Brian Message, co-manager of Radiohead, Faithless and pop act Kate Nash, revealed how management and artists now work together to build a fan base without the backing of a traditional record label, during a keynote at MIDEM.
Message, a partner in U.K. management company Courtyard, appeared at the first day of MIDEM, the international music market and conference in Cannes, which runs until Jan. 21. He has just been elected chairman of the Music Managers’ Forum.
The Radiohead campaign for “In Rainbows,” beginning with the pay-what-you-want business model for the album release, was about “artist empowerment” following the band’s departure from EMI, said Message.
He declined to reveal the average price paid for the download release, only confirming that it was a “lot more than the cost of delivering it.”
“The band wanted some control, they wanted to go direct to the fans,” said Message.
He did reveal that a significant part of the band’s revenue now comes from touring, with the buzz from the “In Rainbows” release helping them to play to 60,000 fans in San Francisco where they previously played to 25,000.
“A lot of it [revenue] comes from live,” he said. “Radiohead’s live business has gone up hugely.”
The release also resulted in Radiohead getting contact details and data on around 3 million fans, he said, which is used purely to inform them about Radiohead events and releases.
“Radiohead, for want of a better word, is a trusted brand,” said Message. “Once you drive that trust, you have a big opportunity.”
The business model has also been transformed for new artists. “It has been a quite dramatic period of change,” he said. “Our business models have migrated from easy 20% commissions and having to put up no investment, to having to put up quite a lot of investment. It definitely makes the pips squeak a little bit in terms of taking that risk.”
He said the management arrangement with some new artists involves investing money, either seed money from the management company itself or raised from other sources such as venture capital firms, and working on a business partnership with the artist. Courtyard or a third party would then share revenue, but not take any control of the copyright.
“Despite the economic woes, there is a lot of VC money waiting to come into the music business,” added Message. “If you get it right, the returns for an artist as a business can be huge.” However, he largely excluded the mainstream recorded music business as attractive for investors.
Artists are also encouraged to record music and make videos at a low cost, relying on their creativity. “We’re forced to go down that route because there just aren’t that many record labels any more,” he said.
However, some of Message’s bands such as the Rifles and Kate Nash do have major label deals. But the Rifles’ relationship with Warner Music U.K. also involves the major as a profit-sharing business partner in the band, although Message didn’t characterize it as a 360-degree model.
Message explained that a business partnership between Courtyard and the artist Yoav had succeeded, because it gave Yoav the freedom to go to markets where he had an audience, rather than being forced to repeatedly try and break the U.K. by a label.
Check back at Billboard.biz for full coverage of MIDEM in the days ahead.