It’s slightly surreal to head to the trendy arts district in downtown Los Angeles to visit Warner Records’ offices instead of the ‘70s-style “ski lodge” building in Burbank, Calif., the label’s longtime home. But one familiar holdover signals its new headquarters within the Warner Music Group building in the former Ford factory on Santa Fe Avenue: a water tower emblazoned with the blue WMG logo.
Inside the five-floor building, also home to Atlantic Records’ West Coast office, Warner Chappell Music, Rhino and other divisions, Warner Records is housed on the second floor. Several of the walls in the expansive area are illustrated with commissioned original murals by noted street artists Shepard Fairey, Tristan Eaton and KMNDZ (Johnny Rodriguez), in keeping with the label’s new location in the burgeoning downtown L.A. Arts District, along with soon-to-be neighbors Spotify and Soho House.
The new location and open-space design also reflect the identity and logo rebranding and creative evolution being fostered by U.S. co-chairman/CEO Aaron Bay-Schuck and U.S. co-chairman/COO Tom Corson. The executives are in the middle of their first year together: Bay-Schuck came onboard nearly eight months ago from Interscope; Corson, 17 months ago from RCA. In their first interview together at the helm, the pair say they were cautioned about coming to Warner. Among the warnings they received: “It’s too far gone to turn around,” said one naysayer, while another challenged, “Lots of other smart people have tried; why would it work for you?”
“But the team and culture that’s in progress here is super encouraging,” says Corson. “It reminds me of the reboots I’ve been part of, whether it was RCA when we combined Jive or when Clive Davis and a bunch of us started J Records. This feels very familiar and similar to those moments when you knew you were at the beginning of something great.”
“For me, that’s what’s made it the most exciting opportunity,” says Bay-Schuck. “I like that we got the chance to rebuild a major company in 2019 when the business is finally like this. There’s a fire, a let’s-all-get-in-the-trenches mentality that we have to win and prove a lot of people wrong.”
In an hour-long sit-down with Billboard, Corson and Bay-Schuck assess the changes made to the staff and roster at Warner so far, the efforts to regain the label’s foothold in R&B/hip-hop, the importance of artist development and the challenging landscape of record contracts.
Looking back on the past year, Corson says, “There were a number of strong artists that needed more focus when we arrived, whether that be Dua Lipa, Bebe Rexha or Mac Miller, God rest his soul. Or just being able to optimize projects that came through [Drake’s label] OVO or other ventures. We stress-tested this company in the last 17 months and this company proved itself. We’re ready for battle.”
Billboard: Have the new logo and brand identity also extended into a new mission statement?
Tom Corson: This wasn’t something we’d imagined that we’d have the opportunity to do coming here. But when the license ran out with Warner Media, it was a necessity. The new mission statement is Art + Impact with the view that we are a major with the heart of an indie, the indie part being things that represent artistry, integrity, freedom and accessibility but with the power, impact and ability to scale the major labels globally.
[Warner Music Group CEO of recorded music] Max Lousada puts it slightly differently. He says bespoke and with scale. You can get the custom plan but you also get the impact, the scale. We have a fun slogan that we also dreamed up: a label born in the California sun and at home everywhere on earth. That’s a major part of our DNA. Warner Bros. Records always was the quintessential L.A. label and Warner Records will continue to be that.
Aaron Bay-Schuck: My heart sunk a little when I heard initially that we were going to have to do this. But as we peeled back the onion and learned more about why and what was going to come along with changing the name and the new logo, we got excited. We are, with all respect, saying goodbye to the old and looking into the future of what this company is going to be all about.
Our roster is essentially 25% of what most major record labels are. At this moment, we really don’t have many more acts than the biggest indie would have. We have really embraced the artist-first mentality in our ability to get in the weeds on things the way an indie sells itself as doing.
How would you assess the changes made thus far during your respective tenures?
TC: It’s been fun. But there was a lot of work to do when I got here and there’s still a lot of work to do. But we’ve accomplished a lot, pretty much building a whole new team. We’ve been very fortunate to attract people that were in great places and didn’t have to move. And we retained and promoted some great people, too. All of them wanted to be part of this iteration of Warner Records and help redefine the label, putting it in the position where it’s again the best record label in Los Angeles, if not the world.
We’re bringing the best parts of this great label forward and also what needs to be brought in at this moment in time. The new building — a move that had already been planned for a few years — is a big part of that. As beautiful and classic as the Burbank building was, this building and this floor represent the music business, the entertainment business and the media business in 2019 and onwards. It’s very important to have everybody on the same floor, everybody visible, everybody connecting on a minute-by-minute basis. You can do a loop of the floor in 15 minutes, talk to 20 people briefly and connect. It’s minimized emails and minimized meetings. It’s really super productive.
ABS: Initially knowing that Tom was going to start without me made me a little nervous. It was a new partnership and I’d sort of dreamt of us walking in there on day one and doing this together. But in hindsight, thank God that he came in here a bit early. I walked in unquestionably to a much healthier company than Tom walked into. I was able to just throw myself into the deep end of the company’s creative side.
I was faced with an A&R team of only a few people, maybe three to five people tops, which is way too small. And in seven to eight months we’ve turned that A&R team into a real force of nearly 30 people. Not all of those are full time; some are consultants, some are creatives: songwriters and producers that are part of our staff but also continuing to pursue their own careers. Then we dropped a large portion of the roster to make room for what these 30 people are going to want to sign.
In a year of volatile transition for Warner, we still had the biggest top 40 song of the year in “New Rules” and ended up with two best new artist Grammy nominations with Bebe Rexha and Dua Lipa — and Dua winning. We had BlocBoy JB & Drake’s “Look Alive,” one of the biggest songs of the year, and also Bad Bunny featuring Drake with “Mia.” That speaks volumes about what we’re going to be able to do moving forward if we were able to have that kind of success with that much volatility.
What is your roster-building philosophy moving forward?
TC: We’ve been aggressively signing, but strategically. We don’t want to be in every deal but we want to have the opportunity to be at every deal. There’s a couple dozen acts that have been brought in since Aaron arrived and slightly before he arrived.
The real takeaway isn’t what we dropped. The real takeaway is that there’s bandwidth here. This is our competitive advantage right now. Many of our competitors have large, vast rosters. And they’re struggling with finding space to work with all the acts they’ve signed and are trying to put out. I know: we used to work at those places. We have the benefit over the next couple of years of having a lot of bandwidth. We’d rather not have it [laughs] — and we will very soon be quite, quite busy. But our goal is to always have enough room to work every act in a strategic and bespoke way.
ABS: There were acts on the roster that we knew weren’t going to be part of the future. Some were no longer prominent; others were signings that we didn’t believe fit with how we wanted to move the company forward. And we’ve been able to sign a great handful of acts now across all genres. This bandwidth allows myself and the A&R team the freedom to still do things a little bit of the old school way, in terms of using gut and instinct. And if we are excited about something that the data doesn’t say is already out there and popping, we still have the bandwidth to get in the nitty gritty with those acts from day one, the way a record company used to do. Of course, we’re always looking for great music, but things that might be happening a little bit faster than your typical two- or three-year artist development story.
It was a conscious decision by Tom and I to not hire a head of A&R by title and instead rely heavily on a highly qualified group of senior A&R executives like Jeff Sosnow, Nate Albert, Brock Korsan, Eesean Bolden, Rani Hancock and Mr. Morgan. Ultimately, anything in this rebuilding phase that takes too much of my attention away from building the strongest A&R team in the business, to making the best signings, to ensuring that we have hits coming into the building every day, is probably not time well spent. It was important to me to not have a buffer between myself and the rest of the A&R staff, so I’m in it with them every single day in addition to the traditional CEO responsibilities. I can’t say it will be like that forever, but for the time being it’s been a very positive and essential piece of our reinvention at Warner Records.
Warner Bros. Records was once the go-to label for urban artists. What moves are being made to reboot that mindset at Warner Records?
TC: It’s a major priority and commitment for us. We want to do it urgently, but we want to do it properly. We’re going to get this right and we are in the process of getting it right. We’ve already signed a handful of urban acts, actually, with green shoots popping up on Shordie Shordie, Saweetie, and a few others, and we re-signed Wale. Look at some of our venture partners that are already here, like OVO, which is a tremendous asset to the company. Another partner, Think It’s a Game, is in a rebuilding phase and about to drop a record with YFN Lucci and Trey Songz that — knock on wood — feels like it’s going to go. There are other venture projects we’re looking at as well.
We’re probably missing a key executive or two on the creative front and maybe in one or two other areas, which we’re looking at closely now. Nothing to announce at the moment. But we expect by the end of this year to have an urban division that is defined by the people and by the artists in a very positive way that sends a message to the community that we’re open for business. We want to be a full-service label and we are a full-service label.
ABS: We just want to be genuine about it. It doesn’t feel genuine to go out, spend a bunch of money and all of a sudden say, “Hey, we’ve got these acts.” You’ve got to have the people inside the building, too. There are a lot of labels that have a real head start on us in the genre: Interscope, Atlantic and Epic, who own the street rap culture. Then you’ve got a label like RCA that’s owning the alternative R&B space. We want to own something, right? Our job as A&R people is to look into the future and ask, where is urban music going? Let’s try to focus our attention on where we think it’s going rather than chase what’s already happened. Let’s have some of that, because it’s obviously important to the culture. But let’s also use our brains, instincts and hearts to try to predict where it might be going two years from now so we’re at the forefront of what urban music is in 2020 and 2021.
I always have to remind people when we do get criticized as not being in the urban business. Probably more of Tom’s career than not has been spent with acts in those genres. And the first seven years of my career were exclusively rap and R&B. I’ve never lost my passion and desire to be involved in those genres, so we have a lot more skin in that game than people see on the surface.
How is Warner developing more effective marketing strategies to break new artists?
TC: The whole goal of marketing is to differentiate and then amplify what those positive differentiators are with that artist versus others and really target the fan that’s going to react to that. We have a department here that everywhere else is called digital marketing or something like that. Ours is called fan engagement and it’s very adept at engaging the artist’s fan community and then scaling that appropriately. We also have a department internally that focuses on YouTube only and figuring out how to optimize that algorithm. You have to be able to utilize those algorithms, the data and that process to find your audience. It won’t sustain if it’s fake. We’re not buying a bunch of bots. In fact, we’ve cleaned up a lot of our data and followers voluntarily, with a strong desire to have clean, real data and real fan/user engagement. When we sign an act, we’re really digging into their DNA. They fill out questionnaires, sit down and talk with people and get media training. Then we figure out what the segmentation is to go out and find their audience.
ABS: We are also putting in a real effort to create synergy between marketing and A&R — not looking at those departments as two completely separate entities. They need to be hand-in-hand communicating every day. That’s one of the great things about an open-space office like this: marketing is 20 feet away from us. So there are no more excuses for, “Why doesn’t marketing know about this? Was A&R consulted? Did A&R talk to marketing?” I’ve heard that at all the labels I’ve worked at prior. And in 2019 and 2020 it makes no sense. There’s complete overlap in the skill set between each of those departments. Tom and I are talking 1,000 times a day and a lot of it is about A&R and marketing and how they’re working together.
How important is artist development in the fast-moving data/streaming climate?
ABS: It’s as critical as it’s ever been. Some labels have abandoned it because we have the data and analytics to tell us as much as one can about what a sure thing is. So they’re going for something that’s already got the trajectory. Then all you’ve got to do is pour some gasoline on it and it goes. You’d still be hard pressed to find an artist today who is truly one of the greats — a Bruno Mars, Drake, Taylor Swift, Ed Sheeran, The Weeknd — that came from research. All of those artists were true, start-from-the-bottom groundwork artist-development stories.
We’ve brought in a guy named Warren Gesin [senior VP of artist development] to spearhead our new version of artist development. He comes from a promotion background and was most recently head of talent at Beats 1. There are so many other things that can be going on when an artist maybe doesn’t have a lot going on while they’re in the studio. Whether it’s getting their look together, their art direction, their relationships with fashion, press and television, whatever it may be. Warren will be the conduit between A&R and all of the other departments that really should be doing a lot even before the outside community is telling us there’s a demand for that artist. It’s going to be the backbone of what we do. I want Warner Records to stand for career artistry, for artists with a point of view who stand for something and take risks, who dare to be different and have long careers. I don’t know any other way to do that than have a true artist development process. It’s an indispensable part of our A&R thought process.
How is your working relationship with streaming services in breaking songs?
TC: It’s exciting and interesting. They’re great partners, but that doesn’t mean there isn’t some friction and disagreements. They are truly global partners, which is very different than the way it used to be. There were very few partners that you could work with five to seven years ago and wrap a true global campaign around. You’d have to go market to market, region to region. That’s been a lot of fun to learn and figure out how to work with them. They’re very engaged. They need us, we need them.
Voice is very interesting right now and Amazon has an edge on that. It will be interesting to see where they go. Apple has real strength in urban and what they do through their broader platforms with the Apple Corp. projects. Spotify is in music and in so many different markets around the world and that’s exciting. Then you have more regional platforms and the whole social media part of things, something that’s truly arrived and has an impact now. In the last two to three years, it’s really come to bear on what we do every day.
What are the biggest challenges on the horizon for the music business?
ABS: The changing landscape of a record contract. We’re seeing money back in the business from the deal-making side. Artists, their managers and lawyers are very savvy, so the structure of deals is changing. It’s about finding new ways to find common ground. Artists want to own their masters. Are we looking at licensing deals? Are we looking at more profit-sharing deals? There’s a lot more money being demanded for quality and competitive acts.
On the one hand, that’s amazing because we all want money back in the business. The flip side is that things are popping up and getting signed so fast that it’s a little unfortunate. I believe in really getting to know who you’re getting into business with, because it’s not just about the artist. It’s about the team behind the artist. Is this artist a one-hit wonder or is there a real career here? Sometimes it’s unfair on everyone: for the label and artist to have to make that judgment in an hour meeting and all of a sudden we’re talking seven-figure deals. It’s not changing; that’s what it is. I think we look at anything we sign as a 10- 15- or 20-year relationship and normally you spend a little more time with someone before you engage in that kind of relationship.
Do you see that seven-figure number leveling out?
TC: No, it’s ratcheting up to another level. It feels like the 1990s again. It’s just so quick now because the data throws up serious data points and KPIs and you have to make a judgment call, have a gut check. Do you believe in the act or not, especially when the figures are being put in front of you that you have to stand behind as a businessperson. And the buck stops here.
In addition to that and voice, there are other industry issues — is there a blockchain solution down the line? And direct-to-consumer conversations: who owns that relationship and that information? Data being paramount is critical but analysis is even more important. At the end of the day, it’s going to be the people that work the hardest, make intelligent bets and have a pretty good artistic instinct of what’s going to move the market. That hasn’t changed. If you’re running a really fun company, you have all the things at your fingertips needed to make that decision to insulate you from the downside. Then the question becomes, how good are you on the upside?