MBW’s World Leaders is a new regular series in which we turn the spotlight towards some of the most influential industry figures outside the US and UK markets. In this feature, we speak to Claudio Ferrante, founder of prominent Milan-based distribution company and record label Artist First.
Just over a year ago in a pre-pandemic world, concepts like bans on mass gathering and entire countries being quarantined seemed far-fetched.
You’ll remember that as the Coronavirus crisis began to worsen globally in March 2020, Italy became the epicentre of COVID’s spread in Europe – and that the country subsequently became the first on the continent to enter into a national lockdown.
At the time, MBW spoke with Claudio Ferrante, founder of prominent Milan-based distribution company and record label Artist First for a first-hand account of what life under lockdown in the country was like (something many of us would find out for ourselves soon enough).
Ferrante predicted a “catastrophic” impact on Italy’s shuttered live music business (which soon became a reality). He also talked of his fears for the record industry, and how his own company was “enthusiastic” about its outlook for 2020 before the “nightmare” of the pandemic set in.
Catching up with Ferrante 12 months later, however, reveals that Artist First has thrived over the past 12 months, in spite of the challenges of COVID.
As the company prepares to move into a new premises in Milan, Artist First’s founder strikes a positive note about the firm’s future, forecasting a 150% increase in its income over the next three years.
“Instead of being timid and simply consolidating [during 2020], my partners and I expanded and invested,” comments Ferrante, on his company’s strategy to weather the COVID storm.
He adds: “As a result during lockdown, we have made great strides towards becoming a fully fledged, 360-degree company that includes a successful artist management [company] 432 Management and a thriving digital agency, Officine Orange, representing a mix of music and non-music clients.”
Ferrante concedes that the company’s recorded music activities “definitely took a big hit, especially on the physical side”, last year, but notes that Artist First’s streaming numbers “keep growing” – seeing 35% growth on the digital side of the business in the past year.
Amid Italy’s impending reinstatement of a national lockdown due to a spike in Covid cases, Ferrante doesn’t foresee the return of “normality” on the live the side of the business in the country until at least the end of the year. But Ferrante’s firm is preparing for a live restart as soon as possible, having recently acquired a 30% equity stake in live entertainment agency Colorsound.
Ferrante tells MBW that this live music investment marks a significant step towards Artist First “becoming a truly 360 degree offering with distribution, record labels, brand divisions, artist management, talent booking, music publishing and merchandising”, which he says is “a unique proposition in Italy”.
Here, Ferrante tells MBW how Artist First has faired over the past 12 months and how the company is preparing to grow in a post-pandemic world…
It’s been a year since we last spoke to you – What is the mood like in the music industry in Italy a year on from the start of the pandemic?
Well, it’s certainly been an interesting 12 months! There’s definitely a sense of re-birth, which I share with my fellow independents and that extends beyond our commercial rivalry. We can certainly say this period been one of those turning points in our history, a tipping point that defines a major socio-economic shift. It is for me and our industry a great opportunity to grow and to start afresh. Music has held great importance throughout this whole period and it’s really encouraging to see people looking ahead instead of backwards.
“We have a responsibility, as entrepreneurs, to see beyond the thirst for commercial gain to help artists realise their creative vision. This remains a people business.”
Merck Mercuriadis of Hipgnosis said recently that Music is like “gold and oil”, but I would add that music is also like soil or land. Ground for new ideas, where we can grow our future. Music is also about ideas and we have a responsibility, as entrepreneurs, to see beyond the thirst for commercial gain to help artists realise their creative vision. This remains a people business.
We also need to create more jobs after everything we have all been through. It was also good to see many independent companies having such an impactful presence at the Sanremo Festival recently, which is a really important event here in Italy and was until this the domain of the major labels. I think that highlights the fact that we are entering a golden age for independents here.
Are you satisfied with the level of support provided by the Italian Government for the cultural sector over the past 12 months? What more would you like to see done?
I am sorry to say it so bluntly but governmental support for the Italian music industry has been pathetic. We do appreciate the severity of the overall financial situation, but culture has always been a crucial and valuable asset for the Italian economy, and it should be nurtured and protected. Our country should be proud of our cultural legacy but to date all of our requests for assistance have gone unnoticed and unanswered.
“It’s been extremely hard for a lot of companies and self-employed people to survive throughout this last year.”
The situation is really not great. It is not just about wealthy pop stars or successful artists, there are many music industry workers in many different roles who need to make a living and feed their families. It has been dispiriting and disappointing to have been ignored in this way.
In Italy, there is a somewhat backward mentality, which says that because we are in the entertainment industry, we only do what we do out of love do and that there is no requirement for us to make any money. It’s been extremely hard for a lot of companies and self-employed people to survive throughout this last year.
Tell us about how your business has adapted and kept going over the past year?
We have been very fortunate – my team is amazing, and our senior executives offered unilaterally to reduce their own wages early on in the crisis so we could pay everyone’s salaries, which meant we didn’t suffer as much as some other companies with a lack of assistance from the government.
The furlough scheme has been managed very poorly over here, and that motivated me and my colleagues to become entrepreneurial and do something about it. Instead of being timid and simply consolidating, my partners and I expanded and invested.
“Instead of being timid and simply consolidating, my partners and I expanded and invested.”
As a result during lockdown we have made great strides towards becoming a fully-fledged, 360 degree company that includes a successful artist management “432 management” company and a thriving digital agency Officine Orange representing a mix of music and non-music clients.
This ‘new normal’ has also presented a huge opportunity to invest more in our A&R activities. People still want compelling content and with live activity on hold there is a major shift back to recorded music.
Interestingly, we are in the process of moving into brand new premises in Milan, and as part of this fresh start we have installed a state-of-the-art recording studio to facilitate creativity. While our recorded music activities definitely took a big hit, especially on the physical side, our streaming numbers keep growing. It’s crucial now that my fellow content owners and I obtain better deals for our artists from DSPs. I want to add that even if the live has been dormant, we are preparing to restart.
We have recently acquired a 30% equity stake in the live entertainment agency Colorsound, an investment that has seen us take a significant step towards becoming a truly 360 degree offering with distribution, record labels, brand divisions, artist management, talent booking, music publishing and merchandising – a unique proposition in Italy.
Have there been any good things that have come from the pandemic in terms of the way you and your teamwork now?
Four our company there have been mainly good things, to be honest. As we got deeper into lockdown, my team and I got even closer. I guess we have really learned to value each other, and our sense of community and I hope that remains as a lasting legacy of what we’ve all been through.
We have appreciated the time we’ve spent together, even if just on Zoom calls and I think we all now have a better appreciation of the fact that above all else it really is people that make a company successful and healthy.
Tell us about the impact that the pandemic has had on the physical distribution side of your business and on the wider physical music business in Italy?
Italy’s physical market has pretty much crashed and burned sadly. Record stores and shopping malls are closed so we don’t have any presence in that sector of retail, which has had a catastrophic effect on sales. Interestingly one positive chink of light in the gloom has been vinyl, which keeps hanging on.
“Italy’s physical market has pretty much crashed and burned sadly.”
Our e-commerce site Musicfirst has kept on selling a lot and we’ve never stopped making home deliveries throughout this whole period, so there is something to build on, but it will take us all some significant time and effort to repair the damage.
How have your artists’ streaming figures been affected by the events of the past 12 months?
On the digital side we have enjoyed 35% growth, which is very positive. Listening habits have changed too; in the pre-COVID era, music was consumed while travelling, commuting on public transport, in school, and so on… that’s now changed and our data suggests that we will continue to see streaming growth throughout the rest of this year , which is encouraging.
A number of summer festivals in the UK have already announced that they will be going ahead when/if lockdown restrictions are eased after June 21 – When do you predict it will be possible for large-scale live music events to return in Italy, and do you think the demand is there from fans to attend large events when it is safe to do so?
The UK have got a lot of things right in my opinion. The music business there has received help from government , there is a well planned and executed vaccine program and from here it looks like there is a clear strategy to get out of lockdown.… In Italy unfortunately, it is a much more fragmented and confused approach. I don’t know how things are going to pan out for us. One thing is for sure though, we will be investing in live music and booking gigs.
“Realistically, we’re looking towards the back end of 2021, maybe even early next year before we get back to any sort of ‘normality ‘on the live front but hope I’m proved wrong.”
These may be mix of online streaming and live concerts and if I’m honest I think it will be a while before we can enjoy large scale live events again. But that doesn’t necessarily mean we can’t start with smaller shows and in fact I think there is a real appetite for more intimate performances, whether they be streamed or in person.
Realistically, we’re looking towards the back end of 2021, maybe even early next year before we get back to any sort of ‘normality‘ on the live front but hope I’m proved wrong. We’ll be looking at ways we can make positive things happen in the meantime though!
What are your projections and hopes in the short term and the long term for both Artist First’s business activities and for the wider Italian music industry over the next 12 months?
It won’t be an instant return to normality but we’re very positive and hopeful that the next 12 months will look much healthier for everyone. Our financial advisor Fabio Arpe Founder and CEO of the highly respected Arpe Group, confidently predicts a 150% increase in our income over the next three years.
“It won’t be an instant return to normality but we’re very positive and hopeful that the next 12 months will look much healthier for everyone.”
We aim [to] continue our mission to offer a full service across all aspects of the industry to artists and labels and to integrate all of our various offerings into one easily accessible central hub.
Our country has so many amazing people working in music and we genuinely think there are good times ahead, not just for us but for everyone involved. We will continue to take an entrepreneurial approach but we will also create partnerships with like-minded professionals wherever we can to take advantage of the huge opportunities available as our music industry landscape evolves.Music Business Worldwide