| When Max Lousada took over as the head of recorded music at Warner Music Group, his no. 1 job was to fix Warner Bros. Records. The label, founded in 1958 as a division of the famous film studio, had once excelled at developing talent like Fleetwood Mac, Madonna and the Red Hot Chili Peppers under the leadership of Mo Ostin. But Warner Bros. had slipped into an extended slump. Lousada decided to model its leadership after Atlantic, then Warner's more successful sibling. Atlantic was led by a creative person, Craig Kallman, and a business person, Julie Greenwald. Kallman identified talent and developed their sound. Greenwald took over after the music was made and specialized at marketing and distribution. At Warner, Lousada targeted Aaron Bay-Schuck, a rising star at Interscope, to play Kallman. Lousada thought Bay-Schuck could grow into the CEO of a label, but Bay-Schuck was, by his own admission, not ready. To help him get there, Lousada wanted to find a savvy veteran. He hired Tom Corson from RCA. For several years, it looked like the plan wasn't working. The label still trailed almost all its rivals in market share and had few big new acts to its name. But over the last couple years, Warner — it dropped the Bros. — has broken one new act after another, starting with Zach Bryan and culminating this year in Benson Boone and Teddy Swims. "I got to develop there for five years before I had any commercial success," Swims told me, days before his first performance at the Grammys. Both Boone and Swims are nominated for best new artist. Warner has contributed nine nominees in the category since Bay-Schuck and Corson took over. Lousada has since left the company, but WMG chief Robert Kyncl has renewed deals for Corson and Bay-Schuck. On the eve of the Grammys, I met with Bay-Schuck and Corson at Warner's headquarters in downtown Los Angeles to talk about how they brought a label back from the dead, the future of TikTok and the key to breaking new music acts in the Spotify era. Was there any point at which you thought that the Grammys wouldn't happen? Corson: I didn't think it was a no brainer that they were going to do them. I'm hopeful that it'll be a great healing experience for everyone and that they will raise money, which is sorely needed, and that it will publicize a very tragic event. I don't know that moving it would've made a difference. I'm glad I didn't have to make the decision. You have two best new artist nominees. That's nine since you took over. How is the process or the approach to breaking an act now different from when you started? Bay-Schuck: We're an artist development label. That's always been our mission from the moment Tom and I got here, and it was one of the distinguishing factors of Warner Brothers records under Mo [Ostin] in its heyday. They were willing to have unwavering commitment, have patience and do the hard work to build trust with their artists. Those three things created an atmosphere where artists were allowed to succeed and fail and really discover who they are. What's an example of failure? Bay-Schuck: We put out a lot of music we think is amazing and that we believe should be hits. And it doesn't always work that way. It feels like failure sometimes when you are excited about something, and it just doesn't react. But you can try again the next day. Getting something wrong doesn't spell disaster for the rest of your career. Corson: That's very different than it was even 10 or 15 years ago where you had to go on tour, go support the project. You kept working and hoping it would happen. It was much less easy to continue to put up music. Bay-Schuck: Back in the day you wanted mysteriousness. You released a lot less product. It's not that we don't prioritize mysteriousness, but, for most artists these days, if the quality is there, we're really pushing for is a more-is-more philosophy. With this need for more, are there artists who get overexposed? Corson: Always consider the audience. Some audiences are thirsty and they want an always-on strategy. Some audiences want to just pace themselves differently. Rufus du Sol is very patient about how they go about it. They put out an album every three years. You took over the label as we were approaching the peak of TikTok mania where every label was just signing anyone who went viral. How many artists did you try to sign based off TikTok hype? Bay-Schuck: Zero. Those deals were so competitive, and they were so expensive, that we couldn't be in those conversations. When you say you couldn't be competitive, what do you mean? Bay-Schuck: We couldn't compete versus Interscope, Republic and Columbia -- labels that were thriving when we were ice cold. We weren't going to be able to go sign the most competitive deals when TikTok was exploding because we just didn't have enough to excite artists. Is TikTok still where you seed music first? Corson: We'll seed it across multi-platforms, but that is the most viral. You'll see stuff work or not work very quickly, and you'll scrape it and go through it and iterate. We monitor nonstop. And it can be old school hits, it can be Dreams by Fleetwood Mac. Bay-Schuck: Our team has done an exquisite job understanding how to turn moments into sustained stories. Our mission here is for songs to never be bigger than artists. That's always the danger with virality on TikTok, especially if you're a new artist. Have you discussed how your strategy would change if there is no TikTok? Corson: We don't have a great answer because, fortunately, at the moment we don't have to do that. I think what you find is the audience finds something somewhere else to get that endorphin hit. Bay-Schuck: Reels has probably been the most effective for us outside of… Corson: YouTube Shorts can be pretty powerful. Bay-Shuck: Yeah, Shorts and Reels. If I remember correctly, Kenya Grace's Strangers started within a small micro car culture on Instagram Reels. Aaron, on your Wikipedia page it says that you discovered, signed and developed Bruno Mars. If I asked other people at Atlantic at the time, is that how people remember it? Bay-Schuck: I am quite confident that story would be validated, but I think the way I've told that story has evolved over the years. It was early in my career when the Bruno success started to happen. Atlantic had passed several times before allowing me to sign him. People would be like, 'God, how did they miss? It's so obvious.' And I'd say, 'I know, isn't it?' And now that I have gone on longer in my career, it's honestly the greatest gift of all time that Craig [Kallman] challenged me on that. He had the wisdom to know that when I first walked in the doors with Bruno Mars that there weren't the songs. That he didn't have the style locked down yet. He didn't know musically who he wanted to be. He had raw talent, but sometimes it's better to wait. How well did you guys know each other before this marriage? Corson: Not at all. We'd met once, where Aaron asked for so much money we couldn't hire him. He eventually got it. Bay-Schuck: The idea was the model worked at Atlantic, right? You had a creative chairman and an operational chairman. So then what is the division of labor? Bay-Schuck: Everything that goes into signing artists, making the music, delivering that to the company — that's my territory. Once that music is turned in, the marketing and promotion is Tom. Corson: Then obviously the operational part -- finance, HR, admin, corporate. When you took over, one of the things that you did is flip the roster. So do you just go and drop a ton of people? Bay-Schuck: Yeah, although there's a little more thought and care put into it. But how do you deliver that message to an artist? Corson: It is obviously never easy. The first thing you're doing is you're looking for what you can keep, and there are a lot of artists that we did keep. And then you have to make tough decisions. If you don't have a vision for an artist, then you should move on. You should do it quickly because these are young people. There's a clock in this industry. Bay-Schuck: It was a necessary evil. Our perception of Warner when we got here — and certainly the industry's perception -- is that for years it had stopped really signing. It wasn't investing in new artists or taking risks. We've been very fortunate that the drops we did in that era seem to have been the correct decisions. You have called out Zach Bryan as the first moment where you felt like there was momentum behind what you were doing. Why is that? Bay-Schuck: It was the first time we were breaking an artist behind hits. We had a good number of hit records in our first few years, but we weren't having that moment of breaking a household name. Dua [Lipa], of course, but that felt different. She was signed before you got here. Bay-Schuck: Zach was the first wholly owned signing of this regime that not just had hits, but that truly broke as an artist. When his sophomore album came out and you open the Spotify charts and he owns positions one through 20, and the song debuts at number one on the Hot 100, that's a good feeling. Corson: We didn't pop too many champagne bottles. It was like, 'okay, this is how it feels. Everyone get back to work, we got to do it again, and again and again.' Zach was at the beginning of this recent explosion in country. Is there another trend that you want to be ahead on? Bay-Schuck: There's some partnerships with India coming together. I don't think it takes a genius to recognize that there's going to be a confluence of Latin music and country music. Corson: We don't have yet the Bob Marley of the Afrobeats, Africa sound. Bay-Schuck: With Kendrick [Lamar] owning 2024 for rap music, is the West Coast having another revival? Three quick questions. How much should Spotify cost a month? Corson: We should match Netflix's price. I don't see why we're not 20 bucks a month. Are you using artificial intelligence in music creation at all? Bay-Schuck: Yes. How? Bay-Schuck: Randy Travis is an AI product. Tom: He lost his voice, but with his full buy-in -- he was in the studio -- they managed to create a perfect, near perfect replica that he was excited about. If you had to bet in Vegas, who's the new best new artist? Corson: It is the most random category of who wins from time to time, and I'm not really sure why. The best of Screentime (and other stuff) | Private equity comes for talent managers | We broke a couple stories this week about major talent management companies. 3Arts Entertainment, which represents Kevin Hart and Mindy Kaling, is looking to raise up to $250 million. Entertainment 360, which represents Margot Robbie and Greta Gerwig, sold a significant minority stake to private equity firm Carlyle. (Though neither party would disclose the terms, Carlyle invested more than $100 million.) Both of these companies represent a lot of bold-faced names in Hollywood, and produce shows such as Nobody Wants This and Game of Thrones. They are raising money to fund more production and expand into areas like sports, news, music and digital-native talent. (Entertainment 360 also gets to take some money off the table.) The more interesting question is: Why are private equity firms pumping money into talent representation? Crestview Partners bought a stake in Gersh. TPG acquired Untitled Entertainment and Grandview. Now Carlyle. The UK's Independent Talent is reportedly for sale and many view PE as the most likely buyer. The simplest answer is that management companies generate meaningful profit and cash flow at a time where that is attractive. Investors see the return TPG got for CAA and would like to repeat that. There is also lots of interest in building businesses around famous people. And, as we covered last week, a lot of smart people think management companies are one way to play that game. Representation businesses carry risk. Clients can leave. Strikes happen. Managers can quit. But all the senior folks at 360 have signed long-term deals. The 360 deal is also structured in such a way that Carlyle's risk is limited. The No. 1 movie in the world is…Ne Zha 2, the sequel to the hit Chinese animated movie. It's the highest-grossing film in China so far during the lunar new year, and could top $1 billion from just its home market. Dog Man is the top movie in the US, posting more than $35 million at home, and I would be remiss if I didn't note the success of One of Them Days, a modestly budgeted comedy in the vein of Friday. It crossed $30 million at the box office this weekend, which is solid for a movie that cost a reported $14 million to produce. Netflix's show and tellDespite being the most powerful entertainment company in Hollywood, Netflix still feels misunderstood. Before introducing an impressive and never-ending slate of new programming at an event in Hollywood this week, Chief Content Officer Bela Bajaria told a room full of journalists what she thinks they get wrong about the company. Netflix makes quality shows. It makes original shows. And it isn't operating out of fear. The room of reporters seemed more interested in whether Netflix would release more movies in theaters. The No. 3 tour in the world is…Morat. I somehow missed that this Colombian group delivered one of the biggest tours at the end of last year, concluding with three shows at a major stadium in Mexico. In the most recent Pollstar charts, the group had an average gross of almost $4 million — more than P!nk, Bruce Springtsteen and Usher. Deals, deals, dealsThe Selena documentary has me revisiting her greatest hits, while the FireAid show reminded me how much I enjoyed No Doubt as a kid. The two best songs of the night were Stevie Nicks' Landslide and the Red Hot Chili Peppers' Under the Bridge. Lastly, I am sharing my unofficial Grammy ballot. This is who I believe deserves to win, not who will win. Best New Artist: Chappell Roan. I might like Doechii's album more, but Roan was a legitimate phenomenon. She combines commercial success with great music and gets bonus points because she's only released one full-length album. (Looking at you Sabrina Carpenter.) Song of the Year and Record of the Year: Not Like Us, Kendrick Lamar. This was my favorite song of last year. It wasn't close. The feud with Drake elevated Lamar, already a huge act, to another stratosphere. These categories reward two different skills, but this song has tremendous lyrics and production. Let's call this a makeup for the Recording Academy naming Macklemore and Ryan Lewis the best new artist over Lamar in 2014. I could see giving record to Espresso but I fear the Grammys will extend their love affair with Billie Eilish. Album of the Year: Cowboy Carter, Beyoncé. It's a career achievement award for one of the most decorated artists in music history who somehow has never won this prize. If this goes to Taylor Swift for a fifth time, please find me at the bar after the show. | 
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