For a man who hardly does any interviews, Ministry Of Sound CEO Lohan Presencer is having to get used to being quoted by the media.
There is a simple reason why Presencer is so attractive to headline writers.
On the rare occasions when he elects to speak about his company, he delivers morsels that are extremely rare in the modern music business: blunt, sincere opinions.
He means what he says. And what he says is never boring.
Many of his views, of course, aren’t to everybody’s taste.
Yet there’s no denying his smarts – or the entertainment value of his industry-baiting zingers.
This was demonstrated with aplomb earlier this year in Barcelona, when Presencer tore strips off execs from Deezer and Rdio live on stage over streaming’s economics.
(You may recall that MBW ran with ‘furious freemium takedown‘. Thanks Lohan!)
So we’re very happy to inform you that when MBW sat down with Presencer at The Fireside Sessions event at The Great Escape in Brighton yesterday, he didn’t disappoint.
As a taster, give these a whirl:
- On the major labels: “They have f***ed everyone up the ar**” on streaming
- On Ministry: “No-one likes us, we don’t care.”
- On the majors (again): “Why wouldn’t anyone start a f***ing music service? Why would anyone want to go and negotiate with those beasts?”
But to merely paint Presencer as some kind of sophisticated put-down machine wouldn’t be right.
Yes, he’s skilled at firing out memorable barbs – something that’s doubtlessly worked in his professional favour over the years – but he’s also a rather handy music executive.
Ministry is the UK’s fourth biggest record company (just behind those ‘beasts’) and regularly achieves an international hit-rate that far outweighs its size.
Not only that, but in recent years it’s broken real long-term album artists, from London Grammar to Wretch 32 and Example. (Watch out for young singer/songwriter Rhodes, being readied for the mainstream as you read this.)
The company’s A&R force, led by David Dollimore and Dipesh Parmar, is respected across the business.
Meanwhile, Ministry’s compilation brand is one of the strongest in music history, plus it runs hugely successful nightclub, broadcast, merchandising and live touring operations.
Just this week, it entered into Sonos and Beats’s world, launching its own range of high-end audio electronics products.
All this adds up to an unusual entertainment enterprise – or an “odd-shaped” company, as Presencer would have it – with an uncommon perspective on the relationship between commerce and artistic endeavour.
You can read MBW’s full chat with Presencer below.
No-one likes him?
Come on now. It’s pretty hard not to.
Your music industry story isn’t one of knowing the right person or, indeed, being related to the right person. How did you go from being a teenager in Watford to being the boss of one of the most influential music labels in the world?
My dad was a musician, an opera singer, but that didn’t work out for him. Music was always in our house.
I started playing piano when I was four. My brother was a jazz musician, a very successful jazz musician. I sort of knew I wasn’t good enough as a musician, so I started trying to make records when I was about 14 or 15 by bouncing keyboard lines back and forth between tape decks and realised that wasn’t going to work either.
I ended up at university studying acoustic engineering, which wasn’t quite what I thought it was going to be. It was mostly maths.
Maths must come in handy at this point in your career…
Now, God yes. But then as a result of that, I was at college in the late eighties when dance started to happen. I got involved in college entertainment, and I became the entertainments officer in my union.
I was very lucky to do that full-time for a year, booking gigs. I stopped putting on gigs from bands and putting on all-nighter raves. I was putting on DJs and trying to explain to people why we didn’t require a bar…
How did you explain that…?
I said people were just so into the music. That’s why we were selling so many bottles of water and fizzy pop…
I inexorably got drawn into the record business after that. I was always fascinated by the record business as opposed to the live side of things.
“I was putting on all-nighter raves and having to explain why we were selling so many bottles of water and fizzy pop…”
I found a job in a little record promotions company, which eventually led to me getting a job in Warner Music. I spent a few years there, and then I joined Ministry about 16 years ago to run their compilations business.
Gradually everybody else left, nature abhors a vacuum and I got sucked up to the top. That’s the story!
What are your memories of working for a major label?
It was a good experience. It was a different time, the nineties. It was a lot more buoyant, there was a lot more money flowing around. I never saw any of it, unfortunately. I learned how every aspect of it worked.
I sat in the central division – Warner Enterprise & Special Projects. Everybody forgot about us. We were kind of left in the corner. “Just go and make some money.” Which was a really good principle to have, because no-one else in the company thought like that…
We would look at back catalogue and think of ways to reactivate it, doing compilations and working with this funny thing called the internet.
All of these clubs had started releasing comps at the end of ‘95. Three albums came out at around the same time: Renaissance Mix Collection, Cream Anthems and a little album called Ministry Of Sound: The Annual.
“As opposed to most people who met ministry and thought: “What a bunch of w*nkers.’ I quite liked them.”
You’d look at the back of these compilations and you didn’t know what the f*ck any of the tracks were. They all sold about 100,000 copies.
My boss at Warner, who was in charge of licensing at the time, started getting a bit tetchy about the fact that these clubs were releasing albums and were packed with our underground repertoire. Then the majors, really interestingly, started phoning each other up and saying: ‘Let’s not license to these people.’ Not that that sort of thing goes on at all in the major record companies…
In spite of all of that, the first Ministry of Sound album did around 120,000 sales. The second one sold three quarters of a million copies. All of a sudden those guys were on the scene, we all knew who they were.
They were pretty aggressive. As opposed to most people who met Ministry of Sound and thought: ‘What a bunch of w*nkers,’ I quite liked them.
And I liked them enough to go there when they offered me a job.
What is it about the Ministry of Sound that makes you such an independent… even amongst independents? And what appeals to you about that?
No-one likes us, and we don’t care. Our business is different. Aspects of it are similar [to other labels] – we understand how major record companies work and why they do the things that they do.
We understand the independent sector and why it does the things that it does. We understand how nightclubs operate, because we’ve got one of them.
We’ve had to learn and understand about digital media. We have a radio station – we understand how radio works.
“No-one likes us and we don’t care. Our business is different. We’ve had to carve our own way.”
We have a live touring and events business, so we understand how that works. We make merchandise products. We launched a range of consumer electronics equipment last night.
Because we’re many things, we have to consider the cross pollination between all of those businesses, which makes us different.
I find it difficult when people ask: ‘Who are your peers?’ There’s no one thing that’s the same as Ministry Of Sound.
We’ve had to carve our own way, which sometimes makes us seem a bit… possibly… aggressive. I’m not sure that’s the right word.
No, f*ck off!
[Cooking Vinyl boss Martin Goldschmidt shouts: “Arrogant?”]
[Laughs]. Why do you have to sit at the front?
It certainly makes you unique, and potentially attractive to bigger businesses. Have you felt the encroachment of companies trying to buy or buy into Ministry?
Over the years, obviously people have come in to kick the tyres but it’s part of that ‘we don’t understand what you are’ thing.
If a record company comes in, they look at the record company bit and go: ‘What’s this nightclub? We’re not really interested in that…’ And we go: ‘Well, if you don’t understand that, go away.’
Or it’s: ‘This nightclub’s really good, but we’re not really interested in this record business because that’s dying.’ I’m so fed up with hearing that…
The oddest thing when people come in, certainly modern businesses, is: ‘You make a profit. So therefore, we need to value you at a multiple of your profit.’
Whereas modern digital business don’t make any profit and, in some cases, certain big green companies lose a shitload of money and yet have astronomical valuations.
You seem to be hindered by the fact you’re profitable.
Well, it’s so short-sighted…
It really is. It means you can invest in people, talent and ideas. As opposed to borrowing money to do that.
But I’m sure we’ll get onto that in a bit…
Yes, let’s not peak too early.
We’re an odd-shaped beast. And you know what? We’re not for sale.
We’re really, really happy being us, being independent and carving our own path; having a crack at things, and f*cking things up… which we do a lot. But learning from it, moving on and having fun while we’re doing it.
[For us] it’s not just about earning loads of money and running away. I mean, what would you do with it?
So the record business isn’t dying… but elements of it might be. Your market position sits comfortably outside the battle between the major labels, but you’re a significant player. How do you see the evolution of the record industry changing in the next decade, particularly when it comes to the majors?
God, that’s a big question.
It’s difficult because of the short-termism that exists within those companies, and has existed since the eighties when the consolidation of the record industry began; when I started there were six or seven majors and now there’s three.
“We’re an odd-shaped beast. And you know what? We’re not for sale.”
The way the people who run those companies are contracted and remunerated and rewarded is all short-term.
Part of the reason we get frustrated is that people do things within big companies that are immensely damaging to the industry – but I do understand the reasons why they do them. Maybe if I was in their position I’d do things in the same way.
But you’ve got very short-term decisions being made by people on the basis that they have five or three-year contracts that pay them a huge amount of money. As we’ve seen with the Sony Wikileaks emails…
I don’t know what you’re talking about.
Oh yes, of course, we’re not supposed to have read them, are we…
These people are incentivised to deliver [on] short term goals. So what they do is all driven by that.
Then they get their bonuses, they get their contracts renewed if things go well – or they don’t if they don’t. And then you find yourself two or three contracts forward and the decisions you’ve made have completely f*cked everyone up the arse.
I’m not optimistic about that. I don’t see that changing. I think that culture is very ingrained in the big record companies and the big publishing companies – and in fact in the big movie companies too.
The difference with us is that this is [Ministry’s] business – we’re privately-owned. We’re not trying to exit. It’s the same as Martin [Goldschmidt’s] business. These are things we’ve built and that we’re immensely proud of and that we love dearly.
You listen to independent executives talk about their business, and they do so with much more knowledge and much more passion. They don’t just repeat what’s coming from above and say: “Well this is good for the business and we need to drive everyone towards it.”
You’ve got this really bizarre thing going on in Universal at the moment where everybody’s been trotting out the same line about streaming, freemium and blah, blah, blah for years.
All-of-a-sudden the guy at the top has changed his mind, and executives down the line are: ‘Well I was saying this but now I don’t know if I should say this because he’s saying that. What does he know that I don’t know? Am I going to keep my job?! Oh f*ck!’
You said ‘ingrained in the culture’, maybe you meant ‘inGrainged’… Odd to think, but even Lucian Grainge is capable of being worried about losing his job. He’s ultimately an employee of Vivendi.
Nah – he’s untouchable, isn’t he? I’ve got a tremendous amount of time and respect for Lucian. I think he’s a great executive. He’s consistently taken risks, rolled the dice, done big deals, signed great artists.
Right at the heart of Lucian is music. But I think some of the things that [Universal] have done digitally are awful.
They’ve created a landscape for themselves which they’re now trying to dig their way out of. And they don’t necessarily have the solution.
That has massive implications for all of us, and we have to navigate our way around those decisions.
Okay. You’re not just the boss of Ministry Of Sound, you’re also something of a viral sensation… You railed against ad-funded, on-demand streaming services in Barcelona recently and the video was an industry hit. Could you just recap your views of the likes of Spotify and Deezer’s free tiers?
It’s YouTube as well. The music industry’s response to piracy was, ‘Let’s give everything away for free legally.’
Now, the movie industry didn’t do that. The TV business didn’t do that. Even the book publishing industry hasn’t done that. Newspapers have managed to put paywalls around their content.
But the music industry’s reaction around piracy was to give everything away – initially, under the pretext of promotion via YouTube.
We’re all hypocrites – [Ministry] as much as anybody else, trying to drive those YouTube views and being really optimistic about the fact that 300m people have viewed your content for nothing. But that horse has bolted.
I get sick of these streaming services telling us that they are an antidote to piracy when they’re paying us f*ck all from those free-level services.
Let’s be under no illusion: I don’t understand how major record companies continue to report their fantastic results yet the global music industry continues to contract.
There’s a gap somewhere: obviously someone’s lying about their numbers.
“Right at the heart of lucian is music. He’s a great executive. But some of the things Universal have done digitally are awful.”
Let’s be clear about what these streaming services are there to do. Like I said earlier, I don’t blame them for running their businesses to succeed and trying to achieve what they’re trying to achieve… which in their case is either IPOs or sales to exit and repay their investors.
Their objectives are different to ours. So when they dress themselves up as the saviour of the music industry – but in saving the music industry they’re giving content away for nothing… Things continue to contract.
There are fewer and fewer independents in the world investing in talent. You can see the contraction of the majors. And there’s a homogenisation of A&R to the safest things.
Less investment in creative talent, less risk-taking… and I think that’s desperately sad.
$8.4bn [Spotify valuation] at the last count. Good for them. But not necessarily good for us.
But you must appreciate that lots of independent music businesses are very happy with the money that has come through from Spotify. I know it makes up a small percentage of your income, but that’s not common. To end it or to damage it would really hurt a lot of indies.
Like I said, I’m representing my business, and I will do what’s right for my business.
I do understand if you’re running a smaller label and someone turns up at your door with a cheque, that’s a bloody good thing. But what’s it at the expense of?
It may be that streaming is better for smaller labels, whose content isn’t ‘hit’ content, because people are more likely to sample it through a streaming service than buy it on a download service or buy a CD.
So the mechanic [may] work better if you’re a smaller label developing talent at early stages. But my business is hits-focused, whether it’s compilations or singles.
We’ve released four singles this year – all of them have been Top 10, two of them have been Top 5. We didn’t release an artist album last year. We released one two years ago and that sold 1.5m copies.
London Grammar’s debut album, which famously wasn’t on Spotify in the UK.
Yes, for a variety of reasons, not just principle.
I understand people have a different position on [Spotify]. I also understand the perspective of the major record companies. And let’s be clear: who designed the licensing system for subscription? It was Universal.
Universal were the first people to engage with Spotify. Universal said, okay, well, look, what we want is people paying £10/$10 a month. We’ll work out what the breakage is – the breakage being, if you don’t use the service, how much the content owners get and how much that money is cut up.
The major record companies in the nineties performed a trick of having one of two records on the radio – particularly in America – and then selling you the album because there was no singles market available. Thus you spend ten bucks for a couple of tracks.
“The music industry’s response to piracy was: ‘Let’s give everything away for free… legally.’ The movie industry didn’t do that.”
iTunes f*cked all of that up for them – well, Napster first , and then iTunes legitimised the process. You didn’t have to buy an album full of crap anymore. Not that every album was full of crap but, let’s face it, quite a lot were.
What subscription gave them the opportunity to do was to put the cat back in the bag. To say: “If we own 40% of the world’s content, we’re going to get 40% of the money.”
It valued a track that was made 40 years ago at the same level as a track that is made today – a frontline artist. A Grateful Dead track from the late sixties costs the same as the latest Katy Perry single. Now that’s not right!
If I want to watch the Adam West Batman, that’s not the same as me going to see The Avengers Age Of Ultron in terms of what I’m having to pay. But it’s very convenient if you own loads of catalogue – because you’ve been acquiring it over the years – for you to get that huge chunk of change.
The [majors] have done what they did with PROs; they’ve split the remnant money at the end of distribution between themselves on the basis of market share. That’s not fair. It’s just not fair.
We know your views on ad-funded. But what would you like to see change about the way a premium service pays out to the record industry?
Why’s it all or nothing? Why’s it the ad-funded free site or $10 a month split up that way? Because it favours the three biggest players in the game. That’s clearly why it’s been designed that way.
What I’d like to see is all sorts of different models. But there’s no incentive for [the majors] to license those models. Should there be micro-payments? Pay as you go? Different tiers for different types of content?
There should be a free element – a SoundCloud-type thing for user-generated content, for people to discover new artists, for bands to put their content up and for labels to determine whether they want to give their content away for free.
There should be a different tiered subscription for deep catalogue, or popular catalogue. For development artists, for premium content, for high-definition audio. Be more imaginative!
“Why would anybody start a f*cking music service? Why would you negotiate with those beasts?”
I’m sure these services exist, they’re all out there – other people are trying to create models. But when they go to the big live content owners and say: ‘We’ve got a different model,’ they say: ‘Hmm. Okay. We don’t really want to damage Spotify because we’ve all got a piece of that and actually if that floats for $12bn we’re all going to get a massive pay day so we can’t really f*ck that up.
‘So the only way we’re prepared to consider this is either if you pay us a massive advance for the rights to our catalogue or you give us an equity stake and we’ll give you a one-year license and allow you to run your business, depending on whether you run out of the money you’re scraping together by going to investors.’
Why would anybody start a f*cking music service?! Why would anybody want to go and negotiate with those beasts?
I don’t think the consumer gets a great offer here. I don’t think other models get a chance to succeed, or that indie labels get a opportunity to sell their wares in a fairer mechanism because they’re only given ‘free or $10 a month’, which favours the big guys.
Your narrative with Spotify has been fascinating. You didn’t like them. You ignored them. Then you had a big falling out. Then you shook hands.
It wasn’t that I didn’t like them. At the beginning, I didn’t see the value for my business.
We were selling lots of downloads, we were selling loads of digital and physical compilations.
I could see was this was going to erode my downloads business. They weren’t in the charts, which is important to us as a hits-focused business. And they had absolutely no model for monetising compilations. They didn’t value curation, they only valued content ownership.
I could afford to not play the game. But fine, we kept a dialogue going and had a watching brief.
“We asked spotify to take down the playlists, they refused. We asked again, nicely, they continued to refuse… so we sued them.”
Then they started allowing people to put up playlists that were exact replicas of our compilations, called by the same name with our trademarks – and somehow some of them even had our sleeves up there.
We took issue with that because it was a clear infringement of our intellectual property rights. We asked them to take them down, they refused. We asked again, nicely, they continued to refuse. We asked them slightly more aggressively and they continue to refuse. So we sued them.
Then they took them all down. Make of that what you will.
How’s your relationship now? And how can Apple and what we think we know for certain – their upcoming paid-for streaming service – help you in your quest to not give in to forces that want everything to be free?
Well, the relationship [with Spotify] is much better since we resolved that. Our content – not our compilations – is up there now. We can decide what we want or don’t want to put up there.
We’ll have to see how that plays out. I don’t really like having stuff on the free service but [putting music on premium-only] isn’t an option at the moment. The numbers are so pathetic from our perspective that it’s irrelevant to us, financially. But better to learn about it, understand and be in the game than not.
As regards Apple? I know about as much as everybody else does – which is nothing. I have mixed feelings of huge anxiety and massive optimism.
“I believe Apple is on our side. They did a remarkable thing for the music business. They’ve been paying us an enormous amount of money.”
The really positive thing about Apple is that I believe they are on our side. They did a remarkable thing for the music business; far from Spotify who monetise piracy, or gave the ‘antidote’, Apple gave us a way through and they’ve been paying us an enormous amount of money as an industry over the past 10 years. I’m very grateful to them.
They have consistently tried to be on the side of the creators. I’m not saying that they always get it right or that they don’t have other agendas. But I do think Apple like to be the good guys.
I don’t think they’ll want to put too many noses out of joint, but we’re all hearing the rumours of what’s going on and it’s very interesting.
We’re right in the middle of this massive crucible of change. It feels like a pivotal moment in the industry. I suspect that whatever they launch is not going to go ‘bang’ and change everything overnight because people’s consumption habits are very ingrained; 50% of paid-for music consumption still comes through CD, and I remember hearing in 2001 how we only had two years left to live.
We still sell quite a few of those little plastic things. I don’t think downloads are going to disappear overnight, either. I don’t think streaming is the future – it’s part of the future. Just as much as vinyl, downloading, physical and whatever comes next – direct transmission, straight into your f*cking brain… There will be other formats.
While all this goes on, you continue to be a record company – one breaking tracks and artists. Those artists include London Grammar. How did you break them to such a worldwide degree?
Everyone loves to post-rationalise their successes and say: ‘We always knew blah blah blah.’ I’m not going to bullsh*t. You sign an act and you have dreams and hopes. And when things come together, it all seems like you planned it but actually there’s a magic involved.
Ultimately it’s down to those three guys who are immensely talented and absolutely know what they want, are completely committed and passionate about that music. We’re just lucky to be involved with them.
We met them four or five years ago – Dave Dollimore and Dipesh Parmar, who run our record label, saw them at a showcase in West London somewhere. I think they both stood at the back crying like babies, cuddling…
They rushed [backstage], introduced themselves to the band, told them they wanted to sign them immediately and a few weeks later that was done. They didn’t’ have management at the time, we introduced them to some managers. They fell in love with Jazz Summers. Many have!
“We’re right in the middle of this massive crucible of change. Now feels like a pivotal moment in this industry.”
And then we made a record, and it wasn’t right. So we made another record with them and it was right.
We were very aware people would not take this from [Ministry Of Sound] so this had to appear like it came from somewhere else. So we created a label for them, with them, called Metal & Dust. They put Hey Now up online and it just went bonkers.
It was funny sitting in our office watching every A&R in the world going: ‘Hi, I really love your track!’
Strong rightly won the Ivor Novello Awaerd for best song, it’s incredible, but they never really had a big hit.
But the album was a proper album. Every time a demo would come in, we’d sit round crying.
That stern, tough Ministry image is taking a beating…
Well, music does that to you. I think even the Ministry bouncers were crying and hugging…
Thankfully, bless them for it, Radio 1 got behind it right from the beginning. They were huge supported – George [Ergatoudis] really got it. They are everybody’s favourite band, that’s what’s so wonderful.
For me, somebody who started life as a musician, to have brought a record to the world where people are so passionate about it because that act have proper integrity and make amazing music… it’s magical. I’m very excited about what they do next.Music Business Worldwide