Mathieu Drouin: One of the things we wanna do is once we bring on, either we, let’s say we’re working with a more commercial, mainstream artist. I say hypothetically, even though that’s not our focus right now at all, I bring it up because it’s more likely that this type of situation would come about in that type of context.

So we sign an artist and all of a sudden Sony comes to the table and say we want to do, we want to sign the artist, we’ll give a half-a-million dollars as an advance to record the record. And we’ll, half-a-million dollar marketing commitment and tour support and blah, blah, blah. Say okay we’re gonna bring that, we’re gonna take that deal. And we’re gonna keep the Canadian rights and put it out ourselves; keep a separate royalty pool for the artist which is cool. But we really realize that all things being equal with 90 percent of CD sales still happening in stores and the fact that major labels have the clout at retail, blah, blah, blah. It’s in the artist to the artist that we make this deal. So we’re gonna make the deal.

Well at that point, once we’ve made a major label deal, you can afford, especially one with good terms, you can go out to an established manager who knows he’s going to be able to make money simply because even if the project fails, the way the major labels invest in a project, whether it’s through tour support, putting them on the road, paying to some degree for radio airplay which is gonna generate performance and royalties and publishing income. You know that you can make money as a manger.

So once you have a major label deal on board, what we wanna do a lot of the times, if the artist wants it, is—and we provide contractually them the right to request this—is once we get things going, you can request that we, the company, bring out outside, third-party co-management. And that’s an objective third-party co-manager who’ll be not consistent through every artist that we work with. Whose agenda, first of all, he will get paid. Why I say the artist would have to want this, because right now, economically speaking this proposal that we provide in terms of the deal structure is very beneficial to an artist especially in the case of success. 50 percent of the profits on a record, on a successful record, amounts to way more money than even a 20 percent per unit royalty with the deductions in the typical industry contract.

So not only in the successful project are they making a bigger share of the profits. They have no manager taking 20 percent of that. If we bring in an outside third-party manager, they’re gonna want a commission the revenue centers of publishing and recording income that we don’t. So there’s cost component for the artist. But what it provides them with and what it provides us with is a system of checks and balances where this situation is unavoidable in any context but at the very least we’ll bring on an independent co-manager. It’ll cost you a little bit more because you’ll have to give him, if it’s 20 percent and we’re co-managing, industry standard is 20 percent, you’re gonna have to give him a ten percent commission, let’s say, on your recording and publishing income.

Interviewer: You would split that with him?

Mathieu Drouin: No. I would say we’ll split the work with an independent manager and we’ll have to split the work. They’ll have to do the work. But they will take half of our commission on touring and half of our commission on merchandising. And they’ll wanna take a commission on publishing and recordings ‘cause they have no participation in it. But they’ll take a half-commission. So if the industry standard is 20 they’ll take ten. And we won’t take a commission ‘cause we’re involved with the artist on that level.

So that provides them with an independent system of checks and balances. Where they have somebody who’s only gonna fight for their interests within the framework of opportunities that come into the company.

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