Analysis

Amuse CEO talks growth, Old Town Road and artist-friendly deals


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“What have you done for me lately?” Diego Farias, CEO of music distributor and label Amuse, is on the other end of a video call to Music Ally, singing the chorus of Janet Jackson’s classic track with a smile on his face, but thankfully no wardrobe malfunctions with his clothing.

It’s not (just) for the love of famous mid-80s hits. The phrase has just come up as Farias explains the impact he thinks Amuse and other distributors are having on the wider music industry, in terms of artists’ expectations when they’re talking to the labels that they’re already signed to.

“Someone at one major label here in Sweden was telling me that they find themselves in a really weird negotiation because of deals like the ones Amuse offers,” he says. “Artists really do come in and ask ‘What have you done for me lately?’ They’re asking what are they getting in return?”

“Increasingly, it’s difficult to answer that question. The true disruption is about the control the majors had on breaking stars in the past, versus the loosening grip that they have on that now.”

Yes, of course Farias would say that: he founded and runs a company that aims to persuade artists that it can be an alternative to the major labels. Arguing that the latter have lost their status as the big new-talent breakers is a key part of the Amuse pitch.

“It was very possible 10 years ago to sign someone, put them on every radio show on the US, UK etc, put them on all the big TV shows, have their face on every magazine and in all the storefronts, and suddenly – believe it or not! – you had a star,” he continues.

“But now, when TV has a diminishing role, it’s no longer radio that is breaking stars, and people aren’t walking in to CD stores any more, that incredible grip that the majors had starts to fade away a little bit. So why are the deals still the same?”

That’s the nuance of the argument: Farias isn’t saying that majors can’t break artists in 2019, but rather that if other entities (like Amuse, or AWAL, or UnitedMasters or whoever it may be) can also break artists, and if those entities are offering different kinds of deals to those musicians, then pressure may build on major labels to follow suit.

He’s talking from a position of confidence. Amuse launched worldwide in March 2017 as “the world’s first mobile record label”, complete with an app through which unsigned artists could upload their tracks for distribution. The company would then sign those with promise to its own label, providing them with more services.

By that September, Amuse had 15,000 artists using its platform, and had added Will·I·Am as a ‘co-founder’. In May 2018 it raised a $15.5m funding round, and now in 2019 it’s signing up “around 1,000 new artists every day” for its distribution platform, according to Farias. Amuse’s label, meanwhile, has put out around 200 artist projects so far – including singles, EPs and albums.

“For 55 tracks, we brought them to over a million streams,” he says. Not a bad hit rate by traditional music-industry standards, although Farias sees this as a necessity for Amuse to be a sustainable business.

“We don’t have the luxury of having a back catalogue to rely on. We can’t have a bad quarter or have eight out of 10 investments fail! Every investment we do has to be of some level of hit,” he says. “We’re not sitting here making money on our back catalogue of Prince or Led Zeppelin. We only have frontline, so we have to kill it every time we release music.”

Farias adds that Amuse has so far done “north of 250 deals” through its Fast Forward feature, announced in February, which pays automated advances out to artists of its distribution service. Half of those deals were renewals, meaning that artists have accepted an advance, recouped it, and then accepted another one. Farias says that these advances range from “a couple of hundred bucks to a couple of hundred thousand dollars”.

On the label side, Amuse’s roster includes emerging artists like Adel, Plàsi, The Endorphins and Reyn from Sweden, but also US acts like Moxie Raia and Telykast. Oh, and a sprinkling of established acts like Imogen Heap and the co-founder’s own Black Eyed Peas.

“We could probably do more of those deals. We haven’t: we need to make sure it all works and feels good,” says Farias. “The fact that people are renewing and coming back for more suggests that it’s working.”

Not everyone who comes through Amuse’s distribution pipe opts to sign a deal with the company’s label, though. Back in January this year, Amuse published the latest in its series of ‘Staff Picks’ blog posts highlighting new tracks put out using its distro service that were gaining traction.

“Wow, this song blew up! Undoubtedly one of the biggest genre the coming years is going to be country rap,” suggested the post about one recently-released track. “This ‘Red Dead Redemption 2’ inspired song is now the most streamed on our platform. I got the horses in the back!”

You know what track that was, and the rest is history. Yet as ‘Old Town Road’ continued its rise, Lil Nas X signed to Sony Music’s Columbia Records in March, despite Farias making him what he has since revealed was a “north of a million dollars” deal to sign with Amuse. Lil Tecca – riding high right now in various industry breaking-artist charts – also came through Amuse, but has since signed to UMG’s Republic Records.

You could see these emerging-stars that got away as an indication that major labels still have plenty of clout to turn an artist’s head with a big advance when a track starts to pop. Farias is philosophical about the challenge: he hopes that if Amuse can continue proving itself as a spawning ground for stars, it will be able to hang on to more of them too.

“We always knew that the next star could come from something like Amuse: it wasn’t such a far-fetched idea! For us it was a matter of waiting, but we knew this artist was going to come, and the platform lent itself perfectly to an artist like Lil Nas X,” he says.

“We see more and more of those artists coming through our pipeline. Is it sad that we were not able to sign him? I don’t think so: he’s super-happy about his decision, and that’s what we would have wanted him to be with us. As we continue to grow as a company, and our brand gets more known, we will be able to secure more of these deals and lock down more of these stars. They’ll know that they can trust us.”

Actually, ‘lock down’ is exactly what Amuse is trying to avoid in its dealings with musicians. It pays for recording projects upfront then shares the profits on a 50/50 basis with artists, with the rights reverting to the musicians once the licensing term is over. There’s also no obligation for Amuse-distributed artists to sign with its label in the first place.

“This is never going to work if we have predatory terms or they’re signing with us because they have to. We had nothing in place to force someone like Lil Nas X to stay at Amuse, because that would be against everything I stand for,” says Farias.

He also thinks this may be an expectation for younger artists in particular, who’ve grown up in the social-media age, with its plethora of new creative-industry career paths and business models.

“These kids now, they might have a buddy who’s a Fortnite star, or a friend who’s doing makeup videos on YouTube, or another buddy travelling around taking photos and posting on Instagram – and all making money from that. Self-made stars in genres that didn’t exist five years ago,” says Farias.

“That’s setting the tone for how these millennials think about how talent and talent development works. If those friends are doing it on their own, why would they accept that an old fart like myself would tell them what to do in their music career?”

“We need to understand that this ship has sailed: if we’re not open to working with them [on their terms] they know how it works, and they can do it on their own. That’s why first and foremost, all our deals are non-predatory. They are collaborative deals, no life-time agreements, and we don’t acquire rights.”

amuse app

That does bring some restrictions: for example, the ideal deals under this kind of model probably don’t – Lil Nas X aside – involve huge advances, with Amuse preferring to invest the money in building the artist’s audience and streaming profile. People don’t always agree, though.

“Some artists and some managers are still really conditioned in the old way of thinking. Some American artists, for example, will want a big advance – and they’ll have three people [on their team] who are going to have a piece of that advance, so it has to be high,” he says.

“Maybe investing that money into marketing would have been a better investment, but all these people around the artist will advise them against taking that smarter deal. So how we operate can be a blessing and a curse to some extent. But being non-predatory is super-important to us.”

Amuse has been fighting its corner as an alternative. In February 2019, it launched Fast Forward, and it also recently commissioned a study by Midia Research into independent artist revenues.

Other than deals, Farias is thinking hard about how music distribution will evolve in the coming years. He sees technology as key, unsurprisingly, with Amuse soon to roll out new features that he hopes will have a “tremendous impact” on its business.

“I don’t think you can fundamentally differentiate yourself as a distributor in any way other than technology,” he says. “I’d dare to say that we’re going to be the best distribution service in the world in 2020, as far as technology goes! A lot of these players are not really tech companies…”

AWAL, for certain, will be bristling in response: its parent company Kobalt has always prominently described itself as a music AND technology company. But of course, other distributor and artist-services firms are building up their tech capabilities too.

Farias also thinks that some of the prevailing trends within distribution – the prominence of playlist pitching for example – may fall in importance as the streaming services evolve. For example the ‘algotorial’ playlists being tested by Spotify where an initial pool of tracks chosen by a human editor is then narrowed down for individual listeners by an algorithm, so that the playlist is personalised to their tastes.

To put that another way: when I listen to, say, the ‘Happy Hits!’ playlist, its lineup will be different to when you listen to it. That could have a knock-on effect for the importance of playlist pitching.

“With the introduction of Spotify’s algotorial, less and less shelf space is actually available for pitching. That’s going to spark a change in what types of services are being offered to artists, and it will impact how deals look,” suggests Farias.

“Rather than talking about how to pitch this or that playlister, these algorithms are what everybody should be talking about. With all these services geared towards providing these individualised listening experiences, over time they’ll be even less inclined to spoonfeed you something someone else has said is good or important to listen to.”

“It’ll be more important for them to feed you the stuff that will keep you listening. So our focus, to a large extent, has to be on the other side of that coin. How can we build a sustainable career for a kid… even if they don’t stick on playlists?”

As things stand, Amuse intends to do that as a fully-independent company, despite recent news that Troy Carter’s Q&A had signed a partnership with Warner Music Group, to ‘upstream’ some of its artists to Atlantic Records if and when they decide they want to be on a major. Couldn’t Amuse do a similar deal?

“These types of deals have been around forever: the format of being a small label where the storefront is independent and then pipelines that go to a major. That’s an old structure which we haven’t pursued,” says Farias, stressing that he is not criticising Q&A or Carter, who he thinks has done a “great deal” for the artists he works with.

“We have had offers from majors about working with them. That’s an opportunity that we could have pursued. But we really think we can do this: when you work with bigger talent, it primes your team, so the next time you work with something big, you already have that experience. We think we can get there on our own…”

Stuart Dredge

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