Primary Wave: The New 360 Deal?

Sidehatch teammate Evan Kramer not only writes for our blog here, but is also a regular contributor to the Music Business Journal at Berklee College of Music. The post below concerning the expansion of publishing companies into other facets of the industry was published by Evan in the MBJ over the weekend, and we thought it was an awesome look into that part of the industry. The question is will companies like Primary Wave help artists by acting as all encompassing entertainment companies with stronger reach and thus more power than traditional publishing companies? Or will this lead to monopolistic-like business practices and increased ownership recalling the greedy major label 360 deals? Continue reading and let us know what you think in the comments!


(Berklee MBJ) The Publisher as a Record Label

Credit: Evan Kramer as seen in the Music Business Journal

At the start of the summer of 2010, the release of the self-titled debut album from Oklahoma rockers, Taddy Porter, left a sizable impression on the music industry… well, the business part of it, anyway.  Sales were low, chart time lasted only a week (peaking at 24), and the music was everything one would expect from a mid-western four piece shooting for the opening slot of next year’s Skynyrd tour.  Yet, Taddy Porter’s debut still merits significance as one of the first major releases to be recorded, developed, and managed by a music publisherPrimary Wave is currently one of the leading pioneers in expanding the publishing business into other facets of the music industry.  As cost-cutting major labels continue sending departments to the chopping block, publishing companies are beginning to pick up the slack by opening shop in areas outside their traditional reach.

Primary Wave is one of the largest independent music publishers in the world, and has climbed to its rank in a relatively short time.  Founded in April 2006 by former Virgin Records exec, Larry Mestel, the company has established its reputation controlling the rights to such catalogues as Kurt Cobain/Nirvana, Steven Tyler/Aerosmith, Daryl Hall & John Oates, Founding Members of Chicago, Steve Earle, and Bo Diddley…just to name a few.  Primary Wave also retains co-publishing deals with artists like The Airborne Toxic Event, Saving Abel, and Blue October.

Over the past few years, with the publishing business clearly booming, Primary Wave began noticing that changes in the industry were leaving doors wide open in areas outside of their métier.  With record labels pinching pennies like it were the Great Depression, the quality of their service has been significantly reduced, leaving artists without proper tour support, promotion, and -in some cases- management.  “[Artists and managers are] looking for a lot more from their publishers nowadays,” said Primary Wave Music Publishing partner/GM Justin Shukat in an interview with Billboard. “They want more than synchronization and writer collaboration opportunities. They are expecting a marketing plan and brand marketing.”

With this in mind, the company decided to try its luck in Artist Management, forming its Urban Management Division in June 2009.  Two of the industry’s elite talent finders, Rick Smith of Wild Justice and Scott Frazier of Overtone Music Group, were brought on to head the new department. “Rick and Frazier are an exceptionally talented management team with a unique passion and commitment to their artists,” said CEO Larry Mestel.  “By leveraging our relationships with key players in the music, television, motion picture and advertising industries, Primary Wave will be able to add significant value to the artists signed to the new joint venture.”  So far, the Smith and Frazier duo has already signed five new artists to its roster including Saving Abel, Crowfield, Abby Owens, Rookie of the Year, and of course, Primary Wave’s newly-released Taddy Porter.

For Taddy Porter, the timing could not have been better.  The ink had hardly dried on their Urban Management contract before Primary Wave announced the grand opening of its Label division in the earlier part of this year.  Also called Primary Wave, the label performs all of the functions that one would expect:  Signing new artists, developing talent, and producing records.  For physical distribution, a deal was signed with EMI in March 2010.  GM and Sr. VP for EMI Label Services, Dominic Pandiscia, speaks on the deal, “Primary Wave is a great partner for EMI Label Services, because we’ve both developed a different approach to the business in response to the changing needs of artists and third party labels today.”

Primary Wave, despite their proclivity for innovation, is not the only publisher to have ventured into record label territories.  London-based publisher, Notting Hill, recently launched an independent label, Transmission Recordings, last October.  The new operation has already signed R&B/ Hip-hop artists like The King Blues, Bodyrox, Ezcapade, Rhythms Del Mundo, and Lil J.  Independent publishing heavyweight, Bug Music, has also jumped on the bandwagon, signing a deal with the Kings of Leon imprint label and 429 records in June 2010.  The label plans to debut with the release of new music by The Features.  Other Publishers such as Peermusic and Sony/ATV have also entered similar co-production agreements.

Mastering the Recording Rights
The interesting thing about this trend is that ownership of a label grants a publisher exclusive rights to master recordings.  This opens the floodgates for all sorts of new revenue streams and promotional opportunities.  Take for example, the ability to control both sides of a synchronization agreement- the publishing and the master rights.  Independent publishing institution, Peermusic, suggests this “total ownership” to be the next step in the evolving music business.  American Regional President, Kathy Spanberger, explains that, “We used to be able to develop new talent without owning master rights, but these days, because Internet marketing and film, TV and advertising promotion is such an important part of development, we need to own or administer the masters as well in order to expand the development opportunities and ease the licensing issues.”

As Primary Wave’s Record Label and Urban Management divisions were being developed, efforts to internalize tour planning and concert promotion were simultaneously in the works.  Standing in the face of a harsh indie touring industry, the company began a campaign to secure corporate sponsorships to help ease the financial load for their artists on tour.  “Being on the road is an integral part of a band’s success,” said Devin Lasker, Partner/Chief Imagination Officer for Primary Wave. “Unfortunately, touring is an expensive proposition, so we created this program to alleviate that burden.”  On August 26th of last summer, an agreement was signed with Motel 6 that offered six weeks of free lodging to bands touring under the “Rock Yourself to Sleep” banner.  So far, the partnership has been an enormous success, having helped subsidize the tours of Stephen Kellogg & The Sixers, Hit The Lights and Sparks The Rescue. “We are really grateful to Primary Wave and Motel 6 for choosing us to be a part of [this tour]” said Alex Roy, lead singer for Sparks The Rescue.  We are “going to rock hard and sleep well!”

With hands in almost every pot of the industry, Primary Wave appears to be flourishing, and has potentially found a qualitative model for the future. “We are now a full-service entertainment shop looking for opportunities in all parts of the business,” says Justin Shukat.  But from an aerial view, one can’t help but be reminded of Major Label’s extortive use of 360 record deals- designed to extract revenues from all facets of an artist’s career.  And under this light, the Primary Wave model looks suspiciously similar… only they actually do own the rights to everything. This could pose a potentially monopolistic problem that would not be too far off from what brought the industry to its knees in the first place.  While Primary Wave was founded on the ideals of supporting artists and promoting great music- and has done nothing but that so far- companies in this kind of position must remain consciously aware of the power they hold.  With the new opportunities presented in these types of innovations, artists may be seeing their careers move much quicker and more profitably as the industry develops.

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