'It's an Ecosystem': New A2IM CEO Richard James Burgess on Goals for Indies and Beyond
"The most important thing for us is to not be the last one to the table and have to live on crumbs because someone else has eaten most of the cake."
The American Association of Independent Music (A2IM) will enter its next phase led by someone who has moved through a few himself. Richard James Burgess, named CEO of A2IM on Jan. 5, joins most recently from a role as head of business for the nonprofit Smithsonian Folkways label, but he has also been an electronic musician, a record producer, a college professor, an artist manager and the author of a book on music production.
Burgess, who was born in London and raised in New Zealand, laid the template for the early '80s New Romantic movement in his productions for Spandau Ballet. The 66-year-old takes the helm of the U.S. independent label trade group at a time when membership has swelled to more than 380 labels and indies account for a lion’s share, 34.4 percent, of the market. He’s the fourth executive to lead A2IM, succeeding interim president Molly Neuman, the recently appointed Kickstarter head of music who in July replaced the indie organization’s head for eight years, Rich Bengloff.
As A2IM comes off its 10th anniversary, Burgess spoke with Billboard about his preparation for this role, the group’s copyright and digital priorities and what indie labels might be able to learn from the craft beer industry.
You’ve had all these different roles in music, most recently as business head of the long-running Smithsonian Folkways label. How has that prepared you for leading A2IM?
One of the reasons this really appealed to me is because I have the heart of an artist, because I am an artist [Burgess was the vocalist and drummer for synth-pop band Landscape, best known for the song "Einstein A Go-Go"]. I still make music. It’s something that you never get out of your system, or I’ve never gotten out of my system anyway. Something I have to do. I still play drums, I still record things. So I have that heart in the industry, and it’s an obvious statement, but the artists are the heart of what we do. Nothing else would exist without the creativity and the artistry. But then you also realize it’s an ecosystem. Labels are potentially the vehicle for artists to realize their dreams. And likewise with the tech companies, the infrastructure that’s built, the distribution systems. You find out that as you progress as an artist, the more you understand the business, the better. You can work it to your favor.
All these different things have gone a long way. I sat on a lot of committees when I was at Smithsonian [Folkways], and that really helped. I got myself a Ph.D. while I was at the Smithsonian, as well, and doing that research and writing books really helps in this job because you have to understand a lot of complex issues.
Speaking of complex issues, what are the biggest developments you’ve seen in the indie-label space since coming to A2IM as chairman last June?
The single biggest was the Web IV rate setting, which is still not resolved. That was of great concern to the indies because there was a suggestion that there could be segmentation of rates by the licensor, which would mean that two recordings are not worth the same. They would be worth more depending on who the owner was. And nobody really knows quite how that segmentation would work -- but speculatively, one would assume that the major labels would have the higher rate and the indies would have the lower rate. And that’s antithetical to indie thinking, but also it should be antithetical to anybody’s thinking. Clearly, a recording is a recording.
As the organization enters its next 10 years -- or even just in the shorter term -- what are the key challenges going forward for A2IM?
I’m hopeful that we can create more synergy in the industry. That means that we don’t bicker over tiny slices of market share and allow the industry to become divided. Because there are some gigantic issues that face the music industry as a whole.
We’ve watched what has happened since 1999. Revenues have dropped dramatically. We’re in a very different environment today. We’ve got the tech companies that have amazing infrastructures. We’ve had to build new business models around those. It feels to us, and certainly the indie community, that we could not only be back, in terms of the amount of revenue the industry generates, to where we were in 1999 and 2000, but maybe much even much bigger than that. It’s going to take a real combining of forces.
Indie labels release not just music overlooked by major labels, but also some of the biggest-selling albums of our time. Where do you see common ground between the interests of the labels behind Adele or Taylor Swift, the more mid-size indie labels and upstart or boutique outfits?
You’re right, the two biggest-selling artists last year were Adele and Taylor Swift. Obviously, although Adele is on Columbia in this country, she was signed and developed by XL, an indie label. Taylor Swift is obviously also on an indie label. But like I say, it’s an ecosystem, and there’s an awful lot of symbiosis or synergies in the system.
First of all, a significant proportion of indie labels are distributed by major-owned distributors. So it might be ADA, RED or Caroline, which are often referred to as indie distributors, but they are owned by the major labels. There’s revenue moving back and forth all the time. What’s good for the indies is good for the majors in that regard.
Not only that, but you look at the makeup of the majors. When you start teasing it apart, what do you see? You see massive amounts of indie labels that have been acquired over the years. I always think of it like London, which is really a collection of villages that got subsumed into this greater whole. Labels like Island, Chrysalis, Virgin, Motown, Atlantic -- these were all indies at one point. They all started out with not very much and grew into these behemoths. That’s the history. It’s been going that way since 1877, when Edison invented the phonograph. This is a healthy process, I think. I don’t think there’s anything wrong with that.
That’s from the bigger indies to the majors. But from the bigger indies back to the smaller, I think there’s tons in common. I doubt that there’s an indie in the world that doesn’t want to be a big indie.
The beautiful thing about A2IM is you have the opportunity to mingle with [labels like Beggars Group] and to learn from them. We pool our resources in terms of knowledge. This is a rapidly changing marketplace and has been for the past 15 years in a way that I’ve never seen in my entire career. I’ve been in the business I suppose since the late ’60s, and I’ve never seen changes like I’ve seen since 1999. Just keeping up with that can be a challenge, especially if you’re primarily artist-based and you’re just all about the music. But if you don’t keep up with the technology you’re not going to make a living at this point.
What are the big priorities as far as digital partners right now for A2IM?
If you want to get down to the most basic fundamentals, what A2IM wants is a level playing field. We want an equitable relationship with all entities out there that distribute our music one way or another. The most important thing for us is to not be the last one to the table and have to live on crumbs because someone else has eaten most of the cake.
As far as the technology companies are concerned, they’re building businesses of creativity off of copyright creation and copyright ownership. It’s really important that the just returns of that are returned to the industry that helped them build their structures.
In September A2IM called for a new service that would create dedicated playlists for independent music. What’s the status of that project? What role do you see playlists having in the new environment?
We’re still working on that. It’s not there yet. We hope to get that done pretty soon.
The tendency is for the smaller indies in particular to get left out of those playlists, because what the Internet is moving toward -- and I say the Internet in general but it applies to any kind of music discovery platform -- what it seems to be shifting toward recently is more sort of “what’s the hottest and the latest.” That’s all well and good, and I’m sure that’s what the vast majority of people are looking for when they go on the Internet. But when you look at the group of people who are left out, that aren’t the vast majority, that’s still a huge number of people. And they’re often disenfranchised. They often feel that they can’t find what they’re looking for.
Better discovery mechanisms will be better for the industry as a whole. And they’ll allow for people who want to dig a little bit deeper. There have to be better mechanisms for discovery, and the indie labels are on the cutting edge in terms of finding new and exciting and different artists.
There’s this idea of digital deflation, where in the digital age there’s more music consumption and yet less revenue being earned off of that. In the streaming era, it seems like there’s more emphasis on catalog, and the major labels have such vast catalogs, including the indie labels that they’ve bought up. What steps can be taken to bolster indie labels, or what argument do you make for indie labels being so crucial to the ecosystem?
I would make the argument that all music needs to be worth more and needs to be valued better. We live in a time where more music is being listened to on a daily basis than ever in the history of humankind.
But we’ve actually gone backward in terms of compensating musicians. It’s very clear that people are willing to pay for music through subscriptions and so on, and if they’re not then the ad-supported streaming services seem like a viable model. What I think is unfortunate is that the rates that are being paid to labels and artists are often sadly small. I’ve heard people [at digital platforms] complaining about paying out 50 percent of revenues on music, but all they do is serve music. They’re fundamentally platforms for music.
There’s more money there for everybody -- for the tech companies, for labels, for artists. We just need to make sure that we’re creating a healthy environment. If labels can’t get started, if artists can’t get deals, if they get their music out there and they can’t survive on it, if you have to work a day job, it becomes very difficult. If we create a healthier industry, the revenues will be there for everybody.
The thing about the tech companies is they have scalability on their side. Artists don’t have scalability. They’re usually one person or a small group of people, who can do what they can do, but they have to make a certain amount of money for it. A tech company sets up an infrastructure, and that can scale from being $50 million in debt for five years to suddenly being billions of dollars in the black. That’s only available to a small number of artists. I’d like to see there be a healthy middle class, with both labels and artists.
Is there anything the indie labels can learn from the example of craft breweries, which have been seeing such success recently?
I just got out of a conversation about that this morning. Honestly what’s happening is that the indie labels are very much doing what the craft breweries are doing. They’re creating these brands. The majors have stepped away from that in the sense that they’re like Wal-Mart basically -- they sell everything. You know you can get anything at Wal-Mart. Kind of similarly to some extent at Universal and Sony and Warner, although they don’t go down beyond a certain level with their artists. You’ve got to be selling a certain amount of product in order to remain signed, but still they have a pretty broad range of material. You don’t talk about the Warner sound or the Sony sound or the Universal sound.
I just came from Smithsonian Folkways Recordings. Even though it’s not branded by sound particularly because we have Latino music, African music, Asian music and Americana, at the same time there’s a similar approach to every recording and a similar ethos. So people tend to buy the Smithsonian Folkways Recordings because it’s branded by label, much like Motown was branded by label, Atlantic was branded by label back in the day, much like many of the indies today are.
What we are faced with, though, is a problem insofar as the metadata is not really being delivered via the digital platforms in such a way that you can promulgate your label by brand digitally. Back in the physical days you did it with your artwork and so on and so forth. These days you’re staring at a thumbnail. You can’t search iTunes for instance by label as far I’m aware. It’s really a problem, that.
The other thing is the data that we have available to the industry is not parseable down to the level that we need. We live in an age of big data and I think that the more granular that data can be, the more different ways we can slice and dice it, the better it will be for everybody. Because we can start to understand niches and genres. And again, the majors probably don’t care so much about niches and small parts of the market, but that’s exactly where the indies can carve out their market share and build a business.
So to go back to your question, I feel that the indies are doing what the craft breweries are doing. It’s something we should take a very close look at to see if there’s anything we can recommend that the craft industry did that we’re not doing.
Is it a priority to increase female representation in the indie sector of the industry, or diversity more generally?
It’s one of the first things that I talked about when we got here is we would definitely like to have more diversity in the labels and memberships of A2IM. We would like to see more diversity in the industry generally. I can’t imagine why people don’t want diversity. It’s better for everybody to have more points of view.
We have women on labels. Our treasurer of the board, Portia Sabin, she owns Kill Rock Stars. They exist. But you’re right: Why are we not sitting in a boardroom that’s 50 percent women? Or 51 percent women, right? And likewise, why do we not have representative percentages of other groups and other ethnicities and so on and so forth? We should. I’m all in favor of that. The indies have a better shot of doing that because you’re indie because you have an idea and you want to do it. You strike out on your own and you’re very entrepreneurial. There’s tons of opportunity for anybody who wants to start a label, and I don’t think it really matters what ethnicity you are or what gender you are. But you are right, we’re not seeing that level of diversity right now. I would definitely like to resolve that, if I can.
After the nearly 20 percent increase in membership in the past two years, how big a priority is continuing membership growth?
It’s huge. There are tons of labels out there that aren’t members yet. What we do tends to benefit labels, whether they are a member or are not a member. But what’s important to say to labels that are not members is that we can do more if we have your voice and if you are a member. For one thing, Congress tends to look at the size of representation, and the bigger the representation, the more diverse it is geographically, in terms of minorities and so on, the much more weight we can have. And in that regard I think we can bring something to the table that the majors and the RIAA cannot
If we work together with the RIAA and the majors to improve the lot of artists and labels, we could be much more effective. There do seem to be noises to that end, but only time will tell obviously. On geographic diversity, I’m pretty sure that there’s a label in every congressional district in this country. We would like to add those labels. I think they they would find it more than worth their while. We don’t just want to have the labels as token members. We want to have their voices, and we want to have their input, so we can resolve their concerns. That’s a major priority for me.