MIDEM 2013: Guvera's Phil Quartararo Says Old Record Business 'Committed Suicide'

Guvera's Phil Quartararo speaks at MIDEM


Lars Brandle

Guvera U.S. Managing Director Phil Quartararo served-up the soundbite of the morning at MIDEM, when he identified where the major labels messed up.

“The old record business didn’t get killed. It committed suicide,” he said. “(The industry) didn’t listen to its consumers.”

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Quartararo, who comes from a major-label background and now works in the digital music space, gave a 20-minute notes-free speech on bands and brands in the online world.

“Today’s curator is the brand. The lifestyle brands rule,” he explained. “Brands are using music as their currency. The old business was a push business, this is a pull business -- attracting consumers into it.” The new relationship, says Quartararo, is for the brand activating the community. “If they can successfully do that, they can prolong the engagement. The brand can also take the role of being the curator. Today the record companies can’t afford the advance and the marketing budget isn’t so big. The brand can deliver bigger budgets and do the heavy lifting.”

Quartararo heads-up the U.S. activities of Guvera, a digital music service which launched out of Australia’s Gold Coast, a city best known as a paradise for surfers. Guvera is built on a brand-funded business model, and to date it’s pulled in somewhere in the region of Australian $30 million in funding.

Far from kicking the majors when they’re down, Quartararo reckons the big record companies are making some sharp moves. “They’re starting to bring people in who can connect with the brands,” he said. “They’re a little late to it, but they’re getting there.”

Billboard.biz caught up with Quartararo after his speech.

You said today the big labels weren’t killed, but they committed suicide. Will the big labels make a Lazarus-style resurrection?
I believe a lot in the major labels. Because they have the foresight to build the infrastructure for an industry that brought a lot of music to a lot of people for a long time. So, I think the only mistake that was made -- and I don’t exclude myself -- we didn’t have the relationship with consumers that we needed to have, like every other content biz. The film biz talks to its consumers. The TV biz talks to its consumers. The advertising biz talks to its consumers and so does the video game industry. We spent a lot of time not talking to our consumers. We didn’t have that relationship.

And don’t forget the big labels sued their consumers.

Yeah. Now we’re having (that dialog), but we have to resurrect ourselves. We’re coming from below the baseline, which is unfortunate but at the end of the day we have a reason to exist. I believe it’ll be fine.

You’ve been with Guvera about a year. What’s your sense of where Guvera sits in the marketplace?

Guvera has a huge opportunity now because what’s out there is a lot of music platforms. All these companies trying to be music players, they’re all missing the point because they’re basically one notch above a hardware place. What Guvera is trying to do is not give consumers a way to listen, but give consumers a reason to listen. And that’s the value of having the brand at the table. So having the brand in the mix gives the consumers a chance of join other people in the community to share a common interest in an artist or band or song. That’s a reason to listen. The other guys don’t give a reason to listen; if you want to buy or show up, that’s great. That’s not how Guvera wants to be.

I get a sense that the digital music space could get bloody in the next few years.

I don’t think it’ll get bloody. I don’t think it’ll get to that point. There are 25 players and 20 of them are hemorrhaging money so bad, they’re going to be gone in the next year or two.

Do you miss being part of the big labels?

No. I miss dealing with the artists. I miss sharing with young people, teaching them the music business. That’s the part I loved the most. I don’t miss the big company, per se. Because the big company is cumbersome and unfortunately can’t move as quickly as the consumer or artists need to move. It’s not as nimble as it used to be.

What do you plan to get out of MIDEM?
On one hand, I want to get the word out on Guvera. On the other, but I also want to hear what people are thinking about. Because we’re at a crossroads in the business right now and a lot of people have a lot on their mind. A lot of people don’t have the answers because they don’t know the questions to ask. The people have made it a lot more complicated than it needs to be. It’s a really simple equation. People love music and they want to find the easiest way to consume it. It’s up to us to find that easiest path between the artist and the fan.