Terry McBride and Nettwerk

Terry McBride is the CEO of the Nettwerk Music Group, Canada’s leading privately owned record label and artist management company. Nettwerk is responsible for managing some of the biggest artists around like Sarah McLachlin, Avril Lavigne and the Barenaked Ladies, as well as many others. Terry McBride is one of the world’s leading businessmen in the music industry and has created a music business model empire long before this so called “new” management/label/artist 360 deal. He is an innovator in everything he does. Nettwerk was a 360 company long before the new craze of 360 deals emerged. Terry becomes the management company, the publishing company, and the record company all rolled into one, and only takes 20% of the whole pie. He has embraced the quick and ever changing music industry to the point where he says that the future of the music industry isn’t selling records, it’s selling music in every form imaginable!

For instance, Terry McBride’s latest promotional idea for the new Barenaked Ladies’ album was to issue a single, and all 29 songs of the new album as Protools files through MySpace–so DJ’s can use them like Lego bricks to create something unique on their own. McBride is known to be one of the most artist-friendly persons in this industry to date, but he is very aware of what the music industry is going through with the new digital revolution. He has even paid for the legal fees of a young boy who was being sued for illegal downloading and file sharing. For decades, major labels have tried to control how music is distributed, how it’s priced, and who gets to keep it. With Terry’s vision, Nettwerk has basically done the opposite, giving customers music in literally any tangible form, giving them cheaper or even free music, while giving artists more control over their music. This gives these artists the ability to sell that music with what is called a ‘long-tail approach’, that is, in more forms and for less money.

I had the honor to speak with Terry in a lengthy and very informative conversation. I touched on his vison, how he runs the Nettwerk Music Group and ultimately asked him where the music industry is headed.

Terry was the businessman that first came up with the positioning idea for Lillith Fair, along with artist Sarah McLachlan. Lillith Fair became a festival with an \all female lineup that included both big headliners and smaller local acts. It wasn’t just about empowering women, but also about empowering local communities and filling a niche in the music industry. Each show was devoted to a different local charity, and although it took 3 years of his life to create it, Terry said it was totally worth it. Women in the music business overall get the shaft, Terry says. Rock radio has a hard time playing females and it is very prejudicial even though it has nothing to do with the music– it is just the male perception. Overall there are a lot less female artists on the airwaves, although terry says it doesn’t seem this way because about half a dozen of those artists are huge and there is Disney.

What Terry has learnt from global artists such as Avril Lavigne, who sells about 70% of her intellectual property outside of North America, is that whether the artist is male or female shouldn’t matter. Kids are emotionally attached to the songs, and they use those songs in their own lives, which turns them into a sort of bookmark. It is easy for people to become very cynical and negative in thisindustry, so they don’t see what music is all about. Music is about emotions, not products or celebrity endorsements; it is much deeper than that. The way Nettwerk markets, promotes, and goes about things is truly different, and Terry really tries to stay away from the cynical and negative vibes of the industry.

Nettwerk Music Group was started by Terry McBride in Vancouver, BC, Canada, where he and Nettwerk’s headquarters are still based today. Terry McBride’s role at Nettwerk varies a bit, but essentially his main job is to work directly with Sarah McLachlan, Avril Lavigne and the Barenaked Ladies. He travels about two weeks every month for various reasons, and works with other managers within Nettwerk and their artists to help them when needed. On the record label aspect of the business, nothing gets signed unless Terry loves it, and he pledges his word on that. His great ear and sense for the music industry’s inner workings has brought top artists such as Coldplay and Dido, as well as many other great artists that remain loyal to Terry.

Nettwerk works with major labels, but they offer alternatives. Artists which use the infrastructure of Nettwerk hold on to the ownership of their intellectual property. If at any point, they choose to opt out, they can do so. For Terry, major label artists get paid a flat royalty which doesn’t give them ownership rights to their music. Labels also inhibit artists from benefiting from the multiples associated to that stock. It’s not really a true partnership, because the artists have no equity.

Since Nettwerk works with many different global artists, Terry has had to learn to adjust to the many different markets in order to promote his artists. Economically the world is flat when it comes to music. Anyone from anywhere can access music from virtually anywhere else. Marketing and promotion is very different and dynamic and needs to be based on the cultural codes in individual places. What Terry has found is that even within the United States, it is like marketing to seven or eight different countries in one country. The marketing done in Boston is very different than the marketing done in Texas, or Florida, because it is all based on the local culture.

For Terry, finally, the future of the music industry is here. “I think that major labels have about one or two more years of pain, but they are slowly coming to the realization that trying to control their intellectual property is not the best way, and they have to somehow monetize the behavior of the consumer better”. The need and desire to own something is generational and as the millennium generation is approaching their mid thirties, that need may go away. There is a true behavioral shift from a push society to a pull society.

By Ivonne Hernandez



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