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01.06.12 MusicWeek 11
BMG’s ambition doesn’t stop at establishing itself
as a new kind of major player in the publishing world, though. Masuch and his team show a telling confidence in their firm’s growing masters business, which offers artists a model based on partnership and a revenue split of around 70% of receipts. BMG plans to double revenues from that side of
its operation this year, and it already has a big-name advocate: Kevin Rowland’s Dexys, whose heavily anticipated comeback album One Day I’m Going To Soar will arrive next week. But whatever you do, don’t call BMG a “label”.
Masuch instead insists – although even he admits it’s a mouthful - on defining the company as “a recorded-based rights company”. Why the differentiation? “The word ‘label’ for me conjures up that old-school image of the cigar-smoking mogul,” he explains. “Some executives think they can decide what the market wants. But that’s the wrong way round. You can’t create culture long-term by sheer size of marketing spend. “I’m not in a position where I say: ‘This artist
will be a No.1 artist within a year.’ It’s not about me. I’m not interested in telling everyone: ‘I broke this act.’ It’s about the artist. The artist knows their audience better than anyone. We follow them. “We took a lot of guidance from [Chrysalis
founder] Chris Wright on this subject. He said there was a time when this industry really grew up, and that was the attitude back then: not ‘we as the labels know what we should do and take all the money’; but ‘we align our interests with the acts, then we learn what their audience is, then we make recordings’.” Masuch has the unhurried air of a man
comfortable in his own shoes; one who clearly believes his company’s model is well-placed to take advantage of the power the artist holds in the modern era. But if he’s confident BMG’s publishing business is
already in ‘major’ territory, why bother with the masters plan at all? His answer is charmingly German; informed, unafraid and data-driven to the last.
SOUL REBELS WHY DID DEXYS SIGN WITH BMG INSTEAD OF A TRADITIONAL LABEL DEAL?
“The publishing backbone is here at BMG; now
we’ll bring in more and more people who can translate rights management to the masters side.” Far from hindering BMG’s path to doing battle
with the Universal and Warner Musics of this world, Masuch believes his company’s background in publishing is the perfect introduction to the disparate revenue sources that labels have to rely on in 2012. “If your [label] business can only survive when
you create million-sellers, you might have a problem today,” he says. “But when you ‘grow up’ in publishing, you have
Masuch: “It was the philosophy of us aligning our interests with theirs. They decided what their ambition was – not the other way round, where a label says: ‘Only if you recoup this or that or co-write with this person.’ We don’t start with a view of wanting to sell 200,000 records. We want a realistic starting point where everyone’s comfortable, with a much lower break-even. “You don’t enter complicated discussions about every single track that ends up on the album because we don’t need a ‘perfect’ record that sells 500,000 units.
“For artists who have seen it all in this business, that’s very attractive. “Some new artists just coming into the industry love the idea of the big label treatment, where the man with the big cigar takes you out for the posh dinner that you end up paying for anyway. I understand that. If they give you the red carpet, that’s attractive. “But that’s no restriction for us, because there’ll [soon] be more and more artists who can’t find a place in a world down to three major record companies offering record deals.”
“The master rights-based market worldwide will
be worth approximately 20 billion Euros in the near future,” he explains. “Music publishing is worth around three-and-a-
half billion. We want to be a very different company in three years’ time, with a significant interest in recorded rights, catalogue and actually breaking new artists with our new concept.
to make sense out of small transactions. That’s a big help. Labels would always say: ‘If things work out, we’re on a 75% contribution margin.’ Publishers, if they didn’t take advantage of their artists, always operated on a 25 – 30% contribution margin. That has an impact on how you see the world and how your operation is shaped.” At last count, BMG controlled 23,000
recordings – and Masuch promises two or three more big-name announcements to join Dexys in the coming weeks. As such, BMG’s growing masters business is
possibly the hottest talking point surrounding the company; even more so than that million-mark copyright figure. But while we’re sat in front of a man so famous
for acquiring others, it would be wasteful of us not to switch the conversation back to publishing, and ask the obvious: how does BMG feel about missing out on the EMI acquisition to Sony/ATV? “Of course we would have loved EMI’s
catalogue,” replies Masuch. “We spent a lot of time and money on the due
diligence and really would have loved to acquire the catalogue. But obviously, Sony valued it at a higher price than we did.” Masuch pauses before merrily delivering a
sentence that could be applied to so much about BMG’s industry-shaking aspirations in 2012: “We’ll find out very soon if we were right.”
ALEXI CORY-SMITH FLYING THE FLAG FOR BMG IN THE UNITED KINGDOM
A year in the life: Cory-Smith’s highlights include the signing of The Maccabees (left) and Swiss Lips (above) as well as a sync for the Nokia Lumia TV ad campaign (above)
ALEXI CORY-SMITH IS CELEBRATING 12 months in the job as SVP of BMG Chrysalis UK – a role focused on organically growing the company on these shores. She jointly runs the UK business
from West London alongside John Dobinson, COO of BMG Europe. Her key lieutenants are the
triumvirate of VP of A&R Ben Bodie, VP of sync and marketing Gareth Smith and VP of legal and business affairs Simon Harvey.
On her first yeaR “There have been so many highlights creatively, from signing Frank Turner to newer acts like Swiss Lips or Foxes. It is difficult to pick one out, but certainly signing
The Maccabeeswas important. It was the first big one on my watch. It is a band that I am a fan of and everything they have done since then has affirmed my faith in them. “Also, moving into the new office
in Wigmore Street, W1 as one team was a major step forward. [Previously BMG UK was split between the old Chrysalis office in Bramley Road and an office in Soho].”
On BMG’S MASTERS MODEL “Two clear highlights have been Deaf Havana and Dexys. Deaf Havana have shown that with the benefit of an enlightened manager, the masters model can work for newer artists, while Dexys has given it a whole new impetus. We have been inundated with enquiries from other managers since Dexys was first announced.”
On SYNC “We have had numerous successes, but probably my favourite is Nokia’s use of Garden
by Totally Enormous Extinct Dinosaurs in its TV spot for Lumia phones. It has had an incredible impact.”
On THE BMG ETHIC “BMG is a start-up. We have incredible wealth of executive talent and expertise, but we are less than four years old. You have to check your ego in at the door here. Sometimes the best ideas come from the most junior team members. It is a start-up culture which makes the BMG alternative.”
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