[by Mark Frieser] During the MIDEM show, I interviewed Jason Fiber, the President of Warner Music Group’s new online only label Cordless Recordings. Headed by Jason and music industry legend Jac Holtzman (founder of Elektra Records), Cordless is pitching itself as a new type of label, with a new business structure and distribution process.
Jason and Jac are innovators in the areas of music technology and distribution, and aim to use digital channels – mobile and digital – to distribute and market music. Cordless’ initial roster includes DEVO founder’s new band Jihad Jerry and the Evildoers, Nozzle, Humanwine Dangerous Muse, Maven, Breakup Breakdown and Koishii and Hush. In direct contract to traditional labels, it will only distribute via mobile and digital channels, and most significant, it will allow artists to retain ownership of their masters. On the flip side, the label runs more like a scrappy independent than a traditional WMG label – specifically in terms of marketing budgets and advances, which are token in comparison to the traditional label model. Cordless, regardless of model, is a significant step forward by a major label to harness the power of mobile and digital distribution and marketing.
More in extended entry…
Following is a chat with Jason on how he aims to develop Cordless and its place in the industry.
Q: How did you and Jac Holtzman get into the development of Cordless, and what is the overall vision for the label?
JF: Actually, it started when Edgar (Bronfman Jr.) completed the acquisition of Warner Music Group. Jac called him to congratulate him on a smart acquisition, and during the course of their ongoing conversations regarding the industry and the growth plans for WMG, and the discussion turned towards the development of an e-label (which had been brewing internally for some time at WMG). After a good deal of discussion, Jac came onboard, built out the company’s business model and incorporated the ideas and thinking of others at the company (like WMG SVP Michael Nash) to develop an electronic media play, marketing model and artist development model that works in the digital media environment. Once the model was developed, Jac, who I have worked with in the past, talked to me about the idea of coming in and running the effort.
Q: How does the model work for Cordless versus the standard industry morel?
JF: Traditionally, the industry front loads marketing and pays artist advances upon signing, owns the royalties and typically uses a six week timeframe to get the artist out the public through traditional marketing and distribution channels. Our model differs in that we strategically find new and young talent who need encouragement to record new songs, with good production values, then release them with non-traditional marketing and distribution – via networked communities via Myspace, etc.
Q: But don’t bands already use these communities for their marketing efforts without Cordless?
JF: Yes, of course, but they do not do it with the strategic resources of a label, with the staff who has expertise in this realm, nor do they pull it together in a complementary way such as we do. What we do is the following: we publish across online channels; get feedback from the fans; record and release live performance; clear sync releases. Then based on the fan feedback from this effort, we make a strategic decision on whether or not to produce more songs (a cluster of singles versus an album – differing from the traditional model significantly) and put more investment in production and marketing. We’ll then put out further material and see how its received by the fans, including video, podcasts and then keep re-investing in the artist – with approximately three songs per trimester. At the end of the day, it is both a tool to gauge the artist’s viability commercially and a tool for getting new music out at an early stage to the public. (PC – this sounds like an R&D lab for the WMG majors…)
Q: What is the investment in the artist by Cordless?
JF: Typically it is minimal in comparison to that of a traditional label – about $50,000 (Ed: usually a label invests about 500K in artist development and marketing) – that gives both the artist and us less risk. And, if the artist picks up real traction in the marketplace, we have many options within the Warner Music Group to further develop the band from putting out an entire Cordless album to then bringing the artist to one of the more traditional WMG labels for a traditional distribution/marketing deal.
Q: And what does the artist get other than marketing?
JF: The biggest benefit is that the artist gets a greater percentage of the back end and keeps their masters… and their publishing rights. This is a significant benefit – if they decide to leave they can utilize them as they wish. Now, in terms of artist revenue generation, its derived from merchandise, recordings, publishing and touring – usually the artist’s label has no part in the development of these revenue sources other than recorded masters – we take a different approach – we work with the artists to ensure that they have the right sales tools at their disposal – and the right products to sell. We’ll work with them to make sure they have a good solid path to merchandising to their fans – something these bands don’t often have at the onset.
This bundling of products has to be done in a sensible way… whether SMS tones, ringtones, images, etc. in addition to recordings. We have to develop the right cost points, respond to what the consumer wants and to be very intelligent in terms of how we expand from the standard creation process and bundling – making sure we meet the expectations and desires of the fan.
Q: What about other areas of distribution and merchandising, specifically mobile?
JF: Well, mobile is the next step, but we are somewhat limited to direct to consumer, and further hampered in terms of product innovation by partners such as Apple and others – in terms of types or product and interoperability. Our first task has been to develop the foundation to sell basic musical content, which we have done, and now that is done, we can expand our efforts creatively and start to use mobile and other methods for marketing, outreach and distribution in the near future.
Related: Warner Music Launches Online Label