Cooking Vinyl’s Martin Goldschmidt On 30 Years of Indie Music [INTERVIEW]
In this edition of In The Hot Seat with Larry Leblanc, he sat down with Martin Goldschmidt, the chairman of Cooking Vinyl Group, to discuss the inception of the company, the process around signing and keeping artists, and the evolution of the company.
Guest Post by Larry LeBlanc on Celebrity Access
Headquartered in London, England, Cooking Vinyl Group is a global music powerhouse.
Founded three decades ago by Martin Goldschmidt and his former business partner Pete Lawrence, Cooking Vinyl initially operated from Goldschmidt’s council house in Stockwell, South London.
By 2016, Goldschmidt had opened Cooking Vinyl America in New York as a full-service company offering strategic global marketing, and creative marketing services in North America to labels and artists from around the world.
The company has also established similar aggressively creative full-service outlets in Australia, Germany, and France.
As well, the Cooking Vinyl label imprint has greatly evolved from its folk-based roots into both an Americana titan (and as a credible rock, metal, punk, and electronica imprint) that has released recordings by Billy Bragg, Counting Crows, Adam Cohen, Richard Ashcroft, Prodigy, Marilyn Manson, Alison Moyet, City and Colour, Madness, James, and many others.
Among its more recent signings are such engaging acts as Lissie, Röyksopp, SKYE | ROSS, Area 11, Deap Vally, and the King Blues.
Goldschmidt’s involvement in music began in in the early ‘80s when the UK anarcho-punk act, the Poison Girls, asked him to manage them.
In 1982, he founded the management company and booking agency Forward Music which was subsequently renamed F.A.B.
From 1984 to1986 Goldschmidt ran the independent record label Forward Sounds International.
In 2003 Goldschmidt and Mike Chadwick launched Essential Music & Marketing, a comprehensive one-stop service for indies requiring distribution, label management, and marketing. The company operated under the Cooking Vinyl Group umbrella until being sold to Sony UK in March 2016 to form the London-based company Red Essential.
In a scenario worthy of David and Goliath, Cooking Vinyl battled for top position on the Official UK album chart with Passenger’s “Young As The Morning Old As the Sea” LP against Bruce Springsteen’s “Chapter and Verse,” and won. Well done.
Look out. We punch above our weight.
[Passenger’s “Young As The Morning, Old As The Sea,” released on Black Crow Records, issued via Cooking Vinyl and distributed by Red Essential, beat out Bruce Springsteen’s “Chapter and Verse” to the UK top spot by 704 units last week (Sept. 30). It is the first UK #1 album for Mike Rosenberg, aka Passenger, as well as Cooking Vinyl‘s first UK #1 since Prodigy’s “The Day Is My Enemy,” released in March 2015.]
And not for the first time. Cooking Vinyl partnered with Ingenious Media Investments In 2009 to release Prodigy's 5th studio album "Invaders Must Die." The album sold 1.2 million units worldwide and was the biggest-selling independent recording in Europe that year.
A bit of a game changer as well.
Correct. And the Billy Bragg (signing in 1993) was incredible as well. He was a big milestone for the company. Billy and Prodigy have really been mainstays without whom I don’t think we would be here.
What’s your secret in attracting and keeping these two acts?
Both Billy and Prodigy want to be on an independent label. That’s the first thing. Secondly, they know that we are honest. Both have audited us more than once. It’s been easy. Frictionless, which never happens in label audits because the agenda on both sides is to get the numbers right. If we owe them money, we cut them a check. It’s not about trying to win. It’s about accurate accounting, and that’s a different agenda. The third thing is that we really care about them. We will work to four in the morning if a job needs doing for them. We will go that extra mile for them, and they know that. We have played a big role in building their careers, and keeping them in the great positions that they are in as artists today. They know we make them money. They know we are honest, and they know we are good at our jobs, and that we care about them. They are massive priorities for us, and I think that’s a nice cocktail for an artist.
Now called an “artist services” deal, the agreement Cooking Vinyl completed with Billy Bragg in 1993 was very much ahead of its time, and under it, you began releasing his back catalog. Twenty three years later what are Billy’s concerns with his releases, and your role in sustaining his career?
Billy has the final say on everything so there’s never an issue in terms of power, and who has the final say. We let him make the decisions. So he has commercial control, not just creative control.
He has control of the marketing of his releases?
Totally. We don’t do anything that he’s uncomfortable with. We will present him with options. We will recommend what we think he should do. We will respect the decisions that he will make. So we don’t get any of those issues. He really wants us to understand what he’s trying to achieve. What his music is about, and we will try to help get it heard.
Cooking Vinyl has only recently been involved with Billy in the U.S.
Before that his sales were quite low in the U.S. We significantly increased them on “Tooth & Nail” (released in 2013, and Bragg’s first studio album since 2008’s “Mr. Love & Justice”). Part of it (the reason for the sales increase) is that it’s a brilliant record. Part of it is that we’ve got a really strong team, and we worked on that record for a year in the States. One of Billy’s goals was to get into the whole Americana scene. He opened that door with (singer/songwriter/producer) Joe Henry. It was Billy’s choice. Not ours to do “Tooth & Nail” (recorded with Henry in his basement studio in California). We really worked that and got him into the Americana scene a bit, and right now, he’s right in the middle of it which is unthinkable for an Englishman.
[Billy Bragg and Joe Henry are currently on tour of the U.S. to Oct. 25th, followed by a UK tour Nov. 7-19, with more dates in January. Their album, “Shine a Light: Field Recordings from the Great American Railroad,” was released Sept. 23rd, 2016 by Cooking Vinyl.]
To acknowledge its first three decades, Cooking Vinyl has teamed with PledgeMusic to launch a 30th Anniversary campaign offering a limited edition box set, a book by music journalist and author Hanspeter Kuensler, and a series of live shows at The Lexington in London Dec. 5-7th with past and present label artists performing, as well as additional guests.
Not only can this be viewed as a celebration of Cooking Vinyl, but it will likely provide the label with a big commercial footprint in the marketplace.
We have always been crap at it (boosting the label). Part of the reason is that we have been too busy. Part of that is also that we don’t see ourselves as a consumer brand at all. We see ourselves as a business brand. We see the artists as the people that deal with the consumers.
You once said that you don’t believe that people purchase music by label. I think people do trust some labels, and that label brand can be important if it has a reputation for quality.
You are totally right, but that is, in my opinion, the exception. I think that so many labels think that they are the brand and that the artists aren’t. You know that especially in the dance sphere there are some labels that people collect, and in other spheres there are also, but most of the time the artist is the brand. There are very few collectible labels.
All of these activities will likely provide Cooking Vinyl with international visibility in a time when there are limited positive stories about the music industry. This is a great story.
Thank you. For us, it’s about celebrating. We think that it is a great story, and it’s about celebrating that, yeah?
What is your taste in music? Explain to me the link between Billy, Bragg, Prodigy, Cowboy Junkies, Michelle Shocked, Amanda Palmer, the Cranberries, and Suzanne Vega. Other than they are each exceptional acts.
First of all, I don’t do all of the A&R on the label. I’m not responsible for everything that we sign. Actually, more and more I do less and less of it. Rob Collins (GM/MD of Cooking Vinyl) is doing far more than me, and doing an amazing job in that area. But, actually, everybody that you just mentioned, I signed. Everyone that you have said has sort of a humanist or a political edge to them. That’s one of the biggest things in the music that I like. I like stuff with a political and a humanist edge.
From its beginnings, Cooking Vinyl was known for having artist-friendly deals. Many of the label’s earlier deals, including with Billy Bragg, have been three-year contracts with rights reverting to the artists.
Cowboy Junkies. We lost them three years after “The Trinity Session” (1998)
You lost Cowboy Junkies to BMG?
Correct. But they returned in 2001, and we are still working with them today.
Cooking Vinyl very rarely signs deals today involving ownership of copyright. Many of the label’s signings are Billy Bragg-style services deals involving a split of 75/25 or 80/20 in the artist’s favor. In these deals, the artist gets the lion’s share of the money but pays all the costs. Aren’t most the artist contracts now 7 years?
Ahhh, it varies. In general, it is longer than that. If the act is massive worldwide, we are flexible.
Do all rights still revert back to the artist after the contract expires?
Yes. The thing about that is that because they are on such a high percentage that they tend to be happy to stay with us. Because they are doing great there’s no point leaving.
While artists are given the freedom to become their own retailers, thus reaping the fiscal benefits of direct sales to their fans, and although after the costs are paid they earn far more money than a royalty deal, you recognize that Cooking Vinyl must recoup too.
Yeah. When I started out, three years seemed like a lifetime. When you are 30, three years seems like a hell of a long time. Thirty years later, you have a different perspective. You realize that three years will come around very quickly. Yeah, the idea of working really hard, and losing the rights very quickly isn’t so attractive.
You and your original business partner Pete Lawrence borrowed £8,000 to launch Cooking Vinyl?
Yeah, that’s exactly what happened. I didn’t know the people. They were Pete’s friends.
You made no money from Cooking Vinyl for 5 years. You had to keep your job as a booking agent.
I took no money out of the company for 5 years. I worked four days a week as a booking agent, and one day a week plus nights in the office.
Were you married at the time?
Yeah. I worked many nights on the label and many weekends. I taxed my wife’s patience far more than I should have. To be honest, it is something that I regret.
The company came close to bankruptcy.
We went close to bankruptcy when Rough Trade (Distribution) went down in 1989.
Cooking Vinyl lost £100,000?
I think we lost a bit less than that, but the problem was that we had a really strong catalog, and we depended on those catalog sales. Suddenly our records weren’t going into the shops. The amount of cash that we lost in the bankruptcy was less than £100,000, but suddenly our billing went from pretty strong each month to zero because nobody was shipping our records out to the shops. We needed billing. The shops just deleted our catalog. I don’t think we ever got back into the (UK) shops in the same strength that we were in those days. We were a very small company at the time. It took me five years to pay all of the debts
And you bought Peter out.
Yeah. We were both going to leave. After a couple of weeks, I changed my mind. I turned the thing around, repaid the debt, and bought out Pete. I did it (the company) on my own for many years.
Billy Bragg was recently the first non-American artist to receive the Americana Music Association’s Spirit of Americana Free Speech Award. It is an honor, as presenter Ken Paulson of Middle Tennessee State University’s Fi
rst Amendment Center, noted, as “a roll call of integrity—people who say what needs saying with their music.” You were in the audience. Your reaction?
It was surreal. It is so wrong to have an Englishman on center stage at the Americana Awards talking to Americans about their country, and about politics. But Billy can do it, and Billy communicates, and Billy has spent many years studying Woody Guthrie. He spent so much time traveling right around America. Not to just the big metropolitan areas, and he really understands the place. It was incredible to see.
[In his acceptance speech Billy Bragg spoke on American values, citing the motto E Pluribus Unum, a 13-letter phrase on the Seal of the United States, and noting that he had come to protest music—specifically Woody Guthrie, who was also honored that night—through the Clash. “America is never greater than when it strives to live up to that high ideal,” said Bragg to considerable applause.]
There’s an irony of a social activist like Billy being lauded in Nashville, given to what happened to the Dixie Chicks in 2003.
Today, America is a country very much divided.
It’s very divided. It’s amazing that they loved it (his speech). He really resonated with the audience, and with the artists onstage. They took him to their hearts. It was incredible to see. It was very moving.
Meanwhile, while at college in the ‘80s, you stirred up a lot of trouble as a political activist protesting the right-wing agenda of then British prime minister Margaret Thatcher.
Yeah. I think there’s something similar coming in with Donald Trump in America.
I’m not sure that Trump has the same right wing convictions of the Iron Lady who commanded the political stage for 11 years in the UK.
No. The thing about Margaret Thatcher was that she had a very strong right wing agenda, and she executed it very well. She was a massive catalyst for dissent, protest, revolt, and struggle.
There were multiple mass strikes during her time in office with the miners, transportation workers, and others.
Yes. The firemen too. I remember the fireman strike very clearly. There were many of them.
Her priorities included privatization of government assets, education reform, and the roll-back of immigration.
Yeah, she had a very clear agenda which was about the bottom line. It was to downsize public services which is a form regressive taxation because public services help the poor. Various ways of transferring wealth from the poor to the rich. Smashing the unions etc. etc. She executed it really well. But it led to a massive popular movement against her, and it led to a massive raising of political consciousness. Trump is definitely a very different animal, but I can see the political consciousness in America being massively raised. Bernie Sanders started that ball rolling, and Donald Trump could be a catalyst to a much higher level of political consciousness in America.
It’s unclear how Trump would react to events on the global stage, especially in the Middle East.
I think that Hillary Clinton is just as dangerous in the Middle East. The U.S. has just given a $38 billion military aid package to Israel. I’m expecting to see another war that Israel is involved in Israel or in the Middle East very soon because what are they going to do with all of that money? And Hillary is the big supporter of that. Hillary actively supported regime change in Syria. Hillary is one of the most hawkish potential presidents American could have seen for years. Americans have the choice between one of the biggest and worst warmongers, and one of the biggest psychos, and it’s not a nice choice.
After President Barack Obama and Israeli Prime Minister Benjamin Netanyahu met recently in New York for likely the last time in their current positions, Obama said, “We keep alive the possibility of a stable, secure Israel at peace with its neighbors and a Palestinian homeland that meets the aspirations of their people.” That sounded hopeful of a change happening.
Of U.S. presidents, (Jimmy) Carter was very good on things like this. He tried to initiate peace as well. But the Israelis are very focused, and it’s hard to get them to listen. To my mind, there are two clear solutions there. There’s peace or slow genocide (of Palestinians), and the power seems to be with the lobby that wants a slow genocide.
When you started the label in 1986, there was no recognizable Americana music genre, just folk or roots music. Until Michelle Shocked, Tom Russell, Rodney Crowell, and Cowboy Junkies gave the genre its musical force there was no Americana movement or widespread radio airplay in North America outside of college and NPR stations in the U.S. and CBC Radio in Canada.
It’s fantastic. We were one of the pioneers in this. Our first record was an English folk band the Oyster Band who went on to tour America quite a few times and did well in Canada as well in the fantastic folk scene that was up there. Then the second release was Michelle Shocked who really fits into the (Americana) genre very well.
“The Texas Campfire Tapes” (1986) recorded on a Sony Walkman.
Exactly. It was a big part of what all that was about. Quite soon after that we did Cowboy Junkies who then really fitted into it well. We also went through sort of the Mekons’ honky tonk years which if you listen to those records again fit perfect for this genre.
[The Americana genre, incorporating elements of country, roots-rock, folk, bluegrass, R&B and blues, was developed as a radio format to distinguish artists whose music fell outside American country radio. There are now three Grammy categories dedicated to Americana, and Billboard magazine charts its best sellers in the U.S. The Americana Music Association was launched in the U.S. in 1999. The Americana Music Association UK was formed 4 years ago and successfully lobbied for an Americana Album chart now tracked by the Official Charts Company. In February, it hosted the first annual UK Americana Awards.]
“The Texas Campfire Tapes” sold three-quarter of a million copies without any significant radio airplay.
Yeah. It blew up for Michelle when we dropped the track “Anchorage” (from “Short Sharp Shocked” in 1988). She had a little following before that. She was big on the folk scene. I didn’t find her. My ex-partner Peter did at the Kerrville Folk Festival in Texas. The second album really moved the dial for the first album. Before that, Michelle had done a lot of work getting into the heart of the underground scene. She had toured around America a couple of times and played all of the Canadian folk festi
vals. There was a lot of support for her before she got onto radio.
After the release of “The Texas Campfire Tapes,” Michelle came to London and lived with you and your wife for six months in your council house.
With my wife and me, yeah. I didn’t have kids at that time. She was in the spare room, the office was in another room, and we had the other bedroom.
You ended up managing Michelle.
Before Cooking Vinyl, you launched your own label, Forward Sounds International in 1980 which Rough Trade distributed in the UK.
Yeah, that’s right.
The first thing Forward Sounds put out was a benefit album for the anti-nuclear movement. There was another benefit album for the miners and releases by Akimbo, the Poison Girls, Omega Tribe, and Rory McLeod.
Wow. That’s a great record, (Rory McLeod’s album “Angry Love”). Yeah, it was a wonderful record. It’s interesting because if you kind of mix the sound of Rory McLeod and the Poison Girls it very much again fits in that edgy Americana sound.
The label services sector in the UK has become increasingly competitive in recent years with all three major music companies launching their own operations in the market, and there’s also Kobalt Music Group.
Yeah. Play It Again Sam, and ADA. Unfortunately, they are great competitors.
What was that behind the selling of Essential Music & Marketing to Sony Music UK to form the London-based company Red Essential? That with increasing market congestion, you had hit a ceiling within the label services sector?
It completely was. There were a number of reasons behind that, but I think that the part of the market had become far more competitive. It still is to me that there are too many companies in it and not enough space, and there is going to be some consolidation on that side. ADA is growing strongly. RED, I think, it is going to be growing really strong. BMG is doing really well. The sector has become very congested.
We felt the need to offer a strong worldwide proposition that was competitive. We are competing with companies that are thousands of times bigger than us. That’s why we felt the need to have a strategic partnership with Sony. Selling Essential was part of that picture. But just part of it.
Distribution has always been a tough game.
Yeah but this whole new model has come up of artist services which, to the best of my knowledge, we did first in ’93, but it’s different from distribution. Distribution is logistics. Maybe logistics with some sales on top. We provide a joint worldwide solution to artists and, as I said before, other people have come into that space. It has gotten really crowded. There’s going to be, I think, some consolidation. I saw numbers of what Kobalt lost on label services last year which I don’t think is sustainable.
Label services are about product management which is a hurdle for anyone coming in the field from being primarily focused on music publishing
I think that BMG Rights is becoming, maybe, our main competitor. They are doing it really successfully. I think that Kobalt has made some great moves, but it doesn’t feel like they’ve gotten it right yet. I’m not going to write them off, yet. I’ve got the feeling that they have got some big plans that they are going to come out with soon.
[Kobalt Music Group has, in fact, announced since this interview that it has acquired the publishing and neighboring rights businesses (money obtained after an artist or label’s recorded material is publicly performed, particularly on TV or radio) of Netherlands-born Fintage House. The deal brings Fintage's neighboring rights client list, including Katy Perry, Bruce Springsteen, and Britney Spears, into Kobalt which already looks after neighboring rights for acts such as Paul McCartney, Sam Smith, Ariana Grande and others.]
In 2011, you did a deal with the music funding organization Icebreaker. What developed from that partnership?
It didn’t work as well as we hoped. We did some projects with them and you know it was great. We got Marilyn Manson, the Cult, the Cranberries and some other things—but yeah, they have gone by the wayside, unfortunately.
You’ve been very aggressive in Australia since 2013 and have opened up offices in Germany, France, and the U.S. You obviously feel the need to be more of a global music player.
We feel that we have to really have a global presence. We can do what we do, but we have to take a step back from that and ask, “What do artists need?” Artists want a worldwide solution. They want a really strong one-stop shop that can deliver worldwide. So hence we have to make sure that we can do that, and we have made sure that we have got a very strong on the ground presence in all of the markets that you mentioned, and that we can really deliver results there.
At the same time, you have been developing global partnerships with other labels like Party Smasher Inc., founded by Ben Weinman, lead guitarist of the Dillinger Escape Plan.
Yes, and we have just announced a deal with another label Outerloop and we’ve gotten involved with a label in the UK called Fat Cat Records.
[Brighton-based Fat Cat, founded by Alex Knight and Dave Cawley, was launched in 1989 as a record shop and became a label in 1997. Its roster includes Honeyblood, C Duncan, Ian William Craig, Resina, Oliver Alary, Big Deal, PAWS, Shopping, Tal National, Emilie Levienaise-Farrouch, and Dmitry Evgrafov. Outerloop Records was launched in 2013 by Outerloop Management founder Mike Mowery in Washington, D.C. with Ice Nine Kills‘ third album “The Predator Becomes the Prey.”]
You have also have provided support funding for the London-based management company Black Gold.
That’s correct, and for several other companies.
Cooking Vinyl in Australia opened in 2013 with former Shock Records staffers Leigh Gruppetta and Stu Harvey, and soon had major breakthroughs with Parkway Drive, and City and Colour. Did that encourage you to push into other territories?
We got really lucky there. Shock Records was falling apart in a big way. They (Leigh Gruppetta and Stu Harvey) came from there, and a lot of clients from Shock wanted to go with them. So it really gave us the momentum to launch the thing with two of the best people in the independent scene, and it gave us a massive leg-up. But launching in America is a lot scarier, but it makes us worldwide which is a big step forward for us.
Opening a full-service label division in America is a big gamble
It is a big gamble. We found that basically, as I said before, that artists really want a worldwide solution and when we couldn’t provide a strong enough one we were losing artists. So we just thought that it was the next step. It feels like we are right. It feels like we have moved to another level doing this and we seem to be in the hunt for much bigger deals now, and it’s going to take us to the next level. I think that Howie (president Howie Gabriel) and his team provide a very strong solution. They are on the inside track at RED (Distribution), and RED is probably the best game in town in terms of the access for independent labels and artists to the market. They have 85 people there. So because of Howie’s history there to be on the inside track probably means that we can get more done by that team than anyone else. It puts us in a brilliant position.
[Cooking Vinyl America, based in New York City, is overseen by president, Howie Gabriel who joined from Warner Bros. Records where he was executive VP of Marketing. Prior to joining Warner Bros., Gabriel was senior VP of label management at RED Distribution.]
Any plans to open an office in Canada?
We will fix that one day. That was one of the great things about going to Canadian Music Week this year. It really focused me on Canada, and the opportunities there.
Will Brexit make it difficult for Cooking Vinyl to compete in Europe?
Brexit was not about Europe. It was about the media and politicians telling lies and stirring up racism. We are still 22 miles from France and very much part of the geographical entity called Europe. The sky that was supposed to fall on our head hasn't, but it is scary that racist attacks have significantly increased. I'm sure that our fine politicians will manage some more of their own goals in this process. An upside could be a new strong contemporary Rock against Racism campaign.
Back when Cooking Vinyl began every high street in the UK had shops selling music, including the HMV, Our Price, Virgin Music, Harlequin record shops as well as such mass merchants as Boots, Woolworths, and Marks & Spencer.
HMV has done an amazing job at keeping music retail going and the number of independent shops has been growing for years. It’s very strong.
How deep does the catalog go in the independent music stores?
It completely varies. One thing that has grown up are shops that sell vinyl and other things.
The industry-wide debate around the ad-funded, on-demand streaming freemium model has gone on for some time now. You support the freemium model so long as it can potentially be a significant up-sell model for premium. Why do you feel that way?
I remember when I was a kid. I spent my pocket money on one or two albums. Then it (my money) was gone. But I wanted more music. I would swap tapes with friends. I had no money left. I wanted more music. That was the solution. Kids don’t have a lot of money. They can’t afford subscriptions or whatever or we are not motivating them to spend their money. That is one of the challenges that we have to place. Freemium is the classic solution. It’s how drug dealers work. You give people drugs for free. You get them hooked, and then you get your money for the rest of their lives.
Universal Music Group chief Sir Lucian Grainge and others, however, argue that freemium model is unsustainable in the long term.
I think that there are some issues with it, but they are getting a 25% up sale rate at Spotify which is pretty good. They are bringing masses of people into paying for music who used to never pay for music. You go outside of the 10 rich countries in the world and look at China, Russia, and India, it’s obvious that freemium is the only way to monetize those markets on a mass market proposition. You get .001 percent of the market paying what we say they should pay, £10 a month, or you can get 90% of the market paying for music legitimately, and earning a lot more money. But it has to be a different business model. We (recording executives) are very much saying, “Well this is what you have to do.” Rather than, “What do you want? How can we make this work?” and actually engaging with the consumer and finding the model that works.
At the moment Spotify is out of contract with all three major music companies. Music continues to be licensed there by all three on a rolling month-by-month basis.
Spotify has had a really good year and they are racing ahead. I think that part of that is they have a potential IPO coming. Apple has always been building really strongly. Amazon is…well, it looks very much like a two horse race, but if you look a bit, deeper you will see that Amazon is making a big play. In the U.S. market, even though they haven’t launched a proper streaming service yet, Amazon actually has more streams than Apple. When they launch their new service they have this incredible customer base that they can market to in the same way that Apple does. That could be a very big play. And a lot of those
customers don’t pay for music. You are talking about 80% or 90% of Amazon customers don’t pay, and they are going to try to monetize that.
Still, with the growth in subscription streaming services, driven first by Spotify and more recently by Apple Music, digital revenue may have turned a corner in growing overall, but this increased streaming revenue is only offsetting declining download revenues.
You are suddenly seeing the music industry going from a completely niché, where in the rich countries of the world less than 5% of the population pays for recorded music and outside of the rich countries probably less than 1%, to a situation where music is becoming a mass market product again. People focus on the amount earned to stream, but if you have a small amount earned from 90% of the market then a very large amount from 4% that is substantial as well.
Arguably the use of the freemium model in transitioning fans from piracy has been most visible in markets particularly challenged by piracy. The revenue from music in China, for example, is now impressive.
[In its most recent earnings report, released Aug. 17, 2016 China’s leading music subscription service of Tencent Holdings announced that overall revenue was up 48% to $10.2 billion, and that monthly active users jumped 6.6 percent year-over-year, reaching 899 million with 10 million paying subscribers on its QQ Music streaming music service, the company’s central digital platform.]
I’ve been talking to Alibaba in China quite a lot, and they are predicting in the next two or three years that while the income levels are quite small at the moment they are predicting massive increases in the next three years. The same with VVK in Russia. You are going to have 60 million unique users paying for music a day in Russia which is a game changer. As soon as you get away from the one size fits all to “How can we make this work for both parties” the game gets much more interesting, and the money will start to flow. If you look at how other industries work it, and the success that they have had with mobile telephones, a one size fits all does not work for everyone. You have to come up with different ways to bring me in, and monetize it (music)
Traditionally, the recording industry has viewed international markets through Western eyes and has largely failed to understand the complexities of the global music marketplace.
The music industry has completely had its head in the sand. They have not moved with the changes. It has been “This is what we do. Take it or leave it.” (Apple CEO and co-founder) Steve Jobs said that they (major label executives) saw their customer as the retail, not the real customer, and that’s so true. What used to annoy me more than anything was to hear people in the industry going on and on about the problem of piracy. It drove me mad. You look at what Steve Jobs, did and what (Spotify) Daniel Ek did. They looked at the same situation and they saw opportunity. All we could do was say, “This is terrible. They are stealing it (music). It’s piracy.”
They took a lemon and made lemonade.
They looked at the same situation, and they saw an opportunity. They took a lemon and made it into a lemonade. All that we do is say “It’s so wrong” and complain. It’s partly because we didn’t take the trouble to understand the customer, and we retreated. We are in the middle of the consumers and the artists. I think that the major labels just retreated into, “How do we do better A&R?” rather than “How do we maximize the opportunity in the middle between getting great music from the artists, and motivating people to spend money on it? It built Apple. It built Spotify. Other people made lemonade and got very rich in the process. YouTube, and Google as well. These are not little companies.
Spotify obviously needs the three majors aboard to launch its IPO.
Totally. I have no idea how that is going to play out. I‘m not at that table (laughing).
Thanks to London-based Merlin, representing 20,000 independent music companies globally, and such digital distributor players as New York-based The Orchard, you and other independents are nevertheless represented at the table.
You are absolutely right. I remember very well when Merlin and Spotify started, and we were frustrated with the way services would treat the independent sector. The exception was Spotify. From day one, they always wanted to support independents. Apple got off to a rocky start but changed in about 10 seconds and since then have always wanted a level playing field. The majors would always try to leverage. Sometimes they would be successful, but I do know that Spotify and Apple fought really hard for a level playing field, and to look after our artists as well.
Apple had to be smacked a few times to come around.
I remember those hits.
By 2014, it became clear that any digital business entering the music market had to acknowledge the importance of independent music and negotiate a level playing field deal with indie labels. YouTube discovered this when it unsuccessfully attempted to force the independent label sector to accept a less than favorable deal for its new audio streaming service. It’s now recognized that a substantial percentage of music is released by the Indie sector.
They didn’t care about that. What they care about is when artists speak out. That is how you hit them. When they launched the iTunes store they didn’t give everybody the same deal, and we had an artist campaign against them and after that, they gave everybody the same deal. They were very fair from that time on. It’s been fantastic. Initially, they were dodgy.
As part of the PledgeMusic campaign, Cooking Vinyl has launched a £30,000 industry fund aimed at giving something back to artists, entrepreneurs and visionaries in the music industry. Over the years, you have also called for direct tax breaks for music production from the UK government, similar to tax breaks offered to film, video games, theater and orchestras to mitigate the damage done by piracy and market failure.
Yeah, the two things aren’t really linked.
They, in fact, are. The music industry is a sector needing support. These are different levels of support.
You are totally right. In my head, they weren’t linked. I was doing one thing over there, and another thing there. But, actually, you are totally right. We are getting a great response to this fund that we have launched. It’s open for another month. So the people applying for £30,000 or $50,000, they should go to the PledgeMusic site and apply. It’s way for us to celebrate our 30 years in the business, and It’s to help bands who need help. It’s to help entrepreneurs that need help. It is generally there to help people who want to use music to make the world a better place. So if you fit into any of those three categories go onto PledgeMusic and fill out a simple form, and apply for the money.
[Under its bi-annual global initiative, Cooking Vinyl is investing an initial £30,000 to help artists needing assistance with development, and entrepreneurs seeking seed capital for new ideas, and to those who want “to use the power of music to make the world a better place.” This is a loan-based initiative that will encourage the recipients to pay back into the scheme when they are able to do so with the aim of creating something that can be made available to each new generation of artists, entrepreneurs, and visionaries. Interested parties can submit an initial application for funding via PledgeMusic. Successful finalists will be invited to make a final pitch at Cooking Vinyl’s London headquarters or via Skype if overseas.]
You were raised in London?
Where did you live?
We lived in a few places. We lived in Soho for a bit. It wasn’t like it was now. It was a very sleazy area. It was high crime, really dirty alleys, and flats. Loads of drunks all over the place. Soho was pretty rough in those days.
What did your dad do?
He described himself as a “metaphysicist” because he sold space and time which meant that he set up his own company, and he monitored anything on radio and TV and sold it back to the companies that they were talking about.
Your mother left the UK to live in Australia when you were 10.
I went to boarding school after my mom left for Australia. It was a tough time.
Your father then died when you were 17, and you went to live with your mother in Australia for a year. Traveling around the country, and notably taking home the title of Sydney Junior Chess Champion in 1974. It must have been very difficult having your mother so far away when you were so young and then having your father die when you were 17.
Yeah. It was. You don’t look at it like that. Many people have hard things happen in their lives or, more to the point, live in real
hard situations. I think that there is an element of that life has to go on. You get on with it. You don’t let it pull you down. Different people take different things different ways, completely. That’s the way that I have always been which is to try to look forward and get on with things.
When you returned to the UK in the mid-1970s, you went back to Sixth Form and got your A-Levels. You then went off to the Polytechnic of Wales (now the University of South Wales) where you stirred up a lot of trouble.
You founded two national protest groups, Students Against Nuclear Energy, and No Nukes Music. You launched two waves of national occupations across colleges in the UK against education cuts and fees. You also arranged 25 coaches to come to London for the Rock against Racism concerts. You were also heavily involved in the miners’ strike, and the anti-nuclear movement.
Yeah. I spent quite a few years as a political activist. The Polytechnic in Wales was one of the highlights of that.
What were you studying?
I was studying humanities which is basically sociology and psychology.
Were you a good student?
No. I didn’t have the interest. I didn’t have the academic discipline. I’d much rather read about Karl Marx than all of the stuff that they wanted me to read.
Larry LeBlanc is widely recognized as one of the leading music industry journalists in the world. Before joining CelebrityAccess in 2008 as senior editor, he was the Canadian bureau chief of Billboard from 1991-2007 and Canadian editor of Record World from 1970-89. He was also a co-founder of the late Canadian music trade, The Record.
He has been quoted on music industry issues in hundreds of publications including Time, Forbes, and the London Times. He is co-author of the book “Music From Far And Wide.”
Larry is the recipient of the 2013 Walt Grealis Special Achievement Award, recognizing individuals who have made an impact on the Canadian music industry. He is a board member of the Mariposa Folk Festival in Orillia, Ontario.