TONY BROWN'S TAKE ON SCOTT BORCHETTA'S SUCCESS!Fueled by Scott Borchetta, Big Machine turns
Music has value, Scott Borchetta is happy to tell you, and he should know.
Whether he’s working as a mentor on “American Idol,” advocating for more favorable copyright laws or championing one of the artists in his Big Machine Label Group family, Borchetta has turned the phrase into a battle cry.
While the music industry has shrunk and sales have bottomed out, under his leadership as president and CEO, Big Machine has soared. The company officially turns 10 on Tuesday. The numbers speak for themselves: 50 million albums sold, led by Taylor Swift, an early Borchetta find; 200 million downloads; 10 billion streams.
For all the dreamers enrolling in the music business schools at Belmont University or Middle Tennessee State University, the ascent of Borchetta’s Big Machine can be viewed as an inspiration — an unusual combination of sales growth, unprecedented partnerships, shrewd royalty deals, unmatched radio promotion and keen eye for talent.
Borchetta, the race car-driving college dropout who was born into the music industry by way of his record label executive parents, is the unquestioned king of Music Row.
“I think it validates what my shared vision was with the few people that really believed we could do this,” Borchetta said of reaching the 10-year mark. “Nobody said it was a good idea in 2005 to start a new record company.”
It bears mentioning that 10 years ago at this time, Borchetta’s dream of running his own record label was in limbo.
Borchetta made his desire to run his own label known when he was still at Universal Music Group and his contract, which originated at Dreamworks, was set to expire on Sept. 1, 2005. When UMG decided not to give Borchetta the reins to his own label, he went to work assembling his own.
Borchetta partnered with country star Toby Keith, put together a staff of ambitious, hungry executives and signed three artists: Danielle Peck, Jack Ingram and Swift, who was then an unheralded teen-age singer-songwriter, to record deals. After starting in country music, Swift, of course, crossed over to be come an A-list pop star.
But the financing he needed to make Big Machine a reality wasn’t coming together. Several potential investors promised cash but backed out at the last minute. Many had a problem with a prospectus Borchetta presented, which he now admits showed “numbers that didn’t add up.”
“What I didn’t think was going to be the hardest is what turned out to be the hardest thing starting, and that was getting the check signed. A lot of people say, ‘OK I’m in. I want to invest,' (but they didn't follow through).”
Borchetta said he had a Dec. 31, 2005, deadline to bankroll the label or else the venture would have died in its infancy. In November Borchetta finally got his key investor when Pittsburgh multimillionaire Ray Pronto looked past the iffy prospectus and committed $3 million.
“My mission was to never have to go raise another dollar,” Borchetta said. “We never fell below $1 million in the bank; we were never in the red.”
BMLG at the forefront of industry
In the past 10 years, BMLG has blossomed into a music-fueled media empire. The company is home to five label imprints — Big Machine, Valory Music, Republic Nashville, Nash Icons and Dot Records, as well as a music publishing division.
Among his creative dealmaking, Nash Icons, home to Reba McEntire, Martina McBride and Ronnie Dunn, is a partnership between BMLG and broadcast giant Cumulus Media. BMLG partnered to release Zac Brown Band’s music. The company also serves as the label home to original music from the ABC drama “Nashville."
On the creative partnerships, Borchetta said "it's amazing when you can go into a conversation and start at 'yes.' "
Borchetta also found himself at the forefront of the industry when his company struck deals with broadcast companies to pay BMLG and its artists performance royalties when their songs are played on the radio in exchange for a smaller cut of digital royalties. Federal copyright law does not require broadcasters to pay performance royalties.
Zac Brown Band aligns with Big Machine Borchetta said he’s reached five such deals with broadcast companies, and he thinks the structure of those arrangements “should become” the copyright policy of the U.S. government. Congress is at an impasse weighing an array of copyright issues, including whether to pay artists and labels performance royalties.
John Zarling, the company’s senior vice president for partnership marketing and promotion strategy, said Big Machine is really more than just a record label. Zarling, who was one of the first executives to join Borchetta a decade ago, pointed out that Big Machine has developed creative ways to reach the masses in a time when doing so is increasingly difficult.
Zarling highlighted All-State Insurance sponsoring the release of new music from Zac Brown Band, and incorporating the group’s single “Homegrown” into its marketing campaign.
“We have a favorite saying, start at crazy and work backwards,” Zarling said. “We deal with brands all day long, and we brought them into the promotional campaigns in a really unique way to allow us to launch creative, larger-than-life ideas.”
Competitive fire and ambition drive Borchetta Record producer and executive Tony Brown said Borchetta has reached the top of the industry — he was named the most powerful Nashville executive this year by Billboard— because of his creativity and his competitive nature.
Brown, who hired Borchetta at MCA in the 1990s when Music Row was booming, pointed out that Borchetta was a semi-pro race car driver during his rise through the music business. Brown ranks Borchetta with Jerry Bradley, who helped usher in the Outlaw movement, and luminary Jimmy Bowen as the three Nashville record executives who have “changed the town and made the most impact.”
“I think his creative mindset and his ambition to have success — putting the art and the money together, that’s where it’s at,” Brown said of Borchetta’s success.
What’s next for Big Machine? Borchetta admitted he has fielded offers from suitors interested in buying the company. Borchetta said he declined because it’s important to him that the culture, which helped BMLG grow from 13 employees in 2005 to 93, be maintained.
He said his time as a mentor on “American Idol” has opened his eyes to the potential of incorporating a more involved, demanding and comprehensive artist development strategy, similar to the ones contestants on the show undertake. As more streaming services emerge, Borchetta said he’s not stressing over how his company’s music will be distributed as he looks ahead for BMLG.
“We’re five labels strong, and with Nashville becoming the No. 1 music city in the world, the level of talent may be unmatched,” Borchetta said. “Everybody knows about Nashville now. Anywhere you go in the world, people know the level of talent that’s here.
“If we don’t forget that the mission of Big Machine is to sign the coolest artists who make the coolest music, I don’t care how it’s distributed as long as everybody is properly paid for it so we can continue to invest. We’re not a tech company, that’s not the mission. The mission is to find great artists who are bound and determined to make great art.”