Today marks the end of an era: It’s Martin Bandier’s last day as chairman and CEO of Sony/ATV, the world’s largest music publisher. Over 12 years, he built the company into a juggernaut that includes the catalogs of The Beatles, Leonard Cohen, Bob Dylan, Marvin Gaye, Michael Jackson, Alicia Keys, Lady Gaga, Carole King, Kraftwerk, Joni Mitchell, Willie Nelson, Queen, The Rolling Stones, Sting, Ed Sheeran, Taylor Swift, Kanye West, Hank Williams and Stevie Wonder among thousands of others. It has been the No. 1 publishing company every quarter in the last six years except for one.
Bandier himself is one of the most formidable music publishers of all time, with a career that stretches back to the early ‘70s and also includes building SBK and EMI Music Publishing into powerhouses. Along the way, he’s been the architect of some of the biggest deals in the music industry, including EMI Music Publishing’s purchase of the Motown catalog, spearheading the consortium that brought EMI Music Publishing to Sony/ATV for some $2.2 billion, and leading the Sony Corporation’s $750 million acquisition of half of Sony/ATV from Michael Jackson’s estate. He’s also the founder of the Bandier Program, the highly respected music-business program at his alma mater, Syracuse University, which has spawned dozens if not hundreds of industry professionals and is regularly voted one of the best in the country.
Bandier is also going out with a bang: Earlier this month he signed Dolly Parton and her enormously lucrative catalog — which happens to including one of the top-earning songs of the past 30 years, “I Will Always Love You” — to Sony/ATV. As for what’s next, Bandier is reported to be starting a new venture in partnership with Texas-based investment company TPG Capital (a majority owner of CAA and an investor in Spotify), although he declined to discuss it just yet.
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However, in this exclusive interview from his last week on the job, he talked about plenty of other things, including his legacy, where the industry is, where it’s going, what he really thinks of Spotify and streaming services and their efforts to lower the Copyright Royalty Board’s rate-raise for songwriters, and more — including a memorable meeting with Abba. Come back for Part 2 on Monday, where Bandier talks about the five deals he’s most proud of, the ones that got away (including a memorable encounter with Michael Jackson), and how to learn from losing. (Variety published an extensive interview with Bandier in 2017 so we tried to avoid covering similar terrain here.)
How have the past couple of weeks been?
It’s been an emotional rollercoaster, I can’t handle it anymore (laughing). My grandson, who’s graduating from Yale, just sent me an email saying, “Are you loving all the tributes?” I said, “Enough already!” Honestly, every time someone says something nice to me I feel like bursting into tears. Seriously, it’s all good but I don’t deal with praise that well. I’m ready to start a new life.
From where you sit, where are the music and publishing industries today? What’s good, what’s bad, what needs to be done?
I think the intellectual-property business and music publishing in particular is in a growth spurt, and that’s been created by Spotify and Apple and Amazon and YouTube and the [performing rights organizations] growing. A lot of outsiders have looked at the music-publishing business and thought that it offered a stable return and stable revenue streams, so I think it’s doing quite well. Now, having said that, there is always a ceiling on what you can earn. But we got a great result on the [Copyright Royalty Board establishing a 44% increase in the rate paid to songwriters] over a five-year period, we got a great result in the Music Modernization Act, we think there will be positive outcomes from where the Department of Justice is on the business of the consent decrees, which will free up music publishing. “Everything starts with a song” sounds trite and it’s something I’ve said a million times, but it’s so true.
Now, do we like not being on a parity [in terms of streaming royalties] with record companies? I’ve never liked that but I’ve grown to accept it over the years. I think the record companies are more vulnerable to the DSPs than the publishing business. You can’t start a music-publishing company if you’re a Spotify — although you could avoid record companies and sign artists directly. I’m not suggesting they should do that or that they will, but the 52% share of [streaming] revenue that goes to record companies could be cut down a little. Someone is going to have to blink, either the DSPs or Spotify. It’s very complicated and I think they’ll have to compromise somehow. But there’s no compromise in publishing: The record companies’ deal is useless if you don’t have the underlying songs. So I think the business is in a wonderful position — so wonderful that I’m sorry I’m leaving!
But if streaming services are so far from being profitable, will people lose confidence in the music business? Are we simply in a bubble? Sony and Warner majors sold off most or all of their equity in Spotify, and Vivendi might think we’re at the top of the market if they’re looking to sell half of Universal Music Group.
I’ll be interested to see if they actually sell. But the fact that you’re selling half of your company is not indicative of your belief in the future: It may indicate you want cash for a dividend or to acquire something else, there can be a million motivations. Now, if it was me, why would you sell the world’s No. 1 music company? But I don’t think it has anything to do with their belief that the future is not good. There are business issues to deal with all the time; nothing goes straight up or straight down. And as far as I’m concerned the music industry is a growth business, for the first time in ages. We at Sony/ATV grew our business every year, but it’s not because the industry grew. We grew because we were really good at what we’re doing — except for that one quarter! (Laughter)
That still bugs you?
I like to win. Winning isn’t everything, but it sure feels good when you do.
So you believe the current model is sustainable?
Oh I think it is, and it’s not just me: If you look at all the major investment banks and analysts, Morgan Stanley and Goldman Sachs are predicting astronomical subscriptions by 2030. The world is big, so there’s a lot of room to grow. Where do you go that you don’t hear music? I got a note from Ken Yoshida, CEO of Sony Corp, and he said, “I’m so proud of everything you’ve accomplished, there isn’t anywhere I go that I don’t hear our music.” Music is omnipresent and it will continue to be.
Your tone seems a bit softer when you’re talking about Spotify than when we’ve spoken in the past. Do you think they’re coming around, in terms of publishing?
No, I don’t! We’ve got plenty of issues with Spotify. But I also would be the first to say that Spotify helped to spur growth in the entire industry, so we have to give credit where it’s due. Are they the easiest people in the world to deal with? I would say not. Am I happy that they’re appealing the CRB? No! It’s the dumbest thing I’ve ever heard and I’ve said that to them. I was away on holiday and they forced me to please get one a call, “We’re very concerned about your letter [criticizing] our appeal.” I mean, I don’t think anyone has ever won an appeal of a CRB decision, the standards are so high it’s virtually impossible. We spent years and millions and millions of dollars getting to a rate, and for them to want to appeal that? Shame on them.
But it’s similar to the record companies — I’ve spent years screaming at them, and of course record companies are important. So Spotify is a good thing, and the world would not be as good for music if they disappeared. Now, I can’t tell them that their overheard is too high and maybe they’d be profitable if they cut their overheard and did a few other things. But I haven’t changed in terms of my views. So don’t take my feeling that Spotify is a good thing to mean that I think what they’re doing is perfect!
You were the first publishing company to have a synch department, which was started as a “music resources” department in the late 1980s by the late Sharon Ambrose. How did that come about?
She had been an agent for models — not superstars. But she knew how to sell things at all levels, and I said, “If you can sell the clients signed to your agency, you can sell songs, because these songs need someone to be out there pitching them. Every other music publisher just waits for the phone to ring — nobody is proactive.” So I said, “Learn our catalog, you don’t have to do a deal for a year or two years, I’m happy to pay for you to learn and build a team that sells our songs,” and that’s how it happened. She spent every moment learning the catalog, who the brands were, who the advertisers were, what kinds of themes they wanted — and it just blew up. Before we knew it we had an incredible synch department. Quite honestly, I didn’t tout it, and I was often unhappy when people wanted to write about it — I didn’t want anybody to know what we were doing, because we were so far ahead of everyone else. She was a remarkable woman, and sadly, she passed on at an early age [in 1997 of cancer].
Tell me about some other innovations you brought to the business, like partnering on musicals.
That was always something I had wanted to do and found difficult — the theater folks are pretty rigid about their formulas for music and what they can afford to spend. There are lots of nuances in that business.
I took a different approach and said, “We’re not going to license our music to you unless we can invest, and not at an angel level, where you invest $50,000 and the show makes $100 million and you make $10” — I’m joking — “but at the same level you’re at. We’re not asking you for exorbitant royalties, on the contrary. We believe in your show and we want to invest in it.” So we had investments in “Jersey Boys” and the Motown musical and “Beautiful” and the new Temptations show, and we actually had investments in “Bohemian Rhapsody” as a show, which never made it here but was quite popular in London.
If there’s one that got away, it was not investing in the Abba musical, “Mamma Mia,” but the deal was staggering in terms of how well we did just from licensing the music. I remember meeting with [Abba songwriters and cofounders Benny Andersson and Bjorn Ulvaeus], in London, (laughter) it was such a weird meeting. They said, “We were in the U.S. and we saw a commercial for the Kentucky Derby that had one of our songs in it.” I said, “Oh, you mean ‘Take a Chance on Me’?” “Yes! How did you get that deal?” “Well, that’s what we do, and you shared in all the profits from it.” Actually, I was kinda proud of the fact that one of my people pitched that song for horse racing – “Take a chance on me!” But I don’t see these as innovations — it all seems natural to me.
Do you consider yourself more of a creative or a business executive? Do you know a hit when you hear it?
I’m not sure I’d know a hit today because music has changed dramatically. But I feel like I’ve always been a music guy who also happened to have gone to law school and has a good knowledge of business. To me, it’s more about the songs and songwriters than anything else, and it’s always been that way.
Thank you for being so generous with your time, just a couple of more questions …
(Laughing) You sound like [‘70s TV detective] Columbo!
Can you talk about what’s next for you?
I’d rather do it when I feel like it’s ripe. I don’t want to do it piecemeal. I am trying to put something together and I’m optimistic and encouraged that it will happen. But I’d rather wait until it’s done.
Are you ready to start the next chapter?
I think I will be by Monday. Right now, I still have my allegiance to Sony, but starting Monday it’s a new chapter and hopefully something will come to fruition sooner rather than later.
Do you want to talk about the circumstances of your leaving Sony/ATV?
Listen, one of the proudest things I have — one of the true legacies I look at and get kind of broken up by — is that the heads of all three major music publishers all worked for me, and I’d like to think learned from me, over decades: Guy Moot will be head of Warner/Chappell next month, at Universal it’s Jody Gerson, and at Sony/ATV next week will be Jon Platt. Nothing could be better than that as a lasting legacy. I’ve had an unbelievably lucky run at finding great executives. So you know what? I don’t have anything other than high praise for the [Sony chiefs] in Tokyo and Sony and for Jon Platt.
Do you have any advice for him?
Ah, he doesn’t want my advice! Jon is an experienced music publishing executive. The only thing I would say is that as big as Warner/Chappell is, it’s nowhere close to Sony, and he needs to be able to look at not just one spot, but global issues and multiple genres of music. He’s coming into the No. 1 company, and it’s not one where you need to change the defensive line or find a wide receiver. Everybody’s in place because they’re really good, so it’s like he’s joining the New England Patriots or the Golden State Warriors — we’ve won championships and have championship players. So maybe I’m [Warriors coach] Steve Kerr and it’s time to move on to something for myself.
Come back Monday for part 2, where Bandier talks about the five deals he’s most proud of, the ones that got away (including a memorable encounter with Michael Jackson), and how to learn from losing.
