Analysis

Capitol Gains: Capitol Records talks innovation, startups and music


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In September, Music Ally spoke to three of Warner Music Group’s senior innovation and business-development execs, about how they work with startups and innovative technologies. That month, we also interviewed some music/tech startups, who gave some blunt, honest feedback on the challenges they have faced working with major labels in general.

It’s a conversation that’s worth continuing. Our first follow-up is another major-label interview, with three of UMG subsidiary Capitol Records’ innovation leads: Ching-Ching Chen, Josh Remsberg and Nick Osborne. All three have a palpable enthusiasm for music-tech; were at pains to express that their goals are always artist-first; and that they see innovation as much more than just a new, quick-fix marketing tool.

The wider context: UMG’s overall strategy includes creating a global music-tech A&R network: scouting via a series of partnerships with its Accelerator Engagement Network; through the Abbey Road Red startups incubator; and the idea-exchange hothouse that is the Capitol360 Innovation Center, based in Capitol’s landmark Los Angeles HQ.

Capitol’s role is on-the-ground, artist-centric and based around execution. Its under-one-roof approach and structural distance from UMG should allow a nimbleness in forging collaborations between tech and artists. In mid-November, Capitol Royale, its annual music and tech conference took place – Music Ally’s report is here – and musicians, technologists, sponsors and manufacturers met to talk, experiment and hack together apps.

Fast iterations and quick jumps from tech experimentation to artist implementation sounds ideal – but does it actually work in the wild? Chen, Remsberg and Osborne all acknowledged the oil-and-water nature of the space where fast-moving startups and hulking majors meet, and broached some of the knottier issues head-on.

Their intention, at least, is to push through the changes startups beg for, aiming their sights internally on the higher-ups at UMG, with a long-term goal of loosening access to licensing. Perhaps startups will be cheered to hear that they “spend as much time evangelising about tech inside the building as we do outside.” Read on for our Q&A interview.

Music Ally: Capitol is one of the focal points of UMG’s music-tech efforts: the gBETA accelerator; the Capitol Royale music-tech festival; and the Capitol360 collaborative workspace. What is Capitol’s strategy when balancing these approaches?

Ching-Ching Chen: All of our initiatives so far have been us thinking about artists first – giving them access to the best storytelling tools, and asking how we can create the best record label for the future. We want to provide amazing partnerships and business development opportunities for our artists outside of just recording music.

What’s been really cool is that we’re talking to companies that we would never really think about as brand partners, and artists get to be the first to experiment with that. Some of the projects from our hackathons are things we would never dream up – and getting those things in front of our artists is us making sure that they have a unique way to communicate with fans.

Music Ally: Is that recognition that Capitol has to be much more than a record label now?

Ching-Ching: Yes, absolutely. Our job is to make our artists happy and to make sure that they have the best platform to get in front of as many fans as possible and to bring their creative vision to life. And I think the best way to do that is cutting-edge technology.

Nick Osborne: Ten years ago, music consumption was a digital download, and ten years before that it was physical retail. Now it can be on a number of different devices across a number of different platforms: a full song, a DJ mix, a 15-second snippet – so we embrace every new technology possible to develop channels that cut through that noise.

Music Ally: Is the tech-focused framework you are creating something that artists are actively seeking – that will make them sign to Capitol over someone else? Is the Capitol of the future a tech company as much as it is a music company?

Ching-Ching: Yes, absolutely. We hope that one day this will be one of the reasons why every artist will want to work with us – that they have access to opportunities to bring their art to life.

Nick: Absolutely – I think that’s that’s what a modern label needs to look like. Technology is now intertwined in every aspect of label life – from new marketing and social media platforms to data-driven A&R. Data and technology are the new fabric of how our label works.

Josh Remsberg: Ultimately as a record label our business is the art. The hope is that we can find ways to to bring technology to help tell that story and enhance the story that the artists want to tell.

Music Ally: When you look to sign artists, are you looking at them as technologists as well? Are artists now seeking innovative partnerships as part of their creative process?

Josh: The answer is yes and no. Certain artists are, but not all of them. What we’re seeing is artists wanting to find creative ways to cut through and some of them are looking to technology to try to do that.

Ching-Ching: It’s never them saying, “I’m looking for new technology so that I’m different.” It’s more like they say, “here’s my art form, here’s a story I want to tell, or a thing want to create: is it possible?” Now with how technology is involved [at Capitol], there’s so much more opportunity to bring to life those ideas.

To give an example from Capitol Royale: Bose AR collaborated with one of our artists, Katori Walker, and Bose AR, told me that, “having an actual creator using the technology brings out stuff we didn’t even think about before.” So our artists are able to help shape what’s possible using technology.

Music Ally: Do artists ever say to you, “I want a collaboration with this specific technology partner – can you make it happen for me?”

Ching-Ching: So far it’s been reverse-pitching in many instances. Yes, we have artists who are interested in technology but rarely a specific company. Our job is to create opportunities and encourage artists to consider them as they’re planning their next album cycle… to bring in tech partners and have them explain what’s possible.

Josh: Part of the beauty of Capitol Royale is that it creates a forum on campus where our artists can be exposed to these conversations and companies – which hopefully puts our artists in the mindset of coming to us and saying, “I want to do this,” as opposed to the reverse pitches.

Music Ally: So when you create tech connectivity, it’s considered part of their artist development?

Josh: Exactly.

Music Ally: Is an element of your job now also “audience A&R” – to find niche communities in different pieces of technology, to figure out what they want, then give it to them?

Nick: That’s exactly it, but I think it goes further than that. It used to be that we would build something and assume the audience would come. Now it’s flipped marketing on its head in the way we approach it. Now it’s about finding an audience that organically fits, and leaning into that existing audience… it’s about pairing the right audience with the artist, as much as it is about finding the right home for them.

We also want to foster technologists’ ambitions to create these new communities and platforms. Historically it’s been really challenging as a startup to work with the music industry: music licensing is an extremely complicated world.

Music Ally: Analysing the big data generated by all these platforms and networks is now vital in your decision making. How are you incorporating big data into label life?

Nick: The biggest challenge is that there are so many signals. Our attention right now is how we surface the data that matters, to help inform decisions. It’s never going to replace having creative ideas. But it does act as a really quick feedback loop to better understand if what you’re doing is working or to give your creative marketing efforts context, and that the focus can be on coming up with creative ideas.

Music Ally: Fan consumption is fragmented but connected to the same thing: the artist and the song. In the past, labels have had to go through third parties to connect with fans, but is your goal now to create a direct connection with fans via technology?

Nick – Absolutely.

Ching-Ching – And it’s crucial that we don’t just become the middleman and just connect artists with agencies that have access to the best technologies – but rather that it comes directly from us.

Music Ally: Startups want to move very quickly – but you have to play both sides, as part of a Major label machine which can move notoriously slowly. How do you balance that?

Nick: It’s about getting the right frameworks in place: identifying how we can make things like a simple license or the right API partners readily available – so that this complexity, that is usually very slow-moving, can be sped up. There is commonality across these tasks, so if we can find those patterns, we can offer a menu of things to startups that approach us.

That’s come a long way in the last couple of years. We still have a lot of work to do, but that’s where we’re seeing the most progress right now.

Music Ally: When you create partnerships with technologists, are you looking at a longer, five-to-ten-year view, or getting something new moving quickly?

Ching-Ching: A bit of both. One of the biggest things we balance at a label is to make short term wins, as well as to drive [long-term] excitement.

At last year’s Royale event, with Verizon’s RYOT lab we captured a volumetric scan of JAMESDAVIS from Motown. To be able do that as the initial test-case and think about, “how do we actually distribute this?” – that’s long-term thinking. We’re trying to create an ecosystem to funnel content to fans, because it’s not as simple as just creating the content and pushing it out.

The hackathons often result in the early creation of a prototype, so that we can pitch it to as many artists as possible and get them excited. We’re working closely with companies like Marvel AR, via TechStars, and these are more realistic, shorter-term versions of that technology.

The longer-term ecosystem that we’re encouraging and the startups we support will probably need years to see the results of that strategy.

Josh: We are trying to look towards the future, but we’re also judged internally by getting as many wins on the board immediately, for the artists on our roster right now.

Music Ally: Licensing is hard, and is still seen as a huge stumbling block by startups. In the future, do you think startups will be able to obtain licensing deals more quickly and simply?

Nick: Yes. It’s a bit complicated [for startups obtaining licenses for] full catalogues because there’s a lot of different rights-holders. We want to get early-stage startups in front of the right people at UMG and Capitol, so that they can start forging relationships with our business affairs teams. Then, as they progress and need more rights, they will already have a connection […] that understands what the startups are trying to achieve, and are more open to figuring out a solution that makes sense for everyone.

Historically the music industry hasn’t fully understood technology – and the technology industry has not fully understood music. We see ourselves as the connective tissue to help educate everyone, because that’s that’s how innovation is going to happen.

Ching-Ching: I would say we spend as much time evangelising inside the building as we do outside the building. Part of our role is making sure that [participants in the gBETA accelerator] have audiences with some of the biggest executives here – not just in Capitol but in the CMG ecosystem. We’re very well aware of the bottlenecks when working with a big music company and we’re trying to facilitate that change.

Music Ally: The recent Capitol Royale event brought together lots of external partners with the aim of creating new technology. What were the key successes?

Ching-Ching: This year in particular, success for us was aiming to create the entire ecosystem: from the artists through to the technology. The reason we’re so excited to work with these companies is that it’s not about recruitment or press, it’s about actually seeing a product come to life with an artist as a use-case.

Nick: Innovation is now in our corporate culture and DNA, all the way from from [CMG CEO] Steve Barnett down through the rest of the company. Innovation is not happening in isolation on this team – but throughout the entire company. We’re really proud of that.

This interview has been lightly edited and structured for clarity.

Key takeaways from our Capitol Q&A

– A label in 2020 should be as much about developing tech as it should be about developing artists: “one day this will be one of the reasons why every artist will want to work with us.”
– Capitol’s tech approach is artist-first and in-house, seeking immediate or medium-term impact on meaningful creative expression.
– Artists’ tech experimentation is not currently driven much by artists – the label pitches new tech to them. This will change, with artists explicitly expecting Capitol to source tech opportunities for them.
– Capitol is very eager to create direct-to-fan connections, cutting out the traditional middleman of platforms and media – a core tenet of UMG’s wider tech strategy too.
– A label must now unearth both niche communities and artists, and connect the two in the way the community demands it, in a way that best allows artists to create.
– Big data is where big decisions will be made – if the signal can be tuned from the noise, and, as per the recent advice of YouTube Music’s Lyor Cohen, combine data with instinct.
– Structural change is essential within Capitol and UMG, in the hope that startups will have a smoother, faster and empathetic transition to full licensing opportunities.

Capitol’s music-tech key players

Ching-Ching Chen is VP, Digital Strategy & Business Development at Capitol Records, and oversees its Capitol360 Innovation Centre. She was previously a senior analyst at Morgan Stanley.

Nick Osborne is VP, Digital Strategy & Business Development at Capitol Music Group, and co-leads the Capitol360 Innovation Centre. Prior to joining Capitol, Nick oversaw digital strategy for Universal Music Canada.

Josh Remsberg, VP Business Development at Capitol Music Group, oversees the Capitol 360 Innovation Centre. He co-founded the A-Side Worldwide management company and was previously Senior Director of Label Marketing at Island & Republic Records.

Joe Sparrow

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