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.
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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.
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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.
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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.
After my meeting with Mr. Was, I was taken on a tour of Capitol Records’ studios and mastering rooms. Walking into Studio A, I could feel the spirits of Frank Sinatra and Nat King Cole circling the room. You knew right away you were in a special place. I got to play (ahem, tap some random keys on) Nat King Cole’s favorite piano and learned about the echo chambers that Capitol Records has under its parking lot, which provide the utmost reverb for its recordings. I was in awe at being in a spot that only a few non-musicians have ever seen, and was extremely grateful for all the knowledge my guide and Capitol team member, Jim Kuhla, shared. Mr. Kuhla knew the names of just about every artist who had recorded in the studios, how every mechanical and electronic piece of the studio worked in concert to create the perfect recording, and of course all the old school legendary rock-and-roll stories that are a natural product of such a legendary studio -- including big wig artists who have set up camp in the studio for months on end to record and new artists who are overcome by the nostalgia of the studios and suddenly get stage fright, even though they are the only people in the room.
Following the extensive studio tour, I went out to lunch with Jeff Temske and Justin Seltzer, whose official titles are mix a between data geniuses and A&R aficionados. I just call them “the future” -- they seemed to realize the future of the music industry not only takes having an ear for good music, it also requires understanding of all the raw data that surrounds their customers, potential customers, and untapped markets. They know the data like a Beyoncé stan knows “Drunk In Love.” These two have tracked past projects from the grandiose Prism (Katy Perry’s last album) to the upstart Niykee Heaton's Bad Intentions, their overall message being that if you know exactly where an artist’s consumers are and those consumers’ music-buying habits, you can know when, where, and how to properly market that artist.
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After lunch, I rejoined Mr. Barnett to sit in on two more meetings. The first was regarding the current status of Sam Smith’s smash album In the Lonely Hour, the other to plan for the upcoming November 24, 2014 release of Mary J. Blige’s The London Sessions. While the Sam Smith meeting was spent with team members analyzing the wildfire-like success of his album and beginning to plan for the awards season, the Mary J. Blige meeting took a different turn.
After watching a trailer for Mary J. Blige’s upcoming album and hearing the team plan for the rollout of the album and its marketing approach, Mr. Barnett turned to me and asked, “What do you think?” Shocked out of my mind that he'd asked my opinion, I quickly blurted out something that I now remember as non-sensical -- but I like to think that I might have saved face later on in the meeting with other suggestions I began to add to the conversation once all of my jitters were gone. While the conversation was confidential, my suggestions were focused on trying to retain Blige's core fanbase while introducing her to a new generation of fans.
After the Blige meeting, I entered a meeting with Mike Flynn, svp of A&R, and his “dream team.” As I entered the Capitol Artists Lounge where the A&R meeting was occurring, they were already there waiting for me. I went into the meeting thinking I would serve as a fly on the wall, simply observing, listening, and learning. I was quickly disabused of that notion, however, when Mr. Flynn turned to me and basically said he and his team have heard all of these artists already, and that they wanted my opinion. As the team went down the list artist by artist, Mr. Flynn asked my opinion and thoughts, which I truly believe he valued and processed. I couldn’t believe it. Thirty-five minutes ago I was getting asked my thoughts of approaching the marketing for Mary J. Blige’s album and right now I was helping pick Capitol Music Group’s newest signees. It’s cliché to say I had to pinch myself to make sure I wasn’t dreaming, so instead I’ll say I peeked out of the window to make sure the LA smog was still blocking the downtown skyline. Yep.
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Before I knew it, it was 5:00 PM and time to have my final meeting with Mr. Barnett and Michelle Jubelirer, evp of Capitol Music Group. I thanked and debriefed Mr. Barnett on what a great day I had, and he clued me in on the positive feedback I had received from his team members throughout the day. While Mr. Barnett apologized for not being able to spend the entire day with me due to his grueling schedule, I ensured him that it was even more of a treat receiving such a versatile view of his company from top to bottom as it gave me a more informed perspective of what it takes to run such a successful label. Ms. Jubelirer spoke to me about how she had a similar path to me -- we both went to the same college (the University of North Carolina at Chapel Hill) and she also worked as an M&A attorney at a white shoe law firm in New York City before transitioning to the music side. Listening to Ms. Jubelirer was comforting as she understood the pain of having six figure debt while having your intellectual passion pulling you in a completely separate direction. After the debriefing with Mr. Barnett and Ms. Jubelirer, I hopped an Uber to the airport and got mentally prepared to return to the corporate world the next day.
Kirkland Alexander Lynch is a law clerk in the New York City office of Debevoise & Plimpton LLP.?? Prior to joining Debevoise Kirkland spent two years helping launch Astronauts Wanted: No Experience Necessary, a joint venture between Judy McGrath, ex-CEO and chairman of MTV Networks and Sony Music Entertainment. Kirkland received his J.D. degree from Harvard Law School.
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