The New Music Seminar's Panel "Crystal Ball Movement: Music Business Visionaries Predict the Future" ( From left): Tyler Gray, Editorial Director, Fast Company; John Sykes, President, Clear Channel Entertainment; NMS Founder/Executive Director, Tom Silverman; Lyor Cohen, CEO of Recorded Music, Warner Music Group; and Michael Green, Founder, The Collective. (Photo: Chis Owyoung)
What will the music business look like 10 years from now? This broad question, posed to one of the lead opening panels for New York's 2012 New Music Seminar, served as a segue for Warner Music Group's CEO Lyor Cohen to soapbox on the prevalent disparity in attitudes in the music industry towards artist development and camaraderie.
"For me to predict what it's going to be like in 10 years is silly," said Cohen. "I hate when A&R guys tell me rock is dead. They sound like day traders. I'm focused on being open for innovation and rewarding people for making mistakes. You can't move without making mistakes. Long term artist development is the current commitment trend that will yield for the future. We don't feel desperate."
On embracing innovation, Lyor touted that he is the only music executive to have visited the Spotify offices in Sweden. "We should be fully embracing and engaging in what these new companies are doing. In Sweden the people have been living in a growing music economy because of Spotify," he says.
The panel, iHeartRadio Presents: "The New Music Seminar Crystal Ball Movement: Music Business Visionaries Predict the Future," was conducted by Taylor Gray of Fast Company and also featured John Sykes of Clear Channel Entertainment and Michael Green of The Collective.
Green, who serves as The Collective's CEO, helped further Cohen's point by illustrating the problem faced by the industry in the ever-growing world of democratized distribution.
"What's really changed is that everything is open, and there are no gatekeepers," Green explained. "Social and digital companies that weren't here 5 minutes ago are getting huge valuations and seem poised to take over everything. Previously, if you wanted to get distribution you had to go through a label, but now audiences can be built by the artists. What we need to figure out is how to begin to better filter out the talent from the non talent... and how to create partnerships, which really is the 21st century style of management because [artists] are the ones coming in with the audiences. We help make the deals that will grow those audiences with radio and bring them to the store."
In this emerging economy of friends, subscribers and followers, there can often be a lot of misplaced value in the social cache of large fan-bases as being representative of overall artistic talent. Lyor, much to the delight of the audience, recalled a time when he asked MySpace celebrity and then-budding reality TV star Tila Tequila to "sing something" after his A&R guys "practically kicked [his] door down trying to get [him] to sign her because she had so many online fans." Miss Tequila, as it turned out, wasn't able to parlay her enormous follower-base into a successful career as a singer.
However, it still stands that it has become a growing trend in the music industry today for artists to be signed based on their follower base; a clear sign that what they are able to bring to the table in terms of audience speaks a lot about their revenue generating potential. Cohen again took a stand to argue against this point, illustrating the dichotomy between this trend and Warner Music Group's approach to signing artists.
"If somebody has a huge online following it means that my competitors already know about them," he explains. "I want to be there early to develop, and I want to build slowly. We prefer to foster them, water and give them sunshine so that they can grow. Malcolm Gladwell says that you have to put in the hours, and nothing is better for development than rolling up your sleeves and working and gigging to make something great. There's a reason we don't hand doctors a scalpel right out of medical school and say "have at it!"
Lyor's claims that follower-bases don't translate into revenues stands in contrast to what the Internet has been able to produce in recent years. One can't simply ignore the commotion Justin Bieber has stirred, and while spotlight performances by Lana Del Rey and Karmin both received harsh reviews by the press, they are doing well sales-wise. Lana Del Rey's debut Born To Die has sold 254,000 copies since January and Karmin's single "Brokenhearted" currently sits at No. 17 on the Hot 100.
On his preferred approach towards fostering artists, Lyor emphasized why he thinks 360 deals are important. "360 is an unpopular word, but I really believe that it's great for the artist and it's great for us. It's great to have people committed to our roster and committed to a relationship. We aren't flipping through our artists, and in many cases less is more."
Green followed up on Cohen's point about 360 deals: "As an artist, you need to incentivize the marketing company," he said, "and the business engine behind your music because if they aren't, they aren't going to do what it takes to move the boulder up the hill."
Ultimately, the panelists agreed that what a music industry wrought with decline and turmoil needs to succeed is camaraderie. "A fraternal and paternal industry, where we form a bond like we did when I joined in 1983," Cohen recalls, "where we'd all hang out and drink together and all root for each other. Let's start with an order, where people aren't rooting for each other's failure." His statement was met with thunderous applause from the audience.