The Hot Seat: Michael Smellie

Published in The Music Network

 

Michael Smellie knows what the view looks like from the global music industry’s summit. The Australian enjoyed an irrepressible rise through the ranks of BMG and at one stage orchestrated the major’s 2004 merger with Sony Music. When Smellie left New York in the mid-noughties to return home, he’d forged a CV like few other Aussies. Smellie started his career with Chappell Music Publishing back in 1980, and by the end of the decade had risen to Group Managing Director of PolyGram. In 1993, Smellie became MD for BMG in Australasia. He later served as head of BMG’s Asia-Pacific region, before moving to New York in 2001 to become its worldwide COO. He later became COO of the amalgamated Sony BMG and from 2006-2008 served as President of Media Development, Asia Pacific for German media giant Bertelsmann.

Now, Smellie has swapped the boardroom for a sail boat, but he’s very much in the business of giving back. Smellie is on the executive board of the Global Poverty Project, which organised the John Legend-headlined End of Polio Concert last October in Perth. Smellie and former BMG colleague Stuart Rubin are currently helming a series of music industry masterclasses at the Queensland Institute of Technology, which are free to the public.

Do you miss the cut and thrust of the record biz?

Yes. There’s no doubt about that. I don’t think that’s something you could ever easily get out of your blood. I’ll probably miss it for the rest of my life. But my focus now is giving back to an industry which has frankly been very kind to me. What was your greatest career achievement? In a commercial sense, it’s hard to top the merging of Sony and BMG, particularly coming from the BMG side which was the perennial underdog of the music business. Many people in the music industry were very surprised that we could pull it off as a merger of equals. Whether or not it was a good move, that will be the thing people will write about for many years to come.

What was the secret to your rise through the ranks?

Inevitably luck plays its part in these things. Being the right person in the right place at the right time. It’s about being flexible and open-minded. My first overseas posting was Brazil. I suspect many people given the same offer and the same circumstances would have turned it down. I just saw it as an adventure. I was lucky to attach myself to some good bosses and mentors in the late David Fine (former IFPI chairman), the late Rudi Gassner (former BMG International President/CEO), and Rolf Schmidt-Holtz (former Sony Music Entertainment CEO). They were extraordinary leaders in their own rights, and I was able to form a business relationship with all of them. When you’re starting off your career, you need to get a good mentor.

In 2008, you said the Australian music industry suffers from “an appalling lack of leadership”? Is that still the case?

The reason I said that was because the Australian music industry has under-performed for at least ten, maybe 20 years, but nobody was saying it. Our contribution to the global repertoire supply is falling. That in my view is a strategic issue that needs to be addressed, as it does in sport. We need the contemporary music industry in Australia to be more organised like sport. We need something like the Australian Sports Commission to take a global view and figure out where we fit in the global business and how do we improve. How do we turn our deficit of about $1 billion in creative royalties? If you look at creative industries in Australia, they’re bigger than tourism and agriculture. Australia should have a separate government department that looks at creative industries. Obviously music is a significant component of that.

Are you optimistic for the future of the business?

Yes. I always have been. It’s full of young, optimistic, bright young people. Whilst there’s an argument that the business model of the future clearly isn’t the business model of the past, I grew up in a music industry where there was essentially one business model with a couple of subsidiary ones. The future of the music industry is multiple business models and they will all complement one another.

What’s holding-back the Australian biz from forming stronger ties with Asia?

The biggest failure of all western companies in the region is their inability to view things in the long-term and to build long-term partnerships. They have a tendency to think, “I’m going to Korea for a week. I’ll do six deals and come home.” Whereas what you need to think is, “I’m going to go there once a month for two years and I’ll make long-term relationships.” That’s the way it operates in Asia. It’s relationship driven as much as it is business-driven.

Will you ever come back to the record biz?

Probably, the answer is no. But if someone made me an offer, I’d consider it.

 

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