Scott Borchetta

While it appears that Taylor Swift has suddenly taken the music world by storm, Scott Borchetta, the man who led the team that brought Taylor to the world, is the perfect illustration of someone who has crafted a long, step-by-step path to success. Born and raised in southern California, Borchetta started out playing in a bevy of rock bands before he moved to Nashville in 1981. There he toured as a bass player with big-name Country acts before he decided to segue into the business side of things.

Once again, he started at the bottom ... in the mailroom ... before becoming one of the top radio promotion aces in Music City. About five years ago, he decided to start his own record company -- make that companies now -- and signed just a handful of artists to work closely with. Although Taylor Swift is undeniably his biggest success, it's hardly his only one. Here are Borchetta's views on the Swift phenomenon and how his labels succeed in the current music business environment.

The music business in 2005 wasn't in the best of shape to get entrepreneurial, so what made you decide to start a label with Toby Keith?

We started Big Machine on September 1st, 2005 simultaneously with Toby opening Show Dog. It was time for me to take the leap from promo to running a label and I didn't feel like I could wait for an "opening" to run a label. The town and business looked broken and my ideas weren't congruent with what the majors were doing and thinking. In his own way, Toby felt the same way. Mine was business-centric; his was Toby-centric. We both needed to do what was best for each of us and we identified a launching point that worked for both of us. It's always a good time to be entrepreneurial...

Was there a turning point when you knew the label was on solid footing, especially once Toby Keith left?

Toby's business never affected mine - his money was always his, I was never a shareholder in Show Dog and it was never intended to be long lasting. I had to swim or sink on my own. It was actually much easier for Big Machine after Toby and I identified the date when both companies would stand on their own two feet, as I could then focus entirely on Big Machine and not worry about Toby business.

From that moment we have soared. It started with Jack Ingram's #1 single, "Wherever You Are," in May 2006. Financially the first 18 months were the true test. Taylor is obviously the reason we're doing so extraordinarily well, but we make a point of micro-watching our overhead ... managing that from day one. We never spend bigger than what we can easily afford; actually it's pretty simple stuff. The mentality of the major label system is one where you feel you have to do certain things the way they've always been done -- spend X dollars on POP and X dollars on promotion because 'that's how we do it'. It became very clear to me at Dreamworks from 1997-2004 that you don't have to do those things. You need great music, great executives and a willingness to do the work. You don't just throw money at everything; you identify the ones with a fighting chance and go for it.

For the ones that aren't working, you have to be smart and have the understanding and willingness to turn them loose. Dropping an artist is my worst day, but I have to be truthful to my staff, my artists, my business partners and myself. If we are going to continue to survive and thrive, there is only room for winners.

At what point did you realize you caught lightning in a bottle with Taylor Swift?

She was special from the first day I met her. I always felt her potential was to be a big star, and once we got the snowball rolling, it just kept getting bigger and bigger. It was a huge challenge up front, as the call you never get from a Country PD is, "Hey, do you have any new 16-year-old females coming out?" (Laughs). We felt we had to create a story and awareness before we went to Country Radio.

A big part of that was a new concept with GAC called Short Cuts to get her on TV before releasing a single or video. So we were able to secure a small but consistent TV presence and then we attacked every online media outlet we could find. Her MySpace started to blow up. By the time we got to radio we had a story. It was so much fun to walk into a station and say, "We have you surrounded and you don't even know it." That started in May 2006. By the album release in October 2006 we knew it was lightning ... it was just a question of how big it would be. Her success has blown us all away; it's an amazing force that continues to this day.

As a crossover superstar, does her artist development need more attention now, or are you at a point where she's such a media phenomenon that basically all you can do is sit back and watch?

There has to be a lot of strategy. The biggest challenge is that there's a lot of demand for her all around the world now. We've got to plan her days very carefully; the whole team around her has spent a lot of time discussing what territories she should try to break. It's extraordinarily hard work; we're not sitting back and watching it go by any stretch. There's a great team around her and she's very engaged about what she wants to do.

Are you concerned that now she's so popular that she might lose her Country base ... and even so, would that necessarily be a bad thing?

We've always said, "Country first." She says it on the American Music Awards; she says it around the world. She's proud of it and she makes it cool. I encourage her to make her music without prejudice and this is the music she makes. The fact that Top 40 digs it right now is great. We can't predict what phase Top 40 will be in a year from now. We can predict what music Taylor is going to make a year from now and we're not going to change that if there is some cosmic shift at Top 40. It would be stupid to turn our back on Country Radio and it would be a terrible thing to lose that base, as that is "the base."

Also, people use music differently though. We are so caught up in "formats." Let's get real; it's all at our fingertips. Taylor has a huge and ever-growing fan base. It's obvious why so many formats are drawn to her -- she's contagious. It's bigger than just the music. She would probably tell you that she's a singer/songwriter first. But, there's recording, touring, and now an incredible demand for her acting talent. She realizes that her music is likely the most sustainable part of her career ... and Country is the most loyal and possibly the most sustainable. Taylor is Country. Dig it.

Would it be appropriate to liken her crossover success to Shania Twain, and are there things that happened with Shania that you could use with Taylor?

There definitely are some things Shania did that we learned from. I was at Dreamworks when it merged into UMG in 2004, I was doing promo and I took on Mercury, so I got to work with Shania a little bit; I saw what worked and didn't work. I saw that model and saw how to stay engaged. Some big mistakes were made with Shania at radio before I got there ... things I've learned to successfully avoid.

You have to keep all formats reasonably happy, but Country is always first. We'll continue to put Country first and not ignore the other formats. As far as international goes, we met with all the UMG labels about Taylor -- and ironically, Mercury (Shania's U.K. label) was the one most excited about her and got it.

How has her success impacted your efforts to get airplay for Trisha, Jack, Steel Magnolia and the other artists on your roster?

We treat our artists exactly as who they are -- as individual artists. We're very fortunate to have Taylor's success, which has created a big momentum in the building. Obviously, there's a lot of excitement and demand for Taylor, which has been a big benefit for our other acts. However, Reba didn't need Taylor's help to get her current single to #1. When we put out the Jewel record, she had quite enough marquee value to get her own airplay. It's just an overall momentum builder for our entire company umbrella - Big Machine, Valory and Republic Nashville. Justin Moore is breaking huge on Valory. Steel Magnolia on Big Machine is Top 25 and building very nicely. The Band Perry on Republic Nashville has arguably the biggest brand new artist buzz at Country Radio, so at the moment it's all working.

How has the Country music business changed ... in relation to how Country radio has changed?

Certain elements are the same; you still have to go out and get face-to-face with them. I'm not telling you anything that hasn't been written 100 times before, but radio programmers have a lot more responsibilities now -- there's a lot more on their plate, there's a lot less quality time to listen to music. Artists and new music sometimes feels like an interruption to their day and we have to make sure their music is heard and understood. The thing is, not only do they have less time to spend with us, but there's a lot more centralized programming as we experience deeper and deeper damages from the Telecom bill.

How has Taylor Swift's success changed your promotions staff's relationships with radio in terms of balancing demands for her from competing stations?

It's the best problem to have. We have something everybody wants. We're proud and honored that everyone wants to do something with her, so we do the best we can, market by market. At the end of the day, somebody is probably going to upset. Our job is to minimize the number of upset people.

PPM data suggests that the Country radio audience is a lot older than originally thought. How has impacted your work with radio, in terms of choosing singles and how you work them?

We are aware of what's going on. One of the interesting things about the PPM so far - and we've found this over and over again - is when stations with PPM have Taylor on the radio, be it a song or a station appearance, the audience doesn't leave. Yet that doesn't always match that up with research, which can be diametrically opposite. We cannot let PPM or research lead us; we've never been in favor of that. We've got to go on our gut and be willing to take chances. Again, if I had PPM or research back in '06, on whether a 16-year-old female Country artist would work, that research would've told me to go out of business. We can't let technology get in the way or make our creative decisions for us. With all due respect, we don't care what the PPM says and we don't care what research says.

Research sidebar: You can't research the next phenomenon ... you research Oldies. You can't research what hasn't happened yet ... you research history. Our focus is not to follow the mainstream; our focus is to become the mainstream. And then blow it up and do it all over again. The Doors became the mainstream. The Rolling Stones became the mainstream. U2 became the mainstream. Hip-hop became the mainstream. Show me one piece of research that pointed to Susan Boyle becoming the mainstream! If we are going to save ourselves and save our jobs, we have to have a gut, have an instinct, have a mission. Use every tool at our disposal but lead with our instincts.

Has the performance royalty become a sticking point between your promotion staff and the radio programmers they speak to? How do you dance around that minefield?

Obviously, it's arguably the hottest button we have when we talk about our relationship with radio. The sad thing is, back when the former radio gods were so hot to push the Telecom bill through, if the record industry could have gotten the performance royalty on the bill, they would have signed it as they were so eager ... they were so hungry and foaming at the mouth to push it through, they would've agreed to a performance royalty to get it.

Those are the same people who brought on this incredible debt service to radio and arguably destroyed broadcasting as we know it. Radio is a great cash business. It's a terrible publicly traded business. These recent bankruptcies are good - clean up the debt, restructure and let radio do what it does best - create great programming, sell spots and make cash.

Before that happens, everyone is hurting and everyone wants to find a way to stay alive. Nobody wants to hurt radio and nobody wants to hurt the labels and the artists. Everyone's sales are down at radio and records. You look at the reality of whom this royalty is trying to help ... artists who don't write and cannot survive selling albums, the musicians who don't get paid per sale and record companies charged with continuing to bring new content to radio. We are all just trying to survive this moment. Just look down the hall of every record company and every radio station.

How has Big Machine adapted to the growing digital retail world and downsized revenue expectations from that?

There's probably not a week that goes by that I don't hear, "Man, if this was 10 years ago, you'd be selling five times as much as what you're what selling today." The reality is we are thankful to be selling what we are selling. We understand more people are buying singles digitally; our job now is to get them to buy more. If they're moving away from buying albums, we can't force them to buy albums - especially in this economic environment. We have to understand how people use music and get ahead of it to a point where we can monetize "free." This is not the time and place to be combative with the consumer. We're not going to win them over by demanding they buy something in a form they don't want to buy.

Our artists and we have to learn to survive, be it by selling 100k, 250k or a million single downloads, selling videos, monetizing videos ala VEVO or other platforms. We can make that model work. We have to be very bullish about selling single downloads and encourage it and make it work - even if it doesn't produce the same amount of revenue.

In a way, it's a penny business now, and we have to conduct ourselves in that manner. That doesn't stop us from making the best albums possible. On the contrary, we have to make them with great singles and great music throughout, because when the consumer buys those singles and likes them, they're inclined to buy the physical album. We've asked people who go to our artists' shows what they bought and they'll often tell us they first bought a couple of songs digitally ... one at a time ... and after buying two or three of them, they buy the whole album. That's why Taylor and Miley are selling so many albums. We can't discount the fact that we've trained millions of teens to buy CDs.

Big Machine is a small label with a handful of artists. Do you see yourself becoming a big label or would you prefer staying small?

The whole idea that started with Big Machine was just having a small roster and attack by giving everyone the opportunity to succeed. If we started with more artists all at once, we would've failed. If we added Reba, Jewel, Jimmy and Justin to what we had going with Taylor, Jack, Trisha and Garth, there wouldn't have been enough oxygen for them all. To keep our boutique element, we decided to go horizontal -- by creating Valory and Republic -- and not vertical. So we can spread out our releases and make the same impact with each brand. I don't see us changing that format because each label has been effective and put out a competitive number of releases, with each one getting front-line attention.