino’, a biopic on the silent movie star Rudolph Valentino. “He was a diva and made my life terrible,” he said. “On top, he could not deliver his lines!”

I met Ken Russell in 2006, when I was asked to get in touch with him by a group of friends who were setting up a music and film festival in the French city of Besancon. They planned to offer him a Lifetime Achievement Award and present some of his movies. The first meeting between him and his wife Elize Tribble with the festival’s co-founder Pascal Signolet and myself took place in a restaurant near Southampton where he lived.

He chose the place because they had a good wine list, he told us later. And indeed, over some very decent French wine, we went through the motions. He was happy to do anything we asked him to. He was wearing a colourful shirt and sandals with some woollen socks. Not very trendy, and quite eccentric. Elize Tribble, his fourth wife, appeared dedicated to her husband, often finishing his sentences or helping him when his memory faltered. (“I married him for love, not for money,” she said.)

I believe he was deeply touched that somewhere in the world (and even more so, in France), there were people who highly regarded his work. “I’ve never been recognised in my country where the film establishment ignores me,” he said. He relished the attention he would receive in Besancon and he was looking forward to a few days of good food and wines, and talking about movies (we were to do a master class with him).

Unfortunately, upon advice from his doctors, he had to cancel the trip (although he appeared a few days later on Big Brother so we always questioned the reality of his illness…). But we needed something from him, so off I went back to Southampton to get a video interview with him.

Russell welcomed me in his modest suburban house in Southampton. The place was an untidy mess with documents scattered all over the living room, sharing space with drying clothes. There, we recorded some footage to be played at the festival to introduce his various movies. He grabbed a small digital camera – he was very interested in new digital technologies – and his wife Elize played the cinematographer while I was asking the questions.

As an intro, he put on a mask representing a skull. He thought it was hilarious. Within 25 minutes we had it all in the box (Russell was a very good speaker). “That should do,” said Russell. As I was packing, I suggested that quite a few beautiful women -- Vanessa Redgrave, Ann-Margret or Glenda Jackson, to name but a few – crossed his life. “That’s because I paid them,” he quipped. We laughed, but I am not sure that Elize enjoyed the pun.

The past 30 years have not been too easy for him. A lot of project collapsed, due to lack of financing. He had a few successes with 1980’s sci-fi movie ‘Altered States’ and 1990’s ‘The Russia House’. Towards the end of his life, he was trying to self-finance his films with moderate success. He worked on a project with the late (and quite eccentric) German actor Klaus Kinski about the life of Brahms. With a burst of laughter, Russell recalled that Kinski promised that he would play each scene in which Brahms music would feature with a massive erection…

Russell also worked on a film about the Gershwin brothers, for which he had been in contact with one of the brothers, Ira. Again, the film never materialised. In April 2006, part of his house burnt and in flames went a good part of his archives, scripts and films. At least, he got the recognition he deserved in North America when in 2010, the Cinematheque Quebecoise in Montreal and the Lincoln Centre in New York offered a retrospective of his works.

Too bad he never made it to Besancon. He would have enjoyed the public’s attention, the good food and the local wines. 

I still have the award. Never got the chance to bring it to him.

(See Part 2: An interview with Ken Russell)

Who wins and who loses in EMI’s sale?

By Emmanuel Legrand

So Universal will be getting even bigger, Warner is dwarfed, and somewhere in between Sony will try to survive, most likely thanks to its expanded music publishing division.

That’s, in short, the new mapping of the music industry after the decision made by Citi to sell EMI’s recorded music division to Universal Music Group and its parent Vivendi, and EMI Music Publishing to a consortium of investors led by Sony/ATV.

So who are the big winners in this week’s power contest?

Ø    Lucian Grainge: the top honcho from UMG, who will add The Beatles, Pink Floyd and Coldplay (and many more) to his roster, and who will now run the biggest music company in the world by a wide margin. If there was a defining moment for him, that's it!

Ø    Marty Bandier: The ‘penny’ earner from Sony/ATV, who now puts his hands back on a stack he used to control when he was running EMI Music Publishing. It's Marty's revenge.

Ø    Citi: They got out of a business they did not want to be in, and they’ve got most of the money they wanted. 

Ø    Vivendi: At a limited cost they confirm their leadership in the music business. And If we are to believe what CEO Jean-Bernard Levy told the FT, they're in it for the long haul.

And the losers are:

Ø    Edgar Bronfman: Bronfman dreamt it, and Grainge did it! That’s the problem when you play with someone else’s wallet: at some point that someone says stop, and that’s exactly what happened to Edgar Jr. who was betting with Warner Music Group owner Len Blatvatnik’s cash. This might well be the end of Bronfman’s disastrous career in the music business.

Ø    Warner Music: Condemned to be the biggest US indie, that’s all! Their global footprint is getting smaller. Last week they’ve decapitated their European management, to put more power into the hands of Lyor Cohen. It will go on until Blatvatnik tires of it all, and sells, most likely to Sony. As one of their artists used to sing: “And now, the end is near…”

Ø    Roger Faxon: The CEO of EMI Group advocated a sale of the whole company, not parts of it. It is quite likely that he will lose his job, since it does not seem that neither Grainge, nor Bandier will want to see him around.

Ø    Guy Hands: EMI once was his…

Ø    Doug Morris: Sony Music’s market share was behind Universal’s and Morris was hired to bridge that gap. It’s going to be harder, if not impossible, unless he buys Warner!

Ø    BMG Rights Management: Their growth strategy by acquisition is now kaput. After buying Chrysalis and Bug Music, EMI Music Publishing was going to be the piece de resistance. And their partners KKR will certainly question why they should stay in the venture.

Ø    Market diversity: No one can pretend that going from four players to three is an improvement for artists, suppliers, clients and the whole eco-system. No digital platform will be able to launch without Universal’s repertoire and Universal will have the power to dictate its terms. That in itself is sufficient to object to the sale.

Ø    Artists in general: Since there are now only three majors left, there are limited options for artists looking for a global career. Yes, there are still a good number of indies, but how many have real muscle?

Ø    EMI artists: How many will stay on Universal’s roster? On the publishing side it might be a bit more secure, although previous mergers such as Universal and BMG’s have made a lot of collateral victims among songwriters.

Ø    EMI employees: Most of them will lose their jobs since Universal already has a significant structure to handle repertoire and a big roster. Expect more label consolidation.

There will be regulatory hurdles, obviously, especially in Europe where Universal’s dominant position will be scrutinised by the European Commission’s DG Competition. And it can be expected that indie labels organisation Impala will try to derail the deal – as they confirmed they would on the day the sale was announced – in the same way they were instrumental in messing up the promised wedding of Warner and EMI way back in 2001.

Vivendi said that EMI would find in Universal “a safe, long term home, headquartered in Europe”. And Grainge, who is a music man, said he would “preserve the legacy of EMI Music”.

But a company with a market share over 40% has an impact on its eco-system far greater than any other player. With great powers come great responsibilities. Let’s hope Universal will exercise them wisely, otherwise, the music industry will become a game where, in the end, it’s always Lucian who wins! And what’s good for Lucian might not be good for the business as a whole.

The 10 commandments to successfully run a label [part 2]: Tips from key indie players

By Emmanuel Legrand


In part two of this two-part series on indie labels originally written for the Midem blog in January 2011, we asked several veterans from the indie sector to share their experience about how to run a label:

Bob Frank, Merlin (USA)

Martin Goldschmidt, Cooking Vinyl (UK)

Richard Gottehrer, The Orchard (USA)

Michel Lambot, PIAS (Belgium)

Korda Marshall, Infectious Records (UK)

Martin Mills, Beggars Group (UK)

Simon Raymonde, Bella Union (UK)

Tim Renner, Motor FM (Germany)

Dan Storper, Putumayo (USA)

1 - Bob Frank, Merlin: “Start small and grow organically at first”

Merlin's Bob Frank

Bob Frank is chairman of Merlin, the global licensing body set up by indies. He is currently president and co-founder of Qello, a digital syndication company (www.qello.com). He was formerly president of USA’s biggest indie group Koch/E1 Records from 1999 to 2009. He also served as an exec at PolyGram from 1989 – 1997.

Q: Based on your experience, what are the advices you’d give to people willing to launch a label today?

Bob Frank: Firstly be passionate about music and even better a specific genre. Don't be in a rush to be the next Interscope. Start small and grow organically at first. Study all the new consumption and marketing models and get your labels music directly out to those most likely to enjoy what you are releasing. In other words be a part of the new music business and do not focus on the traditional physical goods model and all the added costs that go along with it. Although still important it will soon be ancillary. And maybe I am getting softer as I am getting older but never work with people who don't bring the same joy, love and passion to the label that you do. Make it a great place to work, put out good music that people want to hear and market/promote them according to the 2010 rules of engagement. Follow this and you've got a good chance of getting royalty checks from Merlin some day.

Q: And what are the mistakes you’d try to avoid if you were to launch a label today?

Bob Frank: If I were launching a label today I would not try and be all things to all people. The business is difficult enough. I would study the market and pick a genre I love and one that indies can compete in. Also I would try and avoid the operating mistakes that we all seem to make over and over like over paying for an artist because another label offered a little more and many others. My favourite is probably working a second single on an album that doesn't really have a second single on a wish and a prayer. Hope is not a good strategy. Hope tempered by experience-based decision-making is of paramount importance. Without that real experience you run the risk of missing opportunities as well. I've seen Dr. No's at bigger labels kill great projects as well as the culture of the company. Saying no is not skill in itself if not combined with battle scars. You can train a monkey to say no.

2 - Martin Goldschmidt, Cooking Vinyl: “If you ignore the money and the business side you won't survive”

Martin Goldschmidt is managing director of UK indie group Cooking Vinyl.

Cooking Vinyl's
Martin Goldschmidt

A: What would you say to someone wanting to set up a label and asking you for advice?

Martin Goldschmidt: Why are you doing it? If you want to get rich, forget it; get a job in a bank. If you want to hang out with stars, wrong answer. If you want to turn people on to music you love and work with musicians you are passionate about then welcome to the club.

Q: How should one approach the business side?

Martin Goldschmidt: It's a tough gig. It's the music business. You have to get the balance right between music and business. The music bit is easy. If your music is great it will get noticed, if not you will waste your time. The business side takes a lot of learning and you need to get it right. I've been doing it over the last 25 years and seen many great labels go bust or get bought. They didn't get it right. If you ignore the money and the business side you won't survive.

Q: Any tips you can offer of what to do and not to do?

Martin Goldschmidt: 1. Plan thoroughly.

2. Budget each project and look at a worst-case budget. Check what similar projects have sold. (Your distributor can be a great source of help here).

3. Work out the time lines and build in for stuff being delivered late. If you don't give yourself enough set up time, you won't set it up properly, and you are not doing your job.

4. Put together the right team. (Your distributor can be a great source of help here). You normally can't afford the dream team. Enthusiasm always means more then gold discs on someone's wall.

3 - Richard Gottehrer, The Orchard: “You have to have passion for the business and for talent”

The Orchard's Richard Gottehrer

Richard Gottehrer is founder & chief creative officer of US-based digital aggregator The Orchard. But he was also co-founder of Sire Records with Seymour Stein in the 1966 and built a reputation as a music producer, working with such acts as Blondie, The Fleshstones, The Go-Go’s, Robert Gordon, and more recently the Dum Dum Girls' debut album.

Q: How would you set up a label today?

Richard Gottehrer: You have to choose wisely how you set up your label. The world today is much different than when we started Sire. In those days, we were in a singles market where radio played a big part. Today, in the US, radio is still influential, but you can’t count on it. With Seymour, we relaunched Blue Horizon at Midem last year. It is an indie label but it is structured differently. If you launch a label today, you have to do it for the love of it because it is quite likely that you will never be able to make much money. You have to remember that in the old days only a handful of people made a living out of it. It never was a business for a large group. All these talks of demise of the business, they are childish talks. It’s the demise of the business as we knew it. But for artists and indie labels, it is a great time to be in this business.

Q: How would you approach A&R?

Richard Gottehrer: You have to choose artists that you love and give them the best of you. Artists today have more of a place and can determine their future. There are now more avenues for independent artists and artists and labels can distribute their music in so many different ways. But you have to be aware that the sales potential is so much smaller than a few years ago. Sales of millions of albums are no longer a reality. So you have to set your goals differently. But like Seymour and I used to do, you have to have talent to recognise talent and help artist with a direction. In my case I learned the business from the bottom up.

Q: How important is digital?

Richard Gottehrer: It should be a tremendous focal point. At the Orchard we have a lot of experience in that field, simply because we started very early on, and we did focus on indie labels. We may not provide the same service as a major label but for artists, we offer a possibility to make their music available on 700 accounts that did not exist ten years ago.

Q: What not to do?

Richard Gottehrer: For a start you have to keep your costs down. Do not spend too much money! You have to manage expenses and expectations. You may be someone with passion who finds artists, but you also have to know the digital world and how to promote and market online. You also have to be aware that physical sales are still a valuable business and sometimes vinyl can be good too for some styles of music. But you have to be careful not to manufacture too much products. Make sure that the artists you sign can tour and work. That’s how they build an audience. It does not need to be huge but it has to exist. Then you have to serve the fans. Before it was a far more closed society. Entrepreneurs have to be aware of that. That’s the new norm.

Q: What would you expect from someone who wants to start a label?

Richard Gottehrer: You have to have passion, passion for the business, passion for talent. Don’t think you are in it to make money. You are in a position to develop something that is special and unique. And you have to balance your passion with some business sense. You must also be consistent and perseverant. And in the end have a great deal of luck.

  

4 - Michel Lambot, PIAS: “Try to provide your artists with the best environment”

PIAS' Michel Lambot

Michel Lambot is CEO and co-founder of Belgian-based music company Play It Again Sam! which operates throughout Europe. He is also one of the principals at Impala, the European trade body representing indie lablels.

Q: Based on your experience, what are the advices you’d give to people willing to launch a label today?

Michel Lambot: If you were to launch a label today, I’d suggest you not to set up a label, but not in a negative way. What I mean by that is that you have to looks at things today from a different perspective. Don’t set up a “label”, which is too restrictive, but set up a “music house”, with a roster of artists, like they did in the 60s. And like they did in the 60s, try to provide your artists with the best environment for them to thrive and develop. You have to look at all aspects of their career and also get revenues streams from all aspects by getting access to all rights.

Q: And what do artists get in exchange?

Michel Lambot: Lots of works and smiles… (smiles) If you don’t mind me saying, this is a very 20^th Century question! What we are talking about is access to the market, and the conditions have changed compared to the 80s or the 90s. Then, you had a very segmented market, dominated by majors. Today, you have to think in terms of how to set up a global marketing strategy and you are the agent making the possible intermediation between the artist and the audience. Therefore it is normal that you maximise your artists’ revenues and yours by tapping into all streams such as branding, live, merch, sponsorship, etc. A good case in point is Grace Jones, whose come back album (‘Hurricane’ in 2008), sold 200,000 worldwide, which is quite significant, but we also get a cut on her live music revenues because we provided a marketing budget that helped her reach her audience.

Q: How would you get started today?

Michel Lambot: I can start telling you how I started in 1977. I was 17 and had no prior experience in the music industry. From the moment I signed my first single and the time it came out, it took nine months. I was simply not ready, I did not know what to do. I went to see one of the biggest retailers in Belgium with a stack of singles, and he took 25, which was a lot for me. The buyer said he’d pay me Belgian Francs 64 per unit and I started to call him a thieve, because he was selling them to consumers for Francs 160. That’s when he told me there was something called VAT. I had no idea what it was. I went to [Belgian rights organisation] Sabam, talked to journalists, to many people. I was wondering how were all these new labels in the UK making it. The information was not available. Today all this info is there for grabs. And it helps. Ironically, you can have all the info in the world but you can’t find anymore retailers like the one who helped me.

Q: Does it help to be funded when you start?

Michel Lambot: It sure helps, but it also puts a lot of pressure on you to succeed and fast. So I’d rather say it is not the most important thing. I tend to think that what I did when I was 17 can be done today. It’s a different environment, but you can find a lot of space if you are smart. I believe there is space for people who are motivated, ready to work on Sundays.

Q: What are the qualities necessaries to launch a music company?

Michel Lambot: You have to have some entrepreneurial spirit. For a while, few people wanted to start something in the music business, but it is changing. Overall, I’d say you have to be crazy about music, hard-working and with a certain talent to spot talent. If you can combine all that, you will find money, you will find partners. But do not expect KKR [one of the biggest investment/private equity firms] to come sit at the table.

Q: What should people avoid doing?

Michel Lambot: When I started I did not know limited companies existed. And all was in my name. So when I went bankrupt, it took me ages to pay back my debts. So be careful. That said, all experiences are interesting... And it can help to have a very good lawyer from the start! Regarding artists, I would suggest a very simple rule: never make promises you know you will not be able to keep, even if you know it can cost you a deal. And if you think you can be true to your promises, then you have to make everything within your power to make it happen. Artists will not blame you for trying, but there is no better way to lose artists than not to keep your promises. You have to be honest, first of all to yourself, and be capable of saying, “Sorry no can do.”

5 - Korda Marshall, Infectious Records: “Embrace digital technology”

Infectuous' Korda Marshall

Korda Marshall is co-founder of Infectious Records, a 1990s label that he re-launched two years ago with entrepreneur Michael Watt and Australian music legend Michael Gudinski. Over the years, Marshall held executive positions at RCA, Mushroom Records and Atlantic in the UK. Acts signed to Infectuous include Melbourne band The Temper Trap, General Fiasco and Local Natives.

Q: What would you say to someone who wants to start a label today?

Korda Marshall: Don’t do it! (Laughs) I sometimes say that majors are in the music business and indies in the business of music, if that makes sense. So to get there you have to have passion, a love of music and a lot of self-belief. If you are simply trying to set up a business, don’t start.

Q: Any advice?

Korda Marshall: The biggest advice I could give is…manage and control your expenses. The secret of making money is not spending. There are always ways to make money, through synch deals, PPL, direct sales, etc, so if you can control your expenditures you will make money.

Q: Is it necessary to have money to start a label?

Korda Marshall: These days, I’d advise you to have a certain amount of capital. But it also depends on the genre of music you want to be in. If you build up a brand in a niche you can build some value.

Q: How important is the A&R process and how should you approach it?

Korda Marshall: You have to have a love of music, of artists. In the early days of Mushroom, I had a strict policy of only signing artists under 21 or over 30. With over 30s you can have intelligent conversation about what they want to achieve and the under 21s are enthusiastic and keen to work hard. You have to have self-imposed rules. Sign artists that you would love and mortgage your house for. You also should look at A&R in terms of space. You cannot compete with majors because you cannot afford it, so find your own space.

Q: How close to majors should one be?

Korda Marshall: The ‘indie or die’ process of a few years ago does not exist anymore. I am not anti-major, and you can find interesting partnerships with majors. You can license music to them, do distribution deals, have them handle your digital distribution, etc. I am in favour of spreading the risk. I also believe that if you have a great piece of music, it will find its space in the marketplace.

Q: How about physical distribution?

Korda Marshall: Try to find the right partners. For infectious, we go through PIAS in Europe, Hostess in Japan, Michael Gudinski’s company Liberation in Australia/New Zealand. There’s no rule.

Q: How should indies approach digital?

Korda Marshall: Embrace digital technology and treat it just like a more complicated format because you have streaming, downloads, mobile, telcos, etc. For indies, it has a lot of benefits, because you don’t have to deal with manufacturing and stocks. At Infectious, 40 to 45% of our revenues in our first year come from digital. With four artists on our roster, we’ve sold over 400,000 albums in physical and digital format, and over 500,000 single digital tracks. By the way, most of our deals with artists are structured in a participative mode so that so that we also have income from live and merchandising. It is important to have a bundle of rights and not simply the rights to the master recordings.

Q: What not to do when starting a label?

Korda Marshall: Do not rush into anything. Do not think in the old school way of physical products only. Think forward. Don’t follow your head, follow your heart. And have fun!

6 - Martin Mills, Beggars Group: “Learn from your mistakes”

Beggars Group's
Martin Mills

Martin Mills is chairman/CEO of Beggars Group, one of the leading British independent companies, which incorporates such labels as XL and 4AD. He is also an active member of AIM, the UK’s indie labels’ association, and Impala, the European arm of the indies.

Q: Based on your experience, what are the advices you’d give to people willing to launch a label today?

Martin Mills: Don't do it to make money, do it because you love it... The most important thing is to spread the word: if the music is wonderful and connects everything else will follow. And join organizations like AIM, Merlin, etc. They will help you.

Q: And what are the mistakes you’d try to avoid if you were to launch a label today?

Martin Mills: Music is an imperfect industry, you have to take risks and that means you'll make mistakes – accept them and learn from them.

7 - Simon Raymonde, Bella Union: “Try to be unique”

Bella Union's Simon Raymonde

After a remarkable career as a member of Cocteau Twins, Simon Raymonde co-founded the label Bella Union, some ten years ago. Now the sole operator of the label, Raymonde looks after the careers of the likes of Midlake, The Acorn, John Grant, Beach Union, and Fleet Foxes.

Q: Any advice to people who plan to launch a label?

Simon Raymonde: If you want to start a label ask yourself this: ‘Is there someone out there doing what I would do if I had a label and if so are they doing it better than I could?’ If the answers to both parts is 'no', then you have half a chance. I can't see the point in having a label that's LIKE someone else's, or that signs bands that someone else would. I don't compete with other labels for bands and don't wish to. When I hear about other label chasing bands I have discovered I think: ‘Find your own! There are enough bands to go round!’. And if you're going to start a label which makes physical product, in general don't spend more than you can borrow and then afford to pay back.

Q: What are the mistakes to avoid?

Simon Raymonde: I think mistakes are good to make as long as they don't affect the bands! I would say don't go into business with someone else. And make sure that EVERYONE who works on your records, be they distro people, art people, press, marketing etc, be sure you like them and that they work as hard as you do. Working with dicks is a real pain and if you work with people you like, at least if the record doesn't sell, you KNOW they're nice and they did their best. Don't expect anything to happen, and don't get call the journalist the minute you finish reading his scathing review of your band. Wait ten minutes.

8 - Tim Renner, Motor FM: “Don’t sign to many acts, don’t overspend”

Motor FM's Tim Renner

Tim Renner is the founder of Motor FM, a Berlin-based radio network, which has also evolved into a service company for artists and labels. Prior to that, Renner served as CEO of Universal Music Germany, the largest music company in the country, and worked with such acts as Rammstein.

Q: Based on your experience, what are the advices you’d give to people willing to launch a label today?

Tim Renner: Ask yourself why you are doing this. Only if you feel that you have a mission you should join this fast-changing marketplace! Your style or your mission has to become the blueprint for your label to build it into a brand. Being a brand is essential to access communication networks! Altogether, you have to stay focused. Don’t try to be an integrated media company while starting your label – build a catalogue and don’t go for the “fast hit” if you don’t have the money and manpower to compete with the majors.

Q: And what are the mistakes you’d try to avoid if you were to launch a label today?

Tim Renner: Rule number one: don’t overspend! Music and musicians need time. You can only give them time while you still have resources… Don’t fear the effects of the digital age; make the best use of them instead. And don’t sign to many acts, this will prevent you from working each of them properly.

9 - Dan Storper, Putumayo: “Don’t spread yourself too thin”

Putumayo's Dan Storper

Dan Storper is founder/CEO of US label Putumayo, which has made a mark by trying to sell music outside of the traditional music retail network.

Q: Any advice to people who plan to launch a label?

Dan Storper: These are my words of advice that I think are relevant not just for launching a record label:

Ensure that the music you’re offering is exceptional and has very appealing packaging to entice people to view it either in stores or online. Find the best possible ways to articulate persuasively why people should listen and help you spread the word about your music.

You’re probably the best advocate for your music. Get personally involved in selling/promoting your music so that the sales team and buyers are motivated. I’ve probably met 1,000 buyers myself as I’ve traveled around the world.

Be confident and persistent but don’t be annoying.

Make people aware via promotion, marketing, social networking, etc. Build word of mouth. Music unfortunately doesn’t usually sell itself.

Q: What are the mistakes to avoid?

Dan Storper: Don’t spread yourself too thin. Focus initially on key markets/retailers. Build internationally gradually by identifying the best potential partners. Midem is great to find potential partners but don’t always grab the first one that’s interested. Look for your best long-term partner and try to avoid settling.




If you found this post informative, you might be interested in the following stories:
The 10 commandments to successfully run a label [part 1]

Ten things about the music publishing business you always wanted to know 

Ten music marketing tips for the digital age
Ten points about copyright from MIDEM 2012