Industry Profile: Marc Ostrow
By Larry LeBlanc
This Week In The Hot Seat With Larry LeBlanc: Marc Ostrow
Boosey & Hawkes is the largest specialist classical music publisher in the world.
Indeed, Imagem Music, a venture capital firm formed by Dutch pension fund Stichting Pensioenfonds ABP, and European indie music publisher CP Masters, paid $248.3 million to acquire Boosey & Hawkes in March.
In 2003, Boosey & Hawkes was bought by the European private equity investor HgCapital for $71.1 million. However, after two years and significant restructuring, HgCapital announced that Boosey & Hawkes was for sale for between £60 and £80 million. Despite offers of up to £115 million from several parties, the sale was canceled in late 2005.
Boosey & Hawkes rents music scores; sells sheet music; produces music for television, and radio; and even provides master ringtones for mobile phones. It was once a leading manufacturer of musical instruments. In 2003, it sold its musical instrument division, which included clarinet maker Buffet Crampon and guitar manufacturer Höfner, to The Music Group.
Boosey & Hawkes--lampooned by Brit comedy troupe The Goons as "Goosy and Borks"--was founded in 1930 in London, England through the merger of two music firms, Boosey & Company and Hawkes & Son. Today, Boosey & Hawkes has branches in Germany, the United Kingdom, and the United States.
The company owns the copyrights to standard classical works by Béla Bartók, Zoltán Kodály, Leonard Bernstein, Aaron Copland, Benjamin Britten. Gustav Mahler, Sergei Prokofiev, Sergei Rachmaninof, Richard Strauss and Igor Stravinsky.
It also publishes such leading contemporary composers as John Adams, Elliott Carter, David Del Tredici, Walter Piston, Ned Rorem, Steve Reich, Michael Daugherty, Peter Maxwell Davies, Heinz Karl Gruber, James MacMillan, and Mark-Anthony Turnage.
Marc Ostrow has been General Manager of Boosey & Hawkes' New York office since 2006. Under Ostrow, the company launched its jazz division, signing Wynton Marsalis, David Benoit, Chick Corea, Paquito D'Rivera, Andrew Hill and taking on representation of Don Sickler's Second Floor Music imprint, as well as representation of some works by Charles Mingus and Vernon Duke.
Ostrow, 44, was director of business affairs and general counsel at Second Floor Music prior to joining BMI 1998 as a senior attorney in the legal department.
This University of Chicago law grad, who also studied English literature and music at the University of Pennsylvania, has penned incidental music for several off-off Broadway productions, including Tom Stoppard's "On the Razzle," Christopher Durang's "Durang by the Dozen" and Woody Allen's "God."
The buyout of Boosey & Hawkes at $248.3 million took many people by surprise. What you do is not regarded as the sexy side of the music industry.
I absolutely agree with you. The purchase price was based on many bidders, including the Imagem Music people, taking a look at the books and seeing what the revenues are. As a classical music publishing company, our revenue streams are more diverse than a lot of other companies.
A pop music company doesn't have rental income. They don't have grand [show] rights income. These are two huge revenue streams for Boosey and Hawkes. Yes, we have the catalogs of Stravinsky, Rachmaninof, Prokofiev, Britten, Copland, the list goes on and on. But Boosey & Hawkes has always had a significant band catalog, in print catalog, educational catalog, and a significant production library.
All of that went into the calculation of determining a purchase price for our new Dutch owners.
One aspect of today's business is the recording of classical music is in decline.
Well, the record business is in decline but we have not seen the downturn in our royalties from the sales of recordings in mechanical royalties that the pop music publishers have seen. Obviously, there's been a dip but not as much because of the internet. Brick-and-motor stores have been drying up, especially for specialty sections like classical and jazz, but people are able to order recordings online. Is it the same as going into a knowledgeable record store with someone helping you browse through the stacks? No, But it's easier to keep a more diverse, long tail of recordings available when you don't have to worry about a big inventory as well as constantly stocking shelves and paying the rent.
We're not in the '40s and '50s heyday of Deutsche Grammophon recording the Berlin Philharmonic with conductor Herbert von Karajan or Columbia recording the New York Philharmonic Orchestra with Bruno Walter, and the Philadelphia Orchestra with Eugene Ormandy.
That era has pretty much passed. But those recordings still remain in existence and they get re-issued from time to time. Part of the problem for classical and jazz is that you are always competing against the ghosts of the past. Whereas with pop music, you do have covers but the covers have their own distinct flavors, more than the subtleties of a particular conductor or a singer or pianist's interpretation of standard repertoire.
Naxos Music and other budget labels have provided fierce competition to the major labels with cheaper recordings. Some say this killed the classical record market. Certainly, it forced EMI Classics, RCA and Deutsche Grammophon deeper into the budget reissue market.
On the one hand, it did inhibit (making) new recordings by the major orchestras. But on the other hand, people who weren't previously inclined to try classical music are now going out and trying classical music. So we've been able to increase our listener base. It remains to be seen where that balance is ultimately going to be struck.
Classical repertoire also keeps getting discovered by a newer generations as well with audiences hearing new people like Italian mezzo-soprano opera singer recitalist Cecilia Bartoli, violinist Joshua Bell, Chinese pianist Lang Lang, and the Peruvian tenor Juan Diego Flórez.
All of that is true. People have been writing the epitaph for classical music for a half century; saying that everybody who listens to classical music is old, and audiences are dying out. However, we see that the (classical) audiences do replenish themselves, although they still do skew toward the older crowd. And these are seniors who didn't start listening to classical music when they were young. People discover classical when they reach a certain stage in their lives, when they have the time, and the sophistication to appreciate the music. The same is true with jazz.
With so few radio stations playing classical music today, has the income from that sector shrunk as well.
There's more of a balance between live public performance income and broadcast performing income for (music publishers with) pop catalogs whereas our live performance income is very significant because our music is performed in concert halls all over the world.
Is the sale of sheet music still a big part of your business today?
It absolutely is. It is a very important and dynamic part of our business. It just doesn't generate the kind of revenue that other areas of the business do. We continue to have a diverse and growing print catalog, especially in the educational market. It is one of the means by which young listeners are exposed to our music. Then they become concert goers and purchasers of recordings.
Print for any music publisher, whether pop or classical, isn't as large part of the economic pie as it was.
Print has been a smaller part of the royalty pie since LPs came along. The royalty is relatively low, and there are other income streams that are more lucrative. Our print, is handled by the Hal Leonard Corporation in North America, and Schott Music overseas.
With so many new opportunities today to place music, has there been a growth in synchronization income for Boosey & Hawkes?
That has been an increasingly important aspect for our catalog, something that wasn't really tapped into until a few years ago. Whereas Boosey & Hawkes always had a promotion staff promoting to our core constituency of orchestras, opera companies, and dance companies, we didn't promote to the film, TV and advertising industries. If someone rung us up, we'd handle the request but no one was proactively courting these people. We have been doing so for a number of years now.
Would you open an office in LA to pitch to music supervisors for film and TV?
We have considered that and it is something that may happen down the road. But we have been able to handle it pretty well out of New York with periodic trips out to Los Angels to court the sync licensing people. So much can be done through emails and sending tracks. Nothing takes the place of an in-person meeting and that's why we go out there from time to time.
How did you come to Boosey & Hawkes as VP of business affairs?
My predecessor [Boosey & Hawkes president] Jennifer Bilfield and I were music majors at the University of Pennsylvania together. We kept in touch for many years. When the head of the business affairs department retired, she rang me up at BMI and asked me, "Marc, would you consider returning to the Dark Side?" meaning music publishing.
You were a senior attorney at BMI. Wasn't one of your roles being part of the "copyright police" that dealt with infringement?
I did various things. But I was one of the guys supervising outside counsel, and prosecuting copyright infringement actions, primarily against nightclubs that were using music and were charging covers, and generating revenue off of BMI songs.
You didn't go out to clubs with recorders under the table did you?
No, but there were people who worked for BMI who had to do that. Basically, you must have evidence of people using your repertoire and then identify it.
After you earlier quit two New York law firms, you went to work at Don Sickler's publishing company, Second Floor Music?
I did legal work and licensing, whatever needed to be done. I had left my second law firm not knowing what I was going to do next. I lived a couple of blocks from Bradley's (jazz bar) and I used to go there for the late show. I used to hear (jazz pianist) James Williams play and I got to know him well. I was a disaffected lawyer, and he said I should talk to his music publisher who was looking for someone to handle his legal work. That's how I came to the music business.
You did the music for New York theatre productions of Woody Allen's "God" and Tom Stoppard's "On The Razzle in the early '90s?
They were off off Broadway productions with the (non-profit) Lightning Strikes Theatre Company in a little black box theatre down in Soho. I had a friend from law school who was doing costumes and makeup design for the company and they were looking for a composer to write incidental music.
How do you go from growing up in Long Island to working in off Broadway shows in New York?
I studied music for many years with (piano teacher) Joseph Nieli who was a Juilliard grad and had done club dates from the time he was a teenager. He had two Steinways (pianos) in his studio and he taught me improvisation, about trading fours, and trading eights. I learned everything from Bach to the Beatles, and he would send me to the black board for dictation. I became a really great musician but not a good pianist.
You played in pit bands in high school and played in groups in college. When you went to law school at the University of Chicago did you put music aside?
I did more composing in law school than I did in college. The law school at the University of Chicago has a tradition of annually doing an original musical from scratch. My second year, I was the musical director for the show. I wrote most of the songs, and orchestrated the whole thing for a 16 piece orchestra that I conducted. My crowning achievement was to get 40 law students onstage singing four part harmony in key, and convincing a renowned constitutional scholar, who ran a Gilbert & Sullivan troupe, to do the (traditional) faculty walk on. I wrote him a part in the style of Gilbert & Sullivan. My crowning achievement.
Does being a musician give you a better understanding of the overall business at Boosey & Hawkes?
It certainly has given me a lot of respect for the concert music and jazz composers we represent who really put themselves out there artistically. It's not the easiest thing to do.
Until recently Boosey & Hakes worked primarily in the classical publishing field. Some people might not know that the Aaron Copland and Sergei Rachmaninof catalogs aren't public domain.
The sophisticated clients know. The major orchestra, opera companies and ballet companies know, and come to us for performing licenses and for score and parts if it's a larger scale work. But yes it frequently happens that we hear, "Oh we thought that Copland was public domain." People will also engage in some wishful thinking or willful ignorance and assume or hope that things are in the public domain when they are not.
It's amazing how similar the arguments you hear today from people wanting to use music free or cheaply to what was being said decades ago. Bar owners used to argue that they were exposing music and they shouldn't have to pay.
We have a very significant rental library for our orchestral works and I can't tell you how often someone says, "We're promoting your music." My answer is, "Well, thank you very much. We don't need to pay the local community orchestra to promote Aaron Copland. Mr. Copland's estate would like to be compensated for the use of the music, thank you."
Part rentals are an integral part of Boosey & Hawkes.
Absolutely. Of course, we don't charge community orchestras the same fee as we charge the Los Angeles Philharmonic. But a fee is charged. The composer or their heirs have a right to compensation. That's something that Larry Lessig and the Copyright Left don't quite agree with. They believe the Internet has changed everything. We are hearing the same arguments that were made a century ago but now in the context of the digital world.
[American academic and political activist Lawrence Lessig is a professor of law at Stanford Law School, and founder of its Center for Internet and Society].
Has the Internet made it more difficult for you to police copyright? Someone can photoscan parts and send them out to hundreds of people quickly today
That is true. There are certain aspects of our business that have become more difficult to police but the Internet has made it easier to police our works. For example, dance companies, except for the very major ones, do prerecorded music so they don't have to come to us for score and parts but they do have to come to us for a grand rights performing license. Often dance companies conveniently forget their obligations. But they post the programs on their websites. So we find out about them and we go after them and get licenses.
Do you have people at Boosey & Hawkes trawling the Internet?
We have people in different departments trawling through the Internet for different purposes. We have people who do grand rights licensing who will trawl the dance company websites to see if there are out of license performances.
It surprised me that Boosey & Hawkes has some of its songwriters on MySpace pages. Composers like John Adams, Steve Reich, and Christopher Rouse and Meredith Monk.
It's a good way to promote our composers beyond our core constituencies. Most of our classical composers are not performers. Someone like Christopher Rouse strictly writes music; he's not a performer or a conductor. This is way to get his music out there. John Adams conducts, Steve Reich performs his own music. But a lot of our composers don't fall into that category.
Why branch out into to jazz?
There are several reasons. It enabled us--to put it in business speak--to diversify our portfolio without diminishing our brand. Jazz, like classical, is taught at colleges, universities and conservatories throughout the world. It is performed on concert stages throughout the world. It has a sophisticated listenership and roughly the same market place and has similar demographics. There is also a cross-pollenization.. For example, Paquito D'Rivera and Wynton Marsalis have been writing concert music for years. So it made a lot of sense (for jazz) to be an extension of what we do and what we do well in classical.
This led to Chick Corea's "Check Blast" being licensed for the X-Box "Gotham Racing." How are your gaming skills game?
Sad to say, I don't play video games. We have some John Adams in "Civilization IV." If people in new media areas want to use our music, we are all for it. Some composers are more receptive to it than others. Most of them are pretty favorable. Why not? How is it different than from having music in a film that later becomes a home video. (A game) is basically direct to video, and it's interactive.
You are leaving Boosey and Hawkes at the end of this month. What are your plans?
I've always been a bit of a restless soul. At about the five year mark, it is time for me to move on. I am leaving voluntarily on my terms and with good relations with the London board, and my team here. There were certain things I wanted to do while at Boosey & Hawkes and I achieved most of them. I felt now was a good time for me, professionally and personally, to make a break, and figure out what is I want to do next.
Are there conflicts between your creative and your administrative side?
There's always that fight. I'm a lawyer by training as well as a musician. It is a fight back-and-forth sometimes. While I am going to continue writing music, I am going to eventually find a new day job. Working in the business, working on legal issues, and managing people are all very rewarding and I want to continue doing that as well.
Meanwhile, I have an original musical called "Congratulations, You're Fired" that I've done music and lyrics for and collaborated on the book. We are trying to get that off the ground. We had a table read. Unfortunately, given the state of the economy, it is going to be more difficult to get it on its feet. There's less money around to produce shows. But it is something that I look forward to working on.
Larry LeBlanc is widely recognized as one of the leading music industry journalists in the world. Before joining CelebrityAccess in 2008, Larry was the Canadian bureau chief of Billboard from 1991-2007 and Canadian editor of Record World from 1970-89. He was also a co-founder of the late Canadian music trade, The Record. He has been quoted on music industry issues in hundreds of publications including Time, Forbes, the London Times and the New York Times.