Sometimes you take a good hard look at your industry, and you don’t like what you see. That’s been Terry McBride’s experience, and he’s hoping his latest venture will shake things up.
The founder of B.C.-based record label Nettwerk Music Group has managed top Canadian talent such as the Barenaked Ladies, Sarah McLachlan, Avril Lavigne and K-OS. His new venture, Polyphonic, is a co-creation of Nettwerk and U.K.-based Mama Group PLC and ATC Music, which are collectively pitching in $20 million to back the project. McBride describes it as an alternative to the raw deals many up-and-coming artists have had to make to secure mainstream marketing and distribution. “They need capital,” McBride says. “And in the past, the capital was the labels’, and the labels would take ownership of the intellectual property and you’d be forced into their infrastructure.”
In the traditional model, the record company performs almost every service the artist needs, including recording, distribution, marketing, tour booking, merchandising and web promotion. But no company – Nettwerk included – is best in show at all of these jobs, McBride laments, especially in today’s fractured, Internet-powered marketplace.
In the Polyphonic business model, the artist is a joint-venture partner with the record label, rather than an indentured content producer, McBride explains. The artist keeps the intellectual-property rights and is free to hire any specialists needed, whether to hawk their MP3s or design their T-shirts. Polyphonic helps the artist pick the team, supplies the upfront cash and manages the business side, charging a 15 to 25 per cent take on all earnings.
The plan is certain to attract the attention of musicians, says Len Glickman, a partner in the entertainment law practice of Cassels Brock & Blackwell LLP in Toronto. Artists are always in favour of retaining their intellectual property rights, which can generate revenue indefinitely, he says, and they’ll certainly enjoy the decision-making powers this kind of a partnership promises. However, that could potentially become a hurdle if, at some point, they don’t see eye to eye with Polyphonic’s financiers, Glickman muses. How such conflicts are resolved will depend on the finer details of the contract, which have not been made public.
Despite any possible quarrels, Glickman says, Polyphonic should be beneficial to an industry that’s seen some tough years recently, if only by introducing an alternative for artists. “They’ve come out when there’s not a ton of deal models out there,” he says. “But the proof will be in the pudding.”