Our Ideas

Nettwerk Records‘ CEO Terry McBride spoke this morning to members of Cascadia Forum and their guests. McBride and his company, which manages such Canadian talents as Avril Lavigne, Sarah McLachlan and Barenaked Ladies, is renowned for bucking industry trends, including embracing digital distribution of their artists’ work when the industry was dead set against it.

In a nutshell, McBride’s opinion is that the big labels are short-sighted in their defense of digital rights management. Rather than confining themselves to the ‘sandbox’ of royalties, they should explore the whole ‘beach’ that opens up with a little imagination. Whereas his competitors are busy defending the dwindling margins they’re earning off digital rights, Nettwerk is earning significantly more by opening up music to free downloads and focusing on the opportunities inherent in a large network of fans.

In a recent example, Nettwerk made available for download individual tracks from Barenaked Ladies songs, inviting downloaders to remix new versions of the songs. Hundreds of new mixes were returned, ranging from reggae to rock to classical mixes. The community of users was then able to vote on their favourites, and a compilation of the best was then released—with revenues shared back to the remixes’ authors.

McBride compares today’s established music companies with those of the early twentieth century who feared that they would sell no LPs if radio stations were allowed to play songs on the air. In hindsight, they were way off base: Hearing music on the radio increases the likelihood of purchase. Similarly, McBride feels that fostering an emotional connection (remember the I in AVID?!) with fans by delivering songs to them will increase their likelihood of purchase—whether of a song, an album, a concert ticket or merchandise.