Country music label Open Road Recordings was a one-man shop before its founder, Toronto's Ron Kitchener, struck a licensing deal in 2007 with another relatively small label called Big Machine Records, co-founded by country music star Toby Keith.
It was through Big Machine Records that Mr. Kitchener gained access to a roster of up-and-coming talent, and one fresh-faced young woman in particular caught his attention. She was a long way from last week's duet at the Grammy Awards with Miley Cyrus, but right from the start he knew that Taylor Swift was going to change the way his label did business: If he could exploit his licensing deal by marketing Ms. Swift properly in Canada and making sure her records flew off well-stocked shelves, Open Road would be poised for rapid expansion.
Since releasing Ms. Swift's Fearless album in 2007, Open Road has grown to 11 employees in Toronto and Nashville and has "significantly" more volume and revenues, Mr. Kitchener says. The album took the No. 1 and No. 2 slots on Billboard's 2008 Country Album Chart (Canada), making the 19-year-old singer from Pennsylvania the seventh-best-selling artist among all genres. The album went double platinum, selling more than 400,000 copies last year in Canada.
On Friday, Mr. Kitchener joined us live to talk about his company's breakthrough.
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Dianne Nice: Hi Ron, thanks for joining us today to talk about Open Road Recordings and the breakthrough you experienced after meeting Taylor Swift. Have you always loved country music? How did you get into the business?
Ron Kitchener: Hello - thanks so much for having me. I am in Los Angeles today and happy we could work this online chat out.
I grew up in the small village of Tottenham, north of Toronto, and went to high school in Alliston and my musical tastes were far removed from country music. My favourite music was Metallica, Iron Maiden, Tom Petty and Motley Crue. Today it still is! Although I have a great appreciation for songwriters and count John Hiatt, Steve Earle and The Jayhawks as faves, but I love just about every form of music and country music certainly takes up a lot of space on my iPod.
My background, well I studied marketing and loved music and felt that if I could have a career in something I loved, I would be two steps ahead.
I booked bands in college and took a semester off to hit the road with a corporate-sponsored "rock and roll game show" that we took to university campuses across the country.
From there I worked as an agent, promoter, PA on video shoots, road manager, anything to learn as much of the business as I could.
After working with a movie-star fronted band from L.A., I became more familiar with country music, having spent time in Nashville. Shortly after, I met Jason McCoy, and we've worked together over 15 years on his solo career first and now as part of The Road Hammers.
Wendell Collier from Canada writes: Hey Ron, congratulations on your success! I have a couple of questions. What would be some key advice you would give to someone looking to create their own country music label in Canada (in the article you mentioned having several "branches" that deal with different aspects) or looking to establish themselves as a published country songwriter? Do you feel as though country music consumers are more "tech-savy" than ever before, and that portals such as MySpace, iTunes, and other online music distributors are a viable stream of both the revenue and promotion that need to be a part of a successful campaign? Thanks for taking the time. Cheers, Wendell
Ron Kitchener: Wendell, thank you. I would not advise anyone starting a multi-artist independent label in Canada unless there was a plan to share additional artist revenue streams. While there are less expensive ways to record music and market online, to be successful, at least as we sit here in 2009, you need to gain income from the artists' touring, publishing and merchandise revenue to make up for the change in margins available from selling CDs only. If you are an artist, I would start a company to own your master recording works and develop licensing or joint venture relationships from there with distributors and publishers.
Country fans are all over the Internet, we just have not seen the level of digital sales transactions as there are in other formats. Artists like Taylor Swift and Rascal Flatts are helping the numbers move upward. It is a matter of time. The social networks like MySpace and Facebook are very significant for any campaign, but more in terms of promotion and fan community rather than immediate transactions. That will change shortly, too.
Terry Parker from Moncton writes: Hello Ron. Congratulations on all your well-earned success. Are there certain indicators or standards you follow before dealing with a concert promoter? What does a brand new promoter need to have going for them before you would consider working with them? Thanks Ron.
Ron Kitchener: Terry, thank you. We work with many different local, regional and national promoters. Regardless of size, they need to have the resources to cover all costs before they sell ticket No. 1. Concert promoting is a high-stakes business and you need to have "deep pockets" to have long-term success in that industry.
We rely on promoters to know their respective market well and can assure us the best opportunity for a successful show when we hit town: making sure there are no similar shows close by or within a certain time frame; the ticket price is competitive for the market; the venue production (sound, lights and staging) is of the highest quality for the capacity of the room. Security, staffing and hospitality are other factors.
Best of luck.
Henry Meerworth from Cottonwood, MN, United States writes: I was just curious as to how aggressive Open Road plans to be in terms of A&R and signing new artists. Are they actively keeping an eye out for unsigned acts?
Ron Kitchener: Henry, we are always looking for great new talent but will likely only sign one new act this year with a release for 2010. Our focus is to develop our newer signings The Higgins and Tara Oram and promote their recordings throughout this year. We also have a lot of new releases at Open Road (Johnny Reid, The Road Hammers, Adam Gregory, Emerson Drive) before summer. Our approach to how we launch new artists is changing by being as creative as possible with the set-up and how we attract a large early fan base before we place a CD into the market.
Brad Phillips from Oshawa, Ont., writes: Mr. Kitchener, first off, I'd just like to congratulate you on Taylor's success. I know you must face a lot of tough decisions from a business standpoint: Are there any rules of thumb that you follow to ensure you're make the right decision? Do you feel that the music industry is on a permanent decline? Is it wishful thinking to hope for a recovery? Do you have any advice for a young person striving for a career in Canada's music industry? Thanks, Brad
Ron Kitchener: Brad, thank you.
I don't have too many rules other than I need to be passionate about an artist, a song, a business venture and I trust my instincts a lot. I read many business and industry books plus the daily papers and trades that I have time for to stay current and up to date on trends. The music business is going through significant consumer habit changes at a time of overall economic decline. There will be parts of our business that will be fine during this; however, there is no question there will be job losses and business closings. A lot of large companies need to get smaller to compete and smart entrepreneurs will be rewarded. My advice is to learn as much as you can for all aspects of the business, learn about the assets; copyrights, masters and how their exploitation impacts various bottom lines.
Jennifer Gougeon from Toronto writes: So much is changing in the music industry these days with bands releasing albums for free on the Internet and file sharing running rampant amongst fans. It would appear to be a risky move to open a new record company. Does Open Road have a plan to incorporate the Internet? How do you think your company will address these issues?
Ron Kitchener: Jennifer, I agree a traditional record label venture is a risky venture.
Open Road has been in business five years now and our approach from the beginning was to do things "outside the norm." We look to compete with every genre and every indie label. To be successful, we need to search for new creative and at times inexpensive ways to connect consumers with our artists and their brand and music.
The Internet provides our best opportunity to close the gap between fans and artists. This has been a big part of Open Road's marketing mix since early on.
Through my management division, we have made a commitment to a year-long online development plan for a new artist, Steven Lee Olsen.
It combines multiple efforts to build community around him and his music. This will start next month, so keep an eye out.
Stephanie Sigel from Toronto writes: What are the greatest advantages for emerging artists signing with a boutique promo agency? Are there services that you cannot offer artists and how does that affect those who want the "whole package?"
Ron Kitchener: Stephanie, I think the changing landscape of our business will spawn new companies offering a different level of specialized services. In fact, I have a new company, Road Angel Entertainment (started with record company vet Jill Snell), that is a marketing company offering a la carte services for all music genres, events and media projects. It supports the idea that there are artists out there with investment already and may have a distribution outlet, however, may not have the expertise in place to do the day-to-day marketing, promotions and administration of a recording release or touring effort. That's one example.
Owen Burgess from Toronto writes: Hi Ron. My question is about publisher access. The backstory is: I have made the investment in well-played and well-sung demos with a producer in Nashville. This person was honest from the start about his role: choosing marketable, accessible material. He was equally honest in making no promises to me to open music publishers' doors. What's your advice for finding business ears to listen to new material? Thank you for your time.
Ron Kitchener: Most importantly, you need to find believers, or "flag-wavers," as I call them. The best place to start is with the PROs (Performing Rights Organizations). I trust you are a member of SOCAN in Canada and they can lead you to doors at the U.S. PROs; BMI, ASCAP and SESAC. They all have offices in Nashville and member relations staff.
MH from Canada writes: You mentioned that Taylor Swift's success is in part due to the online promotion of her album in the beginning. For Open Road's next album releases, are you planning for social networking to make up a larger part of the promotion?
Ron Kitchener: Yes, for sure. It is an increasing priority for us. The level of social network attention we provide is based on the artist and the targeted fan base, but no question every artist now needs to look at online marketing as a key part of their brand building and recording promotion process. We can all be tremendously creative in that space as well. There is no set formula, everyone's trying to generate the next idea that will keep the consumer's attention.
Jeremy Black from Toronto writes: Hi Ron. I own a music merchandising company and have had some contact with your office about various artists in the past. I'm wondering what your view of tour and online merchandising is with respect to country music. Is it as much a part of an artist's total revenue as with other genres? More? Is there as much incentive in the country genre to develop ways to package music with other items (in a pre-sale format for example) as there is with other genres? Thanks, Jeremy Black
Ron Kitchener: Hi Jeremy. Merchandise remains a very important part of all our artists' income streams. Increasingly beneficial online as well. While there are some great effective online merchandisers, I look at artists' websites like plazas or malls. We need to create traffic to the sites and then keep folks there. Interactive elements with the artist are key. While consumers stay longer, there is a chance they will purchase items directly from that artist's store, whether it be T-shirts or hats. Concert tickets and subscriptions for more exclusive content are also revenue generators that will increase in importance and value. The extent to what is offered really comes down to how the act wants to use the website as a promotional, branding or revenue tool. Country music artists are no different than other genres. The volume of tour dates and web traffic will dictate your likely level of success.
Thanks
Dianne Nice: Ron, thank you again for joining us from L.A. and for your insights on how to make it in the music industry. Is there anything you would like to add?
Ron Kitchener: Thanks again. I hope I provided some insight into what we are doing and how our industry in general is moving forward.
There is a new level of fresh excitement in our business. I feel it is the "Wild West" out there right now with more opportunities for smart, creative entrepreneurs. Going forward, strategic partnerships are essential, including the future relationships between recording labels and artists. The record business is really no longer. We all need to strive to be part of something larger that encompasses all fields of the entertainment and how we use combined efforts to reach more consumers.