Tuesday 14 May 2013, 10:33 | By Chris Cooke
Q&A: Mike Chadwick, Essential Music & Marketing
Ten years ago Vital Distribution’s Mike Chadwick teamed up with Cooking Vinyl boss Martin Goldschmidt to launch a new company, Essential Music & Marketing, initially focused on helping US labels market and distribute their releases in Europe.
The new business launched just as a revolution was kicking off in the record industry, and the subsequent growth and development of the company has reflected the new digital age, though getting CDs into record shops remains an important part of the mix too.
Ahead of the company’s tenth birthday later this year, tonight Essential will host a pre-Great Escape party in Shoreditch with CMU to celebrate the landmark. And ahead of that, CMU Business Editor Chris Cooke caught up with Chadwick to discuss his company’s first ten years in business.
CC: Let’s start at the start, what was your background before launching Essential ten years ago?
MC: I’d been involved with independent music since the late seventies. I was co-owner of a company called Revolver Distribution, which was the Bristol-based member of the Cartel, Rough Trade’s independent distribution network. Revolver then merged with a company called APT in 1992 to form Vital Distribution, which became the second largest UK indie distributor. I left in the late 1990s, and the company was later rebranded as [PIAS].
CC: So where did the idea for Essential come from?
MC: I’d known Cooking Vinyl owner Martin Goldschmidt for years, and one day over lunch we hatched the idea of Essential – a label management company helping US labels with distribution in Europe.
CC: A decade of radical change in the record industry was just beginning when you set up Essential. Did that affect the way you set up the business?
MC: Not really, no. Digital was still very much in its infancy at that point, and I’m not sure that it was sufficiently established as a business model to have a major influence. The launch of iTunes changed all that though.
CC: So the subsequent shifts in the industry have affected how the company works today?
Definitely. With nearly 50% of our business now coming from downloads and streaming we’ve been very proactive in growing the tech and online side of the business.
CC: The full name of the company suggests it’s as much about marketing as it is distribution – is that the case?
MC: I think so. I feel we offer our client labels a comprehensive service incorporating all aspects of releasing their records; a big part of that is putting the right emphasis on how a record is marketed to the public.
CC: Ten years on, is digital now more important than physical in your business, or is physical still an important part of the mix?
MC: Physical is still a very important part of the business today, but the writing has been on the wall for a few years now. We wouldn’t contemplate taking on a label for physical distribution-only these days, and digital is now starting to exceed physical sales in many genres.
CC: The death of the CD has been long predicted, how do you see the next ten years of music retail turning out?
MC: It’s inevitable that more sales will migrate towards digital. Once streaming becomes linked to tel-cos, you’ll see a big growth in revenue there. Though I think downloads will remain a significant part of the income makeup with a significant drop in physical sales. However, good specialist independent retailers will almost certainly survive and even possibly thrive going forward.
CC: You work with some leading indie labels. Would you say running an indie label has become harder or easier in the last ten years?
MC: I think you should ask the label owners that question, not me! I would think it’s got to be harder in a world of declining record sales, but if you’ve got a good, solid business model there are more and more opportunities to sign artists, address fanbases and create sales.
CC: You are part of the Cooking Vinyl Group, how do the two companies work together?
MC: We run the companies very separately but, of course, we benefit from each other’s’ strengths. Having both a record company and publishing company as part of the group gives us a unique insight into the requirements of our distributed labels.
CC: What have been the best and most challenging things to happen in the first decade in business?
MC: Obviously one of the best things is when one of our records is successful: we are currently seeing that with the Passenger album. It is a record that has grown since its release, building sales week on week – that’s really gratifying. Most challenging is the shift in the business towards online sales. Getting that balance right in terms of resources keeps us on our toes!