January 20, 2015
While there are few things more iconic and heritage than the Capitol Records Tower, Capitol Records is enjoying fresh success with new acts such as Sam Smith and 5 Seconds of Summer, U.K. stars such as Bastille and, of course, superstars such as Super Bowl halftime headliner Katy Perry. Helping orchestrate the rejuvenation is EVP Greg Thompson, who has helped the label adapt to the new business paradigm. Here, Thompson outlines what it takes to succeed in the music biz's New World Order.
How was 2014 for Capitol Records?
It was a really good year and a challenging year. I'm really proud of our staff. I'm proud we had the #1 and #2 breakout artists with Sam Smith and 5 Seconds of Summer. I'm proud of Bastille being the most-played artist at Modern Rock radio. Those guys and our staff worked really hard to build a great foundation for their career. Obviously, we're happy that Katy Perry was one of the most-played artists in Top 40 and Hot AC, with "Dark Horse" being the most-played song at Top 40, on top of a number of other great awards for Katy. All in all, it was a pretty good year.
How does what Capitol accomplished in 2014 impact how you view 2015?
We look at 2015 as year three of the rebirth of the Capitol Music Group under new owners Universal Music Group. They have been tremendously supportive of the rebuilding; they invested the resources to bring the company back, so while we're excited with what we did in the first two years, we look to grow even more in year three.
How would you describe the label under UMG's overview? What's the main difference?
It definitely has been a reinvention. The truth is, Capitol/EMI is an incredible company with a lot of heritage and an amazing history; EMI as a brand in the U.K. has a storied history. Capitol is an iconic label housed in the most iconic music building in the world, but it was also a company that had been strip-mined by various caretakers for far too long, in spite of the fact that its employees had done an amazing job in difficult circumstances. The company had fallen into neglect. The truth is Lucian Grainge wanted to restore the company to the place where it should be. He brought in Steve Barnett, who was killing it at Columbia and didn't need to do this. But he felt this was an opportunity for him to come and reshape Capitol, and he's accomplished a lot, even though we've still got a long way to go.
How has the national economy, as well as the specific music business environment, impacted the label's reinvention?
The economy has made it a lot tougher. It's hard enough to rebuild a company in normal circumstances; add in the market conditions in the past year and you double the challenge. It makes it very difficult from a financial perspective just because it's so hard to generate a significant return for your investment today.
So what do you, as a label, do differently to deal with that situation?
You have to make better choices, which is really tough to do when you have limited dollars to invest. It really means reevaluating the way you're doing business, and finding better ways to conduct it.
With that in mind, what went through your mind when you heard Sam Smith's music for the first time?
When I initially heard Sam Smith? Well, first and foremost it was obvious that he's incredibly unique, the type of gifted artist who only comes along once every few years. You do everything you can do in the moment for an artist like that. For Sam, I had the support from our shareholders to make those kind of investments and double up on everything. We saw this guy as a huge talent with massive global potential. We're very happy with what we've been able to accomplish with Sam, but it all starts with an incredibly gifted artist and an amazing performer.
Can you afford to sign and take on long shots in the Rock and Alternative formats as you can in Top 40?
It is harder. We have to be a little more careful. The Rock and Alternative landscape has changed, but in the same breath, somebody like Lorde comes along and redefines the format. We're also very happy with the results we've had with Bastille, who were born out of the Alternative and Rock world. In fact some of their songs were exclusive Modern Rock tracks.
In a streaming and single track-heavy business environment, how much importance do you still place on album sales?
We live in a very song-driven world, which probably always will be the case as streaming grows at the expense of digital sales. We have to focus more on individual track sales, but that doesn't mean we totally take the focus off of albums.
Plus, how we work a Sam Smith project would be very different than what we'd do with a Gorgon City project. Each artist has a different and specific marketing strategy, because fans of certain formats are more interested in going for a full album as opposed to others. And the hardcore fans are interested in hearing everything from their favorite artists and not just certain tracks.
In terms of artist development, must every Capitol artist release albums?
Not at all. Not every act has a distinctive quality to build singles into an album. Sometimes, a band like 5 Seconds Of Summer generates such a buzz that it enables them to debut at #1, but it's a different ecosystem for each artist. Artists in certain genres are more album-centric than others, but as a fan base builds, people usually want a full body of work.
Are you satisfied that radio is doing all it can to break your music - especially in a PPM era where music stations are heavier on the hits, lighter on new music, and often eliminating front and back-sells?
Everybody has challenges in their business, and terrestrial radio faces the growing challenge of streaming services, much like the digital realm has increased the challenges we have in selling physical music. I'm not one to sit here and play quarterback on how radio should run their business. I do think the discovery process for music has changed. Terrestrial radio programmers are dealing with more fragmentation than there used to be, but at the same time, there are also a lot of radio people trying really hard to focus on the music. They still love breaking singles and artists, and those who are excited about that create great things.
How have you changed your promotional strategy in the current radio environment?
Set-up is and always will be everything to a successful campaign for a hit record at radio. That being said, I think we feel more than ever it's important to build a solid foundation before we ask our radio partners to engage. Obviously superstars and developing artists are rolled out differently. The size of a fan base can determine how quickly you can create the basic foundation to break a single.
For example, how was your strategy on Sam Smith different than it was for Bastille?
Sam was kind of unique in that he had a lot of things happen so fast. He was featured on the Disclosure song, "Latch," and then on the Naught Boy single, "La La La," so there was an early awareness of him as a vocalist. By the time he started his first solo tour, Sam's success was sort of undeniable.
Bastille had already become hugely successful in the U.K., so by the time we engaged in marketing them in the U.S., we had done a lot of grassroots work, studied their releases, and caught the buzz from people who followed their career in the U.K. We got to a point where there was a strong demand for the band to tour - and they worked hard for their success.
Performance royalty bills are expected to crop up in Congress again this year. Obviously the artists you sign want a royalty, while radio interests don't. How do the competing interests impact your job of promoting the artists' music to radio?
These are complex and complicated issues where everybody has an agenda. One would think a lot of people need to hear the perspective from both sides to really understand what it all means.
There's always going to be some tension between the interests of radio and the interests of records, but you can't forget that both parties have a genuine need to peacefully coexist, so you learn to work as good partners even through complicated issues.
So you feel your relationships with radio haven't changed as the stakes have gone higher?
I think our relationships with radio are great. I'm fortunate to have grown up in the business, and have seen a lot of radio people go from Burlington to New York City, from Texas to L.A. This is still very much a relationship-driven business, and when you spend the time and do the right things to develop great relationships, that makes for a successful business.
Do you have your entire 2015 release schedule pretty much set up by now?
Release schedules have always been fluid. We're in a business where we have to convert art to commerce. There are artists who seem to routinely make records and just put them out, while others have so much passion to perfect their music that they don't finish before our release date, so we push their project back. Still other artists get "writer's block," which necessitates us pushing back their album's release date even further.
Scheduling is very important, too. As much as we are in a fluid business - and it always will be - we can't make an album and not release it because trends constantly change in music. They might be able to do that in film or TV, but that won't work in our business.
What releases are you most excited about in 2015?
We're excited to kick in the year with a new Decemberists album. There's a new album from Ne-Yo on Motown; we'll work with them on that. We have some other great artists we're excited to break - Tori Kelly, Gavin James, Coasts - not to mention the great stuff carrying over from last year. There's a lot of work to do.
So, bottom line, are you bullish on the new year for Capitol and the music industry in general?
I'm cautiously optimistic; 2015 is going to be a very interesting year where the reality is the dynamics are going to have to change on many levels. New technology will play a role in redefining what consumers do and how they do it. Consumption of music is at an all-time high; how they access it - and how the creative community and the business supports it -- remains the question.