The Third in a Series of Follow-up Q&As With
the Heads of the Top Five Labels of 2013
When we last spoke with Capitol Music Group Chairman/CEO Steve Barnett last December, the company he’d been charged with remaking from the ground up that January was in the process of rising like a phoenix from the rubble of the Terra Firma era. Six months later, Barnett’s vision for CMG is fully in motion. The formerly moribund label group has vaulted from the bottom of the pack to #3 in frontline marketshare and #3 in TEA—and that’s before this week’s release of Sam Smith’s eagerly awaited debut album and the upcoming first full-length from 5 Seconds of Summer, with more to come by the end of year two in Barnett’s three-year plan. Thanks to the systematic moves of this canny veteran and his handpicked brain trust, the sun is shining brightly on the newly renovated Capitol Tower.
You’re in the process of building a new culture with CMG both here and in the U.K. At what point are you in your efforts, and what’s next?
We’re 18 months into this journey of rebuilding this company, and 2013 was a major period of rebuilding and revitalizing. We had to get the right team in place, we wanted to make sure that our artist roster reflected the type of company that we want to be, and we really needed to solidify the individual identities of the labels that we have within our roadmap. Obviously, all of this is still in progress, but we’ve made tremendous progress, and now with many of these elements largely in place, our focus is on breaking our new and developing artists, and enhancing the recording careers of our established and inherited artists. So we’ve got healthy mix, which is crucial for the success of a label group as broad as CMG.

Describe how you interact with your U.K. partners. What does each side get out of the relationship?
With any international relationship and alliance, it’s important that all sides benefit—the companies and the artists. We made the decision very early on that the best records should go to the top of the list, and it was irrelevant to me where these records came from, and I felt very strongly about that. So we made priorities of Bastille on Virgin, Five Seconds of Summer and Sam Smith on Capitol, Naughty Boy and Emeli Sandé on Virgin, just to name a few. And obviously, our American artists such as Banks and the forthcoming Basement Tapes project from T Bone Burnett have been embraced by our U.K. companies. And the artists benefit, of course, from a transatlantic commitment to their music and careers by our company. David Joseph has been such a fantastic partner and so supportive from day one of everything that we’ve tried to accomplish. On a personal level, I am greatly appreciative of Ted Cockle at Virgin EMI for all of the great artists he’s putting through our system, and I’m thrilled for the success that Nick Raphael is enjoying at Capitol, who has two of the hottest acts in the world right now in Sam Smith and Five Seconds of Summer.
Having met your goals for the first year, what are your goals for the second, and what have you accomplished so far?
While building the artist roster, revitalizing our company and beginning the process of breaking artists, we needed to pay very close attention to what was right in front of us. Katy Perry’s Prism was obviously a very crucial album for us, and here we are now really into our third phase of the record—we’re at 6 million TEAs worldwide. Greg Thompson and his team have done a brilliant job domestically, and Robbie McIntosh in international and the affiliates around the world have done a brilliant job as well. So that was a vital record, there was absolutely no margin of error that we could allow on that record, and I feel really good where we are, both in our relationship with Katy and her management team, but also the success of the record so far. In February, the 50th anniversary of The Beatles on The Ed Sullivan Show became a really important tent pole for us. Ashley Burns, Jane Ventom and the catalog team under Bruce Resnikoff did a fantastic job. And it was an amazing TV special. So those are two of the things on the established artist front that were really vital for us, and I feel good about how we executed them.

Assess the performance of your executive staff. How is each of them implementing your plan?
All the decisions that are made are really team decisions. We’ve had to take chances and be flexible in our approach, and everyone on the senior team has a voice. Greg Thompson is an inspiring leader and universally admired in the industry; he’s an extremely skilled and seasoned executive who is also down in the trenches every day getting the job done. Michelle Jubelirer, who I talk to five times a day, really helped change the culture of doing business with the company in the most profound way. A respected artist attorney comes into a corporate structure, and she has really thrived, and I couldn’t be happier. I can’t imagine having accomplished our goals without Greg and Michelle by my side. Dennis Reese and the promotion team have done a fantastic job—a fantastic job—and sometimes under difficult circumstances. And Robbie McIntosh, besides doing such a great job, has probably flown more miles than any other executive in the music business in the last 18 months. Kate Denton, who is head of our seventeenfifty/The Capitol Creative Labs, is leading the way in seeking out opportunities for our artists with outside branding partners, finding and overseeing licensing opportunities, and so much more. Mike Flynn is a first-rate producer and now head of A&R at Capitol; he’s making quite a positive difference for us since he stepped into that role. And more important, they all exhibit such strong teamwork. Their attitudes permeate the entire company, and that leads to success for CMG and our artists.

Our CFO, Geoff Harris, who was the CFO of the U.K. company for the last 10 years, moved to Los Angeles only three months ago and has already made a tremendous impact on us. If you look at our roadmap, it’s very similar to how the U.K. is structured. We are a number of labels; they each have their own marketing budgets; they have their own talent budgets, and Geoff’s really brought a level of expertise to that area.
Six months ago, we talked about some of the artists you were most excited about, including Sam Smith and Katy Perry. Since then, you’ve broken Bastille on both sides of the Atlantic, and you’ve gotten off to an impressive start with 5 Seconds of Summer. How would you assess your roster and its core components now, and how do you intend to compete for topflight talent down the line?
We sought to build an artist roster with the right mix of new and developing and established artists, as well as those artists that come from within the Universal international family. And we have a number of important joint ventures with really talented people, such as T Bone, Rodney Jerkins, The-Dream and Tricky Stewart. It’s always a work in progress, but we’re proud of the direction that we’re going in, and we have potential for success going forward. We are the right home for Sam Smith or 5 Seconds of Summer, as we are for Neil Diamond or Morrissey. I’m personally very excited about Motown now being part of the family. I have tremendous respect for Ethiopia Habtemariam and her team, and they have really added to our mix. We’ve got some incredible Motown records coming from successful artists like Ne-Yo and KEM, and we are just as excited about brand new artists like Mila J on Motown. Dominic Pandiscia and Mike Harris have made tremendous strides expanding the outreach and services of Caroline—the recent 50 Cent partnership is only the latest of some great deals—and it will become an even more important component of CMG going forward. So a successful label group stays competitive by proving to the artist community and their business representatives that it not only wants to be a home for artists at every level, but in every genre. So it’s only been 18 months, but I feel like the artist community and the industry have been rooting for us, and now we are certainly seeing some growth and success, and as a result, we can successfully compete for every deal that we’re interested in pursuing. And that certainly wasn’t the case when we started this journey.

You inherited a number of heritage artists, and you’ve brought in several more. What’s the thinking behind those moves?
If you think about Capitol, you think about The Beatles, the Beach Boys, Bob Seger and The Band; you think about Nat King Cole. And 2016 is the 75th anniversary of Capitol. So we have tremendous respect for our heritage, but we’re not burdened by it. And, as we discussed earlier, established and heritage artists are a big part of a healthy roster for a major-label group like CMG. Important artists deserve an enthusiastic and supportive music company behind them for as long as they are passionate and creatively driven to make music. So we made it known early on that we just have to be in that business. We have got fantastic records from Bob Seger and Brian Wilson. And we’ve got some other exciting signings that we’re going to announce. All of these artists have passionate fan bases; they still sell lots of records and play to sold-out houses when they tour. Think about Rod Stewart and all the success that he’s had—in England his last record was one of the most successful records he’s had in his career. We are proud of that accomplishment.
Here’s a question I asked you six months ago that I’d like to revisit: What deals you’ve made so far this year are you most excited about?
We’re all very proud that Beck chose to be a Capitol artist and gave us such a record as beautiful as Morning Phase. It’s culturally important, and particularly in that [the sequence] of Arcade Fire into Beck into Morrissey says something about this company. We recently announced a broad agreement with Neil Diamond and his catalog that will commence later this year. I personally was always a huge fan of Counting Crows, and I can’t wait to present their new album to the public. John Grady and I.R.S. in Nashville are just getting started, but John signed a fantastic duo that many people may know from the Nashville TV series—Striking Matches. T Bone has almost completed Lost on the River: The New Basement Tapes project with Elvis Costello, Taylor Goldsmith, Rhiannon Giddens, Jim James and Marcus Mumford, which is an unusual time-traveling collaboration with the ultimate artist, Bob Dylan. That album will be accompanied by a major Showtime documentary in November. We just signed TV on the Radio to Harvest. Morrissey has made a spectacularly beautiful record that’s going to be on Harvest that we are very proud of. We are just going into a partnership with Darkus Beese at Island in the U.K. and Simon Fuller with an amazing new Annie Lennox record. We’ve just completed a deal with Allen Shapiro for the rights to the forthcoming ABC series Rising Star, and we’ll be releasing a lot of music in conjunction with that show. So the list goes on, and I feel good about that part of our business. As with everything, when I lay awake at night I always think that we can do better, and we have to do better, because the ambition for this company is to really make a significant impact. And as I said to you last year, that’s difficult. This is a very powerful company, but we always felt that we could differentiate ourselves, that we should be slightly different, and that, I think, is starting to evolve.

Your marketshare has grown significantly since we last spoke. I don’t think anyone expected CMG to be this close to the top of the heap so soon.
That is just one barometer that we judge ourselves by. For us to rebuild this company, the only way that we can really do it is to make smart deals, and Michelle has done a fantastic job of streamlining that process. We’re in the game. And then it’s the breaking of new artists. As a company absolutely committed to artist development, we have a goal this year to break five new artists. That’s complicated and difficult in this marketplace, but we’ve made a lot of progress in that area. We’re very excited about Banks, who has a true artistic vision and is developing nicely in the U.K. She was the first artist signed by Harvest, where Piero Giramonti and Jacqueline Saturn lead a passionate team that can give a lot of focus to select projects. Mary Lambert on Capitol is making a really fun record but also has a lot to say, and I believe she has enormous potential. I’m confident that Porter Robinson on Astralwerks is going to break globally. Those are just a few. We all have to do better, we all have to work harder, but I feel that we are starting to see the results of some of those decisions that we made last year, and for us, it’s almost like an American football analogy: You’re relentless on the team in training camp, and then the first game of the season, you beat a much better team. That’s the focus and attention to detail that we need to have. And we do have.
What are your takes on Apple-Beats, John Janick as Iovine’s successor and Lucian Grainge’s leadership of UMG?
Well, listen, everybody knows how supportive Lucian has been, literally from the time that I began discussing the possibility of my coming to the company with him and Boyd Muir, and through all of our rebuilding and the establishment of the Capitol Music Group really as a 21st century entertainment company. And that same level of support has come to all of the senior team—Max Hole, Jeff Harleston, Rob Wells, Michele Anthony, Bruce Resnikoff and beyond—everybody has been supportive, because that they were realistic and they all realized that we needed a lot of help. Lucian has amazing foresight. He makes one great move after another, and he is so incredibly focused and energetic. And despite the incredible demands on his time, he has always been there for me personally, and for our CMG team. So I think the Apple-Beats deal is a classic win-win. Universal Music benefits by having owned a piece of a company and is benefiting financially from the deal. Apple gains the services of two of music’s most remarkably successful and creative people in Jimmy and Dr. Dre. And the industry will benefit from one of our most important partners, Apple, expanding on that partnership through the Beats acquisition. So I’m really excited, and I look forward to what’s in store for Apple in the months and years to come. John Janick is a great executive with really great ears, and Interscope has certainly benefited greatly since he arrived at the company. His promotion is well deserved, and I know he and I will always have a good but competitive relationship going forward.

Finally, you’re one of several successful Brits running U.S. labels—a relatively recent phenomenon. Why are you and your expat counterparts winning when so many of your predecessors failed?
Well, I have to tell you, I’m an American—for a long time. I’ve lived here for 26 years. I have roots, obviously, to England, but I really think of myself and my family as Americans. There are plenty of English people who have been successful over here—Lucian, obviously Boyd Muir, Rob Wells and other people in the Universal system. Obviously, Rob Stringer has been very successful at Columbia. So the whole English-American thing, it’s a non-issue to me. At the end of the day, you are who you are.

Any last words?
I think we’re going to have a great run the rest of this year, and who knows where we may end up? We might surprise a lot of people.
Roddy Rich and The Weeknd are streaming kings. (12/3a)
A company with no corner offices (12/1a)
Who's hot in Blighty? (12/1a)
Hoodie man doin' work (12/2a)
How Swede it is. (12/2a)
Bring your umbrella.
Mulling possible surprises.
We're virtually stuffing ourselves.
He's lost 25 out of 26, and so tired of winning!

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