Distribution
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After splitting with her original record label in October, Megan Thee Stallion is entering a new era: A source at Warner Music Group confirmed to Billboard that the artist has signed a distribution agreement with the company that includes services from a select global team.
For years, Megan Thee Stallion was embroiled in a legal battle over the deal she signed early in her career with 1501 Certified Entertainment, which released her music in partnership with 300 Entertainment. (300 was acquired by Warner Music Group in 2021.) In October, the rapper and 1501 “reached a confidential settlement to resolve their legal differences,” making Megan Thee Stallion — who is managed by Roc Nation — a free agent. “I’m so excited to be doing something for the first time independent since it was just me and my mama,” she said during an Instagram Live session.
Artists prize distribution deals because they typically get to retain ownership of their recordings. At the same time, Megan Thee Stallion will still benefit from WMG’s global infrastructure, marketing muscle and longstanding relationships at radio and television. Her team will include some staffers from 300 Entertainment as well as others across the company. (A rep for Megan Thee Stallion did not respond to requests for comment.)
These types of distribution agreements within major label systems have become more common in the modern music industry once artists gain a certain amount of leverage. Some young acts that have fast-climbing viral hits are even able to negotiate similarly favorable agreements right at the start of their careers, which would have been unthinkable a decade ago.
There is a potential downside to these arrangements: Because labels stand to earn less revenue from distribution deals, they may be less incentivized to throw their full weight behind these artists. Still, this is a dream scenario for many artists because it inverts the traditional music industry power dynamic.
Historically, artists handed their recordings over to a label in perpetuity in exchange for an advance and the chance to become a household name. Now it’s possible to have the best of both worlds. “That’s an amazing position to be in, to keep your copyright and still be famous,” says Tab Nkhereanye, a senior vp of A&R at BMG. (BMG has long offered artists licensing deals; in these agreements, ownership of recordings typically reverts back to an artist after a set period, conditional upon recouping the costs of the deal.)
As a result of these shifts in the industry, though, the term “independent” has become so roomy as to be nearly meaningless. It now stretches from an act self-releasing homemade recordings on TuneCore for a handful of fans all the way to Bad Bunny, who fills stadiums and tops charts around the world while enjoying lavish funding from The Orchard, which is owned by Sony Music. Most basketball players probably wouldn’t group together Giannis Antetokounmpo and a decent guy in a local pickup game, but that’s sort of what happens on a daily basis in the music industry. Adding to the confusion — “indie” is now often used to describe a specific style of rock music, regardless of whether it’s released by a major or independent label.
In many cases, “I don’t know that [independent] is really an applicable phrase anymore,” says Lulu Pantin, founder of Loop Legal. “The big distinction is self-funding versus receiving funding from an outside source.” “Now it seems like you’re either an unsigned artist or an independent artist,” adds Todd Rubenstein, founder of Todd Rubenstein Law.
Artists once required a hefty amount of financial support to record, manufacture, distribute, and market their music. Signing with a major record company meant acts had more resources at their disposal, while remaining independent signified a scrappier, bootstrapping approach, usually with a select group of labels — 4AD, for example, or Secretly Canadian. “Releasing on XL at one point was the height of independence,” says Ben Blackburn, who manages girl in red.
The initial outlay required to get a successful artist project off the ground plummeted with the rise of production programs accessible on laptops, digital distribution companies, streaming services, and social media platforms. Artists had a “newfound ability to compete on the same level without [the major labels], and in doing so, the ability to claim more control and literal ownership,” says Nabil Ayers, president of Beggars Group US.
“With digital distribution, artists weren’t going to keep doing perpetuity deals on the master side for five albums and an 18 point royalty,” adds Nick Stern, a longtime artist manager. “It was just a matter of time.”
In the second half of the 2010s, especially during the SoundCloud rap era, it became more common to hear about major labels chasing artists who were already amassing streams by the million. This meant that record companies had to give up a lot for the privilege of being associated with the artists, rather than the other way around.
Today many rising artists and their managers are intent on giving away as little as possible. This means that the major labels have all beefed up their distribution-and-services offerings, making attractive deals like the one obtained by Megan Thee Stallion more prevalent. “All of these major players with power and money decided to head into the [distribution] fray,” says Blackburn.
Sony Music has had the most success with the distribution-and-services model: It runs these deals through The Orchard, which enjoyed a bigger current market share in 2023 than any frontline label other than Republic and Interscope. The Orchard is hardly a loner, though; every major label group has at least one, if not more, distribution companies. (Warner has the Alternative Distribution Alliance, though Megan’s deal doesn’t run through ADA, according to a source with knowledge of the arrangement.)
“There are a lot of options out there for people to find those kinds of deals now that there weren’t even two years ago, and certainly weren’t five years ago when we started,” says J. Erving, a manager and founder of the artist services and distribution company Human Resources (which was acquired by Sony Music in 2020). “Initially a lot of artist managers and executives thought that type of deal was subpar in terms of your ability to have success. Now it’s something that’s sought after.”
A side effect of this new desirability, though, is “there really is no clear delineation of what it means to be truly independent,” Pantin says. “Independence now is a flexible term,” Blackburn adds. “It’s also a commodified term.”
This means the music industry would probably benefit from developing a new vocabulary to distinguish between artists with wildly different levels of financial support. “The record industry is currently lumped into two sectors: the majors and the independents, or ‘the rest,’” Ayers says. “‘The rest’ is actually a very disparate group of interests that don’t belong in a single bucket. We need a better way to describe the growing number of entities out there.”
Rubenstein agrees: “A deal with a major — or major independent label — is different than using a larger distributor that provides limited services, which is different than being your own ‘label’ and just loading your music up via DistroKid and jumping on TikTok,” he notes.
For now, as Blackburn puts it, “independence in the eye of the beholder.”
Full-service music company ONErpm is filling out further with the launch of two divisions, one being a new administration system meant to simplify managing an artist’s day-to-day needs — and the other an updated distribution platform geared for budget-crunched DIYers. Explore Explore See latest videos, charts and news See latest videos, charts and news The […]
Virgin Music Group announced the members of its global leadership team on Thursday (Oct. 19).
The executives’ responsibilities are split across five regions. Jacqueline Saturn will serve as president of Virgin Music Group North America/executive vp of global artist relations; Thomas Lorain and Nick Roden will be co-presidents in Europe; and Victor Gonzales has been named president in Latin America and the Iberian Peninsula, with Cris Garcia Falcão working as MD of label and artist strategy/GM of Virgin Music Group Latin.
In Australia and New Zealand, Nathan McLay will assume the role of MD — working with Tim Janes as MD of global marketing for Virgin Music Group Australia — and Michael Roe will take the position of MD in Africa, Middle East and Asia (AMEA).
“It is an enormously exciting time to be working in the independent sector of our business,” JT Myers, co-CEO of Virgin Music Group, said in a statement. “In today’s market,” he added, “visionary music entrepreneurs can be successful on a global scale if they have the right team and infrastructure to empower them.”
In addition to announcing regional leaders, Virgin named Jay Blomquist as chief technology officer, Jeremy Kramer as execugtive vp of global marketing, Joy Larocca as executive vp/CFO, Liz Morentin as senior vp of global communications and brand strategy, Matt Sawin as head of global product strategy and operations, Nina Rabe-Cairns as head of global growth strategy and Zack Gershen as executive vp of global commercial and digital strategy.
The appointments are the latest step in a consolidation process for Universal Music Group’s various artist services outfits. In September 2022, the company lumped together Virgin Music Label and Artist Services, Ingrooves Music Group and the newly acquired mtheory Artist Partnerships into a new entity, Virgin Music Group — of which mtheory’s founders, Myers and Nat Pastor, were appointed co-CEOs.
“mtheory was founded on the idea that we could transform the music industry by offering better, more aligned partnerships with artists,” Myers said last year. “By bringing these incredible global teams and resources together, we have the opportunity to turbo-charge that vision, and deliver even more value to artists, labels and music entrepreneurs.”
Warner Music previously combined its Independent Label Group and Alternative Distribution Alliance (ADA) under one roof in 2012. Sony Music merged The Orchard and RED under the Orchard brand in 2017.
BMG said on Thursday (Oct. 18) that it will use Universal Music Group’s (UMG) commercial services division for the distribution of its physical recorded music, in what BMG CEO Thomas Coesfeld described as the first project of a burgeoning “alliance.” Last month, BMG announced it was winding down its agreement with Warner Music Group’s ADA […]
Kanye West and Ty Dolla $ign are shopping for a partner to distribute their forthcoming collaborative album — and sources tell Billboard they are considering five different offers. West “will make a decision soon,” says one source. And while sources say the album release was originally planned for Friday (Oct. 13), it was pushed back and is expected to land in the coming weeks.
The project has record industry executives weighing the risks and rewards of releasing what some who’ve heard the music say is West’s best music in at least five years, since 2018’s Ye, but at an especially fraught time as the conflict between Israel and Hamas intensifies following the surprise attack on the Supernova Sukkot Gathering music festival on Oct. 7.
Some label leaders have passed on the opportunity to distribute the project given the antisemitic comments West began making almost exactly a year prior, beginning Oct. 8, 2022 — even though the music itself isn’t controversial lyrically, sources say. But there are a multitude of smaller distributors in fierce competition for whom such a release could be game-changing, given the two artists’ streaming histories. One such possible company is Too Lost, the music distribution and publishing company that launched in 2021 and currently represents West’s rights on YouTube. (When reached for comment, Too Lost CEO Gregory Hirschhorn declined to comment.)
The last time West and Ty Dolla $ign released a collaboration was “Junya Pt 2” on Ye’s 2021 album, Donda. Before that, they worked together on Ty Dolla $ign’s “Ego Death” (2020) and on West’s “Everything We Need” (2019), “Real Friends” (2016) and “Only One” (2014).
After releasing 10 albums on Def Jam, Donda was West’s last release with the label. His 2022 album, Donda 2, was exclusively released on the Stem Player, and later that year, following West’s antisemitic comments, a spokesperson for Def Jam parent company Universal Music Group denounced his rhetoric and distanced the company from the artist. “Def Jam’s relationship with Ye as a recording artist, Def Jam’s partnership with the GOOD Music label venture and Ye’s merchandise agreement with Bravado all ended in 2021,” the rep said.
West has not officially released any new music since then, and industry watchers have wondered what kind of route he might take when he decided to make his return. Owning all his copyrights, West also has the option to self-release his music through a do-it-yourself service such as Distrokid or Tunecore for a modest one-time fee, but may favor a boutique distribution service that would pay an advance for the deal, provide a more personalized approach and work directly with streaming services for promotion and editorial placements.
BMG is exiting its current distribution agreement with Warner Music Group’s ADA and taking direct control of its 80 billion-stream digital business in a move the company called “the biggest change to its recorded music strategy” yet, according to a statement released Monday. The fourth largest global music company will begin phasing in the new […]
Exceleration Music, the independent music company that has invested in and acquired numerous indie labels over the past several years, has acquired global digital and physical distribution and music services company Redeye, it was announced Friday (Sept. 8).
The deal not only marks Exceleration’s biggest acquisition to date but an expansion into distribution and services, effectively creating an entirely new division at the company — albeit one that will continue to operate under the Redeye name. Under the agreement, Redeye founders Glenn Dicker and Tor Hansen will continue to lead the company, retaining its existing staff and infrastructure while taking advantage of the resources and expertise offered by the Exceleration partners and team.
“We looked at what was happening with the distribution landscape, [which was seeing] a lot of consolidation,” Exceleration co-founder Glen Barros tells Billboard. “You know, you have each of the majors buying up indie distributors, and we thought it would be good to really preserve and strengthen a great indie option and make sure that indie labels have a fully independent path to market.”
The deal also includes Redeye’s in-house labels, Yep Roc and Sundazed, along with its publishing company, Riff City Sounds. Yep Roc’s roster includes Nick Lowe, Dave Alvin, Aoife O’Donovan, Alejandro Escovedo, Chuck Prophet and Jobi Riccio. Sundazed is a reissue label based in the United States.
Redeye — which signed a distribution deal with Exceleration in May — represents some of the world’s most prominent independent labels, including Beggars Group, Domino, New West, Saddle Creek, Mom+Pop, Kemado/Mexican Summer, Stones Throw, Warp, Drag City, Real Gone, Innovative Leisure, Carpark, !K7, Thrill Jockey, Luaka Bop, Partisan, Sargent House, Ninja Tune, Barsuk and Daptone.
Founded in 1996 by Hansen and Dicker, the distributor is headquartered in Hillsborough, N.C., and boasts more than 120 employees spread across 15 locations in the United States, Canada, Europe, the United Kingdom and Australia. Prior to the acquisition, it was wholly owned and operated by Dicker, Hansen and their team. In 2019, the company merged with Sweden-based distributor Border Music to expand its distribution operation in Europe.
In addition to Hansen and Dicker, Redeye’s leadership structure will remain in place following the acquisition. The list of high-level executives at the company includes Michael Petkov, head of international; Jason Taylor, director of global sales (physical and digital); Laura Pittard, director of global marketing; Michael Howard, associate vp of global operations; Hank Stockard, global business development director; Sean Pecor, IT director; and Jim Trenner, global accounting director.
Moving forward, Exceleration will support Redeye’s existing growth plans by providing operational and strategic support as well as capital. “Redeye has done a lot of work over the last few years to expand their worldwide footprint on the physical side, and they’re been a digital distributor for a long time too,” says Exceleration co-founder Dave Hansen. “So we’re going to work with them to continue building that network and offer a real solution for their existing customers, our label group and new customers [as well].”
More than anything, adds Barros, the Redeye acquisition dovetails nicely with Exceleration’s overall mission: to strengthen the independent music community in whatever ways it can. “We really want to serve this community according to what’s important within this community, and [that] is having, I think, an independent vibe,” he says. “It really is looking at the whole sector holistically and saying, ‘How can we really fill the needs of the community and do it in an indie way?’”
Exceleration was founded in 2020 by a group of five prominent independent label executives: Barros (former CEO of Concord Music Group), Hansen (executive chairman of Merlin and former GM of Epitaph), Charles Caldas (former CEO of Merlin), Amy Dietz (former GM of Ingrooves) and John Burk (a Grammy-winning producer and former president of Concord Records). Its music rights group includes investments and partnerships with labels and catalogs including +1 Records, Alligator, Azadi, Bloodshot, Candid, Heroic, Kill Rock Stars, Mom+Pop, SideOneDummy and The Ray Charles Foundation/Tangerine Records. The company currently boasts nearly 30 employees and is currently hiring for two additional positions, including a head of finance. Funding for Exceleration comes from all five of its partners as well as institutional and private investors.
“Working with the Exceleration team feels like expanding the family,” said Dicker in a statement. “Sharing strong ideals and a strategic vision, it feels like the next natural step on our journey towards providing our world class distribution service to an expanded independent community.”
Distribution company and payment platform Stem said on Tuesday it raised $250 million from Victory Park Capital to expand it’s popular advance check product. Stem first started offering the product in 2020 to artists at various career stages, including artists like Justine Skye, who used the capital as bridge financing when transitioning from a major […]
BMG acquired the recording catalog of British band (and Rock & Roll Hall of Famers) The Hollies. The deal includes over 20 studio, compilation, live and tribute album titles and rarities that are wholly owned by the group, including Evolution and Butterfly (1967), Hollies Sing Dylan and Hollies Sing Hollies (1969), Confessions of the Mind (1970); Distant Light (1971), Romany (1972), Out on the Road (1973); Hollies (1974), Another Night (1975), Write On and Russian Roulette (1976), Hollies Live Hits (1977), A Crazy Steal (1978), Five Three One – Double Seven O Four (1979), Buddy Holly (1980), and Then, Now, Always (2009). The agreement encompasses eight of The Hollies’ most-streamed tracks, including “Carrie Anne,” “King Midas In Reverse,” “Jennifer Eccles,” “On A Carousel,” “He Ain’t Heavy, He’s My Brother,” “Long Cool Woman (in a Black Dress)” and “The Air That I Breathe,” as well as the group’s cover versions of “4th of July, Asbury Park (Sandy)” (Bruce Springsteen), “Boulder to Birmingham” (Emmylou Harris) and “Say It Ain’t So, Jo” (Head).
Soundtrack Your Brand, a global music streaming service for businesses, announced a $15 million pre-growth round led by Matt Pincus‘ MUSIC in partnership with Liontree, JS Capital Management and Schusterman Family Investments. The round also included funding from music investors Dundee Partners and was supported by all major existing Soundtrack Your Brand investors including Balderton Capital, Fuel Venture Capital, Industrifonden, Telia and DIG. The investment will allow Soundtrack Your Brand to “double down” on its go-to-market strategy, according to a press release. Along with MUSIC’s investment, Pincus will join Soundtrack Your Brand’s board. In 2024, the company plans to raise an additional growth round.
ADA Worldwide partnered with Rostrum Records to distribute the indie label’s entire catalog and new releases. Recent Rostrum releases include Fat Nick’s “Songs on the Radio” and DC The Don’s “Funeral” as well as new music from Alé Araya and Brevin Kim. Forthcoming releases include music from Fat Nick, Lou Phelps and My Favorite Color.
Yoto, an audio platform for kids that’s behind screen-free portable audio players the Yoto Player and Yoto Mini, signed a deal with Warner Music Group that will make music from some of WMG’s artists available on the players. The partnership kicks off in June with music from Super Simple Songs, a popular YouTube channel boasting original children’s songs and traditional nursery rhymes that’s been distributed by WMG’s arts music division since 2020. Next year, Yoto will create “cards” featuring music from a curated group of WMG’s pop, rock and soul artists.
Believe signed a marketing and distribution deal with Global Records Germany, the new Berlin branch of independent label Global Records. The first release under the agreement is “Party Songs” by Gamuel Sori & INNA, which dropped June 9.
In the two years that Cat Kreidich has served as president of Warner Music Group’s distribution company ADA Worldwide, she has focused on one overarching theme: reinvention.
The music industry veteran has spent the majority of her career in the distribution business. She first worked first at Caroline, then ADA, then at Sony’s The Orchard — where she spent eight years — before shifting to Sony’s catalog division for a little over a year in 2019. But when she returned to ADA as executive vp at the end of 2020, “It was invigorating,” she says, sitting in her office at WMG’s Manhattan headquarters. “I hadn’t expected to come back to ADA, but it makes perfect sense because the culture at Warner is very entrepreneurial. So coming back, to me, was an opportunity to make an impact on a company that I truly cared about.”
At the time, the distribution space was exploding. Consolidation, streaming and new players coming into the space were upending the status quo, and the business was moving faster, and with more volume, than ever before. ADA had a few specific challenges facing it in this new environment: a third-party company that handled its tech; a blurred line between ADA and Warner Music Group that made it sometimes unclear how services were handled; and the implosion of Direct Shot Distributing after Warner and ADA had shifted its physical business to the company — leading to supply-chain issues for vinyl and CDs even before the pandemic made that a larger issue.
Kreidich had spent eight years at The Orchard building its commercial insights team, integrating tech into how the company was expanding and parsing data to help optimize commercialization for the company’s label partners. So when it came to the issues that faced ADA upon her return, she had experience in addressing the problems. But just a few months into her tenure came another change: ADA’s then-president, Eliah Seton — whom she calls “a great advocate for me” — announced he was leaving the company. Just five months after coming in as executive vp, Kreidich became president of ADA.
Following that, Kreidich embarked on an overhaul of the company’s executive structure, bringing in a team she calls “the Avengers of Distribution.” That included Samantha Moore, who heads business operations and development; Adriana Sein, who oversees artist and market development globally; Cathy Bauer, who runs physical sales and marketing; Andrea Slobodien, ADA’s first-ever head of product and integration; and MaryLynne Drexler, who oversees business and legal affairs, among several others.
“We were really specific on how we were thinking about the kind of expertise that we wanted to be in the building,” Kreidich says. “And a lot of us are here because we believe that we can do it better [than the competition], and that opportunity to have that voice feels good.”
Now, after two years of reinvention, Kreidich has the team in place to continue to fine-tune ADA as a leader in the global distribution business, which is expanding by the day. The company has launched offices in Canada, Latin America, Japan and across Europe, among others, while WMG has acquired distributors Qanawat in the Middle East and Africori in Africa to further expand their distribution offerings there, too. “At Warner, we want to have an environment where creatives, entrepreneurs and artists at every stage in their career can thrive — where there are as many different avenues as possible into the WMG ecosystem,” says Warner Recorded Music CEO Max Lousada. “What Cat and the team at ADA are doing is an essential part of our ability to partner with the full spectrum of talent. She’s relentless in her passion for the indie community and her mission to empower ADA-supported artists and labels.”
Now, as ADA celebrates its 30th anniversary this month, Kreidich speaks to Billboard about the company’s reinvention over the past two years, what a distributor can offer in the current music business and ADA’s new brand. “I’m really proud of that and the work we’ve done because I think it really nails who we are now,” she says. “I believe in the culture and I have a real soft spot in my heart for it. So I’m happy to celebrate it.”
You’ve worked at Universal, EMI, Warner, Sony and now Warner again. What were some of the things you picked up at each of those places along the way?
I started my career at Universal Motown and then went on to Virgin, and the reason why I ended up at Caroline was because of the passion for the music and the labels. My passion was always to work with the music that I loved and identified with, so I think a big part of being at each of those places was really understanding culture and the culture of representing music from a lot of different backgrounds and styles. And I think the meaning that that has — when people come together to unite for independence and music that they actually care about in a very personal way, not just a professional way — is one of the biggest things I learned and I wanted to be around and create wherever I continued my career.
I certainly thought many times of diversifying, but I always came back to the landscape of independent labels and artists. And I think that landscape has changed dramatically over the years, and the needs have changed. So the other thing I learned was really that value for a client or a label or a partner doesn’t always look the same in distribution, and many times labels are so busy running their businesses that they don’t necessarily have time to stop and ask you what your value is. So it’s being able to creatively come up with different ways to look at the business, or different ways that a label might have not considered.
You came back to ADA at the end of 2020. What were those first couple months back like?
The first thing I did was come in and interview over 40 people in the organization, mostly at ADA, some at Warner, and asked them the same 10 questions. They were generally, “How do you feel about the business? What would labels say about us?” And then I gathered all of those answers and created a presentation for Eliah. Because I knew how I felt about the business, but I also really wanted to understand how people felt about the business, because I didn’t want to make assumptions. And I think that was a really powerful thing to do, and I think it also helped me to come back to ADA authentically and genuinely; I wasn’t just trying to come here and make it The Orchard, I was truly wanting to listen and hear what were the things that we needed to solve for.
What were the conclusions from that?
There was obviously a need for process and empowerment by technology. Our technology was a third-party company that was facilitating the relationship within Warner, so that sometimes [we] just didn’t talk to each other, as third-party companies do. There was also a need for us to differentiate what it is what we do as ADA and what it is Warner does. Having run commercial teams for most of my career, it was always something that people would talk about — “ADA uses Warner to pitch” — and that wasn’t necessarily the truth. But there were things that we needed to do better together and things that we needed to do on our own, and during that time what came out of those talks was, “We need to figure out where the lines were, and then reorient those lines to make the relationships better and more clear.”
You’ve spoken a few times that once you took over as president, you embarked on a “reinvention” of ADA. Why did it need one and how did you implement it?
Warner had not made the same tech investments or acquisitions that the other majors did. They had been growing their [distribution] business as it was in this very shared service mentality that had worked for a while, and I think there was an opportunity clearly to take advantage of more and more music in small corners of the world as more and more DSPs were saturating markets with subscriptions. So it was really about three things for me. It was about being an indie advocate — that education, that understanding and helping to define what it is we do and what it is Warner does with us. It was also bringing in a skill set that was different from what I had seen at other distribution companies.
And one thing I noticed throughout my career was always, labels, managers and artists want to have expertise, and more and more artists want to own their own rights and be in control of their businesses. And that expertise to understand how other people are doing things, especially around audience development, actionable commercial insights, whether it’s growing an artist or helping with travel or breaking an artist in other countries and bringing them back — that skillset of marketing and artist development doesn’t necessarily exist in full force at tech companies, because it’s just the nature of the game.
So we were really specific about the kinds of talent we were bringing in that was going to differentiate us as we built our tech. And that was really the third thing that was most important, not only for just the idea of getting a piece of content from here to the DSP and back but also just tools and tech that would help us communicate over time zones better, help us to ignite priorities without having to email something. So I think that advocacy and audience development and marketing from a global perspective and the tech piece were the three big things we were changing.
You had gone to work at Sony’s catalog division — then a pandemic happened, and you then came back to distribution. A lot of things changed in a very short amount of time. What did you feel like had to change here because of how many things in the industry had shifted?
The great thing is that ADA is a music company. But ADA needs to be empowered by those tools and technologies that allow communication to happen easily. You can do your business with a carrier pigeon, a rotary telephone and a Yahoo email address — you could get it done — but the truth is, if you don’t have to think about those things, there’s so much more you can do. And let’s face it: we are at a point in the evolution of music formats where there’s so much volume, [thousands of] new tracks are being uploaded, social media is ubiquitous. You don’t want to have to worry about whether something got there or came back or how it worked. So I think the tools, like delivery technology that works; a self-serve platform where you can find out the basic information so that when you’re getting on the phone with somebody you’re talking about things that matter; having the strengths and the ability to talk about artist development and commercial insights and data and how things are flowing — if you have those, then you have a really competitive organization.
You also focused a lot on global expansion and having representation in both emerging and new markets, but also places like Latin America. How did you prioritize all these things?
I’ll give credit to Alfonso [Perez-Soto], who is the emerging markets leader and is a tremendous business development person inside of Warner. That track was already full-blown and a part of Warner’s larger strategy. But the truth is that in places like the Middle East and Africa, those established businesses don’t exist from a record label standpoint, so investing in distribution companies that could develop over time was really a part of that strategy. For us, first and foremost, credit to Eliah — he was able to garner a budget way before I got here and really broke the ice and started bringing people in, and Latin America was obviously really relevant in the sector, and that was a territory he really doubled down in. So we have a significant amount of people in Latin America that are ADA and distribution-focused.
But then I would say what was most important with Alfonso was we acquired Qanawat, we acquired Africori, and there’s many more to come that have not been announced yet that we’re currently working on. Once you’re looking at acquiring companies, then you’re looking at prioritizing what’s going to be most important and most impactful when it comes to market share, what are the feature sets we have to build to make sure we’re giving these labels an equal if not better level of service than they’re already receiving, because it’s distribution deals — they can walk away. So for us, the experience we brought in, it was about understanding what we could ingest the quickest, and what was going to make the most impact. But as far as the acquisitions, they were really part of the larger Warner strategy, though they are the ADA teams.
As you guys continue to expand, what are the challenges and potential pitfalls?
I think the biggest challenge is that there is a lot of competition out there, and it’s hard to compete with rates and advances. There’s a lot of money being thrown around in the distribution market, because there’s venture capital companies, there’s a lot of tourists. So I think that the challenge of growing our business, being a successful distribution company globally and also in the U.S., is making sure that we’re doing smart deals and building our business and delivering value.
I also think ADA is back and revitalized and has a new perspective, especially in the U.S. business, and I think that’s new to people. And reintroducing ourselves and letting people know what we’re doing is best done through our successes. In places around the world we’ve hired some really amazing teams, and it feels different and cool and new because ADA didn’t always really exist in all these territories. And in the U.S., it’s more of an education process because there’s so much competition and because, you know, distribution — it’s the hot new thing. For me, I guess, I’m here because I’ve always loved it.
It’s interesting you brought it up in that way, because I feel like you hear that a lot in the catalog acquisition space — there’s outside money coming in, there are companies coming in that don’t have track records in the music business — I hadn’t thought about the parallels here, too.
And all of that is about to become independent. All of these companies buying music catalogs, they have to put them somewhere, and a lot of them are buying rights that haven’t reverted yet. So those catalogs are now moving around. There’s going to be even more infusion, and I think that there’s a real opportunity. I’m very happy for my experience at Sony catalog, because working catalog is not easy, and I’m hoping that there’s an opportunity for us to continue thinking about tools and tech that can optimize catalogs. Because catalog is more important than it ever was before, and you never know when it’s coming; you have to be proactively reactive. And it’s going to be an opportunity.
What do you look for in bringing on new label partners?
I think the most important thing that we look for is the ability to partner both ways. When we first started, it was really the idea of, “How can we use each other as strengths?” Because when it’s a one-way relationship, okay, it’s transactional and we’re a distributor and you’re a label. Value comes differently for every partner. But I think one of the biggest things is a label wants to know that you’re paying attention and are able to think of opportunity either before or maybe in a different place than they would think about opportunity. We try to be very strategic yet tactical when we do business reviews, and we leave it up to three to five key things that we have to do and be able to measure those things. So of course there’s planning and proactiveness that you can do. But there’s nothing better than getting a call from your distributor and them saying, “Oh my god, I just saw a spike, let’s do this.”
You’ve been president for two years now. When you look back, what are you most proud of in that time?
First of all my team. Bringing in the executives I have is probably the biggest highlight, and empowering them. Also launching Co-Op, which is our proprietary product for third-party labels and artists, which we launched in October. No small feat. And overall I would say the successes that we’ve been able to generate with Quevedo and Central Cee. We just had a No. 1 in India with the Sean Paul–Shaggy–Spice track [“Go Down Deh,”] that literally came from us seeing a spark and starting to work it locally. We just had a No. 1 with Ayliva in Germany that beat out Miley Cyrus. So we definitely have these big wins and I hope to have many more to talk about in the future, but it honestly couldn’t happen without the team that I brought in and the relationships that we created with the ADA folks that have been here before and the new folks that have come in. And I’m really looking forward to holding a global conference and getting everybody together. Being able to be together and appreciate that is what I hope to do for the entire organization.