He’s been Lady Gaga’s manager and Spotify’s global head of creator services, but Troy Carter is now co-founder and CEO of Q&A, a new music company focusing on distribution, management and label services for artists.
Today, he was also a keynoter at the Midem industry conference, interviewed on-stage by journalist Cherie Hu. The conversation saw Carter explaining why he’s launching a company in the distribution space, at a time of intensifying competition and consolidation there.
“The distribution space is definitely interesting. Actually, prior to me going in to Spotify I had been looking at it, and seeing where the white space was: and seeing there were a ton of gaps. A lot of the distribution companies were like black holes where artists put their music into these pipes, and don’t know what comes out the other end,” he said.
“Being inside Spotify [I saw that] a lot of music shows up on the platform without context… One of the biggest problems that I saw and that I still se now, is the industry takes this monolithic approach to artists. Almost this equivalent of Nike using the word ‘athlete’… No, Nike is in business with runners, footballers, basketball players, golfers, and they make product that’s specific to each one of those genres,” he said.
“In music right now, the way people describe artists is so generalised, and they’re making very generalised products and very generalised assumptions. A rapper might have a different approach than a country star… than a DJ… than a pop star. So it’s really about distribution that understands the artist at their core, and building products for those artists to be able to reach their specific goals.”
That white space, then, is “actually being helpful to artists’ careers, believe it or not!” according to Carter, who also offered some criticism of some of the companies and teams working with artists, based on his experience at Spotify. The company offered analytics for artists, but Carter suggested they weren’t always capitalised on.
“You have people on the other side who don’t know how to read the analytics most of the time, and don’t know how to make decisions based off the analytics they DO know how to read… the data’s useless at that point,” he said.
So how can a new player in music distribution compete? “You have to have fair deal structures. You have to have the ability to deploy a massive amount of capital in order to compete with the labels, and/or the ability to pay quicker,” said Carter. “If you get 100m streams today and you get paid on 100m streams today? Sort of that model. So as long as you’re able to help solve problems [you can add value],” he said.
Q&A also has a partnership with Warner Music Group, brokered after a number of the former’s artists decided they wanted to sign with Atlantic Records. Carter sees this as a sign that one of the industry’s current hot talking points may have more nuance than is often suggested.
“They wanted to be on a major record label… There’s a false narrative out there right now: ‘Oh, every artist wants to be independent’. Taylor Swift doesn’t want to be on TuneCore! No offence. Taylor Swift was out of her deal and decided to re-up with Universal. She didn’t do it for the money. She doesn’t need the money. It’s the experience there,” he said – referring to the experience on UMG’s team.
“There’s still business with major labels because of the support system they have around them, and the global infrastructure. So if distributors can add similar value, and have experience, services and capital, that’s where they can become very competitive.”
He added that management companies are “probably the biggest threat in this space” to labels, since they have “the most experience in terms of the value-add”. That’s a phrase he emphasised, saying that Q&A is less about disrupting traditional industry players, and more about adding value to artists. “He who adds the most value is going to win,” he said.
Carter criticised some of the industry’s current A&R practices. “A lot of what we’re seeing right now, the industry is chasing. Okay, this song is getting hot, I’m gonna start chasing this song. Versus ‘I’m going to find this artist that’s going to be around for 30 or 40 years’,” he said, while quickly adding that “there’s a handful of great A&R people out there that are just masterful to watch” in the way they develop artists and help “push them in ways that they didn’t know they could be pushed to”.
Carter said Jimmy Iovine – in his label days – was one of those people, citing his help in Lady Gaga’s early days in advising Carter how to fix her live sound. “He pulled me to the side and said ‘The sound is terrible… Call XYZ tomorrow, this is what you need to do to fix it. That’s A&R… so being able to go out and find talent that hasn’t been discovered yet, there’s going to be so much value in that. You’re not going to be overpaying for the thing everybody’s chasing.”
The conversation returned to distribution, and some of the challenges in the market.
“People treated distribution as a commodity, and they’ve gotten to a place where everybody’s building exactly the same product. It doesn’t have to be a commodity. Water is a commodity, but people still pay seven bucks. I think the water in my hotel was 10 bucks for a bottle of Evian!” said Carter.
“When things are branded or add value – ‘This thing has electrolites and this thing has this…’ – there’s a value-add. So as companies are looking at distribution, it’s ‘Can I add a unique value that’s actually going to help artists?’. If you have the artist in mind… you will build products specifically for that artist. If you’re going after that one-size-fits all and every artist has the same exact needs, it’s going to be a race to the bottom on pricing.”
Isn’t it a race to the bottom on pricing, though? “Everybody has their own strategy around their model, but artists won’t be price-sensitive if they feel like somebody’s actually adding value to their career: helping them make more money, helping them reach bigger audiences, helping their audience engage with them, helping them sell more merchandise,” said Carter. “Artists should be more price-sensitive! It’s the way labels have been able to get away with taking 85%!”
Carter also criticised the structure of the established music industry, suggesting that his work at Spotify had been geared towards helping more artists make money from their work.
“Right now, it’s really really tough. You have three companies that have controlled the entire business. You have publishing companies that are in business with those companies. The structure of the business doesn’t really allow long-tail artists to monetise in a way that’s sustainable, and that can spread wide,” he said.
“I think there are ways where you can allow people to monetise. I don’t want to give too much away, but that’s what we [at Q&A] are looking at.”
Carter finished by addressing his recent history with fellow artist-manager Scooter Braun, which culminated in a lawsuit settlement earlier this year.
“Scooter and I have been friends for a long time, and we had this dispute where I think both of us saw this thing totally different, and were [in] super-parallel universes on it. I think it got ugly: some things that both of us said that we both regret,” he said.
“Over the Christmas holiday he and I had breakfast together and sat down, thought it had gone too far. Squashed it: decided to hug it out. It’s over, and he and I speak. Back on good terms.” With a grin, he added that the fact that his [Carter’s] teenage daughter is a big fan of Ariana Grande, one of Braun’s clients, was a factor. “I thought she’d take his side. And she’s tougher than him!”