Man In The Middle: Bryan Calhoun (UGA Terry Magazine Cover Story)
Bryan Calhoun (BBA ’92) turns up just about everywhere in the music industry. He manages Kanye West’s web site. His innovative software product, Music Business Toolbox, teaches independent musicians and record labels how to make money. And he’s a vice president for SoundExchange, which collects and disperses nearly $200 million annually in digital music royalties. Not bad for a former WUOG disc jockey who hasn’t turned 40.
If you were MapQuesting the journey that Bryan Calhoun (BBA ’92) has taken through the music industry since he began taking finance classes at the Terry College in 1990, you would start by typing in the address for UGA’s campus radio station, WUOG, whose cubbyhole offices on the top floor of Memorial Hall did not afford Calhoun a view of where he has ended up nearly two decades later at the modern, glass-walled offices at SoundExchange on 14th Street in Washington, D.C.
WUOG has an all-volunteer student staff, and its signal begins to fade not long after you leave the Athens city limits. In music industry circles, it’s the rookie league, or what comes before the rookie league. But it’s also a seat-of-the-pants, make-your-own-destiny kind of place where young upstarts like Bryan Calhoun begin their careers in the music business, sort of while nobody’s looking and before anyone can tell you that you’ll never make all the hay you’re intent on making.
“When I wasn’t DJing at WUOG or organizing step shows for Kappa Alpha Psi, I was booking acts for the student union’s Contemporary Concerts division,” says Calhoun, who learned so much in the process that he and some enterprising classmates — including J Lett (BBA ’93, JD ’97), who is now a successful entertainment attorney in Atlanta — pooled their money and started working independently to help usher in the first wave of hip-hop stars before they reached superstar status.
“It was an intriguing time in hip-hop,” says Calhoun, “because back then everyone was afraid to book these acts — which gave us the ability to get into the Atlanta marketplace with acts like Tupac Shakur, Cypress Hill, and Digable Planets.”
Calhoun is indebted to his first event planning experiences when he was still a Terry student. “We were getting big names and decent budgets to work with, and I was calling booking agents and arranging for security. I paused one afternoon and thought, Wow, this is what it’s like being the boss!”
Calhoun now serves as vice president of new media and external affairs for SoundExchange, which the U.S. Copyright Office has designated as the bursar for the entire digital performance industry.
“SoundExchange is a non-profit organization that collects and distributes digital performance royalties on behalf of recording artists and copyright owners (usually a record label) when their recordings are performed on digital cable, satellite TV, the internet, and satellite radio, such as XM and Sirius,” says Calhoun.
SoundExchange represents 5,000 record labels and 40,000 artists. Clients include both signed and unsigned recording artists; small, medium, and large independent record companies; and major label groups and artist-owned labels. Bottom line: This is a company that writes a lot of checks.
“We’re collecting roughly $200 million a year in royalties,” says Calhoun, who has also worked with such hip-hop icons as Ludacris and Kanye West.
Calhoun was previously COO for West’s Good Music label and is one of the driving forces behind West’s online marketing strategy. When MIDEM 2009 convened in Cannes in January, kanyeuniversecity.com generated a lot of positive buzz at the world’s largest music industry fair. At a panel discussion moderated by Billboard international bureau chief Mark Sutherland, West was praised for being one of the world’s most effective artist-to-fan communicators.
“We think it’s the biggest artist web site in the world with more than a million unique visitors some months
— and that’s definitely him,” says Calhoun, referring to the multiple online entries that West posts himself each day. “It’s totally authentic. You can’t pay to put things on there . . . people have tried.”
E-mails and announcements to fans come specifically from West — never from his label, Island/Def Jam — and Calhoun considers that a crucial element in making personalized connections with fans.
When West caused a firestorm of criticism by interrupting Taylor Swift’s acceptance speech at this year’s Video Music Awards, it wasn’t up to Calhoun to sort out the direct fallout from the VMA incident. But as the manager of the controversial Mr. West’s web site, he did have to deal with all the negative responses and hate mail — some with racial epithets — that flooded West’s on-line inboxes and message boards.
“The digital footprint we’ve amassed for him is really significant,” says Calhoun, who turns up in various music industry niches besides SoundExchange and the West marketing team. Principal among those is a company Calhoun created on behalf of the little guys in the recording industry who aspire to be as big as Ludacris or West someday.
“In 2003, I started Label Management Systems to level the playing field with major record labels by offering indie labels the business and budgetary solutions necessary to run their operations efficiently and manage their releases successfully,” says Calhoun, who didn’t stop with mere consulting services. He also developed a financial software application to help small labels predict and manage cash flow. The idea came to him after he convinced his label boss to release a compilation album where the only financial analysis was scribbling some numbers on the back of an envelope. “It seemed crazy to me that we committed hundreds of thousands of dollars to a project with almost no analysis,” Calhoun recalls. “I figured there had to be other labels that would want to do some more detailed analysis.”
Calhoun soon realized that many indie artists and labels needed more basic information about the process for commercially releasing music. The result? An electronic collection of templates, spreadsheets, and detailed instructions that he calls The Music Business Toolbox, which has been used by music industry conferences and…
“Bryan’s role in the music industry is hard to define because he seems to turn up everywhere . . . I’ve always thought of him as an infrastructurist. in the same way that John Keane’s Pro tools software teaches artists how to record music, Bryan’s Music Business Toolbox teaches them how to make money doing it.” — MBus Director Bruce Burch
…universities — including NYU’s popular music business program — to teach students how to manage labels and releases. Calhoun has used that same toolbox, plus considerable skill, in his work with powerhouse management company Hip Hop Since 1978. When the company helped launch the musical career of the now-famous Drake, Calhoun posted the first single on digital services like iTunes. “Best I Ever Had” sold 300,000 downloads in less than two weeks with no major label support.
It was his financial software that got Calhoun hooked up with Kanye West, whose mother was impressed by it — and by Calhoun — at a conference where he was demonstrating his software. “She wanted me to use it to help determine how much Sony was obligated to pay them on the first John Legend release,” says Calhoun, who has worked on West’s behalf ever since.
“Bryan’s role in the music industry is hard to define because he seems to turn up everywhere . . . I’ve always thought of him as an infrastructurist,” says Bruce Burch, a Terry staff member who directs UGA’s popular Music Business Certificate Program. “In the same way that John Keane’s Pro Tools software teaches artists how to record music, Bryan’s Music Business Toolbox teaches them how to make money doing it.”
Sorting through his extensive resume, Calhoun points to one early achievement that convinced him he could make it in the music industry. “I really don’t tell too many people about this,” he confided to a group of Terry students during a recent on-campus visit, “but in 1997 I was instrumental in getting the group Three 6 Mafia signed to a record contract at Relativity Records — and that’s how I got my first A&R job.”
In signing Three 6 Mafia — whose resume would eventually include an Oscar-winning song from “Hustle & Flow” — Calhoun began to establish himself as a player in the industry. His first projects were certified Gold (500,000-plus albums sold) by the music industry trade body, the Recording Industry Association of America. He moved from Atlanta to New York to market other projects for Relativity, including solo projects from Bone Thugs N Harmony. When Relativity merged with Loud Records, he transitioned to the distribution side where he was a founding member of the Sony-owned RED Distribution Urban Music Marketing division, which to this day guides indie urban labels through the complexities of releasing new music.
Calhoun has testified on Capitol Hill on behalf of the Performance Rights Act, which would compensate artists and labels when their music is played on AM and FM radio. Also lending support were (front row, from left) stic.man of Dead Prez, Dionne Farris, and M-1, also of Dead Prez.
Calhoun was on hand at Apple headquarters in Cupertino, Calif., in June 2003 for Steve Jobs’ historic announcement that Apple was opening up the iTunes platform to independent labels.
“I called two of my friends at record stores,” says Calhoun, “and I told them, ‘You guys better figure out something else to do because your days are numbered.’”
Calhoun spent time with his Terry audience discussing the rapid-fire changes taking place in the music industry. “Technology now enables you to record music very easily, quickly, and cheaply — and thanks to iTunes and Rhapsody, you can distribute your product with the same speed and efficiency as the biggest record labels in the world. There are also ways to do direct marketing to fans and consumers through social networking.”
But lower barriers to entry mean there are more people trying, and it’s easy to get lost in the shuffle. The number of people recording and producing music has skyrocketed. Big labels with high overhead costs and multi-million dollar contract commitments have trouble competing in such a market. Inevitably, they lay off people to try to keep pace, and that’s why Calhoun has shifted his focus to servicing indie labels that are gaining traction through 21st-century delivery systems.
Moving to the blackboard during his Terry lecture, Calhoun drew a graph depicting “The Long Tail” concept of marketing and sales — whereby a company like Amazon or Netflix can be successful by selling a large number of items in relatively small quantities. The same concept applies to the music industry. “There are very few releases — Matchbox 20, Lil Wayne — that sell a whole lot,” says Calhoun. “But what happens, as all these new technologies improve, is that there are a whole lot more people putting out music. If you can make a dollar off a million people, it might be easier than trying to make a million dollars off of one.”
Calhoun is a member of the board of directors of the Future of Music Coalition, which is “working to foster the development of a musicians’ middle class,” says Calhoun. That mission is based on the premise that “most artists are either really rich or really broke.” Thinking back to the days when he worked for independent labels, Calhoun got a firsthand look at what it’s like to invest $500,000 in a record — and have it tank big-time.
“Anybody who says they haven’t worked on flops is either lying or too new to have earned their stripes,” says Calhoun, who worked marketing and A&R for a label, record, and title that he describes as a “total disaster from beginning to end.” With $500,000 invested, it didn’t sell 50 copies. On the flip side, Calhoun got Three 6 Mafia signed with Relativity, then A&R’ed the resulting record, which sold 700,000 copies.
SoundExchange plays a pivotal role in paying digital royalties to artists who are utilizing new technologies and delivery systems to, in essence, employ themselves. And because it is a non-profit organization, the money collected goes directly to artists and rights holders.
“I feel very fortunate to have one of the coolest jobs possible,” says Calhoun. “Basically, I call artists and tell them that I have money for them.”
Some artists don’t know they’re entitled to the statuatory royalties that SoundExchange collects for them, and “that first check can be a huge — and a welcome — surprise!” says Calhoun. “We’ve gotten thank you notes from people who could suddenly pay off medical bills, or get their kids new coats for the winter. Artists who never made a dime from their creative property are thrilled to finally see some compensation.”
Calhoun’s role as an artist advocate also connects him to one of the most important legislative issues facing artists today: the Performance Rights Act.
“In the U.S., unlike any other industrialized nation in the world, AM and FM broadcasters do not pay performers or labels when they play their music on the air,” says Calhoun. “Most people are shocked by this, and assume that singers would see at least a small piece of the huge ad revenues that radio makes off their songs. They don’t, and they never have.” Calhoun and SoundExchange have been fighting hard to remedy this injustice, along with partners in the musicFIRST coalition, which stands for Fairness in Radio Starting Today.
“Whenever a business can take somebody’s creative work, use it to make money (through advertising), and not have to ask for permission or compensate the creator, that’s fundamentally unfair,” says Calhoun, whose involvement in this fight has taken him to the halls of Congress for hearings and meetings with officeholders.
Asked to speculate about the future of the music industry, Calhoun says he believes technology will play a role in all parts of the process, as devices become smaller and more powerful, and broadband connectivity becomes increasingly ubiquitous. “At that point,” he says, “the distinction between download and stream will become irrelevant. Music has to be viewed as a service rather than a product.”
Calhoun has been working on a financial modeling tool to explore the potential of a blanket licensing agreement. “Theoretically, fans could pay a nominal connection fee (like $5 added to a cable bill) for unrestricted access to all the music they want. If a large enough pool of people pay into the system, revenues and profits will exceed that of the sales-based music industry.” A free, public version of the tool is available (www.APriceForMusic.com) for anyone who wants to manipulate the numbers and see the outcome. “There’s a new wave of consumer interaction coming,” says Calhoun, “and we want music to be on the crest of it.”
When Calhoun finished his Terry presentation, it was apparent that his student audience was both impressed — and somewhat intimidated — by all that he has accomplished before the age of 40. To allay some of their fears and to assure them that it’s possible to throw yourself into a job as demanding as his and still enjoy life, Calhoun reminded them of the many perks that he enjoys as a mover and shaker in the music business — like spending a week in Los Angeles for the Grammys and doing business in France, Jamaica, Shanghai, and London.
“Most of the successful people I know are insanely busy, and I’m really busy, too,” he admitted. “I’m not rich, but I do all right and I just love what I do . . . I have a ball!”
Source:
This is the Fall 2009 feature story taken from “Terry”, the magazine for alumni and friends of the Terry College of Business at the University of Georgia.
http://www.nxtbook.com/nxtbooks/terryuga/terry_2009fall/#/0
