The Hot Seat: Martin Goldschmidt, Founder, Cooking Vinyl

Published in The Music Network


When Martin Goldschmidt established Cooking Vinyl back in 1986, his label had a distinct lean towards folk music. Not any more. Yes, Billy Bragg remains one of Cooking Vinyl’s most iconic artists, having come on board in 1993. But the Bard of Barking slots into a roster alongside the likes of the Prodigy, Amanda Palmer, Underworld, Groove Armada, the Cranberries and Marilyn Manson.

When Goldschmidt began working with the Prodigy, predictably, a lot of noise was made. The London-based imprint partnered with Ingenious Media Investments to release the electronic punks’ fifth studio album Invaders Must Die back in 2009. The set went on to be one of the year’s biggest-selling independent records in Europe, and shifted more than a million worldwide. Cooking Vinyl got hot.

Goldschmidt is recognised as one of Europe’s savviest independent music chiefs, with an artist-centric strategy, whether his firm is functioning as a label proper or in a services-only capacity.

Cooking Vinyl Group, which also includes its sister company Essential Music & Marketing, landed a deal in 2011 to fund future projects through U.K. venture-capital company Icebreaker.

The British indie label recently opened for business in Australia, with an office in Melbourne led by two former Shock Records executives, Leigh Gruppetta and Stu Harvey. Cooking Vinyl Australia has since struck a partnership with PledgeMusic.

What has been the secret to the success of Cooking Vinyl?

Understanding what our job is. The old school vision of a record label is about amassing a bank of copyrights and exploiting them ruthlessly. Suing the public and paying the artist as little as possible. Hated by both. We see the job of a label is to sit between the artist and the public. The better we serve those two masters, the more successful the artist is. We live and die by our artists’ success.

The label began with folk origins. Clearly the label has changed. What’s been behind that radical evolution?

My personal taste were always very wide in terms of genre but always leaning to left-field, edgy music. Most people’s taste are cross genre. Strip out genre and focus on left-field, edgy – and Amanda Palmer, Billy Bragg, Prodigy, and Marilyn Manson on the same label make complete sense.

When I spoke with Billy Bragg recently, we talked about his long standing relationship with yourself. He said Pete Jenner had told him “the best record deals are the ones that only last seven years and that you get your rights back at the end of that.” Apparently that’s the type of deal you and Billy have and you’ve been going like that for more than 20 years. Is it dangerous to be too flexible?

At the time we signed Billy, it was a case of Pete saying “jump” and me saying “how high.” It took me years to appreciate what a great deal it was for both of us. Firstly, I don’t think CV would be here today without Billy.

Originally the deal was for 3 years. Billy has now stayed with us for twenty years and renewed the contract six times. He has not stayed through loyalty, and I have written to him several times and said that I believed we were the best option for him and what we could do for him, but that he should only stay if he also thought that. I don’t expect blind loyalty.

To my knowledge it was the first artist services deal and although there can be downsides to these deals they have big upsides which worked really well for Billy. His back catalogue sales are very strong. In these deals the artist gets the lion’s share of the money but has to pay all the costs from it. Before the costs are paid, their unrecouped balance can look like bad major label excesses but after the costs are paid then they earn far more money than a royalty deal. Billy has done very well. On top of this he has known and approved how we have spent his money. He knows exactly what he earns from Spotify and also every other piece of the pie by Spotify and business partners. So the artist and management have far more information and control than a standard record deal. Furthermore the fact the costs belong to the artist, not the label, creates a true business partnership with interests better aligned. Pete also taught me some other brilliant twists like letting the artists do official bootlegs to sell at shows and on their website only. It’s really hard for many of our artists to earn a living and selling 2,000 bootlegs without the record company taking a cut could mean they make $20,000 which can really square the income circle and get them through.

You’re launching in Australia. What’s the appeal with doing business Down Under?

The biggest appeal is the people. Our new team are all good friends and people we have worked with for many years. It’s a well-kept secret that my Mum was Australian and my wife is from Tassie. I’ve heard all the jokes. I have an Aussie passport. I have spent a lot of time in Oz. Finally you guys speak English – well, strine anyway – and that makes it easy culturally both to work with, and you get a lot of the music we do better than most places on the planet.

You also have a presence in the U.S. Where to next?

The U.S. is currently a publishing and A&R operation. We don’t use Erik Gilbert to oversee releases but instead we partner with local quarterbacks very successfully. For example last year we sold 120,000 Marilyn Manson records in the U.S. We are looking at other markets carefully. We strongly believe in finding the right people and until we do we will not set up in a country. So we have just taken on product management in Germany and are looking at a number of countries and opportunities.

 What’s the ultimate goal with the CV Group of Companies?

I wish I could talk about it, but there is no plan. I really admire the Beggars business model and success. There is a great synergy between our companies and for example owning our own distribution company, Essential Music, which strengthens both entities. That said Essential’s success this year — with Passenger and others — totally eclipses our own.

The Universal-EMI deal went through, the majors are still playing their game. What’s vexing you right now?

To be honest our business is growing every year. We are getting great artists to work with. We earn a decent living and we’re having a lot of fun. Nothing in the business arena right now.

You told Billboard your revenue target for 2012 was about £10 million. What’s your target for this year?

£12 million

Much has been said about the small royalty streams coming from streaming services. Where do you stand on the likes of Spotify?

Love ‘em. Recorded music is a niche product. Spotify and YouTube are the biggest weapons we have to seduce the public to pay for music and make it a mass market product. The concept of fighting piracy is a joke, the key is to seduce via a great business model. Spotify are getting a lot of heat right now. But it is interesting that their name is synonymous with streaming. It’s like becoming what a Hoover is to a vacuum cleaner. What I don’t get is why people take their stuff off Spotify but still use YouTube and Soundcloud and say nothing about Grooveshark. To me it is pure ignorance. Now if people want to shout about inadequate remuneration from streaming in major label record contracts then I have some sympathy.

The Hot Seat: Benji Rogers, CEO & Co-Founder, PledgeMusic

Record, release, promote. That’s the old way, reckons Benji Rogers. The future as he sees it is all about a deep engagement between musicians and their fans, where the recording process is part of the promotion. The PledgeMusic leader is confident that future is already here. Rogers and founding partner Jayce Varden launched PledgeMusic in 2009, with a plan to help artists bridge those direct-to-fan relationships. To date, the company has worked on campaigns including ABBA, Slash, Bring Me The Horizon, Ben Folds Five and Killing Joke; the likes of homegrown artists Kate Miller-Heidke and Pseudo Echo have launched campaigns on its global platform. As at October, the company had boasted its campaigns had resulted in ten top 40 albums, with top 5 chart placings in the U.K., Europe, Canada and Australia.

Rogers, a guest speaker at Bigsound 2012, has a keen eye on Australia where the average Pledge is $75 — well up on the U.S. ($55) and U.K (£35) average. According to the company, the average Australian campaign success rate tips 93%, and data from its campaigns count toward the ARIA charts. PledgeMusic bolstered its business Down Under earlier this year when it hired former Shock Entertainment executive GM Scot Crawford as GM for the Australian and New Zealand territories.

What’s the mantra behind Pledge?

One of the missions for Pledge is that it has to work for the artist to survive. Because there is no viable alternative at this point due to the sheer lack of sales and the sheer lack of financial income at the smallest-and mid level, to move through. I don’t see a viable strategy. If we keep putting “buy” buttons or “donate” buttons in front of people we’ll start to turn them off. I’m passionate about this because it has to work. In two years’ time we’ll look back and say, “do you remember when people used to just put ‘buy’ buttons up on websites and people used to ask for ‘donations’ on crowd funding platforms?” We’ve just lifted the lid on the last frontier in recorded music, which is the process by which it’s made. And the fundamental belief is, that the more fans that are involved in it, the more fans are brought into that process, the more the music means to them. If you’re confronted with an option as a customer, and you can stream it an infinite number of times for a small fee, buy a download or compact disc, or watch it being made and be a part of the process and share with all my friends as its happening. Which is better for everybody involved? It has to be No. 3. There’s a reinvention going on in the music industry. This is how it will look. The New York Times writer Nick Bilton said, “the fans of yesterday aren’t coming back, so why are we selling to them like it was yesterday?” With the ascendancy of Facebook and Twitter, there’s a participation element to this. The idea of holding everything back and a record label reveals the product is kinda dead, because everybody knows about it through social media anyway.

A recent Nielsen study found consumers would pay extra for exclusive content during that process of recording an album. You were involved in that study. What did you make of the results from it?

Well, the first was that the U.S. alone leaves $2.6 billion on the table because fans want access to the process as its being made. The second thing I took away was that when we asked the consumers who do they want to see going into this process and sharing direct-to-fans, they said, “all of the big guns” – Coldplay, Rihanna, Kings of Leon, Beyonce. They want all the big bands to offer this experience. But instead, all the big bands offer is that blanket cover-all. The third thing was, when they pooled the marketplace and asked “who is interested and aware” or “interested and unaware” of this process that $2.6 billion figure goes up to $9 billion. What that’s saying is that if fans are exposed to it, they would get involved. But the problem is, we’re not exposing it. All we’re doing is exposing the existing music fans to more and more ways to buy, and fewer and fewer reasons to buy. If you purchase a Rickie Lee Jones album now, you get to watch it as it goes through its paces. It’s not for everybody, but the fact is you shouldn’t treat superfans just like they’re everybody. Because their ability to spend is absolutely huge in comparison to what they’re able to spend on traditional direct-to-consumer sites. The industry is leaving not just $2.6 billion but $9 billion in the U.S. alone. That’s kind of crazy.

This model is targeted at the super-fan. How will you get this to the mainstream?

That’s the point; most fans are not able to become super-fans. There’s no way for them to express that loyalty. You can go on Facebook and Twitter and you can go to shows, and you can buy multiple copies of the CD. But how can you express it? How do you become an influencer? The average Australian Pledger spends $75 per transaction, beaten only fractionally by Canada. You think to yourself, how do you spend $75 on the release of a Beyonce album? Nine times of out 10 those big bands don’t offer the general consumers a way to do that. I’m not saying you’ll get all (the consumers). The majority just want to hit play on a streaming service, and that’s fine. But what you don’t want to do is to lose the ones that do want to spend that because they’ve simply no interaction with the artist or their team. Ed Sheeran is going to be in a studio and there’s nothing I can do about it. I can’t interact, I can’t be involved, I can’t watch. Ed’s making an album, and he’s going to emerge once the album is made and try sell it to me. Ed as an artist is a phenomenal thing to watch. Ed Sheeran as a salesman, maybe not so much. When the artist is doing their art, I can be a part of that. I can feel I’m a part of that, even if I’m just giving updates in the studio. When the artist is a salesman, that’s a one-way street – buy my shit, come to my show. A lot of artists aren’t comfortable being a salesman or woman, whereas if you offer the making of the art, the process behind it, that’s what fans are responding to and they’re willing to pay for it if it’s offered.

Your Australian business has been running for a while. What are you have you learned from the Australian projects?

The Australians are an incredibly high spending, loyal fanbase. You have to give them a way to show and prove that. Kate Miller-Heidke’s fans have been going crazy with the way they’ve been sharing it, because we’ve got technology that allows you to. The data we’re seeing from the U.S. is $55. The average in Australia is $75, even with conversation that’s pretty amazing. For us it’s just about telling the story. We have to get better with telling that story in Australia to those centres of influence, those artists and managers who we are a logical step for. And we’re also seeing the emergence of Aussie fans within our system who want to be involved in more campaigns.

So how will improve on telling of the story?

It’s through on-the-ground, meeting with people, artist by artist. It sounds like a lot of work, and it is a lot of work. But it’s worth it. We did a partnership with Moshcam, which was very much led out of Australia.

Is crowdfunding becoming a cluttered space?

I view us as stuck between crowdfunding and direct-to-consumer as the true definition of direct-to-fan. Crowdfunding is essentially a simple thing. It’s “please give me money and then I will go do something.” Direct-to-consumer is, “we’ve already made something, here’s six ways to buy it on our website.” Direct-to-fan is in the middle. What Kickstarter and Pozible and Indiegogo and the hundreds of other straight-up crowdfunding campaigns do well, is they do a proof-of-concept model. I don’t believe music should be proof-of-concept. If you’re going to make a record and you want to involve your fans in it, you can offer them all these multiple ways to do it, why should it just be around a short time period? Albums can take three-six months to make, so why not run a campaign for that length of time?

You don’t play with Marwood any longer?

Sadly no. But I’m glad I don’t have to carry my amp anymore. When I launched Pledge I had a dream, and I was still playing the odd show. I had this dream I’d be able to do both. We got the band together, I had this moment of, “I’ve got 400 emails on my inbox” and I got straight off stage to do product stuff. I figured, this isn’t going to work. As much as it breaks my heart to not be playing music again, I realize the gift given to me has been transferred to be able to help artists.

When I spoke to you at Midem earlier this year, you mentioned expansion into Asia was on the cards. How’s that coming along?

It’s been very interesting. I’m returning to Japan. Let’s wait and see. Our commitment to Australia and Canada is really strong at this point, because we’re seeing incredible, off-the-charts fan reaction. It kills me when a band is just doing a traditional release and not augmenting with this process.

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Game On As Eminem Previews ‘Survival’

Shady’s back, and he’s in the game – quite literally.

Eminem’s new song “Survival” featuring Liz Rodriguez has arrived as the soundbed for a videogame trailer.

The 40-year-old punches out a stream of incendiary lyrics for the “Call of Duty: Ghosts” trailer, an all-action military ops game where destruction and carnage is the currency. “I’m f—ing back again with another anthem, why stop when it doesn’t have to end/ It ain’t over till I say it’s over, enough when I say enough,” the Detroit artist raps.

The song won’t be a standalone single, but it will appear on Eminem’s forthcoming studio 8th studio album, Shady Promotions has confirmed.

The official video for “Survival” is listed as “coming soon,” and a street date for the album has yet to be announced.

Rihanna Sues Topshop for T-shirt Line


Rihanna is reportedly suing British fashion retail chain Topshop for $5 million because it sold a t-shirt range using her image without permission.

The Barbadian pop singer’s team claimed they’d tried to negotiate with Topshop owners Arcadia Group for eight months over the rights to her image, the New York Post reports. But the response was insultory.

“They offered her $5,000 and said they don’t care,” an-unnamed source told the newspaper.

The source then went on to say, “Even though the U.K. laws don’t protect the artist, she has decided to move forward and sue Topshop. She has spent almost $US1 million in litigation at this point. She says it’s the principle, and wants to make a statement about it. They are taking advantage of artists. It is just exploitation. What they are doing is wrong.”

A Topshop source said “This issue is related to a T-shirt provided to Topshop by a third-party supplier. We are aware it is the subject of litigation. [There are] public documents”.

Topshop has built an image of British cool. Its owner, the billionaire entrepreneur Philip Green, is close friends with the model Kate Moss, who had a fashion-line with the retailer, and its brand is popular with the likes of Disney star Demi Lovato and Kim Kardashian.

Green and Rihanna would have been expected to iron-out any issues without the course of litigation. The pair had been on good terms, and were spotted together in Barbados during the Christmas break in 2010.