Universal Music Sells Sanctuary, And Why That Matters

According to a story in the LA Times last week, Universal Music Group has agreed to sell Sanctuary Records, home to metal acts like Black Sabbath, Motorhead, Iron Maiden and Megadeth, to BMG Rights Management. Universal was forced to sell the label as well as other assets as part of an agreement with regulators from the EU in order for the purchase of EMI to be approved.

What's interesting here is that BMG has quietly been acquiring publishing and record labels over the past 4 years, and now looks like it might position itself once again as one of the major record labels, which is good news to everyone in the business. After all, the more competition, the better. It's true that BMG was once one of the Big 5 major labels, but decided to go more into publishing after it merged and unmerged with Sony Music. Now it looks like it's back in the "record" business again.

If you've read my Music 3.0 book, you know that Sanctuary was a unique record label in that it lead the way to the DIY movement that we have today. The problem was that it got too successful and veered off-course, causing it to become just another label which was eventually acquired by Universal in 2007. Here's an excerpt from the book that explains just how influential the company was.

"In 1979 Rod Smallwood and Andy Taylor discovered and then managed the legendary metal band Iron Maiden. They subsequently named their management company after the band’s song “Sanctuary” and expanded their roster to include similar bands of the genre.

Soon afterwards, Sanctuary Management had a brilliant idea. As managers of so-called “heritage acts” that had long-term appeal and large fan bases but no record deals, the company decided to independently finance CD releases for the bands themselves. After all, the audience was built-in and rabid. They’d buy anything the bands would put out, so why not release it themselves if a major label wouldn’t? The bands were going to tour anyway, so they might as well have a product to sell. Little did they know at the time, but this was the beginning of the new business model where the tour sells the record instead of the record selling the tour, as it did in Music 1.0 to 2.0. 

In the past, if an act would get hot as a result of local radio play, they would then tour in that location to take advantage of the energized interest. The record sold the tour by virtue of the airplay it received. The record was selling the tour. If the record flopped, there would be no tour. 

But in the new Sanctuary model, since the act had a strong enough fan base to support a tour anyway, why not have some product to back it up? With these new economics of self-financing the release, the act could now make more money than ever on fewer units sold. And since it was cheaper than ever to create a release (since by then most musicians had a studio at home that was more powerful than The Beatles ever had during their heyday), the stage was set for taking advantage of both the technology and the consumer environment. 

For a time, Sanctuary Records and its artists succeeded wildly, to the point that the company expanded into a full-fledged record label (and a subsidiary of Universal Music) with traditional Music 2.0 staff and infrastructure. Soon afterward, however, it collapsed under the weight of that traditional infrastructure. The company had ventured beyond its original concept and comfort level, and eventually paid for it. Sanctuary was acquired by Universal at the end of 2007, but today Sanctuary Management continues to represent the likes of Fleetwood Mac, ZZ Top, Tommy Lee, and Velvet Revolver, among others, but has drifted somewhat from its initial intentions and goals. 

Sanctuary started the trend of an artist self-releasing a record during Music 2.0, way ahead of the curve and way ahead of what's commonplace today. Without knowing it at the time, the company paved the way for artists living in Music 3.0, where self-production, promotion, and distribution is not only commonplace, but becoming the norm."

You can read additional excerpts from my books at bobbyowsinski.com.

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Radio Promotion Today

Rick Goetz posted a great interview with independent radio promo guy Drew Murray on his musiccoaching.com site. The interview provides a number interesting tidbits about the state of music radio today. Here are a few excerpts.

On not needing a song on the radio to be successful:

At Sanctuary – and Sanctuary thought of itself as a management company first and a label second – that was the mantra that was definitely drilled into us:  radio is the icing on the cake, but not the cake itself. Even at the beginning of the Digital Age – because it was 2001 when I went to go work for them – that mantra was still the basis. They used Iron Maiden as the example:  “Iron Maiden can sell out stadiums and arenas across the planet without a song on the radio.” If they do get a song on the radio, they’re that much better. And again, they were huge with touring and merchandising. The idea of not needing to have a song on the radio to be successful was drilled into my head every day for the seven years I worked at Sanctuary.

On new radio ratings technologies:

I think a lot of this is still evolving, because some of that technology has only been around for about four or five years. It only became national about two years ago. So, radio stations are still figuring out how to read the raw data. I’ll give you a prime example of an argument I had with a Hot AC station, which targets to adult women. Your typical listener might be in her car, driving to the mall. The number one single on your station this week might be P!nk’s “Perfect,” and as radio station, you are playing that song because you know it is doing great for you. But this listener gets to the mall while this song is on and turns off her car radio. The first store she goes into to buy something for her daughter is Hot Topic. So, according to this tracking technology, if it is the be all, end all for you as a radio station, you’re going to drop this particular playlist and add Metallica, because it’s getting played in Hot Topic, and therefore it’s what she’s listening to now. The main point is, you have to be able to interpret the data and what is really going on. This is what radio people will complain about, and it’s always been a problem with the technology when you break it down:  The sample size is still tiny. I don’t know the exact number, but I think that for the New York metropolitan area, which has 15 million people, there are maybe 500 people with people meters. One person could have an effect on over a million listeners.

On radio being open to independent music:

It depends. There are success stories, but mostly in the rock formats these days. It’s mostly alternative or active rock or Triple A with singer/songwriters. Those formats are definitely more open to independent music than Top 40 and Hot AC. Those two and also country are very tough if you’re not signed to a major label.

Read the rest of this great interview at musiccoaching.com.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for daily discussion of music, recording, and production tips and tricks.