Interview with STEPHEN KING, CIO Believe Digital & founder of Believe Recordings UK - Sep 24, 2014
“Unlike the majors we’re sometimes prepared to go in earlier and take the risk. Often the only way we can get those artists is to be the first in.”
How can a small label compete with the might of a major in terms of finding and breaking the best new artists and then keeping them sweet by helping to build successful long term careers?
Founded by Stephen King, an industry veteran with over 30 years of experience in artist management, Believe Recordings UK showcases a more artist-friendly alternative to the major label model. King explains to HitQuarters how the label’s burgeoning success, such as with the likes of Bastille (UK No.1, US Top 5) and James Vincent Morrow (UK Top 30), is thanks to a strategy of discovering artists early, offering very generous terms and a 50/50 collaborative approach, as well as the support of its own flourishing independent worldwide distribution company, Believe Digital.
Can you start by summarising what Believe Digital does and how it started?
The CEO [Denis Ladegaillerie] had previously worked for Vivendi/Universal and saw an opportunity for independent artists who weren’t being serviced very well in the digital arena. He set up the company with a couple of other people, and very quickly grew to be the dominant force in independent music distribution in France.
Believe is now a digital distribution company that distributes music to every territory of the world. We have in excess of 6 million tracks in our system, 250 staff, and people on the ground in 32 territories worldwide. We offer an integrated digital distribution solution for independent labels that starts with basic distribution and then after that we also get involved in the promotion of their assets; in monetizing their assets; in cleaning their data; in social media; in sync services; neighbouring rights, and we offer a variety of services that they can select from us.
How did you get involved and set up the record label arm, Believe Recordings UK?
I was brought into the company in 2010 when, after being a manager for 25 years, the CEO asked me to run Believe Digital in the UK, which was the distribution arm of the company. And, as part of my responsibilities, I requested that I have the right to sign and develop artists ourselves and to essentially have our own label. He thought that that was a good idea, because any success with our own label proves that our international distribution system works, and it brings new clients to our distribution company.
After the UK company was up and running I took a more international role, and started hiring people in all the territories where we thought that there was an effective digital market.
Believe Recordings UK offer deals that give artists “more input, flexibility and scope” in their releases. What does that mean exactly?
Essentially, our deals with our artists for our own label are joint venture approach deals, so that every single thing that the artist does has to be approved by them and by us, and everything we do for the artist has to be approved by the artist.
What that means is that we have to be very careful what sort of artist we sign and what sort of managers we work with, because it’s a very much hand-in-hand process. We don’t dictate to the artist what they have to do. We work very closely with them, and hopefully reach an agreement on every aspect, from who we hire as independent promotion people to who does the artwork; who does the photos; who makes the videos.
In the initial negotiation we also get agreements with them on the minimum budgets we would spend and the maximum budgets we would spend, depending on the level of success.
Can you explain what such maximum and minimum budgeting entails?
We start off with an artist and say: “Okay, we’re gonna spend £25,000 (approx. $40,000) this year on developing you, and that’s gonna cover independent promotion, PR, online, and stuff like that. But as soon as the sales hit a certain target, then we triple or quadruple it.”
On James Vincent McMorrow for instance, we quadrupled our spend on the first album (Early in the Morning) because of the level success that we achieved with him.
Believe pays a higher royalty rate than pretty much anyone …
50% of everything we receive goes to the artist.
How can you afford such generous artist terms?
We can afford that because we own our own distribution and so don’t have other costs. And also, the success of Believe Recordings brings clients to our distribution company. So we make a profit from doing it, and we’re very careful with our investments, but it’s not our core business, our core business is to be a distributor.
If ever we get into competition with one of our own record labels we surrender the artist to them. We never compete with the labels we distribute. So, if I’m trying to sign an artist and they say that one of our labels wants to sign them then I withdraw from the negotiations.
When you signed James Vincent McMorrow, he was attracting major label interest, what were you able to offer that the majors couldn’t, especially as a new label?
I think the crucial thing with him is that I was probably the only A&R guy that flew to Ireland to see him, and I spent a few days with him in Ireland, and longer with his manager [Ken Allen, Faction Management], and tried to work out what the crucial things were for him in terms of the structure of a deal and the sort of record he wanted to make.
He made it very clear to me that he had a vision for his album; he had a vision for the sort of songs he wanted to record and the relationship he wanted with the record company, and it was a vision I was willing to accept. It was a vision that major record companies might not have accepted because, between James and his manager, it meant they had total control of the record they made; the artwork; the videos; when they were going to tour; what the single was going to be …
So in that instance I had a lot of trust in the artist. I signed what I thought was a very important artist, and accepted his vision; I thought it was the right vision to have. I’m not sure they are the sorts of conditions he would get from a major record company.
With majors investing less in developing new artists, has the alternative become for small labels and management to take on this role?
Frankly, I think managers have always done that, and they do it a lot more now. The time when major record companies signed artists and put them through development is happening less and less, although there are exceptions like Lorde, who was signed very early on and, as you know, developed by the label and by the manager [Scott Maclachlan – HQ interview] early on.
But generally, it’s the managers that do it now, and to a growing extent labels like us, Transgressive, One Little Indian and Tape Club. Labels like that are beginning to realise that if they want to sign artists in competition with major labels, then the way to do it is to be involved in the earliest possible stage.
Can you give an example of Believe signing an artist at the earliest possible stage? You’ve made a number of recent signings of up-and-coming artists …
We’ve just signed a young jazzy hip-hop group called The Age Of Luna, and when we signed them, the only thing available online was one video. We saw the video and thought: that’s great; that’s within our vision of what we want our label to do. We contacted the manager and they sent over three more tracks. Within five days we’d signed the artist. We were in contract faster than anybody. None of the major record companies knew about it until it was a done deal.
Isn’t acting that fast a big risk to take?
A&R is a risk; being a label is a risky business. We’re risking our investment on our ability to spot things. But, luckily, the success of James has allowed us to expand our roster and take some risks.
What particular aspects attract your attention with a new artist?
It can be anything. I mean, we signed another artist called ESSE, and he only had one track on SoundCloud, and that’s all he had, and immediately when we heard it we thought: that’s the sort of artist we want to be involved with. I think by the time we signed him we had about three tracks, and that was it. We signed him on a development deal that allows us to invest when he needs money and to help him develop to the next stage.
A&R is a gut reaction and it’s about a vision for where you think an artist can go, and a vision for how big you think they can be.
How is your A&R team able to spot potential breakthrough artists before the majors?
We have a big staff in London – we have over 30 people in the distribution company – and we hire these people because every one of them has a love and a knowledge of music in the UK. So, once a week, the majority of people in our office will say to me: “Have you heard this band?” and “Have you seen this thing?”
We’ve got a network of staff who have incredible knowledge in all the sectors of the music industry; all parts and all genres. And then we have a core A&R team, who’s job it is to be online and be out there going to gigs, just like everyone else.
But unlike the majors, who generally would like something a bit more finished or a higher profile artist, we’re sometimes prepared to get involved earlier. Whereas they might wait until an artist is developed or got a profile or got certain numbers on their SoundCloud and certain numbers on their Facebook, we’re prepared to go in earlier and take the risk. Often the only way we can get those artists is to be the first in.
How important is it for unsigned artists to understand how best to market themselves in addition to creating the music itself?
I think it’s really critical when we sign artists on the sort of deals that we sign artists on that we have a complete understanding with the artist and with the artist manager of the roles that each of us take and the responsibilities of each of us, and so we really try and work with very intelligent and thoughtful managers who have a vision for their artist that ties closely to our own vision, and that’s critical.
Sometimes the artists have a clear understanding of how they’re marketed, and sometimes it’s the managers who have a better understanding, but as long as we have an agreement with one of those parties, or both of those parties if possible, then I think we’re happy to move forward.
I assume you’re primarily focusing on artists with potential for building long-term careers?
We only sign artists where we think they’ll have long-term careers. What we don’t sign is pop, and we don’t sign one off records. We sign artists where we think there’s something very credible about what they do, where we think they have a unique voice and very strong songwriting skills.
Is there a point at which an artist on your roster could naturally “outgrow” you in terms of their career needs?
That’s a difficult question. I think there are certain things that the major record companies do very well, and one of them is their ability to spend huge amounts of money on large scale marketing campaigns, and at the moment with our label we’re in a development phase where we’re getting decent levels of success with our artists, and the next level is to make sure we have a multi-platinum selling artist, and we haven’t got that yet.
We have been approached by major record companies to try and license our artists from us, because they think they’re very good. And we’ve looked at those deals, and we consulted with the managers and the artists, and asked them if that’s something that they want, but generally they want to stay with us because the royalty rate we offer them and the control we offer them is a lot better than they’ll get elsewhere, and they seem confident in our ability as a worldwide distributor of digital music to be able to do a job. So, so far we haven’t licensed on an artist.
We have a joint venture with a label that’s associated with a major record company for one of our artists, but that really was because the man who runs the label had a vision for the artist that we shared, and we thought, given his track record of breaking similar sorts of artists, the sensible way to go for this particular artist was to do a joint venture with someone who we felt had clout in breaking those sort of artists.
How did you get involved with UK group Bastille and what role did Believe play in their early development?
We spotted Bastille through various means, but we saw them at The Great Escape Festival, and our A&R man was very keen on them and kept telling me about them every week. Then they stuck a video up online that we thought was really good, and they’d had some content disputes with the footage they used on it, and so we quickly started talking to the management [Black Fox Management] and said: “Look, we’d be really keen to work with you, get your single out as fast as possible, and see if we can achieve a long-term deal with you.”
By working very closely with the manager [Polly Comber], we very quickly put a team of really good promotion people together, ran a very strong social media campaign, helped fund the videos, manufactured CDs for them, and, most importantly, promoted them very heavily to all the digital services like iTunes and Spotify and Deezer, who took them on board very early on, even before there was success, and gave them very high profile.
So, we were involved in the commercial aspects of marketing them. In terms of their A&R and in terms of their development musically, that was very much their vision and their manager’s vision, which we accepted and didn’t try to make any changes at all. We accepted that was the route they wanted to go on. That was the reason we wanted to sign them so quickly; we felt they already had something unique and so didn’t have to spend a lot of time helping them find it.
You’ve said that in terms of breaking acts you are very good and the majors typically less so – what advantages do you have over them in terms of achieving this?
I think we’re very good at it because we have a small roster. So, that makes it easier for us. It’s very important for our investment that we get returns on it and so we have absolute attention to detail. We have very close relationships with the managers and the artists, and with the independent promotion teams that we work with to make sure.
Everything is critical to us, every part of the process: getting the best director we can afford to make the video; getting the best artwork we can; positioning in social media; positioning in marketing to all the services; even manufacturing vinyl and CDs. Most of our artists’ loyalty in staying with us is that they accept that we’re sometimes going beyond the call of duty in what we do.
With so many years experience in the artist management field, what do you see as some of the main differences between managing an artist now and 20 years ago?
[laughs] 20 years ago, managers pretty much existed in the development phase, taking advances from major record companies and major publishing companies. The advance that they took for their artist paid the manager’s own overheads for a 12 to 18 month period and that allowed him to work very closely with the artist and develop them until the artist achieved commercial success.
Now it’s rare to get the level of advances that we could have got 20 years ago. So managers now have to invest their own money more than they’ve ever had to. They now have to take a longer term view in terms of when they can expect to start earning money.
Also I think more and more managers are the record company rather than just being a manager, they’re involved in that whole process, and it’s definitely a higher level of risk. But hopefully, they’re in a stronger position to get higher level of return, because they’re doing that development as well.
How do you see Believe Digital and Believe Recordings UK developing in the future?
I think Believe Digital as a distribution company is going from strength to strength, and we’re expanding on a worldwide basis. We’re currently in China, which is an interesting country to do business in, and we’re currently expanding rapidly in Latin America, and I think that our technology is now proven, and our ability to distribute on a worldwide basis is growing and growing, and we’re attracting more and more labels to us. So, I think we’re in a very strong position as a distribution company.
And as a label, I think we have to continue with our approach, which is based on the quality of our signings, not a huge number of signings, and our ability to show our labels that we can use our own technology and our own teams to help young artists get to the stage where they’ve got recognition for their music.
interviewed by Kimbel Bouwman
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