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Opinion September 27, 2021

Sony Music Australia’s path out of turmoil [OP-ED]

Sony Music Australia’s path out of turmoil [OP-ED]

It appears right now, Sony Music Australia is running on fumes. The local major has parted ways with its president, its GM, the head of A&R, its HR, and as of our announcement on Friday, its head of domestic marketing. 

So who is actually running the show now? It’s an answer we can’t get clarity on from either the domestic team that remain, or the NY head office.

The allegations

To be clear, the commercial strategy I’m about to propose for Sony Music is not in lieu of Sony Music’s ongoing investigation into the very serious allegations they are facing. Those allegations need to be dealt with and no new leadership or future commercial success will cover those alleged cracks without proper due process and closure to all parties. Sony Music need to face all allegations, and if necessary, identify any systemic issues which led to them and work through them sincerely and transparently.

However in parallel to this, they do need to build a new Sony Music Australia, a better, more open Sony. If their business doesn’t rebound—and rebound quickly—the ones that will suffer most are the artists who are signed to the label and must feel like their careers have been dealt a massive blow. I feel for every Australian artist releasing a record through Sony this year, and particularly those who have just signed long term recording deals with the company right before shit hit the fan. 

Sony Music owe it to these artists to rebuild quickly.

What is the path forward for Sony Music Australia?

Well the obvious path is to poach a talented executive like Heath Johns at BMG or Linda Bosidis from Mushroom, or the many other options The Industry Observer laid out in our story on June 23. 

Linda Bosidis

However my belief is that the best path forward for Sony Music Australia to rebuild and forge a new era of success is via an acquihire. 

Acquihire is the practice of buying a company for the sole purpose of integrating either the staff or technology into the acquiring business. As divisive as he is, I think Mark Zuckerberg put it best when he said: “Facebook has not once bought a company for the company itself. We buy companies to get excellent people.”

There are three Australian companies which could revolutionise Sony Music with this one move:

  1. Unified Music Group
  2. Lemon Tree Music
  3. Chugg Music / City Pop Records

Unified Music Group

unified office staff photo sydney

UMG staff

Outside of Mushroom, Unified Music Group are Australia’s largest independent music company comprised or recording, management, publishing, touring and merchandising businesses. 

It is an incredibly well run company with a founder who I believe is the most inspiring visionary in the country, Jaddan Comerford.

Sony could acquire Unified, put Jaddan as president, integrate his org chart through the business and immediately Sony Music Australia would have the energy of an ambitious, profitable and hungry start up, with the budget and leverage of a major label. 

Why wouldn’t Sony consider this option? 

Lemon Tree Music

Lemon Tree Music

David Morgan (left), Regan Lethbridge (Right), executives at Lemon Tree Music

The second business Sony could consider for acquihire is Lemon Tree Music.

Lemon Tree has already partnered with Sony on a number of their artists including Australia’s biggest international pop star right now, Tones And I. Lemon Tree is run by Regan Lethbridge and David Morgan, two executives who have an incredible track record both turning no-name buskers into global superstars, and also running a corporation with numerous staff, contractors and various stakeholders like clockwork. 

Regan could be president, David could be GM and everyone they hire and who works for them would give them everything they had. They are incredibly inspiring leaders. 

Chugg Music / City Pop Records

Michael Chugg inducted as an ARIA Icon

Michael Chugg inducted as an ARIA Icon

The last Acquihire target could be Chugg Music / City Pop Records. This acquihire would be a huge global statement for Sony Music. 

The iconic Michael Chugg could sit as chair, and Andrew Stone who I believe can out-think almost any executive in the country, would fit the president role perfectly.

All three of these recording companies have incredibly profitable catalogues, and should be an acquisition target for every major record company anyway. These independent businesses represent both the present and the future of the Australian music industry, and Sony Music could fast track their rebuild three-five years by acquiring one of them and inheriting their staff and vision.

Why won’t Sony acquihire? 

Well, there are two main reasons I don’t believe Sony Music will go down this path;

  1. No doubt Sony have been readying a number executives all over the world for an opportunity like this for a decade, I doubt they will deviate from that existing strategy and those relationships 
  2. It would be expensive. Acquiring these companies won’t come cheap, both because of how profitable each company is independently at present, and the premium they’d have to pay to convince one of the parties to do the deal. 

Both reasons to not do a deal however are trivial. Sony should move past them and try to get an acquihire done and done quickly. 

Sony need to ask themselves, do they want to hire an executive and slowly build out a team and new mission in the hope that it will work? Or, do they want to bet on a team at their one of these three companies with a proven track record of success and industry admiration who can bring their vision and enthusiasm to a major label environment and change the game forever. 

An acquihire alternative path which would work

The only other move which I think could work out far better than an acquihire is if Sony Music look to appoint an incredible female executive either from within the business or without. Two examples that obviously come to mind is Kim Boshier (MD at Sony Entertainment, New Zealand) and Linda Bosidis from Mushroom who I mentioned earlier. Given everything the company is going through now – a female lead company could be exactly what they need.

Kim Boshier

Kim Boshier, MD Sony Music Entertainment (New Zealand)

Sony Music should learn from Warner’s mistake in 2017. An uninspired, predictable appointment may leave the company in limbo for years.

You should never waste a crisis, the question now is, will Sony waste theirs? 

This article originally appeared on The Industry Observer, which is now part of The Music Network.


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