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It all started because Terry McBride couldn’t simultaneously play field hockey, study civil engineering and DJ at clubs and weddings. “So I decided to do music,” says the co-founder of Nettwerk Music Group, the 40-year-old Vancouver label famous for breaking Sarah McLachlan, Barenaked Ladies, Passenger and many others. It was the first company to release Coldplay in the United States.

In 1984, McBride and his business partner, Mark Jowett, a member of electronic-music band Moev, dropped out of the University of British Columbia and started Nettwerk with a simple mission statement: “Release music we love.” And while his field hockey background isn’t especially useful, his civil engineering tools have been crucial in Nettwerk’s development.

“The music business was obtuse and as gray and muddy as humanly possible,” says McBride, 64. “I used to run big spreadsheets that had my SoundScan and my radio [Broadcast Data Systems data] and my touring — trying to understand when something was happening early. I had my artists go back to [a particular] city over and over again and turn a flame at a micro level into something that was meaningful.”

This combination of data analysis and music-fan instinct not only helped McBride identify unusual talent with commercial potential, from Skinny Puppy to McLachlan to SYML, but correctly predict where the entire business was heading. In 2008, he co-wrote “Meet the Millennials: Fans, Brands and the Cultural Community,” a paper for the British University of Westminster, that anticipated the decline of digital downloads, the rise of streaming and the resulting revolutionary changes in the music business.

Today, McBride uses these skills, along with his team — including president/COO Simon Mortimer-Lamb, label president Ric Arboit and Jowett, who oversees international, A&R and publishing — to identify what he calls “communities.”

“It’s all about discovery and people sharing music,” McBride says. Nettwerk’s roster includes Paris Paloma, Wild Rivers, bôa, Mon Rovîa, Vacations and The Paper Kites among its 300 acts.

What was Nettwerk’s big boom?

Terry McBride: Mark and I started this company in my one-bedroom apartment in the West End of Vancouver. Back then, terrestrial radio was the dominant force, and trying to hear anything new that wasn’t being pushed or plugged just didn’t happen. We managed to cobble together enough money from both of our jobs and a small loan from the bank.

Did you know anything about how to find and sign artists in those early days?

No. I knew absolutely nothing, and Mark, who was a guitar player in a local band, knew absolutely nothing, too. Which was perfect because we weren’t bound by anyone’s point of view but our own.

What was the earliest success you had that made you think, “Maybe we’ll make it after all”?

There was a folk band called Grapes of Wrath, from British Columbia, and an industrial grunge band named Skinny Puppy. This was when we’d [previously] released all of five records. Grapes of Wrath broke on terrestrial radio, [were] picked up by Capitol Records [and] turned into something else. Skinny Puppy was so far ahead of its time — that hard-edged electronic sound that was coming out of Chicago, Miami, Belgium, leading into what [avant-garde British band] Cabaret Voltaire was doing out of London. It took a long time for those things to connect, but when it did connect, it became a movement.

How do those two acts lead to the bigger stars Nettwerk is known for, like Sarah McLachlan?

Mark had tried to sign Sarah when she was 15. She was in a band called October Game, who had supported Moev. Mark was astonished by her voice. Two years later, I’m in Halifax [Nova Scotia] with Skinny Puppy. There’s Sarah. So we had a conversation, and I talked her into coming to Vancouver and signing to Nettwerk. Sarah flew out and slept on the floor of Nettwerk for the first three to four months. She worked a part-time job at a tea shop, and we started doing the first record, Touch. Sarah went on tour with Grapes of Wrath, and by the end of the tour, one could argue that Sarah was bigger than the Grapes of Wrath.

In terms of the music business and streaming, do you go around saying, “Yeah, I predicted this”?

I wrote a paper [“Meet the Millennials”] about the future of music in winter 2008, over the Christmas holiday. I did it with [former Nettwerk GM] Brent Muhle, who was running my Los Angeles office; ultimately, he got a job at Apple in Europe and couldn’t talk about what we had written together. It left me for three or four years running around saying, “Hey, this is what’s going to happen. We can either realize that and embrace it, or we can live in this fear and this world of litigation.”

I don’t view music as lyrics, melodies, chords, bridges. I view songs as emotions, and when someone falls in love with that song, they attach their own emotion to it, so they essentially own it … The music business was trying its best to inhibit that type of behavior. You look at the explosion of the cassette tape, the burned CDs. It was all about people sharing. It wasn’t really about people ripping things off; it was about sharing their emotions. When I co-wrote “Meet the Millennials,” basically, I was writing the blueprint for the next 20 years of Nettwerk.

How so?

What I didn’t go into in that paper — which evolved out of that paper — was the thought process of “communities.” We were always involved in communities, whether it was the electronic grunge scene or Sarah and Lilith Fair [the all-­female music festival McLachlan co-created with McBride] and even that whole folk scene inside Canada. Streaming allowed the niche marketplace to actually come to life within music. Overlapping fan bases were not going to be walled in by borders or some physical restraint. You could look at niches from a worldwide point of view, not a city point of view — which was where all the scenes came from, whether it was the ’80s new wave scene out of London and New York or the ’90s grunge scene out of Seattle. We started to build the singer-­songwriter community first, and these were bands from everywhere. It didn’t matter. There were no boundaries. We slowly but surely started to build up data behind it.

How do you define “communities” in this context?

It’s basically artists that have overlapping fan bases. If you finish streaming an album, the algorithm kicks in and starts feeding you music based on what you happen to like. I just finished listening to the album [by] Haevn, a band from the Netherlands; eight of the next 10 songs were all Nettwerk songs, from their community. So Haevn is giving those other artists a lift.

So Nettwerk says, “We’ll sign all of these bands in this community.”

There’s a whole music scene that’s happening outside the traditional pop-hit culture. We’ll probably sign another 50 artists next year, and it’ll all be based on these three criteria: Do we love the music? Can we honestly add value? Are the artists and manager not a–holes? If you check those three boxes, we’re interested.

Nettwerk has a history of zigging when everybody else is zagging — in 2008, everyone thought record companies were dead and artist management was the place to be. But you got out of management.

Yeah. Now I can turn my phone off at night and I’m making money as I sleep. That didn’t happen in management. I was talking to two managers today who are in their late 20s, and I asked them how life is going. They said, “This is a horrible Monday — from the minute I woke up, I’ve been putting out fires.” I so don’t miss that.

How has the role and need for outside investors in Nettwerk changed over the years?

We sold most of the publishing seven or eight years ago. From that, we went to friends and family members and brought in a lot of people I really like who were very knowledgeable and some musicians I can’t name who are very big. About a year-and-a-half ago was the first time we brought in institutional money. We have a great balance sheet, and we’re set for the next couple of years. [In 2013, it was reported that Nettwerk had raised $10.3 million in equity growth financing from HBC Investments, previous investor Beedie Capital and Nettwerk’s four founding partners: McBride, Jowett, Arboit and Dan Fraser.]

What do you see happening during the next few years in the music business?

There are some interesting things on the horizon with [artificial intelligence]. That is not going to be determined through technology — it’s going to be determined through legislation and, unfortunately, litigation. It’s not just the music business — it’s every business.

What about the business’ future as it pertains to Nettwerk?

Communities of fans, and their emotional attachments to music, are only going to grow and become more powerful. If I would make one prediction: The middle-class musician is back. So that artist in the ’70s and ’80s who had a career without being on terrestrial radio and having platinum records is back. That’ll be healthy for the music scene. The fact that we’re looking at all these folk bands filling up 2,500-seat venues — that hasn’t happened since the ’60s.

Are you personally thinking of getting out? Retiring?

At some point, would I like to go fishing more? Spend more time with my family? Absolutely. But music’s a passion for me. I’m not looking to retire. We’re in a really good spot. I do want to see it grow. I’m not going to get in the way of that.

To me, the power of music can help people through really challenging times. When I sit down with a young artist and talk about the fact that they’re having success, [I say], “You need to consider something really, really carefully: What are you going to do with that, and how are we going to make this world a better place? Because whether you realize it or not, kids are really emotionally grabbing onto your music.”

If I look at an artist like Paris Paloma, she’s changing the world, and she’s doing it to her generation. Like Mon Rovîa, same thing. SYML, same thing. Paper Kites, same thing.

Why would I want to walk away from that? It’s just too powerful.

This story appears in the Dec. 7, 2024, issue of Billboard.