Max Hole, COO of Universal Music Group International

 Lars Brandle / the 09/28/11

Max Hole is a giant of the international music industry. Indeed, when Hole was appointed last year as the new COO of Universal Music Group International, music industry bible Billboard Magazine described the Brit as a serious contender for the title of “most powerful label executive outside America.” As COO, Hole is responsible for the operations of UMGI’s territories and regions worldwide, and for the central functions at its headquarters in London. In short: the globe is his turf. TMN caught up with Hole in Sydney last week, where the company stalwart met with the local Universal team and presented the Opera House showcase for new classical-crossover signing Miloš.

Do you see Australia ever having a bigger influence on the global music market in much the same way Canada now does?
Part of the difficulty with Australia is physical distance. And presence is very important in promoting artists and music. I’ve often thought I don’t understand why Australia doesn’t score more consistently than it does. Distance is definitely one of the factors, unless you can come up with a magic song that short-cuts everything. Gotye’s [Somebody That I Used To Know] may well be a magic song.

What’s the perception of Australian music abroad?

I’m slightly disappointed from a Universal perspective that we don’t come up with more artists that do well. We get criticised for that. But it’s not for want of trying. We really tried with Powderfinger [Universal released Odyssey No. 5 in Europe]. Eventually I let them go, and they did a deal with V2 and that didn’t really work out any better. At Universal, we certainly invest heavily in Australian talent and we’re doing a lot better with Australian music than we were five years ago. We have a partnership with Dew Process, Eleven, Modular and the two labels Mercury and Island internally. The dream is always that something will become Wolfmother, whose first album did about 1.6 million. It happens. I’d like it to happen more often.

Let‘s talk about piracy. With the Music Matters campaign, the music industry seems to have taken an utterly different tack.
You have to try lots of different approaches. I’m starting to feel a little more optimistic, because of a combination of education and legislation, and we’re seeing in the U.S. a consensus between ISPs, the creative industries and the government. What has helped move things along has been Wikileaks and the Sony Playstation hacking. Politicians now realise that, if that can happen, it’s like anarchy. We live in a time of great danger but it’s a time of incredible opportunity as well. With the explosion of smartphones and tablets we can reach far more consumers than we ever could before. You’re never going to wipe piracy out altogether. But if you can create cool services, at a price the consumer finds easier and more absorbing, than piracy becomes a little less attractive.

Talking about cool services, Spotify hasn’t arrived in Australia. What are your thoughts on its performance so far in Europe and the US?
In the U.S. it’s very encouraging. They’ve something like 200,000 premium users in just a few weeks. With iTunes launching the iCloud, it creates a legitimate universe that makes it easy for people to navigate into. If Google would launch a legitimate universe, that would be a game-changing moment as well. Spotify is the first one of its kind to really start to move. Spotify will launch in Australia in the near future.

This year?

I’m not sure if it will be this year, or early next year. As far as Universal is concerned, the sooner the better.

What other areas are you targeting?
Emerging markets. The last 30 years we made 85% of our revenues in 10 countries. The next 30 years that will change dramatically. Again, because of mobile devices and social media we’re going to start to see our revenues grow in Brazil, China, India, Indonesia, Russia. All these countries where we really struggled are going to become a reality. We’re expanding in the Middle East, because we can make music offerings for telcos to reach the consumer in Qatar and the United Arab Emirates.

Michael Chugg has been banging on for years about a pan-Asian touring circuit.

It’s starting to happen. You’re starting to see a lot of artists play Hong Kong, Taipei, Singapore, Manila, Jakarta and into mainland China. It’s becoming a circuit.

What’s the secret behind Universal’s global power?
Our artists. It’s a simple business in that respect. We’ve always focused more on the music, investing in the music and investing in the people that can bring you the music. We’ve always tended to have music people run our companies. We’ve always set our goals to be about breaking new artists. The heart of it has been the creative people in the company attracting the right artists. And if you do that, you also get a bit lucky.

What Universal’s global market share?

It’s probably around 26%. The year to-date in Australia is about 40. It varies. In most of the major markets, we’re around 30. In France, we’re high 30s. Germany and U.K. about 31, 32. In Japan, where we’re much more successful than we used to be, our marketshare is about 15%. We have grown share since the merger 13 years ago. We’ve done that by having more hits.

How’s Lucian Grainge enjoying the big gig?
I think he loves it. He loves Los Angeles. He’s really enjoying the challenge of reinvigorating our American company. We’ve had great success in the past but clearly it needed some renovation and renewal. He’s really close with [Interscope Chairman] Jimmy Iovine on the West Coast and he’s brought in [Chairman/ CEO of Island Def Jam and Universal Motown Republic Group] Barry Weiss – who he’s also very close with – on the East Coast. And he’s stirring it up.

You’re personally involved in reinvigorating the classical labels for Universal.
I felt we’d lost our way a little with classical music. It had become a little isolated. So, I set about trying to bring it back into the mainstream of our business. Our managing directors are just as likely to be asked about what we’re doing with Gustavo Dudamel or Daniel Barenboim, as they are with Justin Bieber or Lady Gaga. You ignore classical music at your peril. There is a huge audience for classical music. Certainly the ticket business for classical music is bigger than ever. Because of the collapse of retail, we’re finding it difficult to communicate with the classical consumer. We’re doing a lot of things to try and change that. We’re signing a lot of new artists, Milos being a very good example of an artist who’s playing classical music but he understands the power of promotion. We’re trying to bring some pop music discipline to the way we promote classical music. And to really focus on a few artists. It’s not rocket science, this. It’s about paying attention.

You were also closely involved in the Baidu deal.
Two years ago I was pretty pessimistic about China. In the last year, I’ve become a lot more optimistic about China. We took a decision a while ago that we were going to invest in Mandarin-language music; China’s a 95% Mandarin language market. And the Baidu deal was a big step along the way. Baidu agreed that if we could make a deal for a legitimate music service, they would remove deep-linking. It suddenly gives us the potential for real growth. And there’s the very real possibility that iTunes could launch in China in the not too distant future. It’s still a small (music) market, but in the next 3-5 years it really could be something.

Finally, Max, what’s your secret power?
I’m a good team player. The trick to managing a global business is having great people. You support and encourage. That’s really the key. I also travel a lot, to communicate and relate to people. It’s very important if you’re at the international level to show up, and know what’s going on at the coalface. You can do a lot by phone and video conference, but you do need to show up from time to time.


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