September 29, 2015
A veteran of executive stints at Island, Arista and Virgin Records, Larry Mestel decided to venture on his own in 2006 by founding Primary Wave, choosing to go into music publishing when he saw CD sales continuing to crater. With the help of a massive hedge fund investment, he proceeded to build up his music publishing war chest by acquiring a variety of catalogs, from Daryl Hall and John Oates, Steven Tyler, Kurt Cobain and Def Leppard to promising newcomers Blue October and Parachute lead singer Will Anderson.
When the stock market crashed in 2009, he scrambled to set up an in-house digital and brand marketing division, an artist management division (Melissa Etheridge, Ceelo Green, Cypress Hill, Eric Benet, Kevin Rudolf, Natalie Imbruglia, Jane Lynch), expanding to a record label in a joint partnership with BMG in 2013. He eventually moved into film and TV by bringing on Mark Burg's Evolution and David Guillod's Intellectual Talent Management in January 2015, which attracted such talent as Gina Rodriguez, Mayim Bialik, Donald Faison, Gabrielle Union and William Fichtner, noting that "musicians want to move into film and TV, while film and TV stars are anxious to expand into music."
After leaving the record business in 2006, why did you choose to go into music publishing?
In all my years working in it, I never really trusted the recorded music business, just given the volatility. Eight years ago, I saw that CD sales were starting their downward spiral and sensed rough times ahead. But I always had a little music publishing and marketing company outside the label business. I've always loved the music publishing sector, and felt it was a better bet than selling records. I wanted to be an entrepreneur at the time. So, rather than risking money and time in the recorded music business, I saw that there was a huge opportunity in the music publishing space, primarily because most publishers weren't marketing or branding companies. They focused almost exclusively on collection and I felt there was a huge vacuum in the marketplace for a publishing company that knew how to enhance value and drive revenue by aggressively marketing and branding.
Was your original intent to expand into artist management, operate a record label and initiate film and TV projects?
We always had, in the back of our minds, how we were going to expand our publishing business and from our publishing business, but an interesting thing happened along the way. When we started the company, we were funded by a company called Plainfield Asset Management and Credit Suisse. In 2009, the world kind of fell apart, and the bottom fell out of the stock market. People stopped lending money. The hedge fund that was backing us at the time literally overnight went out of business, so while we had this fantastic company, growing with cash flow, in one fell swoop, lost our ability to fund significant acquisitions. I had to come up with alternative ways to grow our business and our publishing, so we decided - in order to attract clients and enhance our value - to start a digital and then a brand marketing company. We got into the management space in 2010 because we had such a big marketing infrastructure artists were coming to us to take advantage of our skills in those areas. We basically have all the services a label has except for pop radio promotion.
You then started an in-house label.
We did a joint venture partnership with BMG for that, and last year we put out Jagged Edge (#1 R&B album on iTunes and Billboard), Goapele and Calvin Richardson; this year we are putting out releases by Jaheem, Melanie Fiona and Alabama, and in 2016, Eric Benet's new album. We choose the distribution group for each release. This January, we acquired a pair of talent management companies in Evolution and Intellectual Talent, which expands our reach into TV and film. There are quite a few of our music publishing, talent management and record label clients who want to be in the film and TV space, and vice versa. We really have put together a full-service music and entertainment company. We're about to get back into the music publishing space over the next few months in a very, very big way. We're about to announce a large acquisition and significant funding.
In this streaming world, are you still bullish on the music industry?
I am exceptionally bullish on the long-term prospects of the music space. The business is starting to level out and streaming provides a gigantic annuity for recorded music artists and music publishers because so many more people will be consuming music in the future than even today. There is never a shortage of people requesting or wanting music. Ultimately, the economics of streaming will get worked out for the betterment of the publishers, labels and writers. Everybody has to play nicely in the sandbox. David Israelite, who runs the NMPA, is a brilliant guy, and couldn't be a better steward. I have a lot of faith in him being able to lead the industry in the proper direction.
You seem to specialize in taking veteran artists like Melissa Etheridge and revitalizing their brand.
Melissa Etheridge is a perfect example of what we do as a company. She is just a rock star, plain and simple. It's a new world order out there, and you have to engage your fans through social media. The old adage of being overexposed has played out a long time ago. Melissa has done so many of the right things, with our guidance, to rejuvenate her career, and she's excited to be doing things in a different way. She's solidified that connection with her fans. Three years ago, she wasn't on Twitter, Facebook or Instagram. We've been helping rebuild that foundation with her fans, and she's making some of the best music of her career, which doesn't hurt. Melissa never embraced brand opportunities before, and now we have her in front of the Chief Marketing Officers of some of the biggest brands in the world, like Deloitte and GE Health Care. Those things are at the heart of her resurgence.
You acquired the Kurt Cobain catalog, a move that raised some eyebrows, but you certainly increased its value with the documentary, Montage of Heck, bringing his music to a whole new generation.
We like to buy music and artistry that are brands in and of themselves. Kurt Cobain was the Elvis of the '90s to me. When we looked at buying his catalog, it was obvious it was very under-exploited and under-commercialized. There was a lot of opportunity. One of the things we all decided to do was the documentary. Our best move was bringing in Brett Morgan to make an absolutely spectacular film. It took a lot of hard work and dedication from Brett!
Wouldn't Kurt be rolling over in his grave with being called a brand?
I could be wrong but one of the reasons Courtney Love agreed to sell us a big part of the catalog was because she thought we and she would be good stewards. And while Kurt may not have wanted to look at himself as a brand, the reality is, every entertainer and star is a brand in and of themselves. The most important thing is we wanted to be true to who Kurt Cobain was. The deals that we did were very specific to enhance the brand. One of the first things we did - which we're really proud of - was with Converse for a sneaker with his song lyrics on the side. It turned out to be one of the most successful niche sneakers they had ever done. And it was perfect because Kurt always wore Chuck Taylors himself. We were offered gigantic sums of money to license his songs for fast-food commercials and turned them down.
McDonald's: "Tastes like teen spirit."
We tried to be as respectful and true to who he was as an artist. At the same time, there's a commerce element, but as a company, we are committed to protecting the long-term value of the brand.
In the wake of the success of Straight Outta Compton, a Cypress Hill biopic might be a good idea.
You are 100% dead on because we're in the early stages of discussions with a director to do a documentary. We're thinking of doing a Goodie Mob documentary, too.
You're also helping Jane Lynch move into the music sphere by developing her cabaret act.
I had so much fun seeing her perform at Joe's Pub. She is so unique, such a delight and so talented. It's exciting to see an artist creatively communicate that vision onstage. Steven Greener here, who handles her day to day, really did a tremendous job on putting that together.
Who are the biggest influences in terms of your own executive style?
In music, I had two main ones. I got such an amazing education from Chris Blackwell. My business and brand acumen come from him. He was probably the most genius at figuring out how to merge business and creativity into a single conversation. And then I learned what a hit record was from L.A. Reid. Very few guys have a better feel for that.
And now you've also produced a music reality show for MTV UK, Say It In Song.
I'm just surprised more music companies haven't branched off into film and TV, but rather shy away from it. There's so much synergy between film, TV and music. There isn't a film or TV production that doesn't use it. The idea of our talent getting together, conspiring and creating together is very exciting. Especially now that all the managers and creative people moved into one space in L.A. We also did The Good Life with Ceelo and the Goodie Mob last year on TBS. There are at least 10 or 11 projects in various stages of development.
What has Ceelo Green brought to the company in his capacity as Chief Creative Officer?
Ceelo just released a fantastic new single, "Sign of the Times," in which he created new lyrics and set them to the instrumental theme of the TV show Taxi. This guy inspires. Every week he comes up with something that is so incredibly creative. His new album comes out on Atlantic in November. He really is one of the most talented people I've ever met. He just oozes creativity walking down the street. We talk to everybody and every conversation sparks ideas.