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  Industry Profile

Industry Profile: Mike Chadwick

— By Larry LeBlanc (CelebrityAccess MediaWire)

This week In the Hot Seat with Larry LeBlanc: Mike Chadwick, managing director, Essential Music & Marketing

Lucian Grainge, chairman and CEO of Universal Music Group, likely hopes this is another Summer of Loveóat least amongst European Commission regulators, and independent labels and distributors.

In the dog days of this summer, Universal Music Group has been working on fine-tuning a concessions offer that may help it earn a final approval from European Commission regulators in a $1.9 billion acquisition of EMI's recorded-music division.

Earlier, the European Commission had raised objections about the impact of merging Universal and EMI; expressing considerable concerns that the vast catalog to be represented by Universal would hinder competition within the global music marketplace

The merger would give Universal control of more than 36% of the global music market, and in some markets, including the United Kingdom, Universal's market share would reach a whopping 40%.

To counter anti-trust concerns, Universal has been reportedly proposing a slew of divestitures in the European Economic Area (EEA) that could benefit the independent label and distribution sector, including:

* In the UK, the rosters and catalogs of Parlophone (excluding the Beatles), Mute, Chrysalis (excluding the Robbie Williams catalog) and Ensign would be sold. This would include Pink Floydís catalog, and the recently concluded new deal with David Guetta, along with his catalog.

* EMI Classics and Virgin Classics.

* EMI's share of the NOW brand and compilation business.

* Sanctuary, Co-Op, and UMG Greece plus several European jazz labels.

At press time, however, IMPALA, the Assn. of Independent Music (AIM), and the digital-rights group Merlin continue to oppose the Universal-EMI deal.

A few weeks ago, Patrick Zelnik, founder and CEO of French independent label and distributor NaÔve and co-president of IMPALA, dropped a bombshell in an op-ed he wrote for the Financial Times in favor of the merger.

News quickly broke that Sir Richard Branson was keen in buying back his Virgin Music if it came on the market; partnering with Zelnick, who launched Virgin in France in 1980. In an ironic turn, Virgin may no longer be part of the divestiture deal.

Meanwhile, Mike Chadwick, managing dir. of London, UK--based Essential Music & Marketing, contacted the U.S. Senate antitrust subcommittee to clarify his stance on the proposed merger.

This came after Lucian Graingeís testimony in June to the Subcommittee on Antitrust, Competition Policy and Consumer Rights that contained an allegedly selective quote from an interview Chadwick gave to the British music trade Music Week earlier this year.

"Mr. Grainge suggested that I believed the proposed merger was a positive step for the business,Ē wrote Chadwick to the Senate Subcommittee. ďIn fact, my interview offered a view in which I questioned whether the merger would be good for the music business.

"To clarify further, my company is a sales, distribution and services company and tends not to compete on label or artist signings with Universal or EMI, however I nevertheless believe that the concentration of market power that would result from the merger would be a negative step for the industry and for independents.

"My considered view is the increase in market share and market power of the merged company would give it too much leverage with important gatekeepers such as radio, TV, music magazines and other media, as well as across retail.

"Therefore, although the transaction could free up certain artists, given Universal's enhanced market power, those artists would have significant difficulty in accessing media and commercial outlets on level terms. A merger would also enhance Universal's ability to abuse its dominant position in the emerging digital market and this would be certain to disadvantage independents in their ability to compete across the world."

Chadwick started out in the music industry in 1976 as a sales assistant at the Bristol record store Revolver Records. He became a joint owner of Revolver Distribution in 1981, and then purchased the company in 1989.

In 1990, Chadwick and Jeff Barrett, co-founded Heavenly Records signing Saint Etienne, Flowered Up, East Village, and Manic Street Preachers.

In 1993, Revolver and Play It Again Sam, owned by APT, merged to create Vital Distribution with Chadwick as managing director.

In 2003, Chadwick launched Essential Music & Marketing with Martin Goldschmidt, owner of Cooking Vinyl Records.

Today, the Cooking Vinyl group of companies is comprised of: Cooking Vinyl Records, Essential Music & Marketing, and Cooking Vinyl Music Publishing.

In Jan., 2012, the UK firm opened CV America in New York as a full-service company offering North American labels strategic global marketing, and distribution services, and offering creative marketing services in North America to labels from all round the world.

Initially founded to offer all-in-one marketing and distribution services to independent labels seeking to release across the UK and Europe, Essential has grown steadily into a powerful distribution force throughout Europe.

Its label roster includes Cooking Vinyl, Arts & Crafts, Stoneís Throw, R&S Records, Shout! Factory, Surrender All, Cheap Thrills, Fat Possum, Megaforce, Vagrant, and others.

In 2012, Essential has had a clutch of major artist and label signings including: the Blue Nileís Paul Buchanan; No Sleep Records for European distribution; Fierce Panda Records for the UK and Eire; a deal handling physical distribution across Europe for digital aggregator, The Orchard; and providing label services across Europe for Betty Wright, and DragonForce; and providing European distribution for the Lojinx imprint.

Were you surprised that Lucian Grainge mentioned you in his testimony to the U.S. Subcommittee on Antitrust, Competition Policy and Consumer Rights?

I was flabbergasted. I really was. The article that was it taken fromÖI mean the comment was taken slightly out of context.

Slightly out of context?

I am being kind here. But the weird thing is the way that the independents have now broken ranks. Last week, Music Weekís front cover was ďIndies Torn Over Universal-EMI OfferĒ And there were two pages of comments from various people in the independent business.

For the first time in the UMG-EMI merger process, disunity is being seen among the European and UK independents who had seemed to be in lockstep in their views against the deal.

The majority of the IMPALA board has voted in favor of Universal-EMI providing that divestments are sufficient.

Patrick Zelnik and others argue that any divestments shouldnít fall in the hands of the other majors or private equity funds.

Itís better for everyone if the divestments fall to the independent sector than to investment funds, VCTs (Venture Capital Trusts) or to Warners. Obviously, Warners could pick up some of this stuff as well.

Itís an interesting situation.

I knew that you were going to ask me about this. I have thought about it for a long time. Is the world better off with four majors? Is it better to have Universal, EMI, Warners and Sony BMG? Probably yes. The status quo has been maintained for a few years now. Everybodyís market share is reasonable. The independents are flourishing under that system at the moment. I think, generally, that the independent sector is very, very strong.

We all know that if the Universal-EMI deal happens then Warners are sort of out of the running. They are the small fry. They are half the size of Sony and half the size of Universal. So what will happen? Sony will gobble up Warners, I guess. Then youíd have two majors.

Increased concentration of ownership could hinder the Independent label community in terms of achieving economic parity and market access. In truth, however, the majors have always had a lock hold on the marketplace.

Absolutely. But the independents have carved out a sizable chunk now. In the UK, we are looking at about 25% (of the music marketplace) now which is substantial (for the independents). Is it scary for one company (Universal) to have more than 40% of the market share? Probably.

Not just market share, but being in a position to influence the commercial terms of doing business.

Commercial terms, absolutely. Apparently, Lucian said that they will come to an agreement where they wouldn't pursue MFN (most favored nation) status at the expense of Indies.

Nevertheless, Merlin, AIM, and IMPALA have had to fight every step of the way for the indies against the majors in recent years.

I totally agree. Look, without AIM, without Merlin and without IMPALA, the indies would be nowhere in this. Nobody would care anything about our opinion. The fact that we have got this really strong international trade body, IMPALA, is fantastic for the independents. It is a very, very powerful voice for us. Itís very unfortunate that it has split, that we are no longer talking with one voice. It weakens us. It weakens us at every level in these negotiations. But Iím still not convinced that Universal divesting large amounts of content is good for us. Iím not 100% convinced of it. Iím not sure where I am on this at all, really. I would much rather maintain the status quo, I think if we can.

IMPALA also opposed acquisition of EMI's publishing business noting that while the market share of a post-merger Sony/ATV-EMI would be less than Universal's share, it would be the biggest in the music publishing.

Yes. But thatís gone through (at the EC) anyway hasnít it?

A big disappointment?

To be honest Iím not that au fait--not up to speed--on the publishing side of things. (That EC decision) just seemed to come very quickly and quietly. In one minute, it was being talked about, and then it was being done. What was discussed or what controls were there against it?

Whether these huge amalgamations or mergers are good for the music industry is questionable but they can be really good for the indie labels and distributors. Unhappy artists will likely gravitate toward companies like you.

Yeah, low hanging fruit just pops into our garden. Absolutely. The fallout if it goes through, regardless of what the divestments are, the fallout is going to be very, very interesting from what crosses markets, and what is available to the indies. The trouble is that all of these things cost money. When you take artists from the majors, thereís always (discussion) of advances and things like that. As long as thereís enough money around, great. Then fantastic. Iím sure there will be opportunities; an opportunity for us as a distributor, and an opportunity for Cooking Vinyl the label as well.

Essential does not generally pay big advances.

Thatís true. We have done well with some of the (ex-major label) artists. We did the last Duran Duran album over here. That did very, very well. We did the last Faithless record over here. We do work quite a lot with managers and artists directly that have been dropped by majors in the past. Itís a growing part of the business for us.

With their own labels, artists receive a greater share of revenue than with being with a major.

Absolutely. They can get a lot better payment and they have complete control. Control all the way from the manufacturing process right through to the marketing spend. Itís their money so they have much more interest in what is being spent and what the return is.

The last ďopportunityĒ you had like this to so quickly expand business was when Pinnacle Entertainment went bust in 2008. At least 400 labels worldwide were affected.

Good ole Pinnacle. Yes, indeed. It was a huge thing. I spent most of my career with Pinnacle being the major main opponent. When I ran Vital in the Ď90s, we were #2 to Pinnacle. Someone said we were #1, and Pinnacle was #2. Whatever. It was our main competitor. When I started Essential, Cooking Vinyl--a partner--was distributed by Pinnacle. And that was fine. I had an awful lot of respect for Steve Mason (Windsong Exports' founder who bought the Pinnacle Distribution in 1984, and turned it into the UK's leading music distributor). Total respect for Steve Mason. And, it was a real shock when that company went bust.

Interestingly, when that company went bust, I had four staff, and now I have 20 staff. Do I attribute that to Pinnacle going down? Yes, of course I do. It did me a big favor. It took a competitor out of the market. It put some staff on the market that I wanted, and it put labels in the market. And there was an opportunity that we could grasp, and grow this company from.

[The closure of Pinnacleóthe distributor for some 400 labels including Rough Trade, One Little Indian and Dramaticoówas catastrophic. Pinnacle's bankruptcy followed a number of woes in Britain's music retail sector with Woolworths and Zavvi going down. This is after Music Zone, Fopp and MVC going bankrupt a year earlier, along with a number of independent stores.]

A lesson there for you?

Itís interesting with Pinnacle because we had our own warehouse with Vital. We shipped out a lot of records from that warehouse. I thought that it was very cost-effective. When I left Vital, the warehouse was taken out, and they did a logistics deal with (wholesaler) Terry Blood. I now realize that the model without the warehouse is the right model. Itís an overhead that you can do without. A headache we can do without. I think that at the end of the day that Pinnacleís downfall was definitely the warehouse. It was a major weakness for them.

[In 2011, Essential Music & Marketing moved its physical distribution to Gem Logistics, a leader in video game and DVD distribution, parting ways with the Warner-owned Alternative Distribution Alliance, and their logistics partner Cinram.]

Vital shipped almost four million Oasis records from its tiny warehouse in conjunction with 3MV, who handled sales.

We did indeed ship four million Oasis records. We were very lucky. Vital thrived in that whole Britpop scene. We caught that wave. We worked with Oasis, Elastica and all of these amazingly good-selling records at the time. I still look back on those days when we had this relatively small warehouse. It wasnít a big place. We had to take on a second overflow warehouse. We did ship all of those records over a period from these relatively small units in Bristol. It was amazing. I look back and I think, ďWow. Thatís incredible.Ē It seems unreal now.

Pinnacleís bankruptcy greatly benefited Essential as well as PIAS U.K.--the company you hate to name in interviews.

(Laughing). I will name them. My friends at PIAS. I donít know if we were the main beneficiaries. We did well. RED/Sony did well out of it. I think that Proper (Proper Music Distribution) did quite well. The other independent distributors picked up interesting pieces. I like to think though that Essential is now the really serious #2 (distributor) in the market over here. I think we are showing lot of people that we can really deliver and that we provide a really great service. Iím really proud of what we are doing here.

There seem to be so many opportunities available to you right now.

There are. The thing is having Cooking Vinyl as an in-house label helps us a lot in terms of profile because Cooking Vinyl has been a bit of a hit machine this year. So we are constantly papering the charts in the UK which raises our profile enormously, and attracts business which is great. Essential is 10 years old now. We have been around long enough as well for being known as a good alternative distributor. So when people are doing the rounds they will come and see us as well as going to see PIAS, Republic of Music or Co-op. We are on the calling list. Once we get a chance to talk to people and tell them about the services we are offering in the deals etc. we have a very good chance of bringing in the business. Overall, we are a very attractive proposition for people.

Your mate Phil Hopwood has been hired to strengthen Cooking Vinylís rock and metal roster.

We go back to Revolver days. The rock scenario we really havenít looked at very much in the past but with Phil coming on board I have a couple of label managers here who are rock-oriented. My sales managerís favorite band is Black Sabbath, and his favorite person in the world is Ozzy Osbourne. We are really well geared up to work metal and rock labels. It is an area that we are really focusing on now and hoping to develop as well. We now have Razor & Tie. We just signed the American label Xumerian who are on the younger end of that market. Everybody is excited about that. They have a band called Asking Alexandria.

[Phil Hopwood most recently worked for EMIís merchandising business, and previously spent a decade as a freelance label manager and record industry consultant.]

You should hear some of the music that we play in the office. You would be surprised. Everything. There was even a little bit of classical music being played the other day which surprised me. Some of the people are into (Karlheinz) Stockhausen and John Cage. Coming in the morning at nine oíclock, and its Stockhausen playing. ďOh my God.Ē

Essential is also aggressively working on building its digital business.

We are concentrating on the digital side of the business-- developing and growing it. Some guys want to be the last guys standing in the physical world. They are welcome to it, honestly. Itís not the future. The future of the music industry is digital. Thereís no doubt about it--whether itís streaming or downloads. Yes, thereís a vinyl resurgence, but itís a tiny portion of the market.

Weíve had a decade of digital music but in many countries physical music sales are still 30% to 40% of overall music sales.

We arenít quite there in the UK yet, and Europe is a bit further behind still. We are still seeing 60%, 70% or 80% physical on some releases, and on some releases 60% digital. Itís not consistent. Itís still easy to buy records (in the UK). One of the saddest things for me is when Iím in New York, and thereís nothing. You have J&R down by the Brooklyn Bridge, which is a great store; but itís not a real record shop. You walk past 4th and Broadway, which was a good Tower Records. Itís just so sad. I used to enjoy going into the Virgin store in Times Square. There are a few decent stores in the Village--second hand or whatever. It really is very very sad.

You have indicated that music retailers being on the High Street may be impractical due to the fact they work with low value goods.

Absolutely. I go back to buying records in the Ď60s. There were chains in those days. Our Price was around. There was a chain called Music Land. There werenít any big High Street stores. We then had it over here with Virgin, Tower, and with HMV taking on these huge High Street sites. You just wonder, in terms of the value per square footage of sales, how they maintain those. It doesnít seem sustainable to me to have these huge buildings dedicated to music. Okay, thereís a lot more electronic stuff being sold these days, as well as DVDs, but even so in terms of that square footage and the rent that they are paying for it, and the rate, it doesnít seem to quite add up. To me the sole indie store on the side street is a more viable option.

Which is where many of us first purchased music decades ago.

Exactly. My local store in the Ď60sóOkay, Iím 59óso I started buying records in í68 and í69. My local shop was a record store in Harrow, behind a green grocer. This guy had a nice little indie store. His father owned a grocery store, and he had a record store in the back.

In the UK, non-music chains like WH Smith and Woolworths also had record bins. There were records everywhere years ago.

Woolworths used to be a gold mine for cut-outs--deletions. I remember going to my local Woolworths when I was in university, and there were racks full of great psychedelic records. UK psych albums 50 p (pence) each or whatever. Records that are worth hundreds of pounds now. Even a department store (chain) like Debenhams used to have record racks and would have deletions as well. Just the excitement of going to stores and seeing these amazing records that you could pick up dirt cheap. It is such a shame that things like that have gone now. Where do you go for that kind of buzz?

There used to be a shop in London, I canít remember where it used to be now, but they specialized in American cut-outs. You could get records like ďFriar Tuck & His Psychedelic GuitarĒ (on Mercury Records in 1967, featuring L.A. producer/composer Curt Boettcher, one of the principal architects of the sunshine pop sound of the mid-'60s), and stuff like that for maybe 40 or 50 p. It was like, ďwow.Ē You just looked at these things. I remember Country Joe and the Fish albums in those bins. All sorts of great records. That thrill has really gone now. It has been lost completely.

Itís far more difficult today for young teens to discover and purchase new music. Itís expensive andÖ

Itís expensive. And how do you find out what you really like? Is it your peer group? Is it what your friends are listening to? In the Ď60s, we had great radio. We had John Peel on the (UK) radio, and stuff like that. We had pirate radio in the UK. That helped you define your tastes. Plus peer groups at school. The new Captain Beefheart album came out and certain people in the know had it. Youíd listen to it and go, ďOh, this is greatĒ or whatever.

There were also weekly British music tabloids like Sounds, NME, and Melody Maker as well as the music monthlies, ZigZag, and Let It Rock!

Yeah. Itís such a different landscape now. Does streaming cover that gap? I donít think so. Not really.

In the UK, streaming music is £10 while Netflix is £6 for films. A bit expensive for music fans?

Yeah, £9.99 for streaming, and Netflix is £5.99. Itís not a really fair comparison. Spotify is virtually everything that you can think of. Netflix here has got a much more restrictive repertoire. The selection of film and TV programs isnít quite as all encompassing as Spotify for music. For instance, this week we had the new album out in the UK by Plan B. So, I liked the last album; I want to listen to the new Plan B album before I go out and buy it. On Spotify, I can listen to it and I can make my decision to whether I want to buy it or not. With Netflix, if I want to see a new film, Iím not going to see it on Netflix for quite a long time. So itís not totally a fair comparison. But £9.99 is too expensive, you are right. Definitely.

My daughter now buys vinyl. For a long time she wouldnít purchase much music. Her argument was that she couldnít get what she wanted at a music store.

Thatís a fair comment. Iím trying to think when was the last time I went into a really great record shop? That had everything that I wanted. The answer is probably October 2009. The last time that I was in Los Angeles and I went to Amoeba. Iím back in L.A. in September. One of the things that I will be doing is going to Amoeba, because itís a real record shop. Itís a great record shop.

One reason Amoeba is a great record shop is that it has knowledgeable music staff.

Absolutely. Even Iím a little intimidated these days going to an HMV and asking for something. The staff are very, very young. I donít think they are specialist music staff. Iíd rather just look through the racks and if I find what Iím looking for, great; if I canít, I will walk out and get it on Amazon or somewhere else instead.

At my age, I often surprise staff with my purchases at some music stores.

I get the same vibe as well in certain record stores. The kind of hipper than thou record stores that I go into sometimes. Iím picking up some weird electronica record, and they are looking at me like, ďDo you really know what you are buying?Ē Like I canít tell what Iím buying? ďI totally know what I am buying?Ē Itís the age (difference) isnít it?

If HMV departs from the High Street in the UK, a lot of people arenít going to go into those small stores on the side streets.

No. So what happens if you want to buy records? You go online? You buy a record online or you go to iTunes, and you download it?

Essential has opened CV America in New York as a full service company headed up by Erik Gilbert.

The U.S. office is there to manage relationships with U.S.-based labels that we are working with; to sign U.S. labels for Europe; and to exploit opportunities for UK-based labels that we work with. Itís biased toward Essential. The idea really is to enhance our business in Europe. Thatís the main rationale behind opening it.

[CV America CEO Erik Gilbert was previously in charge of label acquisition and client strategy at the Independent Online Distribution Alliance (IODA). Previously, he founded, built, and managed the successful independent labels Asphodel and 75 Ark.]

CV America is not trying to replicate what you do in the UK where you are a full service company, inclusive of sales, marketing, digital distribution and all the rest. There are established companies in America doing that well. So CV America is pointedly not a distribution company.

We are distribution agnostic (there). It can run projects for UK and European labels. It can help place European labels with distributors. We can do digital sales from our office. We can work with the local distributors but it is not a distribution company per se. Itís really there to enhance our business here.

Obviously, Essential is evolving in order to service different sectors of the entertainment industry.

We are currently trying to decide where we should be in three years time. We are pretty sure that in three years that we will be more veering toward being a digital company which has a physical option as well. Physical will still be part of the market. It might be 20% or 30% or whatever. It will be an important part of the market but the emphasis will be on digital and on marketing. The company will look differently than what it looks now.

Publishing, marketing, owning masters and other opportunities are now available to music distributors.

Essential is part of the Cooking Vinyl Group of companies. Weíve got Essential which is sales and marketing and distribution; Cooking Vinyl which is the record company; and we have Cooking Vinyl Publishing. We are concentrating on those three aspects of the business.

CV America will operate as a music publisher as well?

Yes, we are opening up a publishing unit in America as well. Erik will be running it for us over there. Publishing is definitely a business for the future. Itís business for now as well, but you can see the value of publishing going right through whatever happens in the physical market; whatever ever happens in the digital market, the publishing business is still there. We see it as being very, very important.

The majors moved into independent distribution to gain further market share but, with few exceptions, they havenít been as successful. Being a major is a different kind of mentality?

Absolutely. And they did the same thing in the Ď90s with those surrogate type of labels as well. All of the major labels then had independent labels going through either Vital or Pinnacle.

Why doesnít it work? Because they are major labels.

Look, all of the great indies have been run by entrepreneurs. They started their own businesses, and they developed their own businesses; and grown their own businesses. I am sure, CBSóquite an archaic name now--Decca and EMI in the early 20th century were entrepreneurial as well, but after 100 years of being run by a succession of managers, the entrepreneurial spirit has gone. I donít understand why people at majors think that they can run independents from that mind-set. I donít understand it. Everybody I know in the independent scene that is doing well comes from that entrepreneurial spirit and have grown their own businesses and developed their businesses.

And the indies are used to grinding it out in the marketplace.

Used to grinding it out. Absolutely. We have been through the bad times as well as the good times.

If a major sells a couple of thousand units, they might dump the act while indies dance on tables with those sales numbers.

The whole scale of what we do is different from the majors. If you have an artist that is doing a quarter of a million units, and itís not good enough for you, we will gladly have it. Itís worth pointing out that the successful (distribution) models in the UK all come back to Rough Trade. Rough Trade in the late Ď70s and early Ď80s with (the independent distribution network) The Cartel. That was the successful model that I certainly built my business on and I think that PIAS has built their business on. And (hats off) to Geoff Travis, and Rough Trade. They were pioneers in this kind of model.

Revolver Distribution was part of The Cartel.

We were part of The Cartel. It took us a long time to come out of that. We were in the shadow of Rough Trade for a long time, and Bristol wasnít the biggest hot bed of musical talent. So, we had to look beyond Bristol all of the time for new signings. With Rough Trade being in London, and there was Red Rhino in York, they had more talent centers than us. We had some great music in Bristol though.

What first took you to Bristol?

I started out in the (Revolver) record shop. I went to Bristol because my girlfriend at University came from Bristol and even though we split up before university ended, I had a lot of friends down there. So I went down to Bristol. It was great. I pulled my family up there and I spent a very happy 20 years in Bristol.

How did you become interested in distribution?

I started in retail and I think that the fact that we were chosen by Rough Trade to be The Cartel member for the south-west (of England) and it sparked the interest in distribution. It wasnít anything beyond that. If Rough Trade never said to us, ďDo distribution,Ē I could still be working in a record store thinking, ďCan we sell enough records to pay the bills?"

You ended up buying Revolver.

Yeah, I ended up buying Revolver with Lloyd Harris who also worked in the shop. He had actually started the distribution part at the back of the shop, originally. (The purchase) was encouraged by Rough Trade. They were quite Machiavellian at the time. We bought out the owner on Rough Tradeís recommendation. Lloyd and I soldiered on for six or seven years, and then I bought out Lloyd in 1989.

Revolver morphed into Vital Distribution?

We left Rough Trade because as a Cartel company it was hard to develop to the next level, The Cartel was Rough Tradeís distribution network. So, I set up one of the very first sales and marketing companies and took the distribution to Pinnacle Ė we did sales, and Pinnacle did the physical distribution for us. It was one of the first bolt-ons, basically. Then, Rough Trade went bust, so it was good timing. We did two years of Revolver as a bolt on to Pinnacle. Then I started talking to APT, the company that came out of the ashes of Red Rhino that was owned by Play It Again Sam. We decided to merge the two companies. In 1993 we launched Revolver/APT. In í94, we changed the name to Vital Distribution.

[A bolt-on is a term used to define a distribution company that uses another companyís warehouse facilities for distribution.]

You and Jeff Barrett co-founded Heavenly Records that signed Saint Etienne, Flowered Up, and Manic Street Preachers.

Not one of my happier memories really. It was expensive. You know when you are good at certain things, and not good at other things. I was good running a distribution company. I donít think that I was very good at running a record company. I didnít have the kind of knowledge to do it at the time. Jeff was a great A&R person, but the business side of it didnít really work. After six or seven releases we bailed out, and Jeff went with Creation (Records).

A great thing about distribution is that you generally donít deal with artists directly. You deal in finished goods.

You are dealing with finished goods, yeah. And labels are slightly easier to deal with sometimes than artists. Itís a different world totally. The distributor has different problems in terms of ďI canít get a record into a storeĒ; not getting paid, blah blah blah. I wouldnít want those headaches of being a label.

Were you a music fan growing up?

Totally. I used to work in a record shop after school from when I was 16 onwards. After school, I spent two hours working in a record shop. Iíd work in a record shop during school holidays. I managed to score a job in a record store before I went to university. When I was in university, I kept in touch with the guy who owned the record shop, and I used to sell records to students. I had some kind of mail-order thing going on. I have always been obsessed with music.

What part of London did you grow up in?

I was born in Finsbury Park but when I was 11 we moved to Harrow. Most of my formative years were spent in Harrow, and the record shop that I worked in was in Harrow. All I ever wanted to do was to work in a record shop. That was my ambition. My parents thought I was mad.

Where did you go to university?

The University of (Central) Lancashire up north (in Preston, Lancashire), taking sociology. Did I ever use it (the degree)? Nope.

Whatís the first record you ever bought?

ďFresh CreamĒ (by Cream on Reaction Records in 1966). I was very proud that I had just bought a blues album. ďHey look, I brought a blues album.Ē Yeah, it was a blues album of sorts, I guess. When I was at university, you either had West Coast acid rock or you had (progressive rock with) Genesis and Van der Graaf Generator. I was the former not the latter.

Two different music scenes represented for sure.

Itís interesting because for me music was always in part about being something. In the late Ď60s, I was a bit late for (Flower) Power and the hippies. My musical interests and tastes were very much (American) west coast, San Francisco and L.A. That was the music that I listened to. Then in the Ď70s, we had punk. And in the Ď80s, we had the whole new kind of new Summer of Love. Thatís what dictated what you listened to because of the tribe that you were part of. Thatís completely different now isnít it? I donít know how people will identify music in the future. Itís much harder.

Today, do you have much music at home?

Unfortunately, I have recycled my collection many times over the years. Iíve got quite a lot of CDs. Iíve sold my vinyl collection four times. I used to have an amazing reggae collection because I was into reggae in the Ď70s. During the punk thing in the Ď70s, I was a reggae DJ in Bristol. We used to play with all of the punk bands.

But thatís all gone.

I look at racks and racks of CDs and think, ďWhenever am I ever going to play these?Ē Thereís just so much music. I have a lot of music digitized now, and itís all the same (to me). Playing music off a hard drive isnít the same. Even putting a CD into a player is some kind of tactile physical experience. I canít read the (CD) booklets anymore because the print is so small, but putting a CD into a player still connects you to the music somehow. But maybe thatís because Iím an old baby boomer. I donít know.

You are 59, and still a hoarder of music.

I try to stop hoarding, but I still have racks and racks of CDs. I look at them and I think, ďI can never sell this stuff. There are CDs, and there are CDs. There are a lot of great reissue labels around like Light In The Attic Records. Their packaging is amazing; their booklets are really informative. And thereís Bear Family. Thereís some really great product there. Compare that with a CD in a jewel case, you just may as well digitize it, and put it on a hard drive.

How many iPods do you have?

Iíve got two. I have got 160 GB classic, and an iPod Touch as well. I got iTunes Max so everything on my computer at work is from my collection up in the cloud. My whole digital collection is up in the cloud. Sometimes at the office, I will shut the door, stick on some really weird Ď60s record just for the hell of it, and just really enjoy it. I listen to more music in the office now thanks to iTunes Max.

Overlooked with all of the Universal-EMI news is that the European Union recently adopted a directive to extend copyright term for sound recordings to 70 years from 50 years. A victory for labels who would have soon faced some very popular recordings passing into the public domain?

Absolutely. Thereís so much music stuff in PD now. The local record store has vast racks full of PD jazz stuff. Thereís great classic jazz music which is now available very, very cheaply in box sets. All public domain. Probably of reasonably good quality from labels Iíve never heard of.

This year, the British Phonographic Industry (BPI) is expected to request the deletion of more than 12 million internet files. Piracy remains a huge problem in the UK?

Yeah, I think that it is. You can do a search for some obscure reggae album on Google and you will see all kinds of illegal files coming up. Piracy is still a big problem.

Piracy is rampant with indie music product because ownership isnít always clear.

There are huge amounts of great reggae records that you canít get legitimately. On that level are the pirates doing us a favor by making unobtainable music obtainable? Maybe on that basis they are doing us a service. But when itís a new release of an artist on a record label who is being ripped off because they arenít getting any royalties (from the illegal download) then I donít think thatís acceptable at all.

With the millions of people in London for the Olympics from July 27th to August 12th do you expect a sales surge for independent music?

Not really, no. The Olympics could be great for the British economy. Could be. In terms of the sales surge for the independent music that we do? Maybe, if we are lucky. But who knows? But, I hope that the economy will benefit overall, which is good for us anyway. But I donít see a direct influence.

The Olympics have caused considerable disruptions to Londoners.

I donít want to be unpatriotic because itís great for London. Itís great for Britain. It might have been better to have it in Manchester, or Birmingham, or somewhere else. ĎCuz itís very disruptive (in London). Itís the capital of the country. Itís affecting public transport. Itís affecting the roads. People canít get to work who need to go to work. London doesnít need recognition. London is a world-class city. So maybe Birmingham or Manchester or other big cities up north could have more benefited from this profile.

Clubs in London are probably doing well.

I guess the live entertainment scene is pretty good. I very rarely go to clubs these days. Itís been too hot, and it is not pleasant. It is very hot and stuffy. It gets very humid, and smelly. Go to a club at night at the moment? I would rather sit in the garden (in Ealing), and have a glass of wine.

Larry LeBlanc is widely recognized as one of the leading music industry journalists in the world. Before joining CelebrityAccess in 2008 as senior editor, he 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, and the London Times. He is co-author of the book ďMusic From Far And Wide.Ē

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