October 9, 2014 marked the best day of my life thus far. That was the day that Grammy U introduced me to Steve Barnett, CEO of Capitol Music Group, who took me under his wing for a day and exposed me to his recording behemoth and forward-thinking team members, in order to give me a taste of what it takes to run one of the world’s leading record labels.
I have been a strong believer for the past year in the idea that the traditional record label is simply no longer needed -- as such, I had been telling my professors, classmates, and fellow Grammy U members that I believe that record labels should restructure themselves in the image of lean venture capital firms.
While I was studying for the bar exam this past summer, Grammy U released its first annual Business Plan Competition. For the past year I had been trying to get my vision of the venture capital record label in order, and Grammy U provided me with the perfect opportunity to transfer my thoughts into a concrete plan.
My original vision for the future of the music industry was that record labels should restructure themselves as lean venture capital firms -- having institutions and high-net worth individuals serving as limited partners and select music industry executives serving as general partners.
With this approach, the label would take an annual piece of the fund (called the “management fee”) as well as split the profits from artist touring, merchandise, and sales between the limited and general partners (called the “carrying fee”). Moreover, before the artist is signed to the label, an algorithm would be used to determine that artist’s success and develop a price for the reversion right of that artist’s master recordings; all before the artist inks the contract. That is, the day the artist signed to the label, he would know that in x amount of years he could buy back his masters for x amount of money (called “the label’s exit”). If the artist could not afford that price at that time, the label could continue to make money from the artists’ masters by way of synchs, sampling, and live performances.
While I still whole-heartedly believe in my business plan, I admit that, after spending the day with Mr. Barnett and his team members, there are some parts that need to be tweaked. While I envisioned a future label needing no more than 50 hands on deck, Greg Thompson, evp of Capitol Music Group broke it down to me best when he said “It takes a village to raise a Katy Perry,” and after my legendary day at Capitol Records by way of Grammy U, I completely understand.
Fast forwarding some time, my winning of the grand prize of the Grammy U Business Plan Competition gave me the opportunity to spend the day with Mr. Barnett, and it was one I'll never forget. Throughout the day, I continuously thought to myself: “What did this kid from West Philly do to deserve the star treatment that Mr. Barnett and his team members showed me during my time inside the storied Capitol Records building?”
Being a new hire at the New York law firm Debevoise & Plimpton, my stint in Los Angeles was extremely short. I flew out of New York at 9:00 PM on Wednesday night, got to Los Angeles at 12:30 AM on Thursday morning and flew out of Los Angeles at 9:30 PM that same day, just to land in New York at 6:30 AM and be at work two hours later. None of which fazed me -- I was riding an intellectual high.
My day started at 9 AM, when he picked me up (yep, Steve Barnett picked me up) from my hotel and drove me to the Capitol Records building. The first thing Mr. Barnett did when I hopped in his car, aside from the obligatory introductions, was point out what he felt were flaws in my business plan. However, he did not speak to me as if he was a music executive and I was just some kid who didn’t know what the heck he was talking about. Mr. Barnett seemed to truly value my thought process and perspective on the future of the music industry -- but at the same time he knew that me not being a direct member of the music industry, there were some things that I simply did not understand the workings of.
Once we pulled up to Capitol Records and walked into the iconic building, the first thing Mr. Barnett told the young lady at the entrance was to crank up the music. From there, we took the elevator to the executive floor.
A few days before I flew to LA, Mr. Barnett asked me to send him my “story,” which I thought was going to be read just by him. It turns out he disseminated it throughout all of his team members. Everyone seemed excited and interested about meeting me. Either these people were America’s best actors, or they thoroughly wanted to get to know me.
My first task of the day was to sit in a meeting with Mr. Barnett regarding the October 21, 2014 release of Neil Diamond’s new album Melody Road. Capitol team members spoke on everything from the current state of the album’s pre-order sales to how the label should attack its international marketing plan.
Next, I met privately with the legendary Don Was, president of the preeminent Blue Note Records. Mr. Was explained to me how he read my story and business plan, and his own thoughts of how to approach the music industry differently. Blue Note Records has, he explained, the opportunity to introduce its fabled catalog, both past and present, to an entirely new generation. I left Mr. Was with some tidbits that I learned through my past work with Judy McGrath’s social and digital media brand (Astronauts Wanted: No Experience Necessary) -- from what it takes to make a song go viral on Vine to who would be the hottest streetwear designer to pair with in creating artist merchandise (my suggestion: Hood By Air's Shayne Oliver). Mr. Was jotted down our discussion and definitely seemed to want to look further into the items -- he even told Mr. Barnett that I introduced him to a few new things.