Magazine article Variety

Power of the Tower

Magazine article Variety

Power of the Tower

Article excerpt

When Steve Barnett left New York City for Hollywood to take over the chairmanship of Capitol Music Group in 2012, the industry was still fully invested in downloads, which provided a steady flow of revenues as physical product gave way to the digital world. Five years in, everything has changed as streaming has become the go-to music source, counting upward of 160 million users worldwide. Just between 2016 and 2017, on-demand audio streams have grown by 50%, according to BuzzAngle Music, and today 80% of audio streaming is done via a subscription service. Of course, the profit margins pale in comparison to the CD boom, but growth is positive and Barnett, who spent seven years at Sony Music before joining Universal Music Group, is more bullish on music's future than he's been in some time.

Variety visited with the British native on the penthouse floor office of the Capitol Tower. The label finished out 2017 in the No. 7 spot for total consumpand

Poland. That's what's changed. So we're in the process of modernizing the company and the best way for me to explain that is if you think of the modern music company and those structures that came into place in the '70s. Every major label in the world is set up with a domestic marketing team, an international marketing team, and a sales team and then ten years ago they added in a tion on the back of successes by Migos, Halsey and Sam Smith.

What has been the biggest shift you've seen in the business over the last five years?

We're back in a global world which had gone away. Mexico is the third-biggest streaming market in the world today; Brazil is five; Holland is eight. And in the top 20 you've got Argentina, the Philippines, Chile digital team. We're in the process of breaking all that down so that it's going to be one global team that covers all those areas. We've got to become nimble and fast. It doesn't matter what came before. The world has changed. Forever, I think.

What does that mean for a business like UMG to be based out of the U.S.?

America is more important than it's been in maybe 20 years because so much originates from here. The reality is, you need to have the right support above you. For me personally it's incredibly empowering to work for [UMG chairman and CEO] Lucian Grainge, who is «- always looking for a reason to say "yes." His faith is greater than his fear.

Is there an example of a global streaming breakout from the CMG roster?

CCMG, which is our Christian label run out of Nashville, had a great 2017. But I'd always said to Bill Hearn [who died Dec. 10], "You need one breakout act, almost as a proof of concept." Four years ago we saw this young artist called NF that Bill had signed. He developed as an artist and built a strong following. He had a really good management team behind him. But the proposition of a white Christian rapper from Detroit - if it was going to be led from here - might have been challenging. So it started in Sweden, then Norway, then Denmark. It became explosive in those territories. The song, "Let You Down," is now top 10 globally and one of the great breakout stories of the year with 15 million streams a week. And there are other examples of that. We've seen a huge explosion in gospel music in markets like Brazil. Amazon Prime and Alexa has been great for Christian music.

How do you foresee voice recognition impacting music?

Obviously voice recognition is a big thing for the future. You can get into your car and say, "Play me the Sam Smith album," and it comes up instantly. Alexa changed a lot of things. And it took Amazon, who had been out of the game, and put them back in, and in a profound way. …

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