SoundByte recently connected with SoundExchange board member and Toolshed CEO Dick Huey. Dick started Toolshed in 2001 and grew the business into one of the oldest and most respected digital marketing agencies in the U.S. Throughout the years, he’s consulted with such influential independent record labels as the Beggars Group, Merge Records, and Kill Rock Stars, along with some of the industry’s most prominent digital music services. In his promotional work, Dick has been associated with musical luminaries Ani DiFranco, Arcade Fire, Sufjan Stevens, and hundreds of others. Needless to say, we were thrilled to get Dick on the record about SoundExchange, the future of the music industry and his secret formula for a successful and meaningful career in the business.
SoundByte: Where are you from originally?
Dick Huey: I’m from Leland, MI, a very small town in Northern Michigan. Leland has a regular population of about 400, and the high school I went to only had 24 people in my graduating class. The kind of town where you know everyone.
What factors most influenced the type of music you grew up listening to?
With only two or three radio stations in Northern Michigan, we really didn’t have much in the way of new music or independent music to listen to. The only music I knew was “top 40” music. Then I went to the University of Michigan for my undergraduate work and was exposed to something different, musically, for the first time. Being located between Chicago and Detroit, Ann Arbor had a thriving music scene, so I soaked up a lot of different influences. From there, music just became a constant presence in my head — one that would never really go away. That eventually turned into me doing performance. I started playing the guitar at age 23 and played at local clubs with other musicians in Charlotte, NC where I was living at the time. And for a while, I was quite convinced that it was all I ever wanted to do.
How did you decide to pursue a career in the music industry?
Performing was actually the catalyst for what moved me into the music industry. At one of those gigs in North Carolina, I was walking out of a bar after an open mic night and I heard a girl singing. I turned around and walked back in. I couldn’t believe what I was hearing! There was this little blond girl from the Pacific Northwest who was living in Charlotte. Her name was Cheralee Dillon. Several months later, she wound up being my first management client and it started the whole thing off. I was able to sign her to an independent label called Glitterhouse Records in Germany, at the time the Sub Pop distributor for the German market. And that’s what got me interested in both the business side of music and in independent record labels. Shortly after that, my socks were knocked off again by the band June, and another band, Stella, both of whom I signed to Beggars Group — which is how I originally made the connection to that label, and with that connection, my entrée into new media.
Where did you begin your work in the music industry?
I ran new media at the Beggars Group for five years, from 1996 through 2001. At the end of that time, I discussed starting my own business with 4AD Music Publishing. My concept was a business where I’d provide the same services I was offering to the Beggars Group, but to other independent record labels as well. This was well before iTunes and well before digital music had almost any revenue attached to it whatsoever. It was a bold business to move into because there was no income really attached to it either, and so my results were judged not on generating sales but rather on generating ideas. But the head of Beggars Group agreed it was a good idea, and so I started Toolshed.
How did you first come across SoundExchange? When did you first join and what drove you to become a board member?
In 2003, former SoundExchange president John Simson reached out to me because he was looking for information about Matador Records (part of the Beggars Group), where I was still consulting. I asked him a few questions about SoundExchange to familiarize myself with what they were doing and I thought it sounded like the kind of thing labels hire me to look into for them. At the time, I had already been in new media for almost seven years — which was considered “an era,” at that point. John knew this and he suggested that I might be interested in coming onboard and working on behalf of Matador, to fill the small independent label seat on the board.
How has SoundExchange evolved since you first became involved in the organization?
SoundExchange has changed a lot since I first became involved. When I started at SoundExchange, the organization was much smaller, first of all, and it used to be comprised of much more disparate parts. You had the majors operating in one corner, the independent labels operating in another corner, and the artists operating in another corner. But what’s probably the most pronounced change I’ve seen over the years is how substantially it’s grown in terms of income distributed to artists and labels — it’s quite remarkable. And while artists were not typically the owners of copyrights, they’ve now emerged as more equal partners, in the sense of being much more involved in determining rates and use conditions attached to their own recordings. In 2012, many artists choose to make their own distribution deals, to self-distribute their music or to manage their own publishing. As a result of that, you have an organization that’s now more aligned, with all its members having an aligned interest in protecting copyright and in establishing reasonable rates for the use of music. And that’s a positive development.
With the increase in digital music listenership and the drop in CD sales, it seems the music industry is at a crossroads. Do you think it will eventually adapt to the widespread switch to digital music? What are your thoughts on the future?
I’m extremely bullish about the prospects for music, and musicians. I think the music industry will undergo a lot of changes – many are already happening. But music itself has an extraordinarily bright future — as bright as it’s ever been, if not more so. There were a lot of really interesting statistics that came out at the end of 2011, which essentially showed that digital music revenues have been growing for two subsequent years in a row, the first time that’s happened since the advent of digital music. I believe there was five percent growth in 2010 and eight percent growth in 2011. There’s also really huge growth in subscribers to digital services. Americans are starting to wrap their heads around the idea of subscription music. And with digital music services and digital radio services coming into their own and becoming integrated into mobile devices and cars, the long-term prospects are bright for music.
I do think there’s a lot of well-placed concern about the decline of physical sales. But that said, at least there’s hope that things are leveling out. Looking at Billboard statistics, last year’s physical sales shrunk by only five percent, compared to almost 19.5 percent the year before. Most importantly, all of the different components of digital revenues are up. It’s getting to a point where the artists and labels of 2012 have started looking at lots of different revenue streams – digital, touring, merchandise, and international collections / neighboring rights – rather than looking at only one. And because they’re able to do that, they’re monetizing their business the way a normal business does, not just based on one revenue stream. They’re now in a position to experiment in a way that they’ve never been able to before. And they’re finding that they can not only exist, but exist comfortably.
Where do you see SoundExchange fitting into the future of the music industry? What are your hopes for the organization?
I see non-interactive webcasting royalties as a growing and crucial component of income for record labels and artists. SoundExchange distributed $292 million in 2011, which was up 17 percent from last year. It’s been on a climb for a long time in terms of revenues collected and distributed, and I think it’ll continue to climb. SoundExchange also has new management since last year. And the new management is very focused on enhancing the overall experience that artists or labels receive when they contact us. The board is also very focused on this – the whole organization is really. And I’m extremely pleased to see it happen. SoundExchange has the personnel in place to drive ahead as a premier collecting agency for growing revenue streams that will be even more vital for artists and labels going forward.
Speaking directly to artists and labels that are registered/members of SoundExchange, why should they be excited about where the organization is headed in the next year? Five years? Ten years?
First of all, they should be excited about where SoundExchange is headed because of the growing revenue stream we were just talking about. And I think they should also be excited to be associated with SoundExchange as an organization, because it has the interests of copyright owners at heart and constantly negotiates to ensure fair rates. I’m confident SoundExchange will continue to work to find a balance between setting rates that work for all parties involved, and bringing payees more closely into the fold. The board has gone to great lengths internally to make sure that individual webcaster groups are able to exist and grow. I’m very pleased to see the relationship with webcasters — who provide a means for people to access music — develop into more of a partnership.
What music are you currently listening to? What’s on your Internet radio playlist or your favorite digital/satellite radio channels?
I’m actually a pretty big Pandora fan. And if you looked at my LastFM playlist, or if you looked at my CD collection or my digital music collection, you would see that I’m very much a fan of independent music. One of the artists that I’m particularly excited about right now is Sharon Van Etten. She’s somebody who Toolshed has worked with and done digital promotion for in the earlier days of her career. Another artist who I feel very strongly about is MNDR, for whom we’re doing some social media outreach work. I’m also a big fan of the new Grimes album, I think it’s sensational. And my list goes on and on…
Do you have a favorite memory or anecdote from all your years in the music industry? Something that you are particularly proud of? Advice for people starting out?
I think everyone involved in music has a story…for me, it was probably sitting with Ani DiFranco early in her career listening to a demo of what became a song on “Not a Pretty Girl,” or perhaps being invited along to Ace Frehley’s birthday party and not being able to figure out which guy at the party was Ace.
But I think what I love most about being in the music industry is the number of shows and artists I get to see, and the fact that I still love to go out 2-3 nights a week to see live music. I’ve recently returned from the South by Southwest, and it is always very exciting to attend. I’ve had very good fortune in my business. My career in music was very much “educated luck.” I felt that I conceptually knew how to move myself to where I thought I needed to be, and so I planted myself firmly in the space that would allow me to move to the next stage. I have more humility than to say that I knew exactly what I was doing, but I believe I do have a knack for changing things up when I run into a wall and taking a new direction. A skill I learned climbing mountains when I was young.
I did make the decision early on that I was only going to work with artists that I like and that I believe in musically. And after 11 years of running my own business, I can honestly count on one hand the number of Toolshed projects that I haven’t been personally interested in. A lot of it has to do with working with great people and great music at Beggars Group and Matador Records. That inspired my all-encompassing mantra for music, which is: You have to give in order to get. In my case, my whole career has been built not only on trying to give out in a fair way, but also building a peer group around me that I like and that I respect. And you can’t ask for much more than that.