Hot Seat: Martin Goldschmidt – Founder, Cooking Vinyl

When Martin Goldschmidt established Cooking Vinyl back in 1986, his label had a distinct lean towards folk music. Not any more. Yes, Billy Bragg remains one of Cooking Vinyl’s most iconic artists, having come on board in 1993. But the Bard of Barking slots into a roster alongside the likes of the Prodigy, Amanda Palmer, Underworld, Groove Armada, the Cranberries and Marilyn Manson.

When Goldschmidt began working with the Prodigy, predictably, a lot of noise was made. The London-based imprint partnered with Ingenious Media Investments to release the electronic punks’ fifth studio album Invaders Must Die back in 2009. The set went on to be one of the year’s biggest-selling independent records in Europe, and shifted more than a million worldwide. Cooking Vinyl got hot.

Goldschmidt is recognised as one of Europe’s savviest independent music chiefs, with an artist-centric strategy, whether his firm is functioning as a label proper or in a services-only capacity.

Cooking Vinyl Group, which also includes its sister company Essential Music & Marketing, landed a deal in 2011 to fund future projects through U.K. venture-capital company Icebreaker.

The British indie label recently opened for business in Australia, with an office in Melbourne led by two former Shock Records executives, Leigh Gruppetta and Stu Harvey. Cooking Vinyl Australia has since struck a partnership with PledgeMusic.

What has been the secret to the success of Cooking Vinyl?

Understanding what our job is.  The old school vision of a record label is about amassing a bank of copyrights and exploiting them ruthlessly.  Suing the public and paying the artist as little as possible. Hated by both. We see the job of a label is to sit between the artist and the public.  The better we serve those two masters, the more successful the artist is. We live and die by our artists’ success.

The label began with folk origins. Clearly the label has changed. What’s been behind that radical evolution?

My personal taste were always very wide in terms of genre but always leaning to left-field, edgy music.  Most people’s taste are cross genre. Strip out genre and focus on left-field, edgy – and Amanda Palmer, Billy Bragg, Prodigy, and Marilyn Manson on the same label make complete sense.

When I spoke with Billy Bragg recently, we talked about his long standing relationship with yourself. He said Pete Jenner had told him “the best record deals are the ones that only last seven years and that you get your rights back at the end of that.” Apparently that’s the type of deal you and Billy have and you’ve been going like that for more than 20 years. Is it dangerous to be too flexible?

At the time we signed Billy, it was a case of Pete saying “jump” and me saying “how high.” It took me years to appreciate what a great deal it was for both of us.  Firstly, I don’t think CV would be here today without Billy.

Originally the deal was for 3 years.  Billy has now stayed with us for twenty years and renewed the contract six times.  He has not stayed through loyalty, and I have written to him several times and said that I believed we were the best option for him and what we could do for him, but that he should only stay if he also thought that. I don’t expect blind loyalty.

To my knowledge it was the first artist services deal and although there can be downsides to these deals they have big upsides which worked really well for Billy.  His back catalogue sales are very strong.  In these deals the artist gets the lion’s share of the money but has to pay all the costs from it.  Before the costs are paid, their unrecouped balance can look like bad major label excesses but after the costs are paid then they earn far more money than a royalty deal.  Billy has done very well.  On top of this he has known and approved how we have spent his money.  He knows exactly what he earns from Spotify and also every other piece of the pie by Spotify and business partners.  So the artist and management have far more information and control than a standard record deal.  Furthermore the fact the costs belong to the artist, not the label, creates a true business partnership with interests better aligned. Pete also taught me some other brilliant twists like letting the artists do official bootlegs to sell at shows and on their website only.  It’s really hard for many of our artists to earn a living and selling 2,000 bootlegs without the record company taking a cut could mean they make $20,000 which can really square the income circle and get them through.

You’re launching in Australia. What’s the appeal with doing business Down Under?

The biggest appeal is the people.  Our new team are all good friends and people we have worked with for many years.  It’s a well-kept secret that my Mum was Australian and my wife is from Tassie. I’ve heard all the jokes. I have an Aussie passport.  I have spent a lot of time in Oz.  Finally you guys speak English – well, strine anyway – and that makes it easy culturally both to work with, and you get a lot of the music we do better than most places on the planet.

You also have a presence in the U.S, where to next?

The U.S. is currently a publishing and A&R operation. We don’t use Erik Gilbert to oversee releases but instead we partner with local quarterbacks very successfully. For example last year we sold 120,000 Marilyn Manson records in the U.S. We are looking at other markets carefully. We strongly believe in finding the right people and until we do we will not set up in a country. So we have just taken on product management in Germany and are looking at a number of countries and opportunities.

What’s the ultimate goal with the CV Group of Companies?

I wish I could talk about it, but there is no plan. I really admire the Beggars business model and success.  There is a great synergy between our companies and for example owning our own distribution company, Essential Music, which strengthens both entities.  That said Essential’s success this year — with Passenger and others — totally eclipses our own.

The Universal-EMI deal went through, the majors are still playing their game. What’s vexing you right now?

To be honest our business is growing every year.  We are getting great artists to work with.  We earn a decent living and we’re having a lot of fun. Nothing in the business arena right now.

You told Billboard your revenue target for 2012 was about £10 million. What’s your target for this year?

£12 million

Much has been said about the small royalty streams coming from streaming services. Where do you stand on the likes of Spotify?

Love ‘em.  Recorded music is a niche product.  Spotify and YouTube are the biggest weapons we have to seduce the public to pay for music and make it a mass market product. The concept of fighting piracy is a joke, the key is to seduce via a great business model.  Spotify are getting a lot of heat right now. But it is interesting that their name is synonymous with streaming.  It’s like becoming what a Hoover is to a vacuum cleaner.  What I don’t get is why people take their stuff off Spotify but still use YouTube and Soundcloud and say nothing about Grooveshark.  To me it is pure ignorance.  Now if people want to shout about inadequate remuneration from streaming in major label record contracts then I have some sympathy.