Monday, April 17, 2017

‘The music business used to be major vs. indie. Now it’s the quick vs. the slow.’ | Music Business Worldwide

Pascal Nègre has been busy.

The revered French executive sent shockwaves through the global business in February 2016 when he left Universal Music Group after 26 years.

It was later suggested that Nègre had experienced a fractious relationship with Vincent Bolloré – a powerful 20%+ stakeholder in UMG parent Vivendi, and the man Sir Lucian Grainge ultimately has to keep happy.

In the weeks following Nègre‘s high-profile departure, MBW and other industry chatterboxes began speculating over where he might end up.

We needn’t have bothered: in the blink of an eye, Stage Two of his career was already up-and-running.

A fortnight after departing his role as CEO of Universal Music France, Nègre became a key player in the team behind emerging French artist Claudio Capéo.

Capéo‘s self-titled breakthrough album was released in July last year, signed to Jo&Co – the label founded by Nègre‘s friend (and former UMG colleague) Sébastien Saussez.

To date, it’s sold over 400,000 copies.

In recent months, Nègre has also launched two successful startups.

The first is his very own independent label, Six et Sept – which arrived last month as a joint venture with RTL Group and its subsidiary, M6, the second-biggest television channel in France.

Six et Sept is being run on a day-to-day basis by Julien Creuzard – the former head of Capitol and Polydor in France, who last year launched the Elektra label for Warner in the market.

Nègre‘s other new venture – the one taking up the majority of his time – is #NP, a Paris-based management company established in partnership with Live Nation.

#NP’s gameplan, according to Nègre, is to become a “serious management company in France” – a market whose artists, he says, are typically looked after by independent operators.

Just four months in, #NP is making remarkable headway.

The company already boasts some of France’s biggest acts on its roster, from Julien Clerc to Marc Lavoine, Matthieu Chedid and new signing Carla Bruni (pictured). It’s also working with stadium-selling diva Mylène Farmer on a services basis.

Nègre says the ambition is to eventually sign a limited roster of “nine or ten of the biggest acts in France”.

In this age of increasing artist empowerment, #NP represents a delicious contrast for Pascal Nègre’s career.

For quarter of a century, he was an unassailable figurehead for the major record company approach.

At UMG, Nègre played an instrumental role in breaking artists such as Lady Gaga, Eminem, U2, Mariah Carey and Black Eyed Peas in Europe – alongside a string of hugely successful French acts.

Now, he’s firmly on the side of the performers themselves – and hasn’t forgotten a single trick from his previous place of employment.

In an exclusive and candid interview, MBW quizzes Nègre on his new love for artist management, why major labels are going to need to start pinching ideas from publishers – and, naturally, that controversial exit from Universal…

blockbuster acts are increasingly taking control of all elements of their career – and their copyrights. #NP offers artists label-like services across A&R, promotion, marketing, brand partnerships, social media and streaming. that puts you in a great position as a manager, but if you still had your previous job, it would give you a bit of a headache…

Exactly. I agree.

We can see that artists – big acts, but also smaller acts in hip-hop and dance especially – are acting more and more as their own production companies.

They want to control all aspects of their monetization.

So they want either a license deal, with the major helping to market and promote, or they increasingly just want a simple distribution deal.

It’s a big change we’re going to see happen more and more.

I’d imagine that artists like Chance The Rapper will inspire lots of young artists to think that way.

Yes. If you are in hip-hop or EDM music today, you can produce your record at home. So the cost of production is less than ever.

At the same time, by creating your buzz on the internet with social networks, you are your own media. And the more ‘mainstream’ media – radio, TV, press – are looking what’s happening on social networks. It’s changed the game.

“When I was young, a record company would sign an unknown artist… then begin to promote them [across the country]. Now the opposite is often true.”

When I was young – ten years ago [laughs] – a record company would sign an unknown artist, someone maybe just known in their home city.

Then you’d start to bring in TV and radio and begin to promote them [across the country].

Now it’s often the opposite: record companies are signing artists who already have buzz and momentum behind them.

As someone who was in a major label environment for so long, what does that mean for the majors? Are they going to increasingly become distribution companies? How do you see them evolving?

My feeling is that record companies are going to become like publishing companies; the record company model of tomorrow will be the publishing company model of today.

What we call ‘distribution’ in records, they call ‘admin’ in publishing.

“the record company model of tomorrow will be the publishing company model of today.”

They also do co-publishing deals, which is [like] a grant of a license.

There is nothing new in this business!

Won’t that present economic challenges for the majors? BMG CEO Hartwig Masuch (pictured) recently suggested that as artists demand better royalty splits on streaming – especially via license or distribution deals – the majors’ margins will get squeezed…

I don’t think it will be a big economic challenge for them. The reality is that on big acts, [the majors] will do less money than before – but they will still make a lot of money.

Back catalogue is going to deliver a lot of turnover and profit to these companies.

If you look at the revenue share of catalogue on physical [sales], it’s around a third of the business. But in streaming, it’s around 55%+.

“The major labels will do a lot more money on back catalogue, and they will do less money on big acts.”

So on the one hand, [the majors] will do a lot more money on back catalogue, and on the other hand, they will do less money on big acts.

Again, it’s the model of publishing: your back catalogue provides a lot of cash, which you invest in doing admin deals, advances and co-publishing deals.

I don’t think it is a big problem.

Presumably, the most talented A&R people in major labels will increasingly end up as independents… or management companies.

If you are suggesting that management companies can become a sort of  ‘record label of tomorrow’, I think so.

But I’ve learned something. I’m an old guy: I started in this business 30 years ago, when 90% of the industry was not owned in terms of distribution by three major companies.

There were eight major companies and big [independent] labels – Motown, Island, Chrysalis… you know the names.

“If you are suggesting that management companies can become A sort of ‘record label of tomorrow’, I think so.”

In each country, you’d also have big independent labels – Barclay or Carrere in France, for example. We forget about that today.

During the ’90s, the majors acquired a lot of big independent labels, and after that – because of the market decline [due to piracy] – we got concentration with a lot of mergers [like EMI into Universal].

When the music market is back, and growing over the next ten years, you’ll see exactly the opposite. I’m convinced about that.

We’ll see a new generation of strong independent labels?

Yes. We can predict that the record business is going to double in the next five years. So naturally there will be space for a lot of new people.

I’m speaking both about artists who are going to produce and market themselves [on their own labels], and also new independent labels.

You’re going to see the independent label back stronger than ever. That’s why we have created Six et Sept.

“You’re going to see the independent label back stronger than ever.”

I think that some new acts still need a label to invest today. That will often depend on the genre of music.

You can do hip-hop or electronic record at home. But if suddenly you want to do a big pop record, or a record with amazing musicians or an orchestra, you need somebody to pay for that.

If you’re famous, you might be able to pay for it yourself. But if you’re not, you’re going to need a record company.

A big question: do you miss working for Universal?

Universal was a part of my life. But since I left I’ve already done tonnes of things. So the answer to your question is no.

I love meeting people; I love beautiful encounters. Suddenly, you meet an artist or somebody special, and you start doing new things together.

“Do I miss working for Universal? The answer to your question is no.”

I continue to do that with artists and my team.

I love writing new pages in the story of music. And that’s exactly what I’m doing today, working within an exciting new model.

How would you sum up that ‘exciting new model?’ in today’s business?

For a long time, the battle was between major and indie – the big and the little.

“today, the battle is between the quick and the slow.”

Today, the battle is between the quick and the slow. When you are little, it’s easier to move quickly – and that’s so exciting.

There were some reports around the time of your exit from Universal that there was some friction between you and Vincent Bollore (pictured) at Vivendi. Have you left things in a place where you can deal with Universal?

We’ve a done deal with Universal for Claudio Capéo [in continental] Europe.

Carla Bruni is on Universal and Marc Lavoine is on Universal. It is not a problem.

How are you feeling about the nature of your exit from UMG now?

For me, I need to have a fit with my boss.

I really appreciate Grainge. But there was no fit between Bolloré and me. And when there is no fit, you stop.

In the end, it was a fantastic thing for me. It allowed me to have a new adventure and build something different with a strong partner in Live Nation, who are fantastic.

“I really appreciate Grainge. But there was no fit between Bolloré and me. And when there is no fit, you stop.”

I have a good feeling with Live Nation’s people and M6’s people too.

I believe it’s easier to be where I am today than to run a major company – because there you need to adapt a big boat to the new conditions of the market.

Those new conditions are changing rapidly.

A quick word on Sir Lucian Grainge: why did you get on with him, and what do you make of how he’s running Universal?

Grainge is running a company which is No.1. End of story.

It’s interesting to hear you say you ‘fit’ with him…

I knew Lucian since when he was running Polydor and I was running a label in France – 25 years ago.

He was a baby in the UK, I was a baby in France. He grew up, and I grew up.

During the 10 years when he was running UMGI [Universal Music Group International], we worked closely together with Max Hole and Boyd Muir.

“Do not forget that Lucian started in the publishing business. I think that will help him a lot over the next five years.”

That was a fantastic adventure, and UMGI was a real success – it’s because of that success that [Grainge] became the king of UMG.

I really appreciate Grainge. He’s clever and he’s a real A&R guy.

Do not forget that Lucian started in the publishing business. I think that will help him a lot over the next five years, for the reasons I have discussed.

What does Live Nation’s investment and partnership mean for #NP?

The game with Live Nation was first and foremost to create a serious management company in France, and we’ve done it in a couple of months.

In France, there are lots of managers who are the brother, the sister or the best friend of the artist.

Live Nation are really professional and they love artists – that is really important to me. And they are expanding in a spectacular way.

“Live Nation are really professional and they love artists – that is really important to me. And they are expanding in a spectacular way.”

John [Reid, Live Nation international boss] has been extremely supportive. I always believe you make more intelligent decisions when you can talk to people and you’re not on your own.

The idea with Live Nation is exactly that: to share a vision, and to move quicker.

If you look at Artist Nation, and all the management companies working within that in the US, it’s really impressive and really clever.

Do you have any ambition to expand #NP into London, New York or Los Angeles?

No. We want to be known as the artist management specialist in France.

Inside Live Nation, there are very impressive management companies working in the US and UK – they don’t need me there.

But in the second stage of #NP’s growth I will meet my famous colleagues [in Artist Nation] to see if we can help in France.

Anything I haven’t asked that you’d like to say to the world?

Yes. I’m really, really happy.Music Business Worldwide


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