Radiohead manager Brian Message is this year’s star attraction on the Web Summits Music Stage.
Hes one of the worlds most high profile music managers. Brian has become a figurehead for a new era of the music business.
He first came to widespread attention as a result of Radioheads Pay What You Like pricing strategy for the release of their In Rainbows album in 2007. This risky and revolutionary scheme was a massive success. Since then Brian has been the personification of music industry innovation at scale.
Brians company ATC are not only managers, they are also booking agents. They blaze a trail of supply chain rationalisation, constantly seeking better business models. Apart from Radiohead, ATC have had massive success with Faithless, The Lumineers, Passenger, Laura Mvula, Nick Cave and many more.
Brian comes to Dublin not to promote his own roster. He comes to speak up for artists in general. As he explains from the windy rooftop of a Parisian hotel, The recorded music industry in particular has gone through somewhat of a seismic change over the last generation. Some of the bigger corporate players in the game, particularly Universal and Sony, have, in my opinion, not been acting in the interests of the wider community. Some of us wanted to stand up and shed light on some of those practices in order for there to be a better structure in the future.
He comes to the Web Summit to talk in particular about the need for transparency in the recorded music industry, regarding payments from streaming services such as Spotify, YouTube, Apple, Tidal and Deezer. In most cases, artists dont deal with streaming services directly and go through aggregators – mainly record labels.
Brian and the Music Managers Forum object in particular to the way in which revenues are divided. To compound this, the record labels dealings with the streaming services are under NDAs, which prevents artists from receiving satisfactory revenue audits.
The big issue is transparency, Brian explains, Sony and Universal own large amounts of catalogue. They can dictate how their licence arrangements work with streaming providers. Artists that are signed to those corporations cannot get an accurate figure as to the basis upon which they’re being paid.
So Brians Web Summit appearance wont involve railing against the tech industry. Its a music industry spat aired on tech turf for techies to choose sides.
Its fair to say that theres been some bad blood in the past between the music and tech industries.
Before he was a Facebook billionaire, Sean Parker founded file sharing site Napster, which almost overnight made all music a click away. Some saw that as amazing. Not the music industry. The opportunity of legal digital music wasnt embraced and illegal downloads become the norm.
What happened with Napster ended up being somewhat of a mistake, in my opinion, and the whole digital thing since was managed the wrong way, Brian explains, The record labels are big companies run by business affairs type people who are looking at it from the perspective of how to protect their business models. I think there’s always been concern dating back to MTV days where a very huge and profitable business was built off the back of free videos under the banner of promotion. I think that set in place a nervousness amongst label executives as how to handle new innovation in the music space.
The revenue nosedive which piracy was blamed for offered up the perfect opportunity for some major consolidation in the music industry. Were now to three major recording conglomerates: Warners, Sony and Universal. Of the three major labels, Universal are the larger. They are the same size as Sony and Warners combined.
So imagine youre a streaming service. Your do-or-die negotiations happen with these three companies. Without them, youre doomed.
Now put yourself in the record labels’ boots in their post Napster/illegal downloads paranoia. Throw in the rueful lessons learnt from dealing with Steve Jobs and the fact that those running the labels are far from digital natives, and you have a heady cocktail.
The result of the streaming negotiations were large upfront payments from the streaming services to the major labels.
This has resulted in massive problems, as Brian explains. The streaming market is only a fraction of the potential it could be. Partly I put that down to the licensing practices of Universal and Sony. By taking extra advance money from streaming services, you handicap them because you’re taking money out of the system. That money should have been spent on marketing to get consumers to buy into paid-for subscription services.
“This is about as good a time for those people who are interested in making a business out of music. It costs you less money now to make a record by a quantum. You can make great visual content for nothing. Youve got access via streaming services to everybody on the planet, around the world via their mobile phones.”
One of Brians management clients, Thom Yorke from Radiohead, has called Spotify The last desperate fart of a dying corpse.
Thats where Brian and Thom differ, because as well as being bullish about streaming he also feels the major labels are here to stay, as he explains, The labels have big catalogues and those catalogues are going to be valuable into the future. They’re not going anywhere. There’s going to be a lot of interesting streaming opportunities but they all need catalogue.
So although the artists spat with Universal and Sony is dominating the headlines, Brian points out that the independent sector has now eclipsed the major labels in terms of market share. The independent sector in the USA is bigger than either Sony or Universal. There are legions of artists out there who are being successful independently.
There will always be big crossover hits., Brian continues, But there will be fewer of them. Sitting outside of that, this is about as good a time for those people who are interested in making a business out of music. It costs you less money now to make a record by a quantum. You can make great visual content for nothing. You’ve got access via streaming services to everybody on the planet, around the world via their mobile phones. It’s not a guarantee of success. Just like a startup fashion business or film company or a food processing company, you have to get it up and running and be good at what you do. There’s no substitute for that.
Brian outlines one current example of the music industrys new, more efficient set-up. We manage a great band called Frank Carter and the Rattlesnakes. Frank came to us and said, Look we’re a 3-piece band. My bass player guitarist is a web designer. My drummer has his own studio and I write and sing the songs. As a business guy, I’m sitting there going I like this. I can do something with this, we can make something happen here because we have a self-contained business unit that can make great product and great quality. It’s not Taylor Swift, or anything along those lines. We are building a little business between us all. Us as management, Kobalt label services providing the distribution and marketing tools, and the band providing all the creativity and going on the road. I see that, for me, as the most sustainable model going forward, its not about having big hits.
Ever since redefining how music is sold with Radiohead, Brian is at the crossroads of tech and culture. He continues to innovate. Only last year, Thom Yorkes solo album, Tomorrows Modern Boxes, was released via BitTorrent. The release was the first major monetised release using BitTorrent, a delivery mechanism previously associated with illegal downloads. Again, another massive success, netting millions more than it would have through conventional release methods.
As someone who must be inundated with tech companies selling him new solutions, I ask Brian what hes looking out for. What I personally really like is any kind of technology that enables a better interaction between artist and fan, and gives us more information about what we’re doing. As an example, I had a meeting in Paris yesterday morning with a company called BandSquare. They effectively allow you to heat map where fans are. Its nothing new, there are other companies that do it, but it’s that type of technology I like. Or Crowdmix, have a look at. I will declare an interest in that we have a very, very tiny, tiny, tiny stake.
I ask Brian if ATC have invested in many tech companies?
No. We tend not to, but its something we’re reviewing all the time. We always review what we do with our money.
And with that, Brian is off to catch the train back to London.
Expect plenty of passion at his chat with Dave Fanning at Web Summit. And a queue of band managers and music tech startups eager to grab him after.
In an industry that has come through hard times and is once again looking at a bright future, Brian is a global influencer.
Brian Message speaks on the Society Stage @ Web Summit 2015 on Tuesday, November 3rd at 2PM