Music Managers vs. Labels, NFTs vs. Art: The Future of Music

What is the future of the music industry? AIM’s Bachelor of Entertainment Management Program Director Tim Kelly has had an incredible career in recorded music, ascending from the most underground indie labels to the upper echelons of the majors. After co-founding One Little Indian (now One Little Independent) Records and releasing Bjork’s smash debut Sugarcubes single, “Birthday,” Tim joined seminal British independent label Rough Trade Records as Head of International. In Australia, Tim then embraced the major label world as Sony Music’s Head of Marketing for International Artists, and for ten years General Manager of Marketing for Universal Music. And he was Managing Director of iconic indie Inertia Records. We caught up with Tim to learn more about his experiences and insights on the ever-evolving 21st century music industry.

Check out AIM’s “Start Me Up: An Introduction to the Music Industry” seminar featuring AIM’s Tim Kelly, AIM Chair Ed St John, artists Josh Pyke and Elana Stone alongside reps from Bandcamp, Twnty Three artist Management, Catherine Haridy Management, Ditto Music and Bandcamp this November 27th here.

From Crass Records to the Sugarcubes

Tim Kelly: “I started out playing in a band and working for Crass Records. I worked in the warehouse and carted boxes of records around. It was a very DIY ethic. We started our own record label, One Little Indian (now One Little Independent). That was a part-time thing to release our band and our friends’ bands, and then we signed someone who was good, The Sugarcubes. They sold a lot of records very quickly, and it became a job.

Sykurmolarnir is “The Sugarcubes” in Icelandic, the song was “Birthday” and they pressed about 500. We said, “Of course we’ll release it, because you’re mates, and also it is brilliant.” It was hard at first because no one wanted to know about it. The English music press (which was very important back then in breaking artists) were difficult; no one had broken out of Iceland. So they didn’t want to write about them, the prejudice kicked in. But eventually we got them onboard. Anyway, long story short, we ended up selling a lot of records. So we set up an international distribution network, which I kind of took charge of. And there we go.”

What’s the danger of data & what is the role of the label, now?

Tim Kelly: “It’s been a fascinating time, there’s been a lot of shifts –  the format shift from LP [still important in indie land] to the CD. And then obviously, to the download, and now streaming. I think the notion that labels are there to develop artists has changed. I’m not sure that really exists. Now, there might be a few small independents who do that, but it’s up to the management teams, or the artists themselves. Labels are there to pour petrol on something that’s already got some sparks, but they’re not going to create it for you. 

Data has been really useful. There’s some real positive science for the use of data. But, apart from a few really forward-looking companies, data tells you what is rather than what is going to be. That has reinforced a sense of conformity and reduced the sense of experimentation.”

Forget NFTs, what does the art really mean?

Tim Kelly: “There’s a lot of debate about disruptive technologies like NFTs. What’s the next thing that’s gonna disrupt the business? And how can we market our products in a certain way, or our art in a certain way? It’s dominating the conversation, when it should just be part of the conversation. The area I think gets too little outlet is the creation of the art in the first place. 

No matter how it is distributed, what’s being made actually has to be great, because we live in a world of abundant supply in music. NFTs, and TikTok, and different means of communicating with audiences are really interesting. But how do we make the art in the first place? How do we create the meaning? Make something that people actually want to find? I rarely hear people talking about that. 

If something’s great, people find it. If we go back a few years, a bunch of boys from Perth start making some prog rock music. People found their way to it, and Tame Impala became a global band. And the meaning, when you heard that music, it stood for something. And people gravitated towards it. Obviously Kevin is a particular talent, but … you need to develop your talent, because without that you’re not going anywhere. 

Actually getting passionate about the music, and the meaning and the creation of the music,  used to be what we talked about. And I’d like to hear more of that conversation, rather than the commercial end of the conversation. Yes, you can create an NFT and make some money. Of course you can, but only if what you’ve made in the first place is great.”

Who’s the real middleman in the streaming economy?

Tim Kelly: “There’s an interesting debate about the streaming economy and how much we’re willing to pay for music on a subscription basis. If you stream a song on Spotify, roughly 70% goes to the rights holders. There needs to be a discussion about how much of that is transferred to the artists. Most of the debates have been framed around how much the distributor is paying the artist and it’s missing a critical link, the rights holder (Record Labels / Publishers).”

Did music tech open the floodgates, or close them?

Tim Kelly: “The whole premise when we came into the 2000s, was that the internet was going to create a democracy of things. The major labels were going to be overthrown and anyone could communicate with anyone, the hits could come from anywhere and the gatekeepers in the US and in the UK (to a lesser extent) would no longer have the power that they had. [That premise] has obviously not translated into reality.

The issue now is that we’ve got fewer gatekeepers, so power is concentrated. 

There have always been gatekeepers, but they were territory-specific. You had gatekeepers in the UK, a different set of gatekeepers in Australia or Croatia, or Switzerland, or France. Today’s global oligarchs include Spotify, Apple, YouTube, possibly TikTok. And there’s a few outliers that are territory specific … you could possibly say Triple J in Australia [is a local gatekeeper]. Because it’s more concentrated, it’s more pronounced – people conforming to the Spotify playlist. People conforming to the TikTok format. There’s nothing wrong with those formats, per se. But it is reducing the scope of things. 

Another challenge in terms of the technology: it means that it’s relatively easy to make a good song. Back in the day, some of the stuff was bloody appalling. At four o’clock in the afternoon on Friday, you might go around to the A&R office and they would be crying with laughter about some of the dreadful demo tapes that have been sent through that people put their heart and soul into. They were awful, they’re out of tune, out of time, the structure was all over the place. Now if it’s out of tune, you fix it. If the chorus needs to be moved, you click and drag. The standard of things has gone up, but the standout music is harder to find. 

Many bigger artists who achieve scale have actually started on the edge of things. Taylor Swift started making country and western music for teenage American girls. There was no market for that. The data did not support Taylor Swift. And there was a period in Australia where the biggest selling artist for two years running was a 60 year old Dutch guy with a bad mullet playing Strauss waltzes called Andre Rieu. The data did not support Andre Rieu. It’s a weird world, a singles world. And it’s hit single-driven. But actually, a lot of our biggest artists aren’t. Beyonce hasn’t had a hit single for over a decade. Lana Del Rey doesn’t have hit singles. Kendrick Lamar doesn’t have hit singles. Yes, Taylor Swift and Justin Bieber and Ariana Grande do, but half of our biggest artists aren’t actually on the hit single trail. They’re on the meaning trail. So there’s this interesting dynamic in the music economy.

Artists need to find their tribes, they need to create meaning for their tribes. And they need to make some great music as well. But the ones that start on the edge and push the envelope in terms of what their meaning is and what they’re trying to do sonically are the ones that have more chance than those that are entering the centre, which is crowded.”

Where are the real opportunities in 2021?

Tim Kelly: “Management is a really big area of opportunity, as the role of the record label translates from a developer of artists to an exploiter of artists (not necessarily in a negative way). I mean an exploiter of artists communicating their music, getting the artist’s music to the widest possible audience. 

The artist’s development journey is going to be led by the management teams, not the labels. Particularly in the major record label world, because they’re looking for data, more than music. There’s a couple of exceptions, but data is ruling the roost – they want to see that the artist has got traction. Now how do we tell if a song is good? It’s got traction online, that’s the ultimate basis, rather than the song is good or bad per se in itself. 

Once an artist gets some traction, led by the management team or support team that the artist has built around them, then the majors will come after them. So, I think that the artist management area is really big. Record labels are growing, so there’s going to be opportunities within those labels in the ecosystems. 

DIY music is becoming a bigger part of the share. The ability to offer services to DIY artists and independent artists, whether it’s promotional services, management services, publishing services, touring services – all these are going to be growth areas in terms of sole traders and small companies.”

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