November 2012 Issue
The Biz

Yamaha’s New Media Content Division Puts It on Both Sides of the Board

Yamaha exec Chris Gero will supervise the media side of the Yamaha Entertainment Group.With record sales in a decade-long slump, this might seem an inauspicious moment to start a record label. Then again, I’m surprised that Warren Buffet didn’t bid on EMI. As the world’s most successful investor has pointed out more than once, look where everyone is running and then run the other way. So perhaps the announcement, in September, that Yamaha was launching its own record label and video production company might not be as puzzling as it first seems.

Chris Gero, a vice president with Yamaha Corp. who oversees the company’s artist relations division, now also supervises Yamaha Entertainment Group of America and its nine full-time employees and four consultants from offices in the Nashville suburb of Franklin, TN. The group also includes a recording studio and video-editing suite. There, projects like British rockers Leogun, signed originally by Elton John’s Rocket Entertainment Group, are making records — the division plans on five record releases per year — while work continues on video projects, such as an Elton John (yes, he’s a Yamaha endorser) live concert DVD and 88, a history of the piano.

A New Label…Now?

A record label at a time when music sales have tanked? A new recording studio in a region with so much recording-time overcapacity that studio closures have become routine? All these questions have good answers, as long as you accept the fact that music has changed from a noun to an adjective — music is now a way to sell a brand rather than the music itself.

That assessment isn’t intended to be cynical, just realistic. As Gero explained, the record label, video unit and media facilities are extensions of a strategy that has Yamaha as one of the three most-seen logos on late-night talk-show orchestra keyboards, drums and amplifiers — along the same lines as the 12-minute brand imprinting exercise during Paul McCartney’s 2005 Super Bowl halftime show. “The question was, how can we take this to the next step?” says Gero.

One way is to go from the artist endorsing a brand to the brand enabling the artist. Don’t expect to hear tracks like “Ooh, Baby I Love Your PM5D,” but do expect to see the brand evolve into an immersive environment instead of just a logo on a product cradled by a celeb. Yamaha makes pro audio gear, but it also make musical instruments, home theater systems, motorcycles and snowmobiles. From Gero’s point of view, Yamaha isn’t just up against JBL or EAW — it’s up against Coke and Nike, too. In fact, they’re not even the first into the pro audio field at that level: Earlier this year, Converse (a Nike sneaker brand) opened a recording studio in Brooklyn that’s available free of charge to indie artists. So Yamaha Entertainment Group becomes a vehicle to reverse the traditional relationship between artists and manufacturer, endorser and endorsee. Instead of projecting the brand through the artist, Yamaha can also project the artist — neatly wrapped in subtle but unmistakable logoed livery — through the brand.

Live Side Issues

I asked Gero about how this will interact with the live side of the business, where Yamaha’s pro audio footprint is largest, between its consoles, speakers, amplifiers and processing. That particular part of the proposition isn’t as fully baked as the recording side yet, but it will become more so once some of the artists that the label is working with hit the road. In Leogun’s case, that will be next year when their LP is released, when they go on tour underwritten and sponsored by Yamaha with, one assumes, a CL Series console and a Nexo PA system, or something like it. And that points up another possible benefit from this development. Gero mentioned that Yamaha will recruit its own crews for their label’s artists’ tours, just as it’s hiring engineers and producers for the record label, and that means more employment opportunities for live sound professionals.

There was one item in the press release announcing the new label that caught my eye. In fact, it was literally a single dependent clause: Yamaha Entertainment Group would, it read, “for a reasonable fee,” produce, market and distribute its recorded music. Even Gero seemed uncomfortable with that wording when I asked if this was code for “pay for play.” But he pointed out that the conventional fiduciary relationships between artists and labels are undergoing radical changes, and that the deals that Yamaha Entertainment Group makes with its artists will vary in terms of percentages and participation, but all will include some degree of financial investment on the part of the artist.

That’s another one of those conventions that’s being upended, and not just in the music business. Shortly after I talked to Gero, I read a comment by Viacom CEO Philippe Dauman, who noted that, now, when their Paramount film division approves a new film, it has restructured its financial deals with directors and actors to work more like a partnership than the studio-as-a-bank, fronting cash. “We don’t mind sharing the upside [of a movie with talent] as long as we don’t have a downside, or we have a sharing of that risk,” he was reported as saying. That could have been Gero talking, or any number of other executives charged with taking legacy media and technology companies into a murky but inevitable future. The days of OPM — Other People’s Money — are over in the entertainment media business.

It’ll be interesting to watch how Yamaha’s grand experiment plays out, and especially to see how it ultimately impacts the live side of music, which is where most of the industry’s revenues are coming from today. The FOH forts and monitorworlds may seem insulated from some of this turbulence at the moment, but don’t get too comfortable.

For more details relating to this month’s topic, visit www.yamahaentertainmentgroup.com.


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