SOCAN's Michael McCarty: We're Entering the 'Most Prosperous' Era in the History of Recorded Music

 Jeff Knights/SOCAN 
Michael McCarty 

The former president of EMI Music Publishing Canada sees a bright future ahead for the industry.

Michael McCarty was recently inducted into the Canadian Music Industry Hall of Fame during the Canadian Music & Broadcast Industry Awards in Toronto. The one-time president of EMI Music Publishing Canada for 17 years and now chief membership and business development officer at the Society of Composers, Authors and Music Publishers of Canada (SOCAN) might work inside the box but is always thinking outside it.  

In the '90s and into the early 2000s, EMI was a unique publishing company for Canada with an in-house recording studio and an A&R philosophy. With his right-hand Barbara Sedun, the two signed and developed artists before they had a label behind them, such as Moist, Matthew Good, esthero, Three Days Grace, Billy Talent, Sum 41 and Alexisonfire. They weren’t simply a song bank, acquiring catalogue and seeking opportunities for those songs. They were entrenched in artist development and were damn good at it. When EMI shut down, McCarty did a stint at publishing company ole and then went over to SOCAN, applying the same approach.

Billboard spoke with McCarty about shaking up the status quo and why be believes “we're entering an era where it's going to be the most prosperous in history for recorded music.”

When you led EMI Music Publishing Canada, those were cool, exciting times. There were other publishing companies, but you were more holistic. You had the recording studio and you were treating it as artist development. Where did that freedom come from or that philosophy?

The freedom came from Marty Bandier [chairman and co-CEO], who obviously controlled the purse strings. I will be forever grateful that he believed that I believed I was on the right track. Even at the early stages, soon after I became president, the first two or three things we did didn't work out and he would say to me, ‘I think you're crazy; you're gambling, but it's your job, your rope, take it.’ And the next project we got involved with was Moist and we were lucky that that took off and it was very successful, otherwise my runway might've run out.

But the philosophy came from a combination of what I personally like to do, which is get involved in things at the early raw stage and what I felt the Canadian market needed. I thought there was a gaping hole for somebody who is well-financed, had connections, knew what they're doing, et cetera, to help artists at a very early stage.

You would hire publicists and radio reps, like [the late] Bobby Gale, before your signing had a label.

Yeah. If you look at the U.S., at least in those days, this would be the early '90s, the publishing business model had taken up a place at the end of the value chain. So once somebody got discovered, got developed and had a record deal, then the publishers would come in and they'd give them a big check -- a lot of money and a little bit of career help, at the end of that value chain. I saw myself at the beginning of the value chain, where we give them a little bit of money and a lot of career help and, again, because I thought there was a big place for that in Canada.

So Moist, Sum 41, Three Days Grace. Billy Talent, esthero, LEN, Matt Good, Dallas Green/Alexisonfire/City and Colour all yours before any kind of profile in Canada.

Take Matt Good and Moist to be two good examples. We called ourselves Invisible Records because we weren't a record company, but we acted one, like a virtual label, on a project-by-project basis. Because if the situation required the artist or the writer to have an independent record to get attention, to get a record deal, then we helped them pay for records and videos. We hired the late Bobby Gale to be our radio promotion person with Moist. He had just left Polygram, where he was the head of Ontario promotion. I realized that we had to put together this virtual team for Moist to support an independent record release, so I said, “Bobby, come over here and you can promote this. Oh, and by the way, you have to get it manufactured and into stores too.”

He was doing all those things and we weren't really getting anywhere and then the band said they wanted to make an independent video. I was already way over my head financially and I didn't want to pay for it, but they said that they had just done a Christmas party for a video production company in Vancouver on a barter and in exchange the company would do the video for them. They just had to pay for the film. I said, “Well how much is that?” They said, “$3,000.” I said, “Still too much” because I didn't think anybody in Canada, especially at that budget level -- free -- knew anything about making videos. 

So then David Usher, the lead singer and leader of Moist, got on the phone with me and in 10 minutes of talking about film and video, I understood he completely understood the language of film. And I thought, “Well these guys know what they're doing.” So I gave him the $3,000 and they delivered a video, which I think is historic in the annals of Canadian video. And, of course, the thing took off and I'll never forget the day Bobby Gale came into my office; he had a stack of papers, faxes from record stores, and said, “Mike, we can't keep up. They can't press enough records to keep going. You've got to turn this over to a label.”

In the States they don't know Moist. But all these acts are still going: Sum 41 is touring, Three Days Grace just had their record-breaking 15th No. 1 rock single on Billboard, esthero is on the new Black Eyed Peas album, Billy Talent headlines arenas at home. It was an end of an era here when EMI got shut down.  What was going on those last few years?

EMI was undergoing tremendous structural change and ownership change. Marty Bandier left and while I had a lot of support from the new regime, the business was changing and I was trying to adjust to it. We went through a period where we weren’t having as much success. I was getting tired of the whole situation. I was sort of on my way out. I actually wanted to be on the entrepreneurial side, so I signed a contract that allowed me to go and do some additional things and then I got the offer to go run ole and went and did that for about almost four years.

That’s 20-plus years of being a song guy. That's your strength. Identifying talented songwriters, nurturing them, hearing great hit songs. Then you get this offer to go to SOCAN.  Not a creative outlet; the songs are already created. What did you think you could bring to a PRO?

Backing up, I think over the years I went from being really good at talent-spotting and spotting songwriters and artists at a very early age, then, as I got older, it became less directly connected to youth culture and street culture. I became good at finding the finders, finding and developing A&R people and creating creative cultures. One of the most important things we did at EMI Publishing Canada was created a creative culture of both the staff and the environment. It's one of the things that drew artists in. You mentioned we had a studio and it was just a symbiotic relationship between the environment and the people. It would just attract more and more people. 

And Greg Below, who I brought in as a studio manager, really the reason to bring him in was to incubate him as an entrepreneur because he was really talented at finding heavy rock bands at a very early stage. He had a little concert production company where he'd bring them into Canada and put on shows and then a year later they would blow up. So I said, “Greg, come in and manage my studio, but you'll start a label [Distort] and we'll sign the things together and we'll use my publishing money to help fuel it and we'll record them in our studio and put them on your label and I'll see if I can get you distribution with EMI Records,” which I did and it created its own virtuous circle. And the first thing that he brought to me was Alexisonfire. And that turned out to be incredibly successful. At one point, as the owner of that label, he was making more money than I was so I told him he had to leave the nest.

We're very proud of all that stuff. But to answer your question about the connection to SOCAN. What SOCAN needed was a dose of creative culture and it needed to build a modern capability of dealing with the writers and the publishers at a higher level of sophistication than they had before. And who do you get to do that? People who are professionals at dealing with artists and creators.

You had to lure back the Canadian artists that SOCAN lost to PROs in America.

Yes.

What was the advantage to Canadian songwriters to go with BMI or ASCAP?

I don't think there was an advantage. It was just the advice they were given. Those are great organizations and I think that SOCAN didn't have the same luster and appeal and probably wasn't as competitive in terms of advances. Also, it was a different time because in that era, SOCAN’s only licensees were Canadian companies -- broadcasters, arenas, et cetera. So if they lost the member as a direct member, they got the rights back through ASCAP or BMI, and that's all they needed was all the world repertoire rights to license the Canadian business. But now all the new licensees are the biggest digital companies in the world, and they're global companies. 

So in order to survive and thrive down the road, SOCAN has to be globally competitive. So on the repertoire side, we needed to get those people back and to keep the next generation of stars. The same thing with great screen composers and the publishers. Canada is one of the great centres of the creation of music in the world now. The fact that we didn't have most of those people had to be turned around. So now we have them.

Including Drake.

The whole camp and all the great producers are coming out of here now, like Murda Beatz and Frank Dukes.

You also took an A&R approach in terms of hiring staff across the country to solicit songwriters, talk to young artists and songwriters, educate them about SOCAN [including his former creative partner Sedun who has since left].

If our job is to recruit the next generation of stars, we need people who are professionals at recruiting songwriters and artists and composers. And in order to do that, basically that’s describing an A&R person. I needed people with talent scouting skills to figure out what signal-to-noise to pick up or to pay extra attention to talent development skills. From a program level, not even an individual level, what kind of programs do we need to put together to help people get from point A to point B? Well, who knows how to get from point A to point B? A&R people. And then finally people skills, networking skills because finding these people and working with them and helping them are all about people skills and networking skills.

And you give advances to songwriters. Kim Stockwood mentioned at the Live Music Industry Awards that SOCAN once gave her a bit of money to put towards her first car. Chad Kroeger said at the SOCAN Awards that SOCAN gives him an interest-free advance to pay his taxes. How does that work for an artist that doesn’t generate Nickelback money?

It's something that's common in the U.S. PRO world and is common now with SOCAN, in the sense that if you have a known amount of money in the pipeline, then we're prepared to advance it to you. We have expertise in data that helps us figure out how much that is. Occasionally, we will take a bit of a risk in a sense that with currently successful people, you can tell again through our professional knowledge of how the business works, and being A&R people and having done this kind of thing for a living for many years we could combine the data and the gut to go a little bit further than the money that's actually in the pipeline because we know it's going to be in the pipeline.

Once in a while, at the very beginning part of somebody's career, if we run into somebody who we think clearly has got the goods, we will sometimes take a bit of a chance and give them a small advance that helps them stay alive, so they get to the point where their talent and ability will be obvious to the rest of the business.

It's really important to understand that we see this as pre-institutions. This is stuff that we're doing for the ecosystem in the pond. So those companies that fish in the pond -- like publishing companies, record companies, management companies, booking agents -- this is all stuff that we're doing to create a healthier environment for them, not instead of it.

You consider this an exciting time for the business and creatively. Why do you think that?

For most of the history of the music industry, the primary obstacle for somebody wanting to create music was institutional or lack of access to resources and needing the permission of an institution to get those resources. You needed permission and money from a record company to get into a recording studio and only then could you make a record. And then if they liked the record, they would bring it to the public. Now you don't need that permission. You can make a record on your phone or your laptop. You get it on social media. You can get it distributed by all the digital platforms. There is no barrier to making music or getting it to the public.

So you can create it, but do you consider this time the most exciting or thriving for the business end?

Yeah, because I think that we're entering an era where it's going to be the most prosperous in history for recorded music, meaning records and publishing and songwriters and artists.

How?

Because the pool of money that's being generated by subscriptions to online streaming. The projections from some of those companies, like Apple, are at some point in the future, there'll be a couple of billion people in the world with a recurring music subscription. That's going to create a regular pool of money that the world's never heard of for music, and that gets divided up between the platforms and the rights owners.

Will those rights owners get paid faster if there are more companies on the blockchain and get rid of the middleman?

I don't think the existence of middlemen is a problem.... They provide a valuable service. They aggregate things. They enable one company to deal with the middleman who deals with another hundred companies or a hundred customers. Even in the new digital industries that are the product of disruption, there's a lot of new middlemen. It’s the job of a SOCAN or a publisher or a label or a manager or whatever to evolve, to continue to add value as a middleman.

Yes, there's going to be great benefits from technology, like faster payments, et cetera, but that in and of itself is not a giant problem or obstacle in the business right now. We just talked about advances that eliminates any kind of delay in payments. It doesn't come any faster than before you earned it.

The biggest opportunity in the streaming service role, again, is that there's going to be more money coming into the system than ever before. The biggest long-term issue is you have to be popular to get a lot of money from that pool. I think there's also some systemic problems. The songwriter and publishing community right now has a smaller piece of the rights holder pie than they deserve. I think over time that'll change. There are strong winds headed towards that way. I think that 10 years from now people will be wondering why anybody ever thought it wouldn’t be a great era.

You make significant differences and change the internal culture wherever you go. What is next?

If you look at the threads in my career, I've been fascinated by, and you can say obsessed with, great songs and the people who write them, helping find them, helping nurture them, helping protect them. I can't see myself doing anything else but that. So wherever things take me, I think I'll always be doing some variation of that.