STEVE BARNETT: RESTORING POWER TO THE TOWER

The grand finale of Steve Barnett’s second year as the head of the Capitol Music Group came in February of this year, when his team made Grammy history. Just two years earlier, Barnett was cobbling together the remains of the storied EMI company, which had been decimated by previous owner Terra Firma and years of egregious mismanagement on the part of its former U.K.-based hierarchy.

The reassembly of those scattered pieces into a highly organized and disciplined creative music company may look easy from the vantage point of that rearview mirror Barnett spoke about in our mid-2014 conversation, but in truth it was a massive undertaking requiring every bit of his expertise.

CMG’s relationship with its U.K. sister companies Virgin and Capitol paid off like a winning exacta ticket, as Bastille, 5 Seconds of Summer and Sam Smith all enjoyed enormous success with their debut albums on both sides of the pond. In addition, Beck and Rosanne Cash made career-defining albums that resonated loudly during the Grammys.

All of the above has made the 2012 acquisition of EMI by Lucian Grainge look like a brilliant strategic move, despite the fact that European regulators forced the sacrifice of Coldplay, Parlophone and some catalog to the Warner Music Group. Can year three come close to year two’s runaway success? The following overview from the man in charge strongly suggests that we ain’t seen nothing yet.

Let’s look back at what you previously described as year two of your three-year plan. How did that work out in terms of what you were shooting for?
In only two years, we got to where I thought it would take us an additional year to be, and there are lots of components to that. At the beginning of last year, I still felt that we needed to look at our team and make some additions and changes there. I asked myself, “How can we be better? How can we be more competitive?” But I truly felt our music was great and that we would make a strong stand. That year, for me, really started with the CBS Beatles tribute last February. I think that they personify the longevity and importance of Capitol in America more than any other artist, and they’ve retained that position for 50 years. We have a unique relationship with Jeff Jones and Apple Corps, and with Bruce Resnikoff and his UMe team, and that was an amazing night to start the year.

Then, Katy Perry continued her dominance as the biggest pop star in the world, Beck returned with a career-defining work and won Album of the Year, 5 Seconds of Summer exploded and ultimately became the second biggest breakout artist of the year, Rosanne Cash swept her Grammy categories and Bastille ultimately sold 5 million singles and a million TEAs. And then, of course, there’s Sam Smith: The biggest breakout artist of the year, four huge Grammys—the most by a debut British artist in the history of the awards—and that rare new artist that everyone can envision as important for decades to come.

Altogether we sold close to 7 million TEAs with three brand new artists who were all British. That’s also an achievement for the people who signed those artists—it starts with them. We developed extremely good relationships with David Joseph, Ted Cockle, Nick Raphael and their teams. Sam and 5 Seconds both came from Nick at Capitol in the UK, and he deserves so much credit for the re-emergence of Capitol as a global brand.

The 2015 Grammys had to be a huge symbolic moment for you.
Yes, Grammy night was really special. We had started to feel really good about what we needed to do to put Sam in the best position to have an historic night. I also felt in the month leading up to the awards that Beck had the opportunity for a big night. For us to achieve something that no other company had achieved in 59 years, with two of our artists—both new to us—winning the big four, and for us to win 13 Grammys that night was really a testament to so much hard work by so many people on our Capitol team. And then the stars became aligned and it became a perfect storm of opportunity, and it was a brilliant night. We celebrated that night, of course, but the next morning I woke up with the thought, “What are we going to do for next year?” We are really a startup in comparison to Universal’s other American labels, which we view as our competition. And as a startup, we needed to be aggressive.

You sound like a football coach again.
I know. I just come by that honestly. So then it becomes about this year, and we have some new artists that we’re incredibly excited about within the different labels: Halsey; Silento, whose “Watch Me” has every kid in America dancing to it; Jon Bellion, who’s emerging as a recording artist in his own right after writing so many hits for others; a distinctive singer and songwriter from Ireland named Gavin James; Ashley Clark; Tori Kelly; Striking Matches; Coasts, BJ the Chicago Kid—there are a lot of artists that we’re excited about this year, but it’s complicated and you have to retain focus.

The CMG starting five (l-r): Thompson, Jubelirer, Barnett, Greer and Harris

But what I’m most proud about is the team that runs the company. We have a road map that’s really styled more on a U.K. company than a U.S. company, with Capitol, Virgin, Motown, Harvest, Blue Note, Astralwerks, I.R.S. Nashville and the reimagined Caroline under one umbrella. But of the people who run those various divisions, all but a few of them are new to the company, post-EMI. Michelle Jubelirer [newly upped to COO; see story] has made a massive contribution to the company, as have Ethiopia Habtemariam, who runs Motown, and Kate Denton, who runs seventeenfifty, our branding and licensing area. Ambrosia Healy joined us late last year and instantly made a world of difference in media strategy and publicity for our artists. Ashley Burns and Mitra Darab, who head our Hollywood and Vine teams, are integral to our marketing strategies and execution.

In our constant evaluation of who we are and what we stand for, we realized that we desperately needed somebody running our operations in New York who could also have a strong voice in our marketing campaigns and the creative direction of the company, Our CFO, Geoff Harris, is a true unsung hero who is so important in keeping our company humming operationally. He came up in the UMG system in the U.K., moved his family here for us a year ago, and made a dramatic improvement in that area from day one.

And, in our constant evaluation of who we are and what we stand for, we realized that we desperately needed somebody running our operations in New York who could also have a strong voice in our marketing campaigns and the creative direction of the company, And so, with the arrival of Scott Greer, who I have a tremendous history with and who has such a bright marketing mind, I felt the change immediately. It was a long, complicated process to get him on board, but it was a game-changer for us once we did.

Greg Thompson has been there since the beginning.
He was the first person I told that we were going to move the company west. He had a long history with EMI and had been an important part of the process for me because he knew so much about the existing culture. He was supportive from day one about what we wanted to do, and I’m incredibly grateful to him, because he was there that day when I said, “This is what we’re gonna do; this is the road map.”

The building blocks for Capitol have been a series of moves you’ve made in terms of bringing in talented people. You’ve gone through that list in previous conversations.
Bill Hearn and the Capitol Christian Music Group in Nashville don’t get enough respect or publicity, but we really dominate the Christian business as a 45% marketshare company. When parts of the company become successful, the goal post rises higher for everybody—that’s what you need to do. And there are lots of football analogies I could use, but I won’t. John Grady and I.R.S. Nashville are just getting going with their impressive slate, and we’re very excited about the potential there.

Are there any signings or deals that you can reveal at this point that are going to happen this year?
There are some very exciting things that we’ve just signed and I’m happy to share with you. First off, the Communion deal, which is very important to us. It puts us in business with Catfish and the Bottlemen, who we think could be a British band—they’re Welsh—that can change the destiny of that kind of music in America. It’s Ben Lovett from Mumford & Sons’ label, and the deal couldn’t have happened without Scott Greer and Michelle Jubelirer. We are very aligned with these guys; it’s perfect for us, and it’s perfect for them. The ink is still wet on our new deal with Quality Control Music, the highly influential independent hip-hop label based in Atlanta. Coach and Pee [Kevin Lee and Pierre Thomas] are going to be great partners, and their artists, OG Maco and Young Greatness, will be our first releases in tandem with them. This is an important and competitive Motown signing by Ethiopia, with help from Scott, and a major statement for CMG as a multi-cultural company. We’re also proud to be releasing the first True Detective soundtrack in June on Harvest. T Bone’s done a tremendous job, as usual, and the record will feature music from this forthcoming season and the last.

After a year in which you had these three breakthrough British acts, will you bring more North American-based talent to the fore in terms of your priorities?

At right, Mitra Darab and Ashley Burns; below, Ethiopia Habtemariam

Our position remains the same: The best records deserve to be the biggestpriorities, and I don’t care where they come from. You have to have that approach as a big global music company. Obviously, we want to do a better job with our domestic A&R. As I said, we’re a startup—we don’t have a deep roster of platinum acts. We’re very excited about a deal we’ve done with the great manager Richard Griffiths, who I worked with on One Direction at Columbia and 5 Seconds of Summer, here. We’re gonna introduce a new band signed by 5 Seconds of Summer called Hey Violet. They’re gonna open for 5SOS at 63 sold-out arenas this year, alone. That’s an unusual set of circumstances, where there’s a long history. The music is amazing; we think it’s right for this type of young teen act. That’s ours for the world. We’re excited about Troye Sivan, who was signed through John O’Donnell at EMI Australia and who is managed by Brandon Creed. His last EP debuted at #1 in 66 countries, and he has made an incredible record. These artists feel like they’re treated by us as our own, even if we’re not technically the repertoire owner.

We also have some of the world’s most iconic artists. Don Henley and Rod Stewart have made great records, and we’re thrilled to be working with them and finalizing plans to present their music to the world. The legacy of this company stands comparable with any company, when you think about the work we do with the Beatles and the Rolling Stones or the Beach Boys. Frank Sinatra’s 100th birthday anniversary is upon us, and there’s a fantastic plan in place to honor him and his role in building this company. There are some other exciting projects that aren’t completely finished, but they’re coming this fall.

Capitol’s heritage is a balance of art and commerce, to put it in the broadest way. And you’ve perpetuated that balance—signing Beck was perfect in that sense. And Sam Smith is wildly successful commercially, but he’s incredibly respected from an artistic standpoint.
From the outset, Michelle and I talked about a theme for the company, which would be that we would try and differentiate ourselves, and we would stand for something. And that’s dictated by the artists you sign. So we wanted to stand for something that was slightly different than the other Universal labels, and that’s why we designed the road map the way we did, and that’s why we’re signing the artists that we want to sign. Yes, we’re competitive with the other Universal labels, but I think we’re also at the point now where we have very good relationships with them. We’re not duplicates of each other. It would be ridiculous if Lucian had told me that we needed to mirror exactly what Republic does, for example. We should do what we want to do.

In terms of changing perception, the renovation of the Tower was an important component of your game plan, right?
I’ve learned over the years that the look and feel of a work environment can really help define a company and its culture. Restoring and modernizing the Tower was a big priority for me, but perhaps even I underestimated its value when the renovation was completed. I think it looks brilliant and the response from our staff, the artist community and the industry has been really gratifying. It speaks perfectly to authenticity. One of the reasons The New Basement Tapes was so important to us was that it encompassed so much of what we are and the environment we’re creating: Brilliant artists spanning genres and generations came together in the Tower for a labor of love; with a tremendous producer in T Bone Burnett. Then, they were working in our world-famous studios and creating results beyond anyone’s expectations in a truly special endeavor. And with Bob Dylan’s participation at the core. How special that it was all captured on film and is now a part of our company’s legacy? We’ve also benefited from Hollywood becoming really hot culturally.

The business has become primarily a new-artist-driven business in the last few years. The vast majority of the top-selling albums are by brand new or relatively new artists, and I don’t know if there’s ever been a time when that has been the case to this degree.
The lifeblood of the industry is artist development, because that’s what makes everything work. And then you step down from that and you think, well, who really invests in that process, and who can make a difference? It’s the label system, now more than ever.

Barnett welcomes 5SOS and Nick Raphael to his crib on N. Vine St.

Everything goes through phases, and we’re in the phase of maturity, so it leaves this void that needs to be filled. And the top heads at radio have done a great job of anticipating the future in terms of their vision and their understanding of the importance of breaking artists. You go and sit down with Tom Poleman, John Ivey, John Dickey, Michael Martin and others, as well as their teams; those guys know how important this is. And we are completely aligned with them, as every major label should be. So we’re surrounded by people who have realized that this is the future of the industry. It’s interesting when you look at the last three years: Who were the three biggest breakout artists in the world? One Direction, Lorde and Sam Smith. That should tell you something. Shouldn’t the focus be on the best records, regardless of where they come from? No doubt things will change—they always do—and American music will go through a period of domination again. But the marketplace speaks to you, and you have to listen.

With Sam, his record came out at the end of June and is now approaching 9 million adjusted units worldwide. Think about how he has grown as an artist in the space of that time. You couldn’t possibly have done that five years ago—it couldn’t have happened that quickly. With his four Grammys, he’s the first British male artist to win Best New Artist since Tom Jones in 1966, and he won more Grammys than any new British artist on his debut album ever. So that is the benefit of the new world we live in. And you think of all the people that played the part in that, starting with Nick Raphael and Joe Charrington signing him, Jimmy Napes making the record and his great management trio that supported our initiatives. But, ultimately, of course, it’s Sam. The bottom line is he was brilliant, and every time he was put in a position where he’d have to be magnificent, he was—every single time.

We have a young artist on the label now called Halsey that’s signed to Astralwerks—very competitive deal—and every sign that you would want that this young woman could be an amazing global superstar is there at the earliest of stages. Obviously, time will tell, and we’ve got a job to do. As we do with Jon Bellion, Gavin James and the others I mentioned earlier. So that’s what we talk about. We’ve always been flexible in our deals. Michelle Jubelirer really brought that reputation to our company, that you could deal with us, that we were not tied to the past in that regard. As you know, EMI had a horrific reputation in that regard for many years. So that gave us an opportunity, which was really significant for us.

I imagine you have a leg up on some of your competitors in the sense that you’re so well versed in the global business.
No, I don’t think so. David Massey is a very talented guy who’s been doing this for a long time and has been a thorn in our side because we have similar tastes. Look at the success John Janick and Interscope have had with international talent. Monte and Avery, obviously, have done great with international repertoire. There have been occasions recently where we had an edge because of our momentum and relationships, but at Universal everybody is a worthy competitor, and that’s good for UMG as a whole.

It sounds cliché, but the simple truth is that business is better when there are good records. Getting those artists and records is the challenge.
It’s a very cluttered environment; it’s hard to fight your way through to get started. It’s almost like we live in a world where there’s the super-rich—the big superstar artists—and no middle class; everybody else is struggling to eat. Once you get past that, then you’ve got that opportunity. If you look at the breakout market, there are not 10 or 15 huge artists, there are two or three per year, so it’s narrower than it was before, and the fight to get to that point is harder. But I think that’s going to open up. I’m more optimistic about that than I was two years ago.

Do you see streaming as becoming something akin to radio in terms of connecting with a broad range of people?
Consumers have voted that they like streaming, so now it’s a matter of better defining the models that work best for our artists and their music. UMG functions at a very high efficiency, and I have no doubt that Lucian and his team will navigate the best way forward. The difference I see from 10 years ago is that every market used to be pretty much the same, and now every market is unique. Look at Germany, which is a strongly physical market and might always remain so. It’s got nothing to do with what’s going on in the U.K., which has got nothing to do with what’s going on in the U.S. Because every market is unique, it makes conceiving the plan to break a new act very complicated. Timing is different; focus is different. But the consumer is going to tell us how they want to consume music. You know, music is more important from a youth-culture perspective than it’s ever been—far more important. That’s my opinion.

That’s interesting. People associate the ’50s and ’60s with the intersection of music and youth culture.
But it’s more pervasive now than it ever was. In the ’50s and ’60s, you very rarely saw music in syncs or commercials—that didn’t happen. I just think it’s broader now than it’s ever been.

How do you feel about this worldwide street date that’s happening in July?
I think it was necessary; it got very complicated. I know that some people don’t love it, but in my opinion—and time will tell—it’s definitely the right thing to do.

Do you find Shazam useful?
We do. There are certain markets where it’s incredibly telling. But yeah, we do, and it’s useful, and it’s not proprietary to anybody. It’s definitely a good thing.

What’s your reaction to Billboard and SoundScan’s suggested marketshare calculation? And how important is marketshare to you as a competitive type?
Marketshare is important to us because we’re still near the beginning of our journey. Some companies have grown and become powerful from consolidation, some companies have done it by breaking artists, and some companies have done it as a combination of both things. Certainly, the way the Christian marketshare was being disregarded was inappropriate and not a true reflection of a meaningful segment of our business. How can you just decide you’re not going to include 16 million albums? How is that right? Clearly, it wasn’t, and ultimately Billboard and SoundScan got it right by finally including it in their calculations.

When you walked in the door, Capitol Christian was part of your kingdom, right?
Well, the interesting thing about us is that, apart from Motown and the recent launch of I.R.S. Nashville, everything that’s a part of our road map has been at EMI for years and years. We took EMI Label Services, rebranded it as Caroline, invested in it with a promotion staff and other resources so we could broaden our business and potentially upstream records from it. We didn’t do that because we wanted to get an edge in marketshare; we thought that was a good strategic move for the company.

What’s your view of the Billboard Power 100?
It’s all so subjective. Lucian was #1, which I was happy about, because I think that was recognition of what he’d accomplished. I can’t remember exactly what my ranking was, but it was better than it was the year before.

Last question: How would you describe Capitol Music Group at this point in its evolution? How have you evolved personally?
Two-and-a-half years later, it’s fair to say that we’ve made enormous progress but still have a long way to go. And that’s the way it should be. There hasn’t been a “mission accomplished” moment, and there won’t be. We can always strive to do better and help our artists achieve more.

On a personal note, getting through the first 18 months was challenging, to say the least—especially uprooting my family from the life they had long known and beginning a new adventure in Los Angeles. It took a lot of faith and encouragement on their parts as well. But now we’re all well-adjusted to living on the West Coast. We love it here. There’s not one day that I regret the decision to take this job, and I love coming into the Tower every day. Lucian and his leadership team run the very best global music company by a wide margin. I’m very fortunate and very grateful to be a part of it. •