Wednesday, June 15, 2016

Richard Burgess: From Folkways to A2IM

[An edited version of this story was published in Music Week]
By Emmanuel Legrand
A2IM's Richard Burgess

One weekend in April 2016, Richard James Burgess is back in Washington, DC for a few hours. The recently-appointed CEO of New York-based US independent labels' organisation A2IM is the guest of Music & Entertainment Industry Educators Association (MEIEA). Burgess is quite familiar with DC: He's spent the past more than 15 years in the US capital, working for the Smithsonian Institution as the head of its non-profit heritage label Folkways Recordings.

Burgess now spend most of his time in New York, steering an organisation that has been crucial to the visibility of the indie community in the past decade. He is the third person to helm A2IM in the past 12 months, following the departure of Rich Bengloff, who held the job for a decade, and Molly Neuman, who did the interim and is now with Kickstarter. He was appointed CEO of A2IM on January 5 of this year. He is quite familiar with the organisation as he served as chairman of its board for six month before taking the job.

Born in 1949 in London, Burgess has been in the music business all his professional life. His parents moved to Christchurch in New Zealand in 1959 and he still has a hint of accent from his stay down under. He was an alumni from the Berklee College of Music in Boston and later worked on a PhD in musicology. He started his career as a musician -- a drummer first with such bands as the Buggles, but also as a synthesizer pioneer (Roland and Fairlight), with his landmark album From the Tearooms of Mars... to the Hellholes of Uranus --, songwriter, performer (as a member of the band Landscape who scored a hit in 1981 with Einstein A Gogo) and producer (Spandau Ballet's To Cut A Long Story Short, but also Kim Wilde and Adam Ant).

Burgess talks fast, layering thoughts one after the other, sometimes going into tangents, but always focused on trying to convince his audience. At the MEIEA meeting, Burgess message to the teaching community is quite simple. He wants the industry to work in a more cohesive and united manner, in order to fix its problems; and he is convinced that indies labels are the lifeblood of musical diversity, especially in the US, where companies scattered throughout the territory, and cover all music genres.

One of his pet talking points is about the value gap. “Value has been created by music but has been channelled away from artists,” he tells these educators in the room and his message seems to resonate with them. Many of the question after his speech were about how could music reclaim its prime position in the cultural and in the creative economy. These are themes that are close to the heart of Burgess.

A2IM is having a few busy months ahead. The organisation is putting together the now well-followed Indie Week (June 13-16 in New York) and is also preparing the next edition of the Libera Awards (June 16), the ceremony celebrating the achievements of the indie community.

You have been in the job now since January 4. How has it been so far? A learning curve?

Richard Burgess: Great and intense. Not so much of a learning curve in the sense that I was on the board [of A2IM] and I was chairman for six months before I started. So in the sense of do I know what the issues are, not that much of a learning curve. In a sense of rebuilding, it feels like fixing the bike while we are riding the Tour de France honestly. I’ve had to re-staff because we were down to three people and now we are about to get back up to six people.

Did the board give you a specific brief as to where they want the organisation to go to?

Richard Burgess: Well, I was part of the board, so I was part of that evolution of that brief and the brief really is growth, but not growth for growth's sake. It is growth because we want to mark out that indie sector; we want to make sure the indie sector is secure and not disadvantaged. We would like it to be done in a way that everybody is on board with it. We don’t want to be fighting with other segments of the industry but at the same time we want what is rightfully ours – the independent sector. Growth is really important and I think prominence and visibility also because the average person on the street doesn’t have a real strong awareness of what independent means. In fact a lot of the times I always joke that indie means a sort of skinny kid, male or female, with a guitar slung look, because that is indie rock, and unfortunately the two terms get conflated. I think that indie means – in terms of labels – anything at all. It means hip-hop, it means EDM, it means all kinds of different music. I’m determined to fix that perception if I can. And I'm determined to consolidate the indie position in the industry. Frankly, with the RIAA [Recording Industry Association of America], and other people, we have some very positive conversations. I think that other entities in the industry realise also that we each bring something different to the table and the indies bring a little bit of credibility, and a little bit of respect.

What are the hot potatoes that you have found and that you had to deal immediately with?

Richard Burgess: I think the biggest hot potato was the staffing. First off, Rich [Bengloff, the former CEO of A2IM] was a very good friend of mine and I really like Rich and he really had everything under good control, so losing someone like Rich, with that much expertise, is always a blow to an organisation. Second thing was Jim Mahoney, who was the second in command there, and was in charge of member relations. Jim was a huge asset to the organization as well. Trying to replace Rich and Jim is not such an easy thing. The downside of having to rebuilding an organisation is you have to rebuild the organisation, and the upside is you have the opportunity to rethink the organisation a little bit. To that end I’m not changing very much right now, but I am bringing in a marketing person because we could do better in terms of awareness of disseminating the information about what we do. In terms of real hot potatoes, the transition happened right during this Web 4 hearing submission [for sound recordings rates], so we were basically battling for the lives of indies in terms of whether we would wind up with two separate rates, one for the majors and one for the indies. That was pretty stressful and that was even before I became CEO and was still chairman.

You now sit on the board of SoundExchange. Do you think that the CRB rates are going to be affecting SoundExchange’s bottom line?

Richard Burgess: SoundExchange was not happy with the Web 4 rates setting. We would always want to see them a bit higher, but on the other hand some people pointed out that there was a 20% increase so it wasn’t the end of the world. But do I think that the CRB rates are going to affect SoundExchange? I think that I would be more worried about massive direct deals with the services than I would be about the CRB rate.

There is the perception that [indie collective agency] Merlin screwed up for the whole industry by dealing lower than market rates with Pandora. Is that a good perception or is it unfair?

Richard Burgess: I’m not here to defend Merlin and A2IM is not Merlin. First of all, the deal that Merlin struck was better for the indie labels that signed onto that deal than not doing the deal. The idea that it was lower than the rate is not really factual because this speaks to the problem with the way that the Copyright Royalty Board judges looked at that deal. They completely ignored the extra benefits of the deal and the truth is, labels that signed onto that would make more money under the Merlin deal than they would if they just accepted the statutory rate. If the judges have looked at the revenue share portions of the deal and various other perimeters that surrounded it, which were available to them to look at and they chose not to, they would have not made the decision they made and they wouldn’t have pointed the finger at Merlin. I think it was an unfair characterisation of that deal especially because they could have made the same characterisations of a number of other direct deals that were done by the majors and by individual indie labels as well.

It is interesting to see that the share of SoundExchange revenues into the mix of revenues of record labels has increased over the past ten years in an incredible manner. Do you think that this is something that will be sustainable and and will continue?

Richard Burgess: I think it depends on a lot of things. I thought at the time the DMCA was a wonderful thing in part because it paid 50% directly to the artists, which I think is a good thing, and that is outside of recoupment. Many of our labels don’t agree with that and I have to represent both points of view, but personally I think that the DMCA fundamentally was a good thing, but the 'notice and take down’ process turned out not to be a good thing because of the way technology developed. I don’t think anybody could have reasonably predicted that. In terms of SoundExchange and the future, I would say that SoundExchange is the sound recording equivalent of ASCAP, BMI, SESAC, PRS, and the publishing industry has thrived over the past 100 years with those kinds of collection societies. I think that because of the low level of transactional costs, having an organization like SoundExchange is really, really valuable for the industry. I know there are very many competing opinions even within my own organisation. The idea of a completely free, negotiated, direct deal environment is a little bit intimidating to me because I feel like the bigger players will crush the smaller players and I think transactional costs will become disproportional to the value for the smaller players. The bigger players can absorb the transactional costs and it becomes less significant in the overall economic package, but the small players' transactional costs are huge.

Indies are the lifeblood of SoundCloud and yet they are more interested in doing a deal with the majors. What does that say about the status of Indies?

Richard Burgess: I don’t know how that will work out for SoundCloud, and I hope it does. I think that SoundCloud is a very useful organisation and we, as a sector, are pretty forgiving. You get organisations that come over from the dark side, that are stealing copyright, that are using unlicensed music for years and then when they eventually decide to go straight, we generally embrace them. I think that’s the right way to approach it, personally. We are not in direct competition with the majors in the sense that I have utmost respect for what the majors are doing, they should get their share as much as we should. My only concern is that we get a fair share.

The class action suit against Spotify over un-licensed mechanical rights – is that something you follow?

Richard Burgess: It doesn’t directly affect us as labels and as A2IM, but I think we are concerned about that. There are a couple of things. One is that many of our labels are also publishers. This is where I talk about the zero-sum game. For instance, if the publishers got a better streaming rate from Pandora but it has reduced the sound recording streaming rate, that wouldn’t make any sense because it would be a zero-sum game. Rights holders need to do better. I support the idea that mechanicals need to be paid. I support the idea that pre-72 copyrights need to be paid for. I support all music creators and copyright owners in getting a rightful share of it because without the creators and the copyright owners, we don’t have a music industry.

In your MEIEA speech, you said that the industry should be more united and speak with one single voice in order to be taken seriously, especially by legislators. It looks like there is more and more of a divide rather than some sort of united front.

Richard Burgess: I see that, but at the same time there are conversations that go on behind the scenes and what I hear that make me feel encouraged about this. I’m not going to say that there isn’t going to be the temptation for people to take advantage and to squeeze that extra fraction of a percent of market share, just for their own benefit. I think that everybody is interested in growing the industry pie. There has never been a time when people listened to music like this. If everybody I’m talking to on all sides of the fence is sensible enough – it’s not about ideology, it’s about doing better for us all and making more money and being more successful – we can grow the pie jointly. I feel like we are dealing with very intelligent people, even the people that are on the absolute diametrically opposite side of the fence from us, they are smart people. If we are able to convince tech companies that we can fill their pipelines up with even more stuff and find even more ways that music can be monetised, these could be fractions of pennies and if there is enough fractions of pennies, it could work out. I don’t care about the actual number, what I care about is that musicians, artists, labels can gross enough each year to stay afloat and keep doing what they want to do.

In your speech you said that the industry is probably delusional in thinking that the government could fix the situation.

Richard Burgess: I was juxtaposing that with the idea that we speak with several voices, therein lies the problem. The government will not fix anything for us as long as the publishers are going in and saying one thing, and the labels are saying another and then the artists are saying another. Given that Congress is somewhat gridlocked as it is, how is it going to work if you have three or four different entities going in from the same industry saying 'well but the major labels are ripping us off,' with the artists saying 'we are not getting paid enough’ and you've got the publishers saying 'well wait a minute our streaming rates are too low on Pandora and the labels are getting more than we are and we want some of theirs,' and you have the label saying 'we are not getting paid on terrestrial radio'… All of which is true and I am sympathetic to those perspectives. The question is, can we fix those problems within the industry so we don’t have disparate factions in our own industry speaking out against other factions in the industry? Can we de-factionalise the industry effectively and can we then, as an industry, speak to government and say this is what we need to fix? I think a perfect example is this DMCA notice and takedown, with over 400 organisations/entities that had signed on to these comments. So if there is a common problem, we will speak to it with one voice.

If there was one thing that needed to be urgently fixed by the government, what would it be?

Richard Burgess: Performance rights for sound recordings on terrestrial radio. I mean, it is just an egregious wrong. Some people feel like by the time we get there it will be too late and there won’t be any terrestrial radio, but this is a good example of growing the pie. The broadcasters want to activate the FM chips in phones and I think the music industry will probably be very proactive in [letting them] doing it if we were able to get paid. But you know what’s going to happen, if that FM chip gets activated in the phone, labels are not going to get paid, artists are not going to get paid. When Respect gets played in your FM chip in your phone, Otis Redding is going to get paid for the song, but Aretha Franklin is not going to get paid for performing it, and that is just plain wrong. There is no justification for that, and I know the argument over the years is that it’s promotion. It’s promotion if you have a new Ariana Grande track out or some new or whatever the latest top ten record is out, you definitely get promotional value from getting your record played on the radio. If they are playing a forty-year old record on a 60s channel or on an oldies program, no one rushes out the door to buy that album.

You can still argue for fairness, even if its promotion.

Richard Burgess: Well I think so and the point I make here is, why don’t the promoters that book the Verizon Center say this is great promotion for your band, that will help you sell records and people will stream it more. So where does that stop? Here is the thing – and I have said this my whole life as a musician – I very rarely played a gig for free even as a kid because I stuck to this rule: if someone is getting paid I want my fair share of that. I don’t see how anybody can say that that is unreasonable. There is always someone getting paid. So the point is that if someone is getting paid, there is money being generated. Even if it’s a dollar then it should be split between everyone who is contributing.

Going back to your Smithsonian days, the label itself is an odd one in terms of where it’s hosted and what its purpose is. What did you learn, from a business perspective, when you were there?

Richard Burgess: From a business perspective, not very much because I was the one who brought the business perspective to Folkways. I came in and there really wasn’t anybody there who had music business experience to speak of besides me. So, if anything, what I did was reorganise Folkways to be more like a record label, because it is record label and it functions just like a stand-alone independent label at the Smithsonian. What I really learned at Smithsonian though, which was a good lesson for me to learn and I think set me up well for this organisation, is about dealing with larger organisations and bureaucracies and reporting to people because I had really always worked for myself. Obviously there is always somebody to report to, if you are a producer you are effectively responsible to the artist and responsible to the label and so on and so forth. But it is another thing when there are 6,000 people at the Smithsonian and it’s a large bureaucratic organisation. So I had to learn how to sort of manage up, manage across, manage down, and how to deal with the bureaucracy and get things done in a system that fundamentally doesn’t want to do things and wants to say no more than it wants to say yes. I very much am a say yes person, so learning how to get people to say yes when they actually want to say no is a real big lesson and a useful one.

How about your perspective on the music itself, on the repertoire, and the heritage role that you are playing there?

Richard Burgess: That was phenomenal. That was what took me there really. I was not looking for a job when I got the job. I was very happy doing what I was doing, I was managing, it was a good job, I was making money, it was a lot fun and a lot of freedom, but when it came up I thought to myself, I will never have another chance to work with a collection like this. This is very unique collection and I had been influenced by that collection when I was a kid. I remember holding a record in my hand, standing in the world record club store in Christchurch in New Zealand listening on the turntable. They would play you records on headphones so you could see whether you wanted to buy them or not. It was one of the Leadbelly albums on vinyl. Just to be able to work on a collection that had had a direct influence on my life and my career... I remember those thick black cardboard library folders with wrap-around stickers and everything like that. It was really the quality of the collection and what Moses [Asch, who founded Folkways Records in 1948] did too, and that I didn’t fully understand until I got there. Once I got there, I said 'I’m going to read everything there is about to read about Moe and talk to his son and talk to everyone who knew him' and that was a great learning experience. Moses Asch was a brilliant man.

Which brings us back to the ethos of Indie labels. They are mostly built around one or two persons – Atlantic with Ahmet Ertegun and Herb Abramson, Blue Note with Alfred Lion and Max Margulis, Verve with Norman Krantz, and countless other. That’s the essence of independent labels: Strong people with a vision of what they are doing. When you have all these people around on your board, it must not be very easy to navigate, is it?

Richard Burgess: That’s an interesting thing because that was the best board I was ever on and I’ve been on quite a lot of boards in my time. The interesting thing is that it can get quite heated at times in terms of people having different opinions, but it’s incredibly collegiate. The thing about entrepreneurs is they are very pragmatic they just want to get it done. They don’t want to faff around, they don’t want to talk about it for the theory so much as they just want to get it done. I have to say every single person on that board I have respect for in one way or another. So that was one of the things I thought about going into this job, was will I report to this board but it’s a great board to report to. My gut feeling is that everybody who runs an independent label to a successful level has certain common characteristics: they are pretty obstinate, they are pretty opinionated, and they are really good at what they do and they really know music, they love music, they love their independence. Those are good people to be around. They are inspiring to be around and I like that. One of the things I always say is that it is good to surround yourself with people who are better then you, to be the least good person in the room as it were. So I feel that way about these people, they are really something else. There are a number of people I can call to say - what do you think about this, how do you feel about that - and I know that they aren’t going to shuck and drive; they are going to actually tell me what they think.

How do you see Indie Week evolving? Is that going to be the forum for all matters related to independent labels?
Richard Burgess: I hope so. That is definitely how we would like to see it. What struck me as being amazing about Indie Week is that it’s so high level. The fact that it is so cutting edge is really valuable. We also try to have a level for younger labels or less experienced music industry people, who can come in and kind of learn the basics of how things work. We don’t want it to turn into a consumer level conference because there are enough of those and they are very good, but that is not what we do.

What are the bridges between A2IM and AIM in the UK?

Richard Burgess: They’re pretty strong. The bridge now would be WIN – the World Independent Network. Alison Wenham who did run AIM, is now going to break away and run WIN. I wouldn’t say we talk everyday by any means but we talk on a frequent basis and we are very aware of what they are doing and I think they are very aware of what we are doing. We actually have common board members as well, so if you have a label based in the UK and a label based in the US you can be a member on both boards. We don’t do everything the same, there are a quite a few things that are quite different about what we do and what AIM does, but obviously AIM was the first of this particular set of trade associations, so there is a really good relationship there.

Are there any things that they are doing that you would like to implement here?

Richard Burgess: Yes. There are a few things. A really big difference between what they do there and what we do here is simply the environment that they’re functioning within because the European legislative environment is incredibly different than the US legislative environment in so many ways. You have got layers there, you have got national governments, and then the European government and then you have also got this sort of ethos. There is a completely different ethos in Europe. Everywhere there is a ministry of culture, it is a more sort of socialist way of approaching the world — government money spent on boosting various programs in the arts, which we do not have here. Funding for instance is very different for them then it is for us. But we are okay with that and we acknowledge the differences and we think that we can do very similar things to what AIM is doing. 
What are you going to be focusing on in the next few months?

Richard Burgess: Next few months the sort of immediate priorities are getting Indie Week established. With the Liberas we are starting to move it now from a straight presentation of awards to industry people with more performances. On the policy side, obviously we have to respond to the issues that are occurring. I’m really pleased to say that the entire community, including the RIAA, has been really together on these last three or four filings and that’s pretty exciting to me because I wasn’t seeing that before. Outside of that, my number one priority is servicing our labels better because even on the best day ever, I never feel like we are quite there yet. So those can be quite small problems sometimes, and sometimes they can be gigantic ones like legislative ones.